PROSPECTUS Filed pursuant to Rule 424(b)(1)
Registration No. 333-111060
2,800,000 SHARES
[THE KNOT LOGO]
COMMON STOCK
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This prospectus relates to the resale of 2,800,000 shares of common stock of
The Knot, Inc. that may be offered and sold from time to time by the selling
stockholders named in this prospectus. We will not receive any proceeds from the
sale of the shares of common stock covered by this prospectus.
The selling stockholders may offer their shares through public or private
transactions at prevailing market prices or at privately negotiated prices. The
selling stockholders may make sales directly to purchasers or through brokers,
agents, dealers or underwriters or through a combination of these methods. The
selling stockholders will bear all commissions and other compensation paid to
brokers in connection with the sale of their shares.
Our common stock is quoted on the OTC Bulletin Board under the symbol
'KNOT.OB'. On December 31, 2003, the closing sale price of our common stock was
$4.00 per share.
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INVESTING IN OUR COMMON STOCK INVOLVES RISKS.
SEE 'RISK FACTORS' BEGINNING ON PAGE 3.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS JANUARY 9, 2004.
TABLE OF CONTENTS
PAGE
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PROSPECTUS SUMMARY.......................................... 1
RISK FACTORS................................................ 3
FORWARD-LOOKING STATEMENTS.................................. 14
USE OF PROCEEDS............................................. 14
DILUTION.................................................... 14
SELLING STOCKHOLDERS........................................ 14
PLAN OF DISTRIBUTION........................................ 16
LEGAL MATTERS............................................... 17
EXPERTS..................................................... 17
WHERE YOU CAN FIND MORE INFORMATION......................... 18
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You should rely only on the information contained in this prospectus. We
have not, and the selling stockholders have not, authorized anyone to provide
you with information different from that contained in this prospectus. The
selling stockholders are not making an offer to sell or seeking offers to buy
these securities in any jurisdiction where the offer or sale is not permitted.
The information contained in this prospectus is complete and accurate as of the
date of this prospectus, but the information may have changed since that date.
Unless the context otherwise indicates, references in this prospectus to the
terms 'The Knot,' 'we,' 'our' and 'us' refer to The Knot, Inc. and The Knot's
subsidiaries. This prospectus contains other product names, trade names, service
marks and trade marks of The Knot and of other organizations.
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PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this
prospectus or incorporated by reference in this prospectus. This summary does
not contain all of the information that you should consider before investing in
our common stock. You should read carefully the entire prospectus, including
'Risk Factors' and the other information contained or incorporated by reference
in this prospectus, before making an investment decision.
OUR BUSINESS
The Knot is the leading wedding resource providing products and services to
couples planning their weddings and future lives together. Weddings are major
milestone events, and consumers tend to allocate significant budgets to their
weddings and related purchases. According to an independent research report, the
domestic wedding market generates approximately $70 billion in retail sales
annually.
We offer both online and offline services to the wedding market.
Our online sites provide future brides and grooms with a searchable database
that draws on thousands of articles on wedding planning and numerous interactive
wedding planning tools including a gown search, wedding checklists, a budgeter,
a guest list manager and personal wedding Web pages. We offer access to the
local wedding market through 60 online city guides that host profiles for
thousands of local vendors, such as reception halls, bands, florists and
caterers. Our online sites generate a high degree of member involvement through
chats, message boards and personalized interactive services. We also provide
consumers a convenient place to purchase a broad range of wedding-related items
through our online gift registry or our online shops which offer a comprehensive
array of wedding supplies.
Our subsidiary, Weddingpages, Inc. publishes regional wedding magazines in
18 markets in the United States. These Knot Weddingpages magazines feature the
look and feel of The Knot brand and combine the editorial expertise of The Knot
with up-to-date, region-specific information. Also, we publish The Knot
Magazine, a comprehensive, searchable shopping guide providing directories of
wedding gowns, fine jewelry, china, home products, invitations, wedding supplies
and honeymoon packages. We sell The Knot Magazine through newsstands and
bookstores across the nation and on our website.
Through integrated media programs, we provide national and local advertisers
with targeted access to couples actively seeking information and advice and
making meaningful spending decisions relating to all aspects of their weddings.
National online advertisers can sponsor entire editorial areas or special
content and participate in newsletter and direct e-mail programs. Local vendors
can purchase profiles or badges within their appropriate online city guide and
reach their market areas through targeted local emails. National and local
advertisers can supplement their online programs with offline print advertising
in our national or local magazines. These programs offer advertisers and
sponsors an opportunity to establish brand loyalty with first-time purchasers of
many products and services.
RECENT DEVELOPMENT
On September 19, 2003, WeddingChannel.com, Inc. ('WeddingChannel') filed a
complaint against The Knot in the United States District Court for the Southern
District of New York. The complaint alleges that The Knot has violated U.S.
Patent 6,618,753 ('Systems and Methods for Registering Gift Registries and for
Purchasing Gifts'), and further alleges that certain actions of The Knot give
rise to various federal statute, state statute and common law causes of actions.
WeddingChannel is seeking, among other things, unspecified damages and
injunctive relief. If The Knot is found to have willfully infringed the
patent-in-suit, enhanced damages are awardable. This complaint was served on The
Knot on September 22, 2003.
Based on information currently available, The Knot believes that the claims
are without merit and is vigorously defending itself against all claims. On
October 14, 2003, The Knot filed an
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answer and counterclaims against WeddingChannel. The Knot's answer raises
various defenses to the counts alleged by WeddingChannel. Additionally, The Knot
has brought counterclaims including a request that the court declare the
patent-in-suit is invalid, unenforceable and not infringed. The Knot's
counterclaims further allege that certain actions taken by, or on behalf of
WeddingChannel give rise to various federal statutory claims, state statutory
claims and common law causes of action.
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Our principal executive offices are located at 462 Broadway, 6th Floor, New
York, New York, 10013. Our telephone number is (212) 219-8555. The address of
our Web site is www.theknot.com. We are also located on America Online (keywords
'Knot' and 'weddings'). Our Web site address and America Online keywords are
provided for information purposes only and the information contained on our
website or on America Online does not constitute part of this prospectus.
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RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
consider carefully the risks described below, together with the other
information contained in this prospectus, before deciding to invest in our
common stock. These risks could have a material and adverse impact on our
business, results of operations and financial condition. If that were to happen,
the trading price of our common stock could decline, and you could lose all or
part of your investment.
RISKS RELATED TO OUR BUSINESS
WE HAVE AN UNPROVEN BUSINESS MODEL, AND IT IS UNCERTAIN WHETHER ONLINE
WEDDING-RELATED SITES CAN GENERATE SUFFICIENT REVENUES TO SURVIVE.
Our model for conducting business and generating revenues is unproven. Our
business model depends in large part on our ability to generate revenue streams
from multiple sources through our online sites, including online sponsorship and
advertising fees from third parties and online sales of wedding gifts and
supplies.
It is uncertain whether wedding-related online sites that rely on attracting
sponsors and advertisers, as well as people to purchase wedding gifts and
supplies, can generate sufficient revenues to survive. For our business to be
successful, we must provide users with an acceptable blend of products,
information, services and community offerings that will attract wedding
consumers to our online sites frequently. In addition, we must provide sponsors,
advertisers and vendors the opportunity to reach these wedding consumers. We
provide our services to users without charge, and we may not be able to generate
sufficient revenues to pay for these services.
Moreover, we face many of the risks and difficulties frequently encountered
in new and rapidly evolving markets, including the online advertising and
e-commerce markets. These risks include our ability to:
o increase the audience on our sites;
o broaden awareness of our brand;
o strengthen user-loyalty;
o offer compelling content;
o maintain our leadership in generating traffic;
o maintain our current, and develop new, strategic
relationships;
o attract a large number of advertisers from a variety of
industries;
o respond effectively to competitive pressures;
o continue to develop and upgrade our technology; and
o attract, integrate, retain and motivate qualified personnel.
These risks could negatively impact our financial condition if left
unaddressed. Accordingly, we are not certain that our business model will be
successful or that we can sustain revenue growth or profitability.
WE HAVE A HISTORY OF SIGNIFICANT LOSSES SINCE OUR INCEPTION AND MAY INCUR
SIGNIFICANT LOSSES IN THE FUTURE.
We have only recently achieved profitability in the second and third
quarters of this year, and have incurred significant accumulated losses. As of
September 30, 2003, our accumulated deficit was $47.7 million. We expect to
continue to incur significant operating expenses and, as a result, we will need
to generate significant revenues to maintain profitability. We cannot assure you
that we can sustain or increase profitability on a quarterly or annual basis in
the future. Failure to maintain profitability may materially and adversely
affect our business, results of operations and financial condition and the
market price of our common stock.
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WE LACK SIGNIFICANT REVENUES AND MAY BE UNABLE TO ADJUST SPENDING QUICKLY
ENOUGH TO OFFSET ANY UNEXPECTED REVENUE SHORTFALL.
Our revenues for the foreseeable future will remain dependent on online user
traffic levels, advertising activity both online and offline and the expansion
of our e-commerce activity. In addition, we plan to expand and develop content
and to continue to upgrade and enhance our technology and infrastructure. We
incur a significant percentage of our expenses, such as employee compensation,
prior to generating revenues associated with those expenses. Moreover, our
expense levels are based, in part, on our expectation of future revenues. We may
be unable to adjust spending quickly enough to offset any unexpected revenue
shortfall. If we have a shortfall in revenues or if operating expenses exceed
our expectations or cannot be adjusted accordingly, then our results of
operations would be materially and adversely affected.
IF SALES TO SPONSORS OR ADVERTISERS FORECASTED IN A PARTICULAR PERIOD ARE
DELAYED OR DO NOT OTHERWISE OCCUR, OUR RESULTS OF OPERATIONS FOR A PARTICULAR
PERIOD WOULD BE MATERIALLY AND ADVERSELY AFFECTED.
The time between the date of initial contact with a potential sponsor or
advertiser and the execution of a contract with the sponsor or advertiser is
often lengthy, typically ranging from six weeks for smaller agreements and
longer for larger agreements, and is subject to delays over which we have little
or no control, including:
o the occurrence of extraordinary events, such as the attacks
on September 11, 2001;
o customers' budgetary constraints;
o customers' internal acceptance reviews;
o the success and continued internal support of advertisers'
o and sponsors' own development efforts; and
o the possibility of cancellation or delay of projects by
advertisers or sponsors.
During the sales cycle, we may expend substantial funds and management
resources in advance of generating sponsorship or advertising revenues.
Accordingly, if sales to advertisers or sponsors forecasted in a particular
period are delayed or do not otherwise occur, we would generate less sponsorship
and advertising revenues during that period, and our results of operations may
be adversely affected.
OUR QUARTERLY REVENUES AND OPERATING RESULTS ARE SUBJECT TO SIGNIFICANT
FLUCTUATION, AND THESE FLUCTUATIONS MAY ADVERSELY AFFECT THE TRADING PRICE OF
OUR COMMON STOCK.
Our quarterly revenues and operating results have fluctuated significantly
in the past and are expected to continue to fluctuate significantly in the
future as a result of a variety of factors, many of which are outside our
control. These factors include:
o the level of online usage and traffic on our Web sites;
o seasonal demand for e-commerce;
o the addition or loss of advertisers;
o the advertising budgeting cycles of specific advertisers;
o the regional and national magazines publishing cycle;
o the amount and timing of capital expenditures and other
costs relating to the expansion of our operations, including
those related to acquisitions;
o the introduction of new sites and services by us or our
competitors;
o changes in our pricing policies or the pricing policies of
our competitors; and
o general economic conditions, as well as economic conditions
specific to the Internet, online and offline media and
electronic commerce.
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We do not believe that period-to-period comparisons of our operating results
are necessarily meaningful and you should not rely upon these comparisons as
indicators of our future performance.
Due to the foregoing factors, it is also possible that our results of
operations in one or more future quarters may fall below the expectations of
investors and/or securities analysts. In such event, the trading price of our
common stock is likely to decline.
BECAUSE THE FREQUENCY OF WEDDINGS VARY FROM QUARTER TO QUARTER, OUR
OPERATING RESULTS MAY FLUCTUATE DUE TO SEASONALITY.
Seasonal and cyclical patterns may affect our revenues. In 2002, according
to the National Center of Health Statistics, 19% of weddings in the United
States occurred in the first quarter, 27% occurred in the second quarter, 30%
occurred in the third quarter and 24% occurred in the fourth quarter. We have
limited experience generating merchandise revenues. Based upon our limited
experience, we believe merchandise revenues generally are lower in the first and
fourth quarters of each year.
WE DEPEND ON OUR STRATEGIC RELATIONSHIPS WITH OTHER WEB SITES.
We depend on establishing and maintaining distribution relationships with
high-traffic Web sites such as AOL, MSN and Yahoo! for a portion of our traffic.
There is intense competition for placements on these sites, and we may not be
able to continue to enter into such relationships on commercially reasonable
terms, if at all. Even if we enter into distribution relationships with these
Web sites, they themselves may not attract a significant number of users.
Therefore, our sites may not receive additional users from these relationships.
Moreover, we may be required to pay significant fees to establish and maintain
these relationships. Our business, results of operations and financial condition
could be materially and adversely affected if we do not establish and maintain
strategic relationships on commercially reasonable terms or if any of our
strategic relationships do not result in increased use of our Web sites.
THE MARKET FOR INTERNET ADVERTISING IS STILL DEVELOPING, AND IF THE INTERNET
FAILS TO GAIN FURTHER ACCEPTANCE AS A MEDIA FOR ADVERTISING, WE WOULD EXPERIENCE
SLOWER REVENUE GROWTH THAN EXPECTED OR A DECREASE IN REVENUE AND WOULD INCUR
GREATER THAN EXPECTED LOSSES.
Our future success depends, in part, on a significant increase in the use of
the Internet as an advertising and marketing medium. Sponsorship and advertising
revenues constituted 20% of our net revenues for the year ended December 31,
2001, 23% of our net revenues for the year ended December 31, 2002 and 31% of
our net revenues for the nine months ended September 30, 2003. Our national
online sponsorship and advertising revenue was approximately $1.7 million for
the year ended December 31, 2001, $1.9 million for the year ended December 31,
2002 and $3.1 million for the nine months ended September 30, 2003. The Internet
advertising market is still developing, and it cannot yet be compared with
traditional advertising media to gauge its effectiveness. As a result, demand
for and market acceptance of Internet advertising solutions are uncertain. Many
of our current and potential customers have little or no experience with
Internet advertising and have allocated only a limited portion of their
advertising and marketing budgets to Internet activities. The adoption of
Internet advertising, particularly by entities that have historically relied
upon traditional methods of advertising and marketing, requires the acceptance
of a new way of advertising and marketing. These customers may find Internet
advertising to be less effective for meeting their business needs than
traditional methods of advertising and marketing. Furthermore, there are
software programs that limit or prevent advertising from being delivered to a
user's computer. Widespread adoption of this software by users would
significantly undermine the commercial viability of Internet advertising.
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WE MAY BE UNABLE TO CONTINUE TO BUILD AWARENESS OF THE KNOT BRAND NAME WHICH
WOULD NEGATIVELY IMPACT OUR BUSINESS AND CAUSE OUR REVENUES TO DECLINE.
Building recognition of our brand is critical to attracting and expanding
our online user base and our offline readership. Because we plan to continue
building brand recognition, we may find it necessary to accelerate expenditures
on our sales and marketing efforts or otherwise increase our financial
commitment to creating and maintaining brand awareness. Our failure to
successfully promote and maintain our brand would adversely affect our business
and cause us to incur significant expenses in promoting our brand without an
associated increase in our net revenues.
OUR BUSINESS COULD BE ADVERSELY AFFECTED IF WE ARE NOT ABLE TO SUCCESSFULLY
INTEGRATE ANY FUTURE ACQUISITIONS OR SUCCESSFULLY OPERATE UNDER OUR STRATEGIC
PARTNERSHIPS.
In the future, we may acquire, or invest in, complementary companies,
products or technologies or enter into new strategic partnerships. Acquisitions,
investments and partnerships involve numerous risks, including:
o difficulties in integrating operations, technologies,
products and personnel;
o diversion of financial and management resources from
existing operations;
o risks of entering new markets;
o potential loss of key employees; and
o inability to generate sufficient revenues to offset
acquisition or investment costs.
THE COSTS ASSOCIATED WITH POTENTIAL ACQUISITIONS OR STRATEGIC ALLIANCES
COULD DILUTE YOUR INVESTMENT OR ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.
To pay for an acquisition or to enter into a strategic alliance, we might
use equity securities, debt, cash, or a combination of the foregoing. If we use
equity securities, our stockholders may experience dilution. In addition, an
acquisition may involve non-recurring charges, including writedowns of
significant amounts of goodwill. The related increases in expenses could
adversely affect our results of operations. Any such acquisitions or strategic
alliances may require us to obtain additional equity or debt financing, which
may not be available on commercially acceptable terms, if at all.
IF WE CANNOT PROTECT OUR DOMAIN NAMES, IT WILL IMPAIR OUR ABILITY TO
SUCCESSFULLY BRAND THE KNOT.
We currently hold various Web domain names, including www.theknot.com. The
acquisition and maintenance of domain names generally is regulated by Internet
regulatory bodies. The regulation of domain names in the United States and in
foreign countries is subject to change. Governing bodies may establish
additional top-level domains, appoint additional domain name registrars or
modify the requirements for holding domain names. As a result, we may be unable
to acquire or maintain relevant domain names in all countries in which we
conduct business. Furthermore, it is unclear whether laws protecting trademarks
and similar proprietary rights will be extended to protect domain names.
Therefore, we may be unable to prevent third parties from acquiring domain names
that are similar to, infringe upon or otherwise decrease the value of our
trademarks and other proprietary rights. We may not successfully carry out our
business strategy of establishing a strong brand for The Knot if we cannot
prevent others from using similar domain names or trademarks. This could impair
our ability to increase market share and revenues.
OUR BUSINESS AND PROSPECTS WOULD SUFFER IF WE ARE UNABLE TO PROTECT AND
ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS.
We rely upon copyright, trade secret and trademark law, assignment of
invention and confidentiality agreements and license agreements to protect our
proprietary technology, processes, content and other intellectual property to
the extent that protection is sought or secured at all. The steps we might take
may not be adequate to protect against infringement and
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misappropriation of our intellectual property by third parties. Similarly, third
parties may be able to independently develop similar or superior technology,
processes, content or other intellectual property. The unauthorized reproduction
or other misappropriation of our intellectual property rights could enable third
parties to benefit from our technology without paying us for it. If this occurs,
our business and prospects would be materially and adversely affected. In
addition, disputes concerning the ownership or rights to use intellectual
property could be costly and time-consuming to litigate, may distract management
from other tasks of operating the business, and may result in our loss of
significant rights and the loss of our ability to operate our business.
OUR PRODUCTS AND SERVICES MAY INFRINGE ON INTELLECTUAL PROPERTY RIGHTS OF
THIRD PARTIES AND ANY INFRINGEMENT COULD REQUIRE US TO INCUR SUBSTANTIAL COSTS
AND DISTRACT OUR MANAGEMENT.
Although we avoid knowingly infringing intellectual rights of third parties,
including licensed content, we may be subject to claims alleging infringement of
third-party proprietary rights. If we are subject to claims of infringement or
are infringing the rights of third parties, we may not be able to obtain
licenses to use those rights on commercially reasonable terms, if at all. In
that event, we would need to undertake substantial reengineering to continue our
online offerings. Any effort to undertake such reengineering might not be
successful. Furthermore, a party making such 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 selling our products.
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.
WE DEPEND UPON QVC TO PROVIDE US WAREHOUSING, FULFILLMENT AND DISTRIBUTION
SERVICES, AND SYSTEM FAILURES OR OTHER PROBLEMS AT QVC COULD CAUSE US TO LOSE
CUSTOMERS AND REVENUES.
We have a services agreement with QVC to warehouse, fulfill and arrange for
distribution of approximately 31% of our products, excluding products sold
through our retail partners. The initial term of our agreement with QVC expired
in December 2003 and is being extended by us for up to an additional six
months pursuant to the terms of the agreement. QVC does not have any obligation
to renew this agreement. If QVC's ability to provide us with these services in
a timely fashion or at all is impaired, whether through labor shortage, slow
down or stoppage, deteriorating financial or business condition, system
failures or for any other reason, or if the services agreement is not renewed,
we would not be able, at least temporarily, to sell or ship certain of our
products to our customers. We may be unable to engage alternative warehousing,
fulfillment and distribution services on a timely basis or upon terms
favorable to us.
INCREASED COMPETITION IN OUR MARKETS COULD REDUCE OUR MARKET SHARE, THE
NUMBER OF OUR ADVERTISERS, OUR ADVERTISING REVENUES AND OUR MARGINS.
The Internet advertising and online wedding markets are still developing.
Additionally, both the Internet advertising and online wedding markets and the
wedding magazine publishing markets are intensely competitive, and we expect
competition to intensify in the future. We face competition for members, users,
readers and advertisers from the following areas:
o online services or Web sites targeted at brides and grooms
as well as the online sites of retail stores, manufacturers
and regional wedding directories;
o bridal magazines, such as Bride's and Modern Bride (both
part of the Conde Nast family); and
o online and retail stores offering gift registries,
especially from retailers offering specific bridal gift
registries.
We expect competition to increase because of the business opportunities
presented by the growth of the Internet and e-commerce. Our competition may also
intensify as a result of industry consolidation and a lack of substantial
barriers to entry. Many of our current and potential competitors have longer
operating histories, significantly greater financial, technical and marketing
resources, greater name recognition and substantially larger user, membership or
readership bases
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than we have and, therefore, have significant ability to attract advertisers,
users and readers. In addition, many of our competitors may be able to respond
more quickly than we can to new or emerging technologies and changes in Internet
user requirements, as well as devote greater resources than we can to the
development, promotion and sale of services.
There can be no assurance that our current or potential competitors will not
develop products and services comparable or superior to those that we develop or
adapt more quickly than we do to new technologies, evolving industry trends or
changing Internet user preferences. Increased competition could result in price
reductions, lower margins or loss of market share. There can be no assurance
that we will be able to compete successfully against current and future
competitors.
OUR POTENTIAL INABILITY TO COMPETE EFFECTIVELY IN OUR INDUSTRY FOR QUALIFIED
PERSONNEL COULD HINDER THE SUCCESS OF OUR BUSINESS.
Competition for personnel in the Internet and wedding industries is intense.
We may be unable to retain employees who are important to the success of our
business. We may also face difficulties attracting, integrating or retaining
other highly qualified employees in the future. If we cannot attract new
personnel or retain and motivate our current personnel, our business may not
succeed.
TERRORISM AND THE UNCERTAINTY OF WAR MAY HAVE A MATERIAL ADVERSE EFFECT ON
OUR OPERATING RESULTS.
Terrorist attacks, such as the attacks that occurred in New York and
Washington, D.C. on September 11, 2001, and other acts of violence or war may
affect the market on which our common stock will trade, the markets in which we
operate or our operating results. Further terrorist attacks against the United
States or U.S. businesses may occur. The potential near-term and long-term
effect these attacks may have for our customers, the market for our common
stock, the markets for our services and the U.S. economy are uncertain. The
consequences of any terrorist attacks, or any armed conflicts which may result,
are unpredictable, and we may not be able to foresee events that could have an
adverse effect on our business.
WE MAY NOT BE ABLE TO OBTAIN ADDITIONAL FINANCING NECESSARY TO EXECUTE OUR
BUSINESS STRATEGY.
We currently believe that our current cash and cash equivalents will be
sufficient to fund our working capital and capital expenditure requirements for
at least the next twelve months. Our ability to meet our obligations in the
ordinary course of business is dependent upon our ability to maintain profitable
operations and/or raise additional financing through public or private equity
financings, or other arrangements with corporate sources, or other sources of
financing to fund operations. However, there is no assurance that we will
maintain profitable operations or that additional funding, if required, will be
available to us in amounts or on terms acceptable to us.
SYSTEMS DISRUPTIONS AND FAILURES COULD CAUSE ADVERTISER OR USER
DISSATISFACTION AND COULD REDUCE THE ATTRACTIVENESS OF OUR SITES.
The continuing and uninterrupted performance of our computer systems is
critical to our success. Our advertisers and sponsors, users and members may
become dissatisfied by any systems disruption or failure that interrupts our
ability to provide our services and content to them. Substantial or repeated
system disruption or failures would reduce the attractiveness of our online
sites significantly. Substantially all of our systems hardware required to run
our sites are located at Globix Corporation's facilities in New York, New York.
Globix emerged from bankruptcy protection in April 2002. Fire, floods,
earthquakes, power loss, telecommunications failures, break-ins, acts of
terrorism and similar events could damage these systems. Our operations depend
on the ability of Globix to protect its own systems and our systems in its data
center against damage from fire, power loss, water damage, telecommunications
failure, vandalism and similar unexpected adverse events. Although Globix
provides comprehensive facilities management services, Globix does not guarantee
that our Internet access will be uninterrupted, error-free or secure. In
addition, computer viruses, electronic break-ins or other similar disruptive
problems could also adversely
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affect our online sites. Our business could be materially and adversely affected
if our systems were affected by any of these occurrences. We do not presently
have any secondary 'off-site' systems or a formal disaster recovery plan. Our
sites must accommodate a high volume of traffic and deliver frequently updated
information. Our sites have in the past experienced slower response times. These
types of occurrences in the future could cause users to perceive our sites as
not functioning properly and therefore cause them to use another online site or
other methods to obtain information or services. In addition, our users depend
on Internet service providers, online service providers and other site operators
for access to our online sites. Many of them have experienced significant
outages in the past, and could experience outages, delays and other difficulties
due to system disruptions or failures unrelated to our systems. Although we
carry general liability insurance, our insurance may not cover any claims by
dissatisfied advertisers or customers or may not be adequate to indemnify us for
any liability that may be imposed in the event that a claim were brought against
us. Any system disruption or failure, security breach or other damage that
interrupts or delays our operations could cause us to lose users, sponsors and
advertisers and adversely affect our business and results of operations.
WE MAY NOT BE ABLE TO DELIVER VARIOUS SERVICES IF THIRD PARTIES FAIL TO
PROVIDE RELIABLE SOFTWARE, SYSTEMS AND RELATED SERVICES TO US.
We are dependent on various third parties for software, systems and related
services in connection with our hosting, placement of advertising, accounting
software, data transmission and security systems. Several of the third parties
that provide software and services to us have a limited operating history and
have relatively new technology. These third parties are dependent on reliable
delivery of services from others. If our current providers were to experience
prolonged systems failures or delays, we would need to pursue alternative
sources of services. Although alternative sources of these services are
available, we may be unable to secure such services on a timely basis or on
terms favorable to us. As a result, we may experience business disruptions if
these third parties fail to provide reliable software, systems and related
services to us.
WE MAY BE LIABLE IF THIRD PARTIES MISAPPROPRIATE OUR USERS' PERSONAL
INFORMATION.
If third parties were able to penetrate our network security or otherwise
misappropriate our users' personal or credit card information, we could be
subject to liability. Our liability could include claims for unauthorized
purchases with credit card information, impersonation or other similar fraud
claims as well as for other misuses of personal information, such as for
unauthorized marketing purposes. These claims could result in costly and
time-consuming litigation which could adversely affect our financial condition.
In addition, the Federal Trade Commission and state agencies have been
investigating various Internet companies regarding their use of personal
information. We could have additional expenses if new regulations regarding the
use of personal information are introduced or if our privacy practices are
investigated.
OUR EXECUTIVE OFFICERS, DIRECTORS AND 5% OR GREATER STOCKHOLDERS EXERCISE
SIGNIFICANT CONTROL OVER ALL MATTERS REQUIRING A STOCKHOLDER VOTE.
As of December 31, 2003, our executive officers and directors and
stockholders who each owned greater than 5% of our common stock, and their
affiliates, in the aggregate, beneficially owned approximately 80% of our
outstanding common stock. As a result, these stockholders are able to exercise
control over all matters requiring approval by our stockholders, including the
election of directors and approval of significant corporate transactions. This
concentration of ownership could also have the effect of delaying or preventing
a change in control.
ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW MAY MAKE
IT DIFFICULT FOR A THIRD PARTY TO ACQUIRE US.
Provisions of our certificate of incorporation, our bylaws and Delaware law
could make it more difficult for a third party to acquire us, even if doing so
might be beneficial to our stockholders.
9
RISKS RELATED TO THE SECURITIES MARKETS
THE DELISTING OF OUR COMMON STOCK FROM THE NASDAQ NATIONAL MARKET HAS
RESULTED, AND COULD CONTINUE TO RESULT, IN A LIMITED PUBLIC MARKET FOR OUR
COMMON STOCK AND LARGER SPREADS IN THE BID AND ASK PRICES FOR SHARES OF OUR
COMMON STOCK AND COULD RESULT IN LOWER PRICES FOR SHARES OF OUR COMMON STOCK AND
MAKE OBTAINING FUTURE EQUITY FINANCING MORE DIFFICULT.
On August 23, 2001, our common stock was delisted from the Nasdaq National
Market. Our common stock is currently available for quotation on the OTC
Bulletin Board. Selling our common stock has become, and may continue to be,
more difficult because smaller quantities of shares are bought and sold on the
OTC Bulletin Board, transactions could be delayed and news media coverage of us
has been reduced. These factors have resulted, and could continue to result, in
larger spreads in the bid and ask prices for shares of our common stock and
could result in lower prices for shares of our common stock.
The delisting of our common stock from the Nasdaq National Market and any
further declines in our stock price could also greatly impair our ability to
raise additional necessary capital through equity or debt financing and
significantly increase the dilution to stockholders caused by our issuing equity
in financing or other transactions. The price at which we issue shares in such
transactions is generally based on the market price of our common stock, and a
decline in our stock prices could result in the need for us to issue a greater
number of shares to raise a given amount of funding or acquire a given dollar
value of goods or services.
In addition, because our common stock is not listed on the Nasdaq National
Market, we are subject to Rule 15g-9 under the Securities and Exchange Act of
1934, as amended. That rule imposes additional sales practice requirements on
broker-dealers that sell low-priced securities to persons other than established
customers and institutional accredited investors. For transactions covered by
this rule, a broker-dealer must make a special suitability determination for the
purchaser and have received the purchaser's written consent to the transaction
prior to sale. Consequently, the rule may affect the ability of broker-dealers
to sell the common stock and affect the ability of holders to sell their shares
of our common stock in the secondary market.
OUR STOCK PRICE HAS BEEN HIGHLY VOLATILE AND IS LIKELY TO EXPERIENCE EXTREME
PRICE AND VOLUME FLUCTUATIONS IN THE FUTURE THAT COULD REDUCE THE VALUE OF YOUR
INVESTMENT AND SUBJECT US TO LITIGATION.
The market price of our common stock has fluctuated in the past and is
likely to continue to be highly volatile, with extreme price and volume
fluctuations. These broad market and industry factors may harm the market price
of our common stock, regardless of our actual operating performance, and for
this or other reasons, we could continue to suffer significant declines in the
market price of our common stock. In the past, companies that have experienced
volatility in the market price of their stock have been the object of securities
class action litigation. If we were to become the object of securities class
action litigation, it could result in substantial costs and a diversion of our
management's attention and resources.
SALES OR THE PERCEPTION OF FUTURE SALES OF OUR COMMON STOCK MAY ADVERSELY
AFFECT OUR STOCK PRICE.
Sales of substantial numbers of shares of our common stock in the public
market, or the perception that significant sales are likely, could adversely
affect the market price of our common stock. The number of shares of common
stock subject to this registration statement is much greater than the average
weekly trading volume for our shares. No prediction can be made as to the
effect, if any, that market sales of these or other shares of our common stock
will have on the market price of our common stock. Sales of substantial amounts
of our common stock in the public market could adversely affect the market price
of our common stock.
10
RISKS RELATED TO THE INTERNET INDUSTRY
IF THE USE OF THE INTERNET AND COMMERCIAL ONLINE SERVICES AS MEDIA FOR
COMMERCE DOES NOT CONTINUE TO GROW, OUR BUSINESS AND PROSPECTS WOULD BE
MATERIALLY AND ADVERSELY AFFECTED.
We cannot assure you that a sufficiently broad base of consumers will adopt,
and continue to use, the Internet and commercial online services as media for
commerce, particularly for purchases of wedding gifts and supplies. Even if
consumers adopt the Internet or commercial online services as a media for
commerce, we cannot be sure that the necessary infrastructure will be in place
to process such transactions. Our long-term viability depends substantially upon
the widespread acceptance and the development of the Internet or commercial
online services as effective media for consumer commerce and for advertising.
Use of the Internet or commercial online services to effect retail transactions
and to advertise is at an early stage of development. Convincing consumers to
purchase wedding gifts and supplies online may be difficult.
Demand for recently introduced services and products over the Internet and
commercial online services is subject to a high level of uncertainty. Few proven
services and products exist. The development of the Internet and commercial
online services into a viable commercial marketplace is subject to a number of
factors, including:
o continued growth in the number of users of such services;
o concerns about transaction security;
o continued development of the necessary technological
infrastructure;
o consistent quality of service;
o availability of cost-effective, high speed service;
o uncertain and increasing government regulation; and
o the development of complementary services and products.
If users experience difficulties because of capacity constraints of the
infrastructure of the Internet and other commercial online services, potential
users may not be able to access our sites, and our business and prospects would
be harmed.
To the extent that the Internet and other online services continue to
experience growth in the number of users and frequency of use by consumers
resulting in increased bandwidth demands, there can be no assurance that the
infrastructure for the Internet and other online services will be able to
support the demands placed upon them. The Internet and other online services
have experienced outages and delays as a result of damage to portions of their
infrastructure, power failures, telecommunication outages, network service
outages and disruptions, natural disasters and vandalism and other misconduct.
Outages or delays could adversely affect online sites, e-mail and the level of
traffic on all sites. We depend on online access providers that provide our
users with access to our services. In the past, users have experienced
difficulties due to systems failures unrelated to our systems. In addition, the
Internet or other online services could lose their viability due to delays in
the development or adoption of new standards and protocols required to handle
increased levels of Internet or other online service activity or to increased
governmental regulation. Insufficient availability of telecommunications
services to support the Internet or other online services also could result in
slower response times and negatively impact use of the Internet and other online
services generally, and our sites in particular. If the use of the Internet and
other online services fails to grow or grows more slowly than expected, if the
infrastructure for the Internet and other online services does not effectively
support growth that may occur or if the Internet and other online services do
not become a viable commercial marketplace, it is possible that we will not be
able to maintain profitability.
WE MAY BE UNABLE TO RESPOND TO THE RAPID TECHNOLOGICAL CHANGE IN THE
INTERNET INDUSTRY AND THIS MAY HARM OUR BUSINESS.
If we are unable, for technological, legal, financial or other reasons, to
adapt in a timely manner to changing market conditions or customer requirements,
we could lose users and market
11
share to our competitors. The Internet and e-commerce are characterized by rapid
technological change. Sudden changes in user and customer requirements and
preferences, frequent new product and service introductions embodying new
technologies and the emergence of new industry standards and practices could
render our existing online sites and proprietary technology and systems
obsolete. The emerging nature of products and services in the online wedding
market and their rapid evolution will require that we continually improve the
performance, features and reliability of our online services. Our success will
depend, in part, on our ability:
o to enhance our existing services;
o to develop and license new services and technology that
address the increasingly sophisticated and varied needs of
our prospective customers and users; and
o to respond to technological advances and emerging industry
standards and practices on a cost-effective and timely
basis.
The development of online sites and other proprietary technology entails
significant technological and business risks and requires substantial
expenditures and lead time. We may be unable to use new technologies effectively
or adapt our online sites, proprietary technology and transaction-processing
systems to customer requirements or emerging industry standards. Updating our
technology internally and licensing new technology from third parties may
require significant additional capital expenditures.
IF WE BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATION AND LEGAL
UNCERTAINTIES RELATED TO DOING BUSINESS ONLINE, OUR SPONSORSHIP, ADVERTISING AND
MERCHANDISE REVENUES COULD DECLINE AND OUR BUSINESS AND PROSPECTS COULD SUFFER.
Laws and regulations directly applicable to Internet communications,
commerce and advertising are becoming more prevalent. Laws and regulations may
be adopted covering issues such as user privacy, pricing, content, taxation and
quality of products and services. Any new legislation could hinder the growth in
use of the Internet and other online services generally and decrease the
acceptance of the Internet and other online services as media of communications,
commerce and advertising. The governments of states and foreign countries might
attempt to regulate our transmissions or levy sales or other taxes relating to
our activities. The laws governing the Internet remain largely unsettled, even
in areas where legislation has been enacted. It may take years to determine
whether and how existing laws such as those governing intellectual property,
privacy, libel and taxation apply to the Internet and Internet advertising
services. In addition, the growth and development of the market for e-commerce
may prompt calls for more stringent consumer protection laws, both in the United
States and abroad, which may impose additional burdens on companies conducting
business online. The adoption or modification of laws or regulations relating to
the Internet and other online services could cause our sponsorship, advertising
and merchandise revenues to decline and our business and prospects to suffer.
WE MAY BE SUED FOR INFORMATION RETRIEVED FROM OUR SITES.
We may be subject to claims for defamation, negligence, copyright or
trademark infringement, personal injury or other legal theories relating to the
information we publish on our online sites. These types of claims have been
brought, sometimes successfully, against online services as well as other print
publications in the past. We could also be subject to claims based upon the
content that is accessible from our online sites through links to other online
sites or through content and materials that may be posted by members in chat
rooms or bulletin boards. Our insurance, which covers commercial general
liability, may not adequately protect us against these types of claims.
WE MAY INCUR POTENTIAL PRODUCT LIABILITY FOR PRODUCTS SOLD ONLINE.
Consumers may sue us if any of the products that we sell online are
defective, fail to perform properly or injure the user. To date, we have had
limited experience selling products online and developing relationships with
manufacturers or suppliers of such products. We sell a range of products
targeted specifically at brides and grooms through The Knot Registry, The Knot
Shop,
12
Bridalink.com or other e-commerce sites that we may acquire in the future. Such
a strategy involves numerous risks and uncertainties. Although our agreements
with manufacturers typically contain provisions intended to limit our exposure
to liability claims, these limitations may not prevent all potential claims.
Liability claims could require us to spend significant time and money in
litigation or to pay significant damages. As a result, any such claims, whether
or not successful, could seriously damage our financial results, reputation and
brand name.
WE MAY INCUR SIGNIFICANT EXPENSES RELATED TO THE SECURITY OF PERSONAL
INFORMATION ONLINE.
The need to transmit securely confidential information online has been a
significant barrier to e-commerce and online communications. Any well-publicized
compromise of security could deter people from using the Internet or other
online services or from using them to conduct transactions that involve
transmitting confidential information. Because our success depends on the
acceptance of online services and e-commerce, we may incur significant costs to
protect against the threat of security breaches or to alleviate problems caused
by such breaches.
13
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference herein may
contain projections or other forward-looking statements regarding future events
or the future financial performance of The Knot. Forward looking statements can
be identified by the use of terminology such as 'may,' 'will,' 'should,'
'expect,' 'anticipate,' 'intend,' 'estimate,' 'plan' and other similar terms.
These statements are only predictions and reflect the current beliefs and
expectations of The Knot. Actual events or results may differ materially from
those contained in the projections or forward-looking statements as a result of
certain factors. The risk factors and other cautionary statements made in this
prospectus under the caption 'Risk Factors' as well as in our most recent Annual
Report on Form 10-K under the captions 'Business -- Competition,'
'Business -- Infrastructure, Operations and Technology,' 'Business -- Government
Regulation,' 'Business -- Intellectual Property and Proprietary Rights,' and
'Quantitative and Qualitative Disclosures About Market Risk,' all of which you
should review carefully, identify some of the important factors that could cause
future results or events to differ from those identified in forward-looking
statements. The Knot undertakes no obligation to update publicly any
forward-looking statement for any reason, including to conform these statements
to actual results or to changes in our expectations.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares offered
and sold pursuant to this prospectus. The selling stockholders will not pay any
of the expenses that are incurred in connection with the registration of the
shares, but they will pay all commissions, discounts and any other compensation
to any securities broker-dealers through whom they sell any of the shares.
DILUTION
None of the shares offered and sold pursuant to this prospectus are being
sold by us. Therefore, there will be no dilution in the net tangible book value
per share as a result of the sale of the shares offered and sold pursuant to
this prospectus.
SELLING STOCKHOLDERS
We are registering the shares of common stock offered for sale by this
prospectus as required by certain registration rights obligations of agreements
dated as of November 18, 2003 in connection with a private placement to the
selling stockholders.
The following table sets forth the name of each selling stockholder, the
number of shares of common stock beneficially owned by each selling stockholder
as of November 28, 2003, the number of shares of common stock that each selling
stockholder may offer and sell pursuant to this prospectus, and the number of
shares of common stock to be beneficially owned by each selling stockholder
after completion of this offering (assuming the sale of all shares offered by
this prospectus). Because each selling stockholder may offer all or a portion of
the shares of common stock offered by this prospectus from time to time after
the date hereof, no estimate can be made of the number of shares that each
selling stockholder may retain upon completion of this offering. However,
assuming all of the shares offered by this prospectus are sold by the selling
stockholders, after completion of this offering, none of the selling
stockholders will own more than one percent of the shares of common stock
outstanding.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting and investment power with
respect to shares. Unless otherwise indicated, the persons named in the table
directly own the shares and have sole voting and sole investment control with
respect to all shares beneficially owned. None of the selling stockholders
beneficially own any shares of common stock pursuant to options or similar
rights. The information with respect to beneficial ownership of common stock
held by each selling stockholder is based upon record ownership data provided by
our transfer agent, information as supplied or confirmed by the selling
stockholders, statements filed with the Securities and Exchange Commission or
our actual knowledge.
14
Within the past three years, none of the selling stockholders have held any
position or office with us or any of our affiliates or had a material
relationship with us or any of our affiliates.
NUMBER OF NUMBER OF
SHARES NUMBER OF SHARES
BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OFFERED OWNED AFTER
NAME THE OFFERING HEREBY OFFERING
---- ------------ ------ --------
T. Rowe Price Associates, Inc. (1):
T. Rowe Price New Horizons Fund.................... 1,350,000 1,350,000 0
T. Rowe Price Global Technology Fund............... 14,000 10,000 4,000
T. Rowe Price Media & Telecommunications Fund...... 80,200 75,000 5,200
TD Entertainment & Communications Fund............. 16,000 15,000 1,000
NYC 457/401K Small Cap Account..................... 50,000 50,000 0
--------- --------- ------
Total.......................................... 1,510,200 1,500,000 10,200
Capital Research and Management Company (2):
Smallcap World Fund, Inc........................... 1,200,000 1,200,000 0
American Funds Insurance Series -- Global Small
Capitalization Fund.............................. 100,000 100,000 0
--------- --------- ------
Total.......................................... 1,300,000 1,300,000 0
---------
(1) T. Rowe Price Associates, Inc. ('T. Rowe Price Associates')
serves as investment adviser with power to direct
investments and/or sole power to vote the shares owned by
the funds listed under its name in the table above, as well
as shares owned by certain other individual and
institutional investors. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, T. Rowe
Price Associates may be deemed to be the beneficial owner of
all of the shares listed above; however, T. Rowe Price
Associates expressly disclaims that it is, in fact, the
beneficial owner of such securities. T. Rowe Price
Associates is a wholly owned subsidiary of T. Rowe Price
Group, Inc., which is a publicly traded financial services
holding company.
(2) Capital Research and Management Company ('Capital Research')
serves as investment adviser to the funds listed under its
name in the table above. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Capital
Research may be deemed to be the beneficial owner of all of
the shares listed above; however, Capital Research expressly
disclaims that it is, in fact, the beneficial owner of such
securities.
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PLAN OF DISTRIBUTION
We are registering the shares of common stock offered for sale by this
prospectus on behalf of the selling stockholders. As used in this section,
'selling stockholders' includes donees, pledgees, distributees, transferees, or
other successors-in-interest. The selling stockholders will act independently of
us in making decisions with respect to the timing, manner and size of each sale.
We will pay all costs, expenses and fees in connection with the registration of
the shares. The selling stockholders will pay all brokerage commissions,
underwriting discounts, commissions, transfer taxes and other similar selling
expenses, if any, associated with the sale of the shares of common stock by
them.
The 2,800,000 shares of common stock registered hereby were originally
issued to and purchased by the selling stockholders at a price of $3.75 per
share in a private placement pursuant to agreements dated as of November 18,
2003. These shares of common stock were issued and sold pursuant to an exemption
from the registration requirements of the Securities Act of 1933, as amended
(the 'Securities Act'), as provided by Rule 506 of Regulation D promulgated
thereunder. We paid Allen & Company LLC a customary fee as compensation for
services as a placement agent to us.
The selling stockholders may, from time to time, sell any or all of their
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The selling stockholders may use any one or more of
the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
o an exchange distribution in accordance with the rules of the applicable
exchange;
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling stockholders may also engage in short sales against the box,
puts and calls and other transactions in our shares of common stock and may sell
or deliver shares in connection with these trades.
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 shares, from the purchaser) in amounts to be
negotiated. 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. Discounts, concessions, commissions and
similar selling expenses, if any, attributable to the sale of shares will be
borne by a selling stockholder. The selling stockholders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares if liabilities are imposed on that person under the
Securities Act.
The selling stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock
16
from time to time under this prospectus after we have filed 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 shares of common stock 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 and may sell the shares of common stock from time to time under
this prospectus after we have filed 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 and any broker-dealers or agents that are involved
in selling the shares of common stock may be deemed to be 'underwriters' within
the meaning of the Securities Act in connection with such sales. In such event,
any commissions received by such broker-dealers or agents and any profit on the
resale of the shares of common stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
We are required to pay all fees and expenses incident to the registration of
the shares of common stock. We have agreed to indemnify the selling stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.
The selling stockholders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating broker acting in connection with a proposed sale
of shares of common stock by any selling stockholder. If we are notified by any
selling stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required, we will file
a supplement to this prospectus. If the selling stockholders use this prospectus
for any sale of the shares of common stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
The anti-manipulation rules of Regulation M under the Securities Exchange
Act of 1934, as amended, may apply to sales of our common stock and activities
of the selling stockholders.
LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus will
be passed upon for us by Proskauer Rose LLP, New York, New York.
EXPERTS
The consolidated financial statements and the related financial statement
schedule of The Knot, Inc. at December 31, 2002 and 2001, and for each of the
three years in the period ended December 31, 2002, incorporated into this
prospectus by reference to our Annual Report on Form 10-K for the year ended
December 31, 2002, have been audited by Ernst & Young LLP, Independent Auditors,
as set forth in their report, which is incorporated herein by reference, in
reliance upon the authority of such firm as experts in accounting and auditing.
17
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission (SEC). You may read and
copy these reports, proxy statements and other information at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains a Web site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the SEC, located at http://www.sec.gov.
The SEC allows us to 'incorporate by reference' the information we file with
it, which means that we can disclose important information to you by referring
to those documents. The information incorporated by reference is an important
part of this prospectus, and information that we file later with the SEC will
automatically update and supersede this information. We incorporate by reference
the following documents we filed with, or furnished to, the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended
(the 'Exchange Act'):
o our Annual Report on Form 10-K for the fiscal year ended December 31, 2002;
o our Quarterly Reports on Form 10-Q for the quarterly periods ended March
31, 2003, June 30, 2003 and September 30, 2003;
o our Current Reports on Form 8-K dated January 6, 2003, February 25, 2003,
May 13, 2003, August 13, 2003, November 13, 2003, November 19, 2003 and
November 20, 2003; and
o the description of our common stock in our Registration Statement on Form
8-A (registration number 000-28271) under Section 12(g) of the Exchange
Act.
In addition, all documents subsequently filed by us with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act before the offering of
the common stock offered hereby is completed shall be deemed to be incorporated
by reference into this prospectus.
Any statement contained herein or in any document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or replaces such statement. Any such
statement so modified or superseded shall not be deemed to constitute a part of
this prospectus, except as so modified or superseded.
We will provide to you at no cost a copy of any or all of the information
incorporated by reference into this prospectus. You may make a request for a
copy of this information in writing or by telephone. Requests should be directed
to:
The Knot, Inc.
Attention: Investor Relations
462 Broadway, 6th Floor
New York, NY 10013
(212) 219-8555
ir@theknot.com
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2,800,000 SHARES
[THE KNOT LOGO]
COMMON STOCK
----------------
PROSPECTUS
----------------
JANUARY 9, 2004
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