Summary
This summary highlights selected information contained elsewhere in this prospectus. This summary may not contain all the information you should consider before investing in our common stock. You should read the entire prospectus carefully, including “Risk Factors” and the financial statements, before making an investment decision.
We are a leading online retailer of new college textbooks and have established a platform for marketing products and services to the nation’s 15 million college students. We have sold textbooks to students at over 2,400 colleges and universities in each of the 50 states. According to MediaMetrix, www.varsitybooks.com had over 645,000 unique visits in August 1999, which made us the most visited college-oriented Web site. Using the Internet, we are able to provide our customers with a convenient purchasing process and reduced prices. Our carefully selected and trained network of more than 1,000 campus student representatives promotes our brand and products, enabling us to customize our marketing to the particular dynamics of each campus and reach students on a peer-to-peer basis. We plan to use this network of student representatives and our student-focused Web site to increase the number of products and services we offer and provide a marketing opportunity for other businesses.
The college student market is large and growing. Excluding tuition and room and board, college students spent over $105 billion in 1998 on products and services. Of this amount, the purchase of new textbooks represents most students’ single largest school-related expenditure. While textbooks are required, purchasing them through traditional retailers tends to be inconvenient and expensive. Based on statistics published by the National Association of College Stores, new textbook sales were over $5 billion in 1998.
Online commerce provides a new opportunity to better serve and more efficiently reach the college student market. According to Student Monitor, 95% of college students used the Internet during the Spring 1999 semester and these students are increasingly purchasing products and services online. Their significant spending power, coupled with the belief that students are still forming their brand loyalties, makes college students an attractive market to businesses and advertisers. However, due to the limitations in reaching college students through traditional methods, few businesses have succeeded in effectively marketing to them in a convenient and cost-effective manner.
We believe there is a significant market opportunity for an online retailer that offers students an enhanced shopping experience by providing textbooks and other student-oriented goods and services with a focus on cost-savings, convenience and customer service. We also believe an opportunity exists to more effectively reach college students by using our peer-to-peer marketing technique, which overcomes many of the difficulties in targeting this market.
Our goal is to become the leading online retailer and the most effective marketing channel to college students. We are pursuing the following strategies:
Our principal executive offices are located at 1050 Thomas Jefferson Street, N.W., Suite 525, Washington, D.C. 20007 and our telephone number is (202) 667-3400. Our Web site is located at www.varsitybooks.com. We do not intend the information contained on our Web site to be incorporated into this prospectus.
Except as otherwise indicated, information in this prospectus is based on the following assumptions:
The number of shares to be outstanding after the offering is based on shares outstanding as of September 30, 1999 and excludes shares that may be issued upon exercise of the following options and warrants:
Below is our summary historical consolidated financial data. We derived the consolidated statement of operations and consolidated balance sheet data from our audited and unaudited consolidated financial statements. You should read this summary data together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes appearing elsewhere in this prospectus.
The pro forma balance sheet data gives effect to:
The pro forma as adjusted balance sheet data gives effect to: