We estimate that the net proceeds to us from the sale of Class A common stock
by us in this offering will be $ million, based upon an assumed
initial public offering price of $ per share, which is the
midpoint of the price range set forth on the cover page of this prospectus,
and after deducting underwriting discounts and commissions and estimated
offering expenses payable by us. If the underwriters’ option to purchase
additional shares of Class A common stock from us is exercised in full, we
estimate that we will receive net proceeds of approximately $
million, after deducting underwriting discounts and commissions and estimated
offering expenses payable by us. The selling stockholders will receive the net
proceeds from the sale of Class A common stock by them in this offering. We
will not receive any proceeds from the sale of Class A common stock by the
selling stockholders.
Each $1.00 increase (decrease) in the assumed initial public offering price
of $ per share would increase (decrease) the net proceeds to us
from this offering by approximately $ , assuming the
number of shares offered by us, as set forth on the cover page of this
prospectus, remains the same and after deducting underwriting discounts and
commissions and estimated offering expenses payable by us. Similarly, each
increase (decrease) of 1,000,000 shares in the number of shares of Class A
common stock offered by us would increase (decrease) the net proceeds to us
from this offering by approximately $ million, assuming the
assumed initial public offering price remains the same and after deducting
underwriting discounts and commissions and estimated offering expenses
payable by us.
The principal purposes of our initial public offering are to create a public
market for our Class A common stock and thereby enable future access to the
public equity markets by us and our stockholders, increase our capitalization
and financial flexibility, increase our visibility in the marketplace, and
facilitate an orderly distribution of shares for the selling stockholders. In
connection with this offering, as part of the Reorganization, we will pay a
special cash dividend to our pre-offering stockholders in an amount equal to
the net proceeds of this offering to us (including any net proceeds from the
exercise of the over-allotment option by the underwriters), after payment of
all expenses related to this offering, plus approximately $ .
As a purchaser in this offering, you will not be eligible to share in this
dividend.
We are a leading innovator in the personal wellness and network marketing
industries. The business of marketing and selling weight-management products,
nutritional supplements and energy drinks is highly competitive both in terms
of pricing and new product introductions, including various prescription
drugs. The worldwide markets for these products are highly fragmented, with
numerous suppliers serving one or more of the distribution channels served by
us. Some of our competitors have longer operating histories, significantly
greater financial, technical, product-development, marketing and sales
resources, greater name recognition, larger established customer bases, and
better-developed distribution channels than we do. Certain competitors focus
on a single geographic or product market and attempt to gain or maintain
market share solely on the basis of price.
We are also subject to significant competition for the recruitment of
individual promoters from other direct-selling organizations, including those
that market weight-management products, nutritional supplements and energy
drinks, as well as other types of products. Our competitors for the
recruitment of individual promoters include direct-selling companies such as
Herbalife Ltd., Avon Products Inc., Tupperware Brands Corporation, Nu Skin
Enterprises Inc., USANA Health Sciences Inc., Nature’s Sunshine Products Inc.,
Mannatech Inc., Natura Cosméticos SA, Amorepacific Corp., Oriflame Cosmetics
SA, Amway Malaysia Holdings Bhd, Noevir Holdings Co., Ltd., Shaklee Global
Group Inc. and Reliv International, Inc. Competitors in our target product
market include Herbalife Ltd. and retail establishments such as Weight
Watchers, Jenny Craig, General Nutrition Centers and retail pharmacies. In
addition, because the industry in which we operate is not particularly
capital intensive or otherwise subject to high barriers to entry, it is
relatively easy for new competitors to emerge to compete with us for our
individual promoters and customers.
90-Day
Challenge, which we refer to as the “Challenge.” The Challenge is a platform
that focuses on helping our customers achieve their health and fitness goals
over a 90-day period. We market the Challenge through our independent promoter
sales force using a network marketing model, which is a form of direct
selling.
. We had approximately 1,258,000 customers at June 30, 2012, an increase of
approximately 500% as compared to approximately 208,000 customers at June 30,
2011. We define a “customer” as anyone who has purchased products from us at
least once in the previous 12 months, other than any purchaser who qualifies
as an individual promoter on the measurement date.
. We had approximately 114,000 individual promoters at June 30, 2012, an
increase of approximately 300% as compared to approximately 29,000 individual
promoters at June 30, 2011. We define an “individual promoter” as a person
eligible to receive a commission within the ViSalus promoter compensation
plan on the measurement date.
. We had net sales of $327.3 million for the six months ended June 30, 2012
and $230.2 million for the year ended December 31, 2011, increases of
approximately 452% and 583%, respectively, as compared to net sales of $59.3
million and $33.7 million for the comparable prior year periods.
. We had Adjusted EBITDA of $55.2 million for the six months ended June 30,
2012 and $35.6 million for the year ended December 31, 2011, increases of
approximately 600% and 2,638%, respectively, as compared to Adjusted EBITDA of
$7.9 million and $1.3 million for the comparable prior year periods.
. Including the effects of equity incentive compensation expenses that we
expect will terminate shortly after the consummation of this offering, we had
net earnings (loss) of $24.5 million for the six months ended June 30, 2012
and $(2.2) million for the year ended December 31, 2011, as compared to net
earnings (loss) of $1.8 million and $(2.0) million for the comparable prior
year periods. Excluding these equity incentive compensation expenses and any
related tax impact, net earnings (loss) would have been $36.9 million for the
six months ended June 30, 2012 and $23.9 million for the year ended December
31, 2011, and net earnings (loss) would have been $9.4 million and $(0.1)
million for the comparable prior year periods.
Our individual promoters are independent contractors and earn commissions
based on purchases of our products. These purchases include those made by
customers our individual promoters have enrolled, as well as purchases of our
products by individual promoters in their down-line sales organizations and
customers referred by such individual promoters. After a customer is referred
to us by one of our individual promoters, we can establish a direct servicing
relationship with the customer, fulfilling orders and delivering products
directly to him or her. Unlike in a traditional direct selling business
model, our individual promoters are not required to purchase any of our
products for their personal use or for resale, although they may do so. If an
individual promoter chooses to purchase our products, they receive their
product at the wholesale price.
We train our independent promoter sales force to sell our products through
their existing social networks, which generally include their friends and
family, as well as any alumni or other civic or social organizations to which
they belong. Our primary methods of training involve teaching our independent
promoter sales force how to effectively host events, which we refer to as
“challenge parties,” and leverage social media and mobile technologies to
engage current and prospective customers and individual promoters, both on
and off-line.
ViSalus was founded in March 2005 by Ryan Blair, Nick Sarnicola and Blake
Mallen, who we refer to as our “founders.” The vision for the company was and
remains offering individual promoters and customers products and services to
improve their life, health and prosperity every day. The name “ViSalus”
represents these goals: “Vi” is the Latin word for “life” and “Salus”
connotes “health” and “prosperity” in Greek. We believe that the leadership
and passion of our founders are key factors that attract people to our
business, demonstrated by the growing numbers of customers and our dedicated
independent promoter sales force working to improve their personal health and
well-being through ViSalus.
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FVA Ventures, Inc. was incorporated in California on February 16, 2005.
ViSalus, Inc. was incorporated in Nevada on August 24, 2012. On September 14,
2012, FVA Ventures, Inc. merged with and into ViSalus, Inc., and ViSalus,
Inc. continued as the surviving corporation. All outstanding shares of
ViSalus, Inc. capital stock are currently beneficially owned by Holdings.
Prior to the consummation of this offering, ViSalus, Inc. will acquire an
interest in Holdings, and Holdings will purchase all of its outstanding
membership interests, other than the membership interests held by ViSalus,
Inc., for consideration of all of its shares of ViSalus, Inc. common stock.
We have one subsidiary, ViSalus Sciences Canada Inc., a British Columbia
corporation, which is wholly-owned and was incorporated on March 7, 2008.
Our principal executive offices are located at 340 E. Big Beaver Rd., Suite
400, Troy, MI 48083, and our telephone number is (877) 847-2587. Our corporate
website address is www.ViSalus.com.