Prospectus Summary
You should read the following summary together with the more detailed information regarding our company and the common stock being sold in this offering and our financial statements and notes to those statements appearing elsewhere in this prospectus.
Fogdog Sports
We are a leading online retailer of sporting goods. We have designed fogdog.com, our online store, to offer extensive product selection, detailed product information and a personalized shopping experience. We believe that we offer the largest selection of sporting goods online, with up to 60,000 distinct stock keeping units representing more than 500 brands in all major sports categories. Fogdog.com features a collection of specialty shops, including soccer, baseball, golf, outdoors, fan/memorabilia and other popular categories, organized to appeal to a broad base of customers from the avid enthusiast to the occasional participant. We provide information and analysis authored by experts, helpful shopping services and innovative merchandising. According to Media Metrix, Inc., our web site received more visits during July 1999 than any other online sporting goods retailer focusing exclusively on sporting goods.
We believe that the sporting goods industry is large and growing and that sporting goods are increasingly being purchased online. According to the Sports Business Research Network, total U.S. retail sales of sporting goods were approximately $77 billion in 1998 and have grown at a 6.8% compound annual rate since 1994. Forrester Research projects that U.S. consumers will purchase $4.2 billion of sporting goods online in 2004. We believe that the sporting goods industry will continue to benefit from the growth in participation and interest in sports, recreation, health, fitness and outdoor activities. We believe the sporting goods industry is fragmented and fails to satisfy fully the needs of consumers and manufacturers.
Our online store is designed to address the limitations of the traditional sporting goods retail channel for consumers and manufacturers. Most of our products, representing 30 different sports, are featured in nine specialty shops and four brand concept shops. In addition to offering a wide selection of products, our web site provides a superior online shopping experience by emphasizing the following:
. Specialty Shops Featuring Extensive Product Selection. We offer a broad range of product lines in a wide variety of sports in order to make fogdog.com a "one-stop-shop." Our specialty shops also feature useful, compelling information and expert advice to help customers make the right product selection to meet their sports performance objectives.
. Value-Added Shopping Services. We offer helpful services to assist our customers with their purchasing decisions, including: - Detailed product information, guides, configurators and comparison charts;
- Brand concept shops;
- Advice and product recommendations by recognized sports experts;
- Consumer reviews; and - Personalized shopping.
. Convenient Shopping Experience. Our online store provides customers with an easy-to-use web site that is available 24 hours a day, seven days a week.
. Commitment to Excellent Customer Service. We emphasize customer service during all phases of the customer's online shopping experience and hire sports consultants with a broad knowledge of athletics, sports products and training to assist customers in their purchasing decisions.
. Network of Fulfillment Partners. We have developed and implemented a fulfillment system that utilizes third-party warehouses, distributors and direct shipping from select manufacturers to support secure and reliable online retailing.
The Fogdog Sports vision is to reinvent the sporting goods retail industry by providing customers with a new value proposition of selection, information and service. Our goal is to be the world's leading sporting goods retailer. We intend to achieve this goal by:
. Building Brand Recognition. We intend to establish the Fogdog brand as the first global brand for retail sporting goods and in the process build consumer trust, confidence and loyalty.
. Promoting Repeat Purchases. We are focused on promoting customer loyalty and building relationships with our customers to drive repeat sales.
. Expanding Specialty Shops. We intend to add five to ten specialty shops organized by sport or brand within the next 12 months.
. Maximizing Product Selection and Fulfillment Capabilities. We intend to expand our fulfillment network, extend our brand relationships and augment our technology and expertise so that we can sell and deliver the broadest possible array of top branded products to our customers.
. Enhancing and Forming Strategic Relationships. We have strategic relationships with Nike USA, America Online and Keystone Fulfillment that we believe provide us with competitive advantages in merchandising, marketing and distributing our products. We intend to pursue additional strategic relationships to further develop our business.
. Expanding Internationally. We intend to replicate our business model and build our brand name in selected international markets with appropriate demographics and market characteristics.
Corporate Information Fogdog, Inc. was incorporated in October 1994 in California as Cedro Group, Inc. In November 1998, we changed our name to Fogdog, Inc. We plan to reincorporate in Delaware prior to the commencement of this offering. References in this prospectus to "Fogdog," "Fogdog Sports," "we," "our" and "us" refer to Fogdog, Inc., a Delaware corporation, its subsidiaries and its California predecessor, and not to the underwriters. Our principal executive offices are located at 500 Broadway, Redwood City, California 94063 and our telephone number is (650) 980-2500. Our web site can be found at www.fogdog.com. Information contained in our web site is not a prospectus and does not constitute a part of this prospectus.
Our trademarks and service marks include Fogdog(TM), Fogdog(TM) with the accompanying design, the Fogdog logo, "The Dog Knows Sports(TM)." "The Dog Knows(TM)" and "Your Anytime, Anywhere Sports Store(TM)." All other brand names or trademarks appearing in this prospectus are the property of the companies that own them. The inclusion of other companies' brand names and products in this prospectus is not an endorsement of Fogdog Sports. These companies are not involved with the offering of our securities.
The Offering
Common stock offered...... Shares Common stock to be outstanding after the offering............. Shares Use of proceeds........... For general corporate purposes, including marketing and sales activities, working capital and capital expenditures. We may use a portion of the proceeds for possible acquisitions. See "Use of Proceeds." Proposed Nasdaq National Market symbol............ FOGD The number of shares of common stock to be outstanding after this offering is based on the number of shares outstanding as of June 30, 1999, and includes:
. 5,294,116 shares of common stock issuable upon conversion of preferred stock sold in September 1999; and . 399,998 shares of common stock issued in connection with our acquisition of Sports Universe, Inc. in September 1999, and excludes:
. 5,731,410 shares of common stock issuable upon exercise of stock options outstanding as of June 30, 1999 at a weighted average exercise price of $0.11 per share;
. shares of common stock reserved for issuance under our 1999 Stock Incentive Plan that incorporates our Amended and Restated 1996 Stock Option Plan;
. shares of common stock reserved for issuance under our 1999 Employee Stock Purchase Plan;
. 6,171,524 shares of common stock issuable upon exercise of an outstanding warrant held by Nike USA, Inc. at an exercise price of $1.03 per share; and . 255,923 shares of common stock issuable upon exercise of outstanding warrants at a weighted average exercise price of $0.98 per share.
For additional information regarding these shares, see "Management--Benefit Plans," "Description of Capital Stock" and Notes 6 and 10 of Notes to Financial Statements.
Except as set forth in the financial statements or as otherwise specified in this prospectus, all information in this prospectus:
. assumes no exercise of the underwriters' over-allotment option;
. assumes the completion of a for reverse stock split;
. reflects the conversion of all of our outstanding preferred stock into common stock upon the completion of this offering; and . reflects our reincorporation into Delaware before the commencement of this offering.
See "Description of Capital Stock" and "Underwriting."
SUMMARY FINANCIAL INFORMATION (in thousands, except per share data)
Six Months
Year Ended December 31, Ended June 30,
1996 1997 1998 1998 1999
Statement of Operations Data: Total net revenues................ $ 677 $ 1,041 $ 765 $ 365 $ 1,084 Gross profit...................... 587 885 490 278 263 Total operating expenses.......... 1,053 1,922 4,665 1,170 7,069 Operating loss.................... (466) (1,037) (4,175) (892) (6,806) Net loss.......................... (469) (1,045) (4,120) (916) (6,648) Basic and diluted net loss per share............................ $(0.09) $ (0.15) $(0.64) $(0.17) $ (1.00) Basic and diluted weighted average shares used in computation of net loss per share................... 5,447 6,815 6,462 5,434 6,631 Pro forma basic and diluted net loss per share................... $(0.29) $ (0.23) Pro forma basic and diluted weighted average shares.......... 14,411 28,463
June 30, 1999
Pro Pro Forma
Actual Forma As Adjusted
Balance Sheet Data: Cash, cash equivalents and short-term investments................................... $ 14,600 $ 29,321 $ Working capital................................ 12,803 26,902 Total assets................................... 17,072 34,359 Long-term liabilities.......................... 498 498 Total stockholders' equity..................... 13,070 29,370
The balance sheet data as of June 30, 1999 is set forth:
. on an actual basis;
. on a pro forma basis to give effect to:
- the sale in September 1999 of 5,294,116 shares of preferred stock;
- the issuance in September 1999 of 399,998 shares of our common stock in connection with our acquisition of Sports Universe, Inc.; and - the conversion of all outstanding shares of preferred stock into common stock effective upon completion of this offering; and . on a pro forma as adjusted basis to reflect each of the adjustments listed above and the estimated net proceeds from the sale of shares of common stock at an assumed initial public offering price of $ per share after deducting the estimated underwriting discounts and commissions and our estimated offering expenses.
See "Use of Proceeds" and "Capitalization."