As
filed with the Securities and Exchange Commission on December 13,
2007
Registration
No. 333-147858
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No.1 to
FORM
S-3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF
1933
AUDIBLE,
INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
|
22-3407945
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
(I.R.S.
employer
identification
number)
|
1
Washington Park
Newark,
New Jersey 07102
(973)
820-0400
(Address,
including zip code, and telephone number, including area code, of registrant’s
principal executive offices)
____________________
Donald
R. Katz
Chairman
and Chief Executive Officer
Audible,
Inc.
1
Washington Park
Newark,
New Jersey 07102
(973)
837-2700
(Name,
address, including zip code, and telephone number, including area code, of
agent
for service)
____________________
Copies
to:
Nancy
A. Spangler, Esq.
DLA
Piper US LLP
1775
Wiehle Avenue, Suite 400
Reston,
VA 20190
(703)
773-4000
Approximate
date of commencement of proposed sale to the public: From time to
time after this registration statement becomes effective.
If
the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following
box.
¨
If
any of
the securities being registered on this Form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.
x
If
this
Form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
¨
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering.
¨
If
this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box.
¨
If
this
Form is a post-effective amendment to a registration statement filed pursuant
to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box.
¨
The
registrant hereby amends this registration statement on such date or dates
as
may be necessary to delay its effective date until the registrant shall file
a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The
information in this prospectus is not complete and may be changed. The selling
stockholders may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not soliciting an offer
to
buy these securities in any state where the offer or sale is not
permitted.
Subject
to Completion, Dated December 13, 2007
PROSPECTUS
5,897,335 Shares
AUDIBLE,
INC.
Common
Stock
This
prospectus relates to the resale, from time to time, of up to 5,897,335 shares
of our common stock or interests therein by the selling stockholders, listed
on
page 13, or their transferees. Information on the selling
stockholders and the times and manner in which they may offer and sell shares
of
our common stock under this prospectus is provided under “Selling Stockholders”
and “Plan of Distribution” in this prospectus. We will not receive
any of the proceeds from the sale of these shares by the selling
stockholders.
Our
common stock is traded on the NASDAQ Global Market under the symbol
“ADBL”. On December 12, 2007, the closing price of one share of our
common stock was $9.83.
____________________
Investing
in our common stock involves a high degree of risk.
You
should carefully read and consider the risk factors beginning on page
4.
____________________
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The
date of this prospectus is ,
2007
ABOUT
THIS
PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission, or the “SEC,” using a “shelf” registration process.
Under this shelf process, the selling stockholders referred to in this
prospectus and identified in supplements to this prospectus may from time to
time sell up to 5,897,335 shares of our common stock in one or more offerings.
Each time the selling stockholders sell common stock, we will provide a
prospectus supplement that will contain specific information about the terms
of
that offering and the manner in which the common stock will be offered. The
prospectus supplement may also add, update, or change information contained
in
this prospectus. If there is any inconsistency between the information in this
prospectus and the prospectus supplement, you should rely on the information
in
that prospectus supplement. We encourage you to read this prospectus and any
prospectus supplement together with additional information described under
the
heading “Where You Can Find More Information.”
The
registration statement containing this prospectus, including exhibits to the
registration statement, provides additional information about us and our common
stock offered under this prospectus. The registration statement can be read
at
the SEC web site or at the SEC offices mentioned under the heading “Where You
Can Find More Information.”
When
acquiring any common stock discussed in this prospectus, you should rely only
on
the information provided in this prospectus and the prospectus supplement,
including the information incorporated by reference. Neither we, nor any
underwriters or agents, have authorized anyone to provide you with different
information. This prospectus is not an offer to sell, nor is it a solicitation
of an offer to buy, these securities in any state in which the offer or sale
is
not permitted. You should not assume that the information in this prospectus,
any prospectus supplement, or any document incorporated by reference, is
truthful or complete at any date other than the date mentioned on the cover
page
of those documents.
Unless
otherwise mentioned or unless the context requires otherwise, all references
in
this prospectus to “Audible,” “we,” “us,” “our,” or similar references mean
Audible, Inc.
OUR
BUSINESS
We
are a
leading provider of spoken audio entertainment, information, and educational
programming on the Internet. We specialize in the spoken word
experience, providing digital audio editions of books, newspapers and magazines,
television and radio programs, and original programming. Our service
provides a way for individuals to consume audio content at times when it is
challenging to read, such as when driving, exercising or performing consistent
simple handwork, and it also provides listeners with the opportunity to simply
enjoy what they want, when they want.
Consumers
shop, purchase and download audio content from our Web sites,
www.audible.com
(United States) and
www.audible.co.uk
(United
Kingdom), and from the Web sites of our related parties,
www.audible.de
(Germany) and
www.audible.fr
(France), directly to personal computers for
listening in a variety of ways. Most of our customers download audio
to their PCs and Macs and then transfer the audio to MP3 players, personal
digital assistants (PDAs), or to smart mobile devices (SMDs) for listening
while
not connected to a computer. Others transfer, or “burn”, the content
to audio CDs, while some customers simply listen at their computers or through
a
digital home entertainment network. Our customers can also have their
audio content wirelessly delivered to their SMDs every day, taking the computer
out of the equation. Our digital downloads are available on
Amazon.com, and we are the exclusive supplier of audiobooks at the Apple iTunes
Store, or iTunes, through a contract that extends through September 30,
2010.
In
addition to the desirability of our content, we offer customers value,
convenience and flexibility. Our customers have the option to buy our
content either a la carte, or to join any one of our AudibleListener membership
plans that offer significant savings from what consumers typically will find
at
other traditional or online retail stores. AudibleListener membership
plans provide customers with access to a 30% discount on any individual content
purchase, exposure to periodic sales, and member-only free content
offerings. Customers typically join the AudibleListener Gold or
Platinum membership plans for a fixed monthly or annual fee that provides them
with a predetermined number of credits to be used for downloading audio
content. Some of these credits may be rolled over month to month,
should members elect to do so. In prior years we actively marketed other plans,
including our Basic AudibleListener membership plan that cost $9.95 annually
with no predetermined number of credits. These legacy plans still
have members. In addition to our AudibleListener membership plans,
our customers may also subscribe to any one of nearly 50 daily, weekly, or
monthly subscription products.
On
our
Web sites, customers can select from more than 140,000 hours of audio content,
comprising of 40,000 different programs. Our selection of audio in
our stores ranges from audiobooks to audio editions of national periodicals
such
as
The New York Times
,
The Wall Street Journal
,
Forbes
,
The New Yorker
and
Scientific American,
to
radio and TV programming such as
The Ricky Gervais Show
,
Car
Talk
,
The Bob Edwards Show
,
Opie & Anthony
and
Charlie Rose
. Language instruction, personal development,
stand-up comedy, children’s audio, study guides, historic speeches and readings,
fiction, business, mystery and romance are only some of the categories of
listening available to our customers.
Another
important element of our success is our ability to build strong strategic
relationships throughout the emerging market for handheld devices that play
digital or compressed audio. Our AudibleReady® initiative was
designed to exploit this market by entering into multiple technology and
co-marketing relationships with companies that manufacture digital audio-enabled
devices. The AudibleReady brand exists as a standard for digital
downloads and playback that ensures interoperability between the Audible service
and digital audio-enabled devices.
Consumers
are able to enjoy our digital content on more than 570 different mobile devices
made by more than 60 manufacturers. These devices include MP3 players, PDAs,
SMDs, and entertainment systems made by companies such as Apple, Creative Labs,
Dell, Hewlett-Packard, Motorola, Oakley, Palm, Philips, Samsung, SanDisk, Sonos,
and Thomson. Our device manufacturing partners support us by
including our AudibleReady software on their devices. They may also
include audio samples on the device, insert marketing brochures in device boxes,
provide point-of-purchase sales support, after-market promotions, and web-based
and e-mail customer outreach. We also enter into agreements to
reimburse customers a portion of their purchase price for the devices if they
enter into agreements to subscribe to our services for a specified period.
Our
relationships enable us to work with original equipment manufacturers of mobile
audio devices, original design manufacturers, and integrated circuit vendor
partners to simplify and rapidly adopt our technology for use in electronic
devices with digital audio capabilities.
Since
launching our service in 1997, over 1,166,000 customers from approximately
174
countries have purchased content from us, and hundreds of thousands more have
purchased our content at iTunes. We acquire new customers through a
variety of marketing and public relations methods, including e-mail, targeted
Web advertising, paid and natural search, word-of-mouth, marketing strategic
partnerships with device manufacturers and retailers, targeted radio
advertising, content-based public relations and other online and traditional
promotions. Beyond leveraging our first-to-market technology in the
English language, together with our joint venture partners, we launched the
German language version of the Audible service (
www.audible.de
) in
December 2004. We have also entered into a license and service
agreement to support a French language version of the Audible service
(
www.audible.fr
), which launched in the first quarter of
2005. In February 2005, we established our wholly-owned subsidiary in
the United Kingdom, known as Audible UK (
www.audible.co.uk
), which began
commercial operations in June 2005. During 2005, we established a presence
in
Japan to support the procurement of Japanese audio content for delivery at
iTunes Japan.
During
2005, we launched Audible Education, which we established to focus on the
educational market. Audible Education is a mobile learning service for students,
parents, educators and professionals with the mission of building literacy,
developing study skills, improving learner comprehension, and expanding one's
knowledge through listening to downloadable digital content. Through a strategic
partnership with Pearson Education, Audible developed and launched VangoNotes
(
www.vangonotes.com
), study guides tied chapter-by-chapter to top college
textbooks, in the fall of 2006. Over 212 guides are now marketed by Pearson
and
Audible directly to students, and 34 more guides are being developed for
publication by December 31, 2007.
The
market for the Audible service results from the increasing usage of the
Internet, the growth of handheld electronic devices that have digital audio
capabilities, and the increasing number of hours commuters spend in traffic
when
they cannot otherwise read. In contrast to traditional radio
broadcasts or satellite radio, the Audible service offers customers access
to
content of their choice and the ability to listen to what they want, when and
where they want - whether commuting, exercising, working around the house,
traveling, or simply relaxing. Unlike traditional and online
bookstores, which are subject to physical inventory constraints and shipping
delays, we provide a selection that is readily available in a digital format
that can be quickly delivered over the Internet directly to our
customers.
We
provide new sources of revenue for publishers, writers and producers of books,
newspapers, magazines, newsletters, radio and television shows, professional
journals and business information. We not only add the utility of
audio entertainment, but of information, education and productivity to a broad
array of digital audio-enabled devices. We provide companies that
distribute or promote our service with a wide selection of digital audio content
to offer to their customers.
The
market for the Audible service is driven by the increasing usage of
the Internet, the growth of handheld electronic devices that have digital audio
capabilities, and the increasing number of hours commuters spend in traffic
when
they cannot otherwise read. In contrast to traditional radio broadcasts or
satellite radio, the Audible service offers customers access to content of
their
choice and the ability to listen to what they want, when and where they want
-
whether commuting, exercising, working around the house, traveling, or simply
relaxing. Unlike traditional and online bookstores, which are subject to
physical inventory constraints and shipping delays, we provide a selection
that
is readily available in a digital format that can be quickly delivered over
the
Internet directly to our customers.
Securities
Offered
We
are
registering for resale by the selling stockholders 5,897,335 shares of our
common stock initially acquired directly from us in transactions exempt from
the
registration requirements of federal and state securities laws. We are also
registering for resale any additional shares of common stock which may become
issuable with respect to the shares of common stock issued by reason of any
stock dividend, stock split, recapitalization or other similar transaction
effected without the receipt of consideration, which results in an increase
in
the number of outstanding shares of our common stock.
Corporate
Information
We
were
incorporated in Delaware in November 1995. Our principal executive
offices are located at 1 Washington Park, Newark, New Jersey 07102, and our
telephone number is (973) 820-0400. Our Web site is accessible at
www.audible.com
. Information on our Web site does not
constitute part of this prospectus.
Additional
information regarding us, including our audited financial statements and
descriptions of our business, is contained in the documents incorporated by
reference in this prospectus. See “Where You Can Find More
Information” below and “Incorporation of Documents by Reference”
below.
RISK
FACTORS
Prior
to making a decision about investing in our common stock, you should carefully
consider the specific factors discussed below or appearing or incorporated
by
reference in this prospectus.
We
have limited revenue, we have a history of losses, and we may not be profitable
in the future.
Although
we had income from operations of $1.1 million in 2004, we had losses from
operations of $3.5 million and $12.0 million in 2005 and 2006, respectively,
and
$3.9 million for the nine months ended September 30, 2007. We can not assure
you
when we will become profitable again, or if we do so, whether we will maintain
profitability.
We
are
highly dependent upon the sales of our audio content through iTunes. During
2006
and for the nine months ended September 30, 2007, approximately 24% and 29%,
respectively, of our revenues were generated by selling our audio content
through iTunes. We cannot assure you that customers visiting iTunes will
continue to purchase the audio content that we provide.
We
have identified material weaknesses in internal control over financial reporting
which may adversely affect our operations.
Section
404 of the Sarbanes-Oxley Act of 2002 requires us to report on management’s
assessment of the effectiveness of our internal control over financial
reporting. Additionally, our independent registered public accounting
firm is also required to issue a report on the effective operation of our
internal control over financial reporting.
During
our 2006 compliance efforts, we identified material weaknesses involving
ineffective execution of non-routine contracts, inadequate financial information
and communication, ineffective review of account analyses, and inadequate
identification and analysis of international non-income tax related
matters. See Item 9A of our Annual Report for 2006 for additional
details regarding these material weaknesses. As a result, our former
independent registered public accounting firm issued an adverse opinion on
the
effectiveness of internal control over financial reporting.
Although
we are in the process of implementing new controls to remediate these material
weaknesses, we cannot assure you that any of the measures we implement will
effectively mitigate or remediate such material weaknesses.
Ongoing
compliance with Section 404 and remediation of any additional deficiencies,
significant deficiencies or other material weaknesses that we or our independent
registered public accounting firm may identify, will require us to incur
significant costs and expend significant time and management
resources. We cannot assure you that any of the measures we implement
to remedy potential future deficiencies will effectively mitigate or remediate
such deficiencies. In addition, we cannot assure you that we will be
able to complete the work necessary for our management to issue its annual
management report for 2007 or in future years. We also can give no
assurance that our independent registered public accounting firm will agree
with
our management’s assessment in future years.
If
too many AudibleListener members refrain from using their audio credits on
a
timely basis, there will be a delay in recognizing the revenue until the credits
are either used or expire.
The
AudibleListener plans implemented in late 2005 include the ability for
AudibleListener members to roll over a certain number of audio credits and
download audio later in their membership periods. To the extent
AudibleListener members roll over audio credits, the cash received from the
sale
of those audio credits are reflected as deferred revenue. As the
rolled-over credits are used to download audio or expire, the value of the
credits are recognized as revenue. If a significant number of
AudibleListener members delay in using their audio credits, the recognition
of
revenue related to those audio credits will be delayed and can adversely affect
our operating results. Our deferred revenue liability has increased from $14.4
million at December 31, 2006 to $17.1 million at September 30,
2007.
If
our efforts to attract new AudibleListener members are not successful, our
revenues will be affected adversely.
We
must
continue to attract new AudibleListener members. In December 2005, we
launched a redesigned Web site and new AudibleListener membership plans aimed
at
making the Audible service more flexible and convenient for our
customers. During 2007 we altered our membership focus to emphasize
more restrictive Gold and Platinum plans, which make it more difficult to
attract new members. We continue to evaluate our membership plans and may make
modifications in the future if we believe that those modifications will be
beneficial. We currently have approximately 441,000 members,
including 143,000 Basic AudibleListener plan members. If consumers do
not perceive our new AudibleListener plans to be of value, we may not be able
to
retain our AudibleListener customers or attract additional AudibleListener
members, and as a result, our revenues will be affected
adversely. The funds we spend on marketing and promotional activities
to acquire new members reflect assumptions about how many members we can acquire
and how long they will remain members. If our actual experience falls
short of our assumptions, our revenue and profit will be materially
affected.
If
we experience excessive rates of churn, our revenues may
decline.
We
must
minimize the rate of loss of existing AudibleListener members while adding
new
members. AudibleListener members cancel their memberships for many
reasons, including reasons related to changes in the available time they have
for listening to spoken audio, a perception that they are not using their
membership effectively, customer service issues that are not satisfactorily
resolved, or competitive service offerings in this or other media, including
the
availability of free podcasts. We must continually add new
AudibleListener members both to replace members who cancel and to grow our
business beyond our current AudibleListener membership base. If too
many AudibleListener members cancel their memberships, or if we are unable
to
attract new members in numbers sufficient to grow our business, our operating
results will be adversely affected. Further, if excessive numbers of
AudibleListener members cancel their memberships, we may be required to incur
significantly higher marketing expenditures than we currently anticipate to
replace these members. While our monthly churn rate significantly decreased
during 2006, it has increased during 2007, and we cannot assure you that we
will
be able to return to these lower rates.
The
market for our service is uncertain and consumers may not be willing to use
the
Internet to purchase spoken audio content, which could cause our business to
grow more slowly.
There
can
be no assurance that our current business strategy will enable us to achieve
profitable operations. While the downloading of audio content from
the Internet as a method of distribution is gaining acceptance, growth and
continued market acceptance is highly uncertain, particularly in Germany, France
and the UK. Our success will depend in large part on more widespread
consumer willingness to purchase and download spoken audio content over the
Internet. Purchasing this content over the Internet involves changing
purchasing habits, the willingness of consumers to engage in downloads, and
if
consumers are not willing to purchase and download this content over the
Internet, our revenue will be limited, and our business will be materially
adversely affected. We believe that acceptance of this method of
distribution may be subject to network capacity constraints, hardware
limitations, company computer security policies, the ability to change user
habits, and the quality of the audio content delivered. While we
believe we have had some measure of success in gaining market acceptance of
this
method of distribution, including through our sales of content at the Apple
iTunes Store, there can be no assurance that this will continue or that we
will
be able to gain market acceptance in Germany, France or the UK. It is also
possible that in certain circumstances we will be unable to provide content
requested by Apple, in which case Apple may elect to attempt to source that
content on its own.
We
may not be able to license or produce sufficiently compelling audio content
to
attract and retain customers and grow our revenue.
Our
future success depends upon our ability to accumulate and deliver premium spoken
audio content over the Internet. If we are unable to obtain licenses from the
creators and publishers of content, including foreign language content, to
have
that content available on our Web site on terms acceptable to us, or if a
significant number of content providers terminate their agreements with us,
we
would have less content available for our customers, which would limit our
revenue growth and materially adversely affect our financial
performance. Although we currently collaborate with the publishers of
periodicals and other branded print materials to convert their written material
into original spoken audio content, the majority of our content originates
from
producers of audiobooks, radio broadcasts, and other forms of spoken audio
content. We are also seeking to increase the availability of foreign
language content on
www.audible.de
and
www.audible.fr
as well as
international content for these and
www.audible.co.uk
. Although many of
our agreements with content providers are for terms of one to five years, our
content providers may choose not to renew their agreements with us or may
terminate their agreements early if we do not fulfill our contractual
obligations. We cannot be certain that our content providers will
enter into new agreements with us on the same or similar terms as those
currently in effect, or that additional content providers will enter into
agreements on terms acceptable to us.
If
manufacturers of electronic devices do not manufacture, make available, or
sell
a sufficient number of products suitable for our service, our revenue may not
grow.
If
manufacturers of electronic devices do not manufacture, make available, or
sell
a sufficient number of players promoted as AudibleReady, or if these players
do
not achieve sufficient market acceptance, we will not be able to grow revenue,
and our business will be materially adversely affected. Manufacturers
of electronic devices have experienced delays in their delivery schedule of
their digital players due to parts shortages and other
factors. Although the content we sell can be played on personal
computers, we believe that a key to our future success is the ability to
playback this content on handheld electronic devices that have digital audio
capabilities. We depend in large measure on manufacturers, such as
Apple, Creative Labs, SanDisk and Palm to develop and sell their own products
and promote them as AudibleReady.
We
must establish, maintain and strengthen our brand names, trademarks and service
marks in order to acquire customers and generate
revenue.
If
we
fail to promote and maintain our brand names, our business, operating results,
and financial condition could be materially adversely affected. We
believe that building awareness of the “Audible,” “Audible.com” and
“AudibleReady” brand names is critical to achieving widespread acceptance of our
service by customers, content providers, device manufacturers, and marketing
and
distribution companies with which we have business relationships. To
promote our brands, we will need to increase our marketing expenditures and
continue to register, maintain, and enforce our registrations and other rights
in these marks in the markets where we do business and plan to
expand.
Increasing
availability of digital audio technologies may increase competition and reduce
our revenue, market share and profitability.
If
we do
not continue to enhance our service and its capabilities and develop or adapt
to
new technologies, we will not be able to compete with new and existing
distributors of spoken audio content. As a result, we may lose market
share and our business would be materially adversely affected. The
market for the Audible service is rapidly evolving and intensely
competitive. We expect competition to intensify as advances in and
standardization of digital audio distribution, download, security, management,
and playback technologies reduce the cost of starting a digital audio delivery
system or a service that gathers audio content. To remain
competitive, we must continue to license or develop technology internally that
will enhance the features of the Audible service, our software that manages
the
downloading and playback of audio content, our ability to compress audio files
for downloading and storage, and our security and playback
technologies. Increased competition is likely to result in price
reductions, reduced revenues, higher customer cancellation rates, higher content
licensing costs, higher marketing costs and loss of market share, any of which
could materially adversely affect our financial performance.
Our
industry is highly competitive and we cannot assure you that we will be able
to
compete effectively.
We
face
competition in all aspects of our business and we cannot assure you that we
will
be able to compete effectively. We compete for consumers of audio
content with other Internet-based audio distributors and distributors of audio
on cassette tape or compact disc. We compete with others for
relationships with manufacturers of electronic devices with audio playback
capabilities. The business of providing content over the Internet is
experiencing rapid growth and is characterized by rapid technological changes,
changes in consumer habits and preferences, and new and established companies
entering the field. We compete with (1) traditional and online
retail stores, catalogs, clubs, and libraries that sell, rent, or loan
audiobooks on cassette tape or compact disc, such as Audio Book Club, Borders,
Barnes & Noble and Amazon.com, (2) Web sites, including iTunes, that
offer podcasts and streaming access to spoken audio content, (3) other
companies offering services similar to ours, such as eMusic, LearningOutLoud,
Simply Audiobooks, soundsgood.com and spokennetwork.com and (4) online
companies such as Google, America Online, Yahoo! and Microsoft Network, with
the
potential to offer spoken audio content. Many of these companies have
financial, technological, promotional, and other resources that are much greater
than those available to us and could use or adapt their current technology,
or
could purchase technology, to provide a service directly competitive with the
Audible service.
Capacity
constraints and failures, delays, or overloads could interrupt our service
and
reduce the attractiveness of our service to existing or potential
customers.
Any
capacity constraints or sustained failure or delay in using our Web site could
reduce the attractiveness of the Audible service to consumers, which would
materially adversely affect our financial performance. Our success
depends on our ability to electronically, efficiently and with few interruptions
or delays distribute spoken audio content through our Web site to a large number
of customers. Accordingly, the performance, reliability and
availability of our Web site, our transaction processing systems and our network
infrastructure are critical to our operating results. We have experienced
periodic systems interruptions including planned system maintenance, hardware
and software failures triggered by high traffic levels and network failure
in
the Internet and our Internet service providers. We believe the
complexities of our software and hardware mean that periodic interruptions
to
our service are likely to continue. A significant increase in
visitors to our Web site or simultaneous download requests could strain the
capacity of our Web site, software, hardware and telecommunications systems,
which could lead to slower response times or system failures. These
interruptions may make it difficult to download audio content from our Web
sites
in a timely manner. Moreover, the success and the availability of our services
depends largely in part upon the continued growth and maintenance of the
Internet infrastructure, including but not limited to; architecture, network,
data capacity, protocols and security. Viruses spam and other acts of
intentional malevolence may affect not only the Internet's speed, reliability
and availability but also its continued method of electronic commerce,
information and user engagement. If the Internet proves unstable and cannot
withstand the new threats and increased demands placed upon it, our business,
Web sites and revenues could be adversely affected.
We
could be liable for substantial damages if there is unauthorized duplication
of
the content we sell.
We
believe that we are able to license premium audio content in part because our
service has been designed to reduce the risk of unauthorized duplication and
playback of audio files. If these security measures fail, our content
may be vulnerable to unauthorized duplication playback. If others
duplicate the content we provide without authorization, content providers may
terminate their agreements with us and hold us liable for substantial
damages. Although we maintain general liability insurance and
insurance for errors or omissions, we cannot assure you that the amount of
coverage will be adequate to compensate us for these losses. Security
breaches might also discourage other content providers from entering into
agreements with us. We may be required to expend substantial money
and other resources to protect against the threat of security breaches or to
alleviate problems caused by these breaches.
We
do not have a comprehensive disaster recovery plan and we have limited back-up
systems, and a disaster could severely damage our operations and could result
in
loss of customers.
If
our
computer systems are damaged or interrupted by a disaster for an extended period
of time, our business, results of operations, and financial condition would
be
materially adversely affected. We do not have a comprehensive
disaster recovery plan in effect and do not have fully redundant systems for
the
Audible service at an alternate site. Our operations depend upon our
ability to maintain and protect our computer systems - all of which are located
in our headquarters and at a third party offsite hosting
facility. Although we maintain insurance against general business
interruptions, we cannot assure you that the amount of coverage will be adequate
to compensate us for our losses.
Problems
associated with the Internet could discourage use of Internet-based services
like ours and adversely affect our business.
If
the
Internet develops more slowly than we expect as a commercial medium, our
business may also grow more slowly than we anticipate, if at all. Our
success will depend in large part on the continued increase in the number of
consumers who use of the Internet. There are critical issues
concerning the commercial use of the Internet which we expect to affect the
development of the market for the Audible service, including:
|
·
|
Secure
transmission of customer credit card numbers and other confidential
information.
|
|
·
|
Reliability
and availability of Internet service
providers.
|
|
·
|
Cost
of access to the Internet.
|
|
·
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Availability
of sufficient network capacity.
|
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·
|
Ability
to download audio content through computer security measures employed
by
businesses.
|
The
loss of key employees could jeopardize our growth
prospects.
The
loss
of the services of any of our executive officers or other key employees could
materially adversely affect our business. Our future success depends
on the continued service and performance of our senior management and other
key
personnel, particularly Donald R. Katz, our Chairman and CEO. We have
employment agreements with all of our executive officers. We maintain
a $2.5 million key-man life insurance policy on Mr. Katz.
Our
inability to hire new employees may hurt our growth
prospects.
The
failure to hire new personnel could damage our ability to grow and expand our
business. Our future success depends on our ability to attract, hire,
and retain highly skilled financial, technical, managerial, editorial,
marketing, and customer service personnel, and competition for these individuals
is intense.
Our
new facility in Newark may not lead to an increase in operational efficiencies
or employee performance.
We
recently relocated our headquarters approximately 17 miles to a new facility
in
downtown Newark, New Jersey. The facility provides us more space, better
studios, better access to telecommunications and mass transportation facilities
and is closer to New York City. Nevertheless, the relocation of a facility
may
lead to employee turnover, disruption of certain supplier relationships and
a
slowdown in responsiveness to customer contacts. This may lead to a reduction
in
service levels which could adversely affect our financial
performance.
Our
common stock has been relatively thinly traded and we cannot predict the extent
to which a trading market will develop, which may adversely affect our share
price.
Our
common stock currently trades on the NASDAQ Global Market. Our common
stock is thinly traded compared to larger more widely known companies in our
industry. In addition, there is a significant short interest in our common
stock. Thinly traded or common stock with a significant short interest can
be
more volatile than common stock trading in an active public
market. We cannot predict the extent to which an active public market
for the common stock will develop or be sustained in the future.
We
may not be able to protect our intellectual property, which could jeopardize
our
competitive position.
If
we
fail to protect our intellectual property, we may be exposed to expensive
litigation or risk jeopardizing our competitive position. The steps
we have taken may be inadequate to protect our technology and other intellectual
property. Our competitors may learn or discover our trade secrets or
may independently develop technologies that are substantially equivalent or
superior to ours. We rely on a combination of patents, licenses,
confidentiality agreements, and other contracts to establish and protect our
technology and other intellectual property rights. We also rely on
unpatented trade secrets and know-how to maintain our competitive
position. We may have to litigate to enforce our intellectual
property rights, to protect our trade secrets, or to determine the validity
and
scope of the proprietary rights of others. This litigation could
result in substantial costs and the diversion of our management and technical
resources.
Other
companies may claim that we infringe their copyrights or patents, which could
subject us to substantial damages.
If
the
Audible service violates the proprietary rights of others, we may be required
to
redesign our software, and re-encode the Audible content, or seek to obtain
licenses from others to continue offering the Audible service without
substantial redesign and such efforts may not be
successful. Furthermore, technology development is inherently
uncertain in a rapidly evolving technological environment in which there may
be
numerous patent applications pending, many of which are confidential when filed
with regard to similar technologies. Any claim of infringement could
cause us to incur substantial costs defending against the claim, even if the
claim is invalid, and could distract our management from our
business. A party making a claim could secure a judgment that
requires us to pay substantial damages. A judgment could also include
an injunction or other court order that could prevent us from offering the
Audible service. Any of these events could have a material adverse
effect on our business, operating results and financial condition.
We
could be sued for content that we distribute over the Internet, which could
subject us to substantial damages.
A
lawsuit
based on the content we distribute could be expensive and damaging to our
business. Our service involves delivering spoken audio content to our
customers. As a distributor and publisher of content over the
Internet, we may be liable for copyright, trademark infringement, unlawful
duplication, negligence, defamation, indecency, and other claims based on the
nature and content of the materials that we publish or distribute to
customers. Although we generally require that our content providers
indemnify us for liability based on their content and we carry general liability
and errors and omission insurance, the indemnity and the insurance may not
cover
claims of these types or may not be adequate to protect us from the full amount
of the liability. If we are found liable in excess of the amount of
indemnity or of our insurance coverage, we could be liable for substantial
damages and our reputation and business may suffer.
Future
government regulations may increase our cost of doing business on the Internet,
which could adversely affect our cost structure.
Laws
and
regulations applicable to the Internet, covering issues such as user privacy,
pricing and copyrights are becoming more prevalent. The adoption or
modification of laws or regulations relating to the Internet could force us
to
modify the Audible service in ways that could adversely affect our
business.
We
may become subject to sales and other taxes for direct sales over the Internet,
which could affect our revenue growth.
Increased
tax burden could make our service too expensive to be competitive and our
revenue may decline.
We
do not
currently collect sales or other similar U.S. consumer taxes for the sale of
downloadable content to residents of states other than New Jersey. If we
establish physical facilities in other states, our sales to residents of such
states may be subject to sales tax. In addition, one or more states may
require that we collect sales taxes when engaging in online commerce with
consumers located in those states, even if we have no physical in-state
presence. As of June 2007, value added tax is collected in connection
with purchases made by EU residents on
www.audible.com
, as well as
purchases made on our U.K. website, and on audible.fr and audible.de.
Other foreign jurisdictions may in the future require that companies located
in
the United States collect sales or similar taxes when engaging in online
commerce with residents of those jurisdictions.
If
one or
more states or other foreign jurisdictions successfully assert that we should
collect sales or other taxes on the sale of our content to consumers located
in
those states or foreign jurisdictions, which currently range from 5% to 25%
of
the selling price of our content, the resulting increased cost to consumers
could discourage them from purchasing our content. This could have a
material adverse effect on our revenue. In addition, continuous changes in
foreign tax regulations require us to ensure we are in compliance with these
obligations as they arise. It is expensive to maintain the requisite
knowledge of taxing activities in the over 170 countries where we have
customers. Failure to collect taxes from non-resident U.S. consumers on a
timely basis may necessitate that we pay these taxes from our revenues without
contribution from the consumers who made the taxable purchase.
A
variety of risks could adversely affect our international
activities.
The
operation of our international activities will require significant management
attention as well as financial resources to operate in accordance with local
laws and customs. If international content publishers fail to provide
us with sufficient content, we may not be able to attract customers with the
broad selection of local content required to be successful. In
addition, the concept of digital spoken audio is not as well developed in
Germany, France, and the UK as it is in the United States. These
factors may have a material adverse affect on our financial
performance.
Our
charter and bylaws could discourage an acquisition of our company that would
benefit our stockholders.
The
following provisions could have the effect of delaying, deterring, or preventing
a change in the control of our company, could deprive our stockholders of an
opportunity to receive a premium for their common stock as part of a sale of
our
company, or may otherwise discourage a potential acquirer from attempting to
obtain control of us, which in turn could materially adversely affect the market
price of our common stock:
|
·
|
Our
Board of Directors, without stockholder approval, may issue preferred
stock on terms that they determine. This preferred stock could
be issued quickly with terms that delay or prevent the change in
control
of our company or make removal of management more
difficult. Also, the issuance of preferred stock may cause the
market price of our common stock to
decrease.
|
|
·
|
Our
Board of Directors is “staggered” so that only a portion of its members
are elected each year.
|
|
·
|
Only
our Board of Directors, our Chairman of the Board, our President
or
stockholders holding a majority of our stock can call special stockholder
meetings.
|
|
·
|
Special
procedures must be followed in order for stockholders to present
proposals
at stockholder meetings.
|
FORWARD-LOOKING
STATEMENTS
This
prospectus contains or incorporates by reference “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of
1995. We use words such as “will likely result,” “are expected to,”
“will continue,” “is anticipated,” “estimated,” “intends,” “plans,”
“projections” and other similar expressions to identify some forward-looking
statements, but not all forward-looking statements include these
words. All of our forward-looking statements involve estimates and
uncertainties that could cause actual results to differ materially from those
expressed in the forward-looking statements. Accordingly, any such
statements are qualified in their entirety by reference to the key factors
described under the caption “Risk Factors” and elsewhere in any accompanying
prospectus supplement.
We
caution that the factors described in this prospectus and in any accompanying
prospectus supplement could cause actual results to differ materially from
those
expressed in any of our forward-looking statements and that investors should
not
place undue reliance on those statements. Further, any
forward-looking statement speaks only as of the date on which it is made, and
except as required by law, we undertake no obligation to update any
forward-looking statement contained or incorporated by reference in this
prospectus to reflect events or circumstances after the date on which it is
made
or to reflect the occurrence of anticipated or unanticipated events or
circumstances. New factors that could cause our business not to
develop as we expect emerge from time to time, and it is not possible for us
to
predict all of them. Further, we cannot assess the impact of each
currently known or new factor on our results of operations or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
USE
OF PROCEEDS
All
proceeds from the disposition of the common shares covered by this prospectus
will go to the selling stockholders. We will not receive any proceeds from
the
disposition of the common stock by the selling stockholders. See “Plan of
Distribution”.
SELLING
STOCKHOLDERS
The
following table sets forth certain information regarding the beneficial
ownership of our outstanding shares of common stock as of November 30, 2007
by
the selling stockholders, and as adjusted to reflect the sale of the shares
in
this offering. The table below has been prepared based upon the
information furnished to us by the selling stockholders. The selling
stockholders identified below may have sold, transferred or otherwise disposed
of some or all of their shares since the date on which the information in the
following table is presented in transactions exempt from or not subject to
the
registration requirements of the Securities Act. Information concerning the
selling stockholders may change from time to time and, if necessary, we will
amend or supplement this prospectus accordingly. The selling stockholders may
be
deemed to be an “underwriter” as defined in the Securities Act. Any profits
realized by the selling stockholders may be deemed to be underwriting
commissions.
Please
read the section entitled “Plan of Distribution” in this
prospectus.
The
selling stockholders acquired the common stock to which this prospectus relates
in connection with private equity offerings completed in August 2003 to
“accredited investors” as defined by Rule 501(a) under the Securities Act
pursuant to an exemption from registration provided in Regulation D, Rule 506
under Section 4(2) of the Securities Act, and to “qualified institutional
buyers,” as defined by Rule 144A under the Securities Act. The selling
stockholders may from time to time offer and sell under this prospectus any
or
all of the shares listed opposite each of their names below. We are required,
under a registration rights agreement, to register for resale the shares of
our
common stock described in the table below.
We
have
been advised that none of the selling stockholders are broker-dealers or
affiliates of broker-dealers. We have been advised that the selling stockholders
acquired our common stock in the ordinary course of business, not for resale,
and that the selling stockholders did not have, at the time of purchase, any
agreements or understandings, directly or indirectly, with any person to
distribute the common stock.
The
following table sets forth the name of each of the selling stockholders, the
nature of any position, office, or other material relationship, if any, which
the selling stockholders have had within the past three years with us or with
any of our predecessors or affiliates, and the number of shares of our common
stock beneficially owned by each such stockholder before this offering. The
number of shares owned are those beneficially owned, as determined under the
rules of the SEC, and such information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules, beneficial
ownership includes any shares of common stock as to which a person has sole
or
shared voting power or investment power and any shares of common stock which
the
person has the right to acquire within 60 days through the exercise of any
option, warrant or right, through conversion of any security or pursuant to
the
automatic termination of a power of attorney or revocation of a trust,
discretionary account or similar arrangement.
Unless
otherwise indicated, the selling stockholders listed in the table below have
sole voting and investment power with respect to all shares beneficially owned.
The information regarding shares beneficially owned after the offering assumes
the sale of all shares offered by the selling stockholders. Beneficial ownership
is calculated based on 24,447,899
shares
of our common stock outstanding as of November 30, 2007.
|
|
|
Shares
Beneficially Owned Prior to the Offering
|
|
|
Shares
Covered by this Prospectus
|
|
|
Shares
Beneficially Owned After the Offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Apax
Excelsior VI, L.P. (3)
|
|
|
5,039,274
|
(4)
|
|
|
20.4
|
%
|
|
|
5,039,274
|
(4)
|
|
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-
|
|
|
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*
|
|
|
Apax
Excelsior VI-A, C.V. (3)
|
|
|
411,635
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(5)
|
|
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1.7
|
|
|
|
411,635
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(5)
|
|
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-
|
|
|
|
*
|
|
|
Apax
Excelsior VI-B, C.V. (3)
|
|
|
274,223
|
(6)
|
|
|
1.1
|
|
|
|
274,223
|
(6)
|
|
|
-
|
|
|
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*
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|
|
Patricof
Private Investment Club III, L.P. (3)
|
|
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172,203
|
(7)
|
|
|
*
|
|
|
|
172,203
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(7)
|
|
|
-
|
|
|
|
*
|
|
* Less
than 1%
(1)
Oren
Zeev, who has served as one of our directors since August 2003, served as a
partner at Apax Partners, L.P. from January 1999 to July 2007. Mr. Zeev is
also
a limited partner of Apax Excelsior VI Partners. Mr. Zeev exercises no voting,
dispositive or investment control over the securities held by the selling
stockholders or any of our other securities and disclaims beneficial ownership
of such securities.
(2)
Alan
J. Patricof, who served as one of our directors from August 2003 until his
resignation in June 2007, was chairman and co-founder of Apax Partners, L.P.
through March 2006. Mr. Patricof is also a limited partner of Apax Excelsior
VI
Partners. Mr. Patricof exercises no voting, dispositive or investment control
over the securities held by the selling stockholders or any of our other
securities and disclaims beneficial ownership of such securities.
(3)
Apax
Managers, Inc. is the general partner of certain entities, including Apex
Excelsior VI Partners, L.P. Apex Excelsior VI Partners, L.P. is the general
partner of certain private equity funds, including Apax Excelsior VI, L.P.,
Apax
Excelsior VI-A; C.V., Apax Excelsior VI-B, C. V. and Patricof Private Investment
Club III. L.P. Apex Managers, Inc. has the sole power to vote or direct the
vote
and to dispose or to direct the disposition of all shares of common stock deemed
beneficially owned by it.
(4)
Includes 284,833 shares of common stock issuable upon exercise of
warrants.
(5)
Includes 23,267 shares of common stock issuable upon exercise of
warrants.
(6)
Includes 15,500 shares of common stock issuable upon exercise of
warrants.
(7)
Includes 9,733 shares of common stock issuable upon exercise of
warrants.
PLAN
OF
DISTRIBUTION
The
securities may be sold from time to time in one or more
transactions,
|
·
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directly
to purchasers,
|
|
·
|
to
or through underwriters or dealers,
|
|
·
|
on
any stock exchange, market or trading facility on which the securities
are
traded,
|
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·
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in
private transactions,
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·
|
in
ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers,
or
|
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·
|
through
a combination of these methods, and
|
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·
|
in
any other method permitted pursuant to applicable
law.
|
The
securities may be distributed at,
|
·
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a
fixed price or prices, which may be
changed,
|
|
·
|
market
prices prevailing at the time of
sale,
|
|
·
|
prices
related to the prevailing market prices,
or
|
GENERAL
Underwriters,
dealers, agents and remarketing firms that participate in the distribution
of
the offered securities may be “underwriters” as defined in the Securities Act.
Any discounts or commissions they receive from the selling shareholders and
any
profits they receive on the resale of the offered securities may be treated
as
underwriting discounts and commissions under the Securities Act. We will
identify any underwriters, agents or dealers and describe their commissions,
fees or discounts in the applicable prospectus supplement.
AGENTS
The
selling stockholders may designate agents to sell the securities. The agents
will agree to use their best efforts to solicit purchases for the period of
their appointment. The selling stockholders may also sell securities to one
or
more remarketing firms, acting as principals for their own accounts. These
firms
will remarket the securities upon purchasing them in accordance with a
redemption or repayment pursuant to the terms of the
securities. Securities also may be sold in block trades in which a
broker-dealer will attempt to sell the securities as agent but may position
and
resell a portion of the block as principal to facilitate the
transaction.
UNDERWRITERS
If
underwriters are used in a sale, they will acquire the offered securities for
their own account. The underwriters may resell the securities in one or more
transactions, including negotiated transactions. These sales will be made at
a
fixed public offering price or at varying prices determined at the time of
the
sale. The selling stockholders may offer the securities to the public through
an
underwriting syndicate or through a single underwriter.
Unless
the applicable prospectus supplement states otherwise, the obligations of the
underwriters to purchase the offered securities will be subject to certain
conditions contained in an underwriting agreement that we will enter into with
the underwriters at the time of the sale to them. The underwriters will be
obligated to purchase all of the securities offered if any of the securities
are
purchased, unless the applicable prospectus supplement says otherwise. Any
public offering price and any discounts or concessions allowed, re-allowed
or
paid to dealers may be changed from time to time.
DEALERS
The
selling stockholders may sell the
offered securities to dealers as principals. The dealer may then resell such
securities to the public either at varying prices to be determined by the dealer
for its account or at a fixed offering price agreed to with the selling
stockholders at the time of resale.
Broker-dealers
engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or
discounts from the selling stockholders (or, if any broker-dealer acts as agent
for the purchaser of securities, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions
and discounts to exceed what is customary in the types of transactions
involved. Any profits on the resale of shares of common stock by a
broker-dealer acting as principal might be deemed to be underwriting discounts
or commissions under the Securities Act.
DIRECT
SALES
The
selling stockholders may choose to sell the offered securities directly. In
this
case, no underwriters or agents would be involved.
INSTITUTIONAL
PURCHASERS
The
selling stockholders may authorize agents, dealers or underwriters to solicit
certain institutional investors to purchase offered securities on a delayed
delivery basis pursuant to delayed delivery contracts providing for payment
and
delivery on a specified future date. The applicable prospectus supplement will
provide the details of any such arrangement, including the offering price and
commissions payable on the solicitations.
The
selling stockholders
will enter into such delayed contracts only with institutional purchasers that
they approve. These institutions may include commercial and savings banks,
insurance companies, pension funds, investment companies and educational and
charitable institutions.
OTHER
METHODS OF SALE
The
selling stockholders also may sell securities under Rule 144 under the
Securities Act, if available, rather than under this prospectus. The
selling stockholders are not obligated to, and there is no assurance that the
selling stockholders will, sell all or any of the securities we are
registering. The selling stockholders may transfer, devise or gift
such securities by other means not described in this prospectus.
The
selling stockholders may from time to time pledge or grant a security interest
in some or all of the securities owned by them and, if they default in the
performance of any of their secured obligations, the pledgees or secured parties
may offer and sell the securities from time to time under this prospectus as
it
may be supplemented from time to time, or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act
amending the list of selling stockholders to include the pledgee, transferee
or
other successors in interest as selling stockholders under this
prospectus.
The
selling stockholders also may transfer the securities in other circumstances,
in
which case the transferees, pledgees or other successors in interest will be
the
selling beneficial owners for purposes of this prospectus.
INDEMNIFICATION;
OTHER RELATIONSHIPS
The
selling shareholders may have agreements with agents, underwriters, dealers
and
remarketing firms to indemnify them against certain civil liabilities, including
liabilities under the Securities Act. Agents, underwriters, dealers and
remarketing firms, and their affiliates, may engage in transactions with, or
perform services for, us in the ordinary course of business. This includes
commercial banking and investment banking transactions.
MARKET
MAKING,
STABILIZATION AND OTHER TRANSACTIONS
Any
underwriter may engage in stabilizing transactions, syndicate covering
transactions and penalty bids in accordance with Rule 104 under the Securities
Exchange Act of 1934. Stabilizing transactions involve bids to purchase the
underlying security in the open market for the purpose of pegging, fixing or
maintaining the price of the securities. Syndicate covering transactions involve
purchases of the securities in the open market after the distribution has been
completed in order to cover syndicate short positions.
Penalty
bids permit the underwriters to reclaim a selling concession from a syndicate
member when the securities originally sold by the syndicate member are purchased
in a syndicate covering transaction to cover syndicate short positions.
Stabilizing transactions, syndicate covering transactions and penalty bids
may
cause the price of the securities to be higher than it would be in the absence
of the transactions. The underwriters may, if they commence these transactions,
discontinue them at any time.
LEGAL
MATTERS
The
validity of the issuance of the shares of common stock described herein has
been
passed upon for us by DLA Piper US LLP.
EXPERTS
The
consolidated financial statements of Audible, Inc. and subsidiary as of December
31, 2005 and 2006, and for each of the years in the three-year period ended
December 31, 2006, and management’s assessment of the effectiveness of internal
control over financial reporting as of December 31, 2006, have been incorporated
by reference herein in reliance upon the reports of KPMG LLP, independent
registered public accounting firm, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
KPMG
LLP’s report dated April 2, 2007 on the consolidated financial statements
includes an explanatory paragraph that states the Company changed its method
of
quantifying misstatements effective January 1, 2006 and changed its method
of
accounting for share-based compensation effective January 1, 2006.
KPMG
LLP’s report dated April 2, 2007 on management’s assessment of the effectiveness
of internal control over financial reporting and the effectiveness of internal
control over financial reporting as of December 31, 2006, expresses their
opinion that Audible, Inc. did not maintain effective internal control over
financial reporting as of December 31, 2006, because of the effect of material
weaknesses on the achievement of the objectives of the control criteria and
contains an explanatory paragraph that states that material weaknesses were
identified as follows: ineffective execution of non-routine contracts;
inadequate financial information and communication; ineffective review of
account analyses; and inadequate identification and analysis of international
non-income tax related matters.
INCORPORATION
OF DOCUMENTS BY
REFERENCE
The
SEC
allows us to “incorporate by reference” certain of our publicly filed documents
into this prospectus, which means that we may disclose material information
to
you by referring you to those documents. The information incorporated
by reference is considered to be part of this prospectus and any later
information that we file with the SEC will automatically update and supersede
this information. This prospectus is part of a registration statement
on Form S-3 that we filed with the SEC and does not contain all of the
information set forth in the registration statement.
The
following documents that we previously filed with the SEC are incorporated
by
reference:
|
(1)
|
our
Annual Report on Form 10-K for the fiscal year ended December 31,
2006,
filed on April 2, 2007;
|
|
(2)
|
our
Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2007,
filed on May 9, 2007;
|
|
(3)
|
our
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2007,
filed on August 8, 2007;
|
|
(4)
|
our
Quarterly Report on Form 10-Q for the fiscal quarter ended September
30,
2007, filed on November 9, 2007;
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(5)
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our
definitive proxy statement related to our 2007 annual meeting of
stockholders held on June 20, 2007, filed April 30,
2007;
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(6)
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our
Current Reports on Form 8-K, as
follows:
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8-K
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January
2, 2007
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January
8, 2007
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8-K
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April
11, 2007
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April
12, 2007
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8-K
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July
12, 2007
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July
13, 2007
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8-K
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September
14, 2007
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September
17, 2007
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8-K
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September
14, 2007
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September
20, 2007
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8-K
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October
31, 2007
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November
6, 2007
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(7)
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the
information filed pursuant to Item 5.02 of our Current Report on
Form 8-K
dated July 31, 2007 and filed August 2,
2007.
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(8)
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the
description of our common stock which is contained under the caption
“Description of the Registrant’s Securities to be Registered” in our
registration statement on Form 8-A filed with the SEC on June 28,
1999,
and including any amendment or report filed for the purposes of updating
such description.
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We
also
incorporate by reference all documents we subsequently file pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the initial
filing date of the registration statement of which this prospectus is a part
and
prior to the termination of the offering. The most recent information that
we
file with the SEC automatically updates and supersedes older information. The
information contained in any such filing will be deemed to be a part of this
prospectus, commencing on the date on which the document is filed.
We
also
note that we have furnished to the Securities and Exchange Commission certain
information set forth in the following Current Reports on Form 8-K:
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8-K
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February
27, 2007
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February
28, 2007
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8-K
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May
3, 2007
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May
3, 2007
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8-K
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July
31, 2007
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August
2, 2007
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8-K
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November
1, 2007
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November
1, 2007
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As
indicated in the foregoing reports, the information in these Form 8-Ks and
the
Exhibits attached thereto which was furnished pursuant to Item 2.02 of Form
8-K was not deemed “filed” for purposes of Section 18 of the Securities Act
of 1934, as amended, nor is such information deemed incorporated by reference
in
this registration statement on Form S-3.
Our
Web
site is
http://www.audible.com
. Our Web site links to our
filings available on the SEC Web site. We will also provide any
person to whom a copy of this prospectus is delivered, on written or oral
request, a copy of any or all of the documents incorporated by reference, other
than exhibits to those documents unless specifically incorporated by reference,
at no cost to such person. You should direct any requests for
documents to Audible, Inc., 1 Washington Park, 16
th
floor,
Newark, New
Jersey 07102, Attention: Investor Relations.
WHERE
YOU CAN FIND MORE
INFORMATION
We
file
annual, quarterly and special reports, proxy statements and other information
with the Securities and Exchange Commission. Copies of these reports,
proxy statements, and other information may be read and copied at the SEC’s
Public Reference Room at 100 F Street, N.E., Washington, D.C.
20549. You may request copies of these documents by writing to the
SEC and paying a fee for the copying costs. You may also call the SEC
at 1-800-SEC-0330 for further information on the operation of the Public
Reference Room. Our SEC filings are also available to the public from
the SEC’s Web site at
http://www.sec.gov
.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution
The
following table sets forth the various expenses payable by us in connection
with
the sale and distribution of the securities offered in this
offering. All of the amounts shown are estimated except the
Securities and Exchange Commission registration fee. We will pay all expenses
of
registration incurred in connection with the offering.
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Securities
and Exchange Commission registration fee
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$
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2,059
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Legal
fees and expenses
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5,000
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Accounting
fees and expenses
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10,000
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Total
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$
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17,059
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Item
15. Indemnification of Officers and Directors
Section
145 of the Delaware General Corporation Law (“Section 145”) permits
indemnification of directors, officers, agents and controlling persons of a
corporation under certain conditions and subject to certain
limitations. Our Bylaws include provisions to require us to indemnify
our directors and officers to the fullest extent permitted by Section 145,
including circumstances in which indemnification is otherwise
discretionary. Section 145 also empowers us to purchase and maintain
insurance that protects our officers, directors, employees and agents against
any liabilities incurred in connection with their service in such
positions.
Item
16. Exhibits
Incorporated
by reference to the Exhibit Index attached hereto.
Item
17. Undertakings
The
undersigned Registrant hereby undertakes:
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1.
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To
file, during any period in which offers or sales are being made,
a
post-effective amendment to this registration
statement:
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i.
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To
include any prospectus required by Section 10(a)(3) of the Securities
Act
of 1933;
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ii.
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To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent
a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease
in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant
to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate offering
price
set forth in the ‘‘Calculation of Registration Fee’’ table in the
effective registration statement.
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iii.
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To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement.
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Provided,
however, that paragraphs (1)(i), (1)(ii) and (i)(iii) above do not apply if
the
registration statement is on Form S-3 or Form F-3 and the information required
to be included in a post-effective amendment by those paragraphs is contained
in
reports filed with or furnished to the Commission by the registrant pursuant
to
section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement, or is contained in a form of
prospectus filed pursuant to Rule 424(b) that is part of the registration
statement.
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That,
for the purpose of determining any liability under the Securities
Act of
1933, each such post-effective amendment shall be deemed to be a
new
registration statement relating to the securities offered therein,
and the
offering of such securities at that time shall be deemed to be the
initial
bona fide offering thereof.
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3.
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To
remove from registration by means of a post-effective amendment any
of the
securities being registered which remain unsold at the termination
of the
offering.
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4.
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If
the registrant is subject to Rule 430C, each prospectus filed pursuant
to
Rule 424(b) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other
than
prospectuses filed in reliance on Rule 430A, shall be deemed to be
part of
and included in the registration statement as of the date it is first
used
after effectiveness. Provided, however, that no statement made in
a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated
by
reference into the registration statement or prospectus that is part
of
the registration statement will, as to a purchaser with a time of
contract
of sale prior to such first use, supersede or modify any statement
that
was made in the registration statement or prospectus that was part
of the
registration statement or made in any such document immediately prior
to
such date of first use.
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The
undersigned Registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act of 1933, each filing of the Registrant’s
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers and controlling persons of the Registrant,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies
that
it has reasonable grounds to believe that it meets all of the requirements
for
filing on Form S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the city of
Newark, State of New Jersey, on December 13, 2007.
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AUDIBLE,
INC.
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By:
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/s/ Donald
R. Katz
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Donald
R. Katz
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Chairman
and Chief Executive Officer
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Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the
dates indicated.
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Signature
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Title
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Date
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/s/
Donald R. Katz
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Donald
R. Katz
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Chief
Executive Officer and Chairman
(Principal
Executive Officer)
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December
13, 2007
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/s/
William H. Mitchell
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William
H. Mitchell
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Chief
Financial Officer
(Principal
Financial and Accounting Officer)
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December
13, 2007
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*
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Richard
Sarnoff
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Director
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December 13,
2007
|
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*
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Gary
L. Ginsberg
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Director
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December
13, 2007
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*
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Johannes
Mohn
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Director
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December 13,
2007
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*
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William
Washecka
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Director
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December
13, 2007
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*
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Oren
Zeev
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Director
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December
13, 2007
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*
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James
P. Bankoff
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Director
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December
13, 2007
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*
By:
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/s/Donald
R. Katz
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Donald
R. Katz
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Attorney-in-fact
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Exhibits
The
following exhibits are filed or incorporated by reference, as stated
below:
|
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5.1
|
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Opinion
of DLA Piper US LLP regarding legality. (1)
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Consent
of KPMG LLP, independent registered public accounting
firm
|
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23.2
|
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Consent
of DLA Piper US LLP (included in Exhibit 5.1)
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24.1
|
|
Powers
of Attorney (1).
|
(1)
Incorporated by reference to the Registration Statement on Form S-3 filed
December 6, 2007.
Audible (NASDAQ:ADBL)
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