As filed with the Securities and Exchange Commission on February 5, 2002
Registration No. 333-69632
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 91-1796903
------------------------------ ----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4901 Vineland Road, Suite 150
Orlando, Florida 32811
(407) 447-7337
--------------------------------
(Address, including zip code, and
telephone number, including area
code, of registrant's principal
executive offices)
-----------------
Eric Margenau, President
The Orlando Predators Entertainment, Inc.
4901 Vineland Road, Suite 150
Orlando, Florida 32811
(407) 447-7337
-------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Gary A. Agron, Esq.
Law Office of Gary A. Agron
5445 DTC Parkway, Suite 520
Greenwood Village, Colorado 80111
(303) 770-7254 (office)
(303) 770-7257 (fax)
--------------------------------------------------------------------------------
Approximate date of commencement of proposed sale of securities to the
public: From time to time after the effective date of this registration
statement.
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, 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, 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 registration statement for the same
offering. [ ]
If this is a post-effective amendment filed pursuant to Rule 462(d) 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
===================================================================================================================
CALCULATION OF REGISTRATION FEE
===================================================================================================================
Proposed Proposed
Maximum Maximum Amount of
Title of Each Class of Amount to Offering Price Registration Fee Registration
Securities to be Registered Be Registered Per Unit Price Fee
-------------------------------------------------------------------------------------------------------------------
Class A Common Stock, no par
value underlying common stock
purchase warrants 775,000 Shares $4.18(1) $3,239,500 $ 810
Class A Common Stock, no par
value 1,467,711 Shares $3.06(2) $4,491,196 $1,123
------
Total fee $1,933(3)
===================================================================================================================
(1) Based upon an average exercise price of $4.18 per share of common stock.
(2) Based upon the closing price of the common stock on the Nasdaq SmallCap
Market on September 17, 2001.
(3) Previously paid.
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, as amended, or until the 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.
These securities may not be sold 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 February , 2002
-----
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
2,242,711 SHARES
OF
CLASS A COMMON STOCK
This prospectus relates to the public offering from time to time of
1,467,711 shares of our Class A common stock and an aggregate of 775,000 shares
of our Class A common stock issuable upon exercise of 775,000 common stock
purchase warrants. These shares may be offered by the selling stockholders from
time to time in open market transactions at the discretion of the selling
stockholders. See "Selling Stockholders" on page 9.
Investing in these securities involves risks. See "Risk Factors" on page 4.
Our Class A common stock trades on the Nasdaq SmallCap Market under the
symbol "PRED." On January 30, 2002 the closing price of the Class A common stock
was $2.95 per share.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
, 2002
----------------
We have not authorized any dealer, salesman or other person to give any
information or to make any representation other than those contained or
incorporated by reference in this prospectus and any accompanying prospectus
supplement. You must not rely upon any information or representation not
contained or incorporated by reference in this prospectus or any prospectus
supplement. This prospectus and any supplement to this prospectus do not
constitute an offer to sell or the solicitation of an offer to buy any
securities other than the registered securities to which they relate, nor do
this prospectus and any accompanying prospectus supplement constitute an offer
to sell or the solicitation of an offer to buy securities in any jurisdiction to
any person to whom it is unlawful to make such offer or solicitation in such
jurisdiction. The information contained in this prospectus and any supplement to
this prospectus is accurate as of the dates on their covers.
Table of Contents
Page
----
Risk Factors................................................................ 3
Where You Can Find More Information......................................... 7
Incorporation by Reference.................................................. 8
Forward-Looking Statements.................................................. 8
Our Company................................................................. 9
Use of Proceeds............................................................. 9
Our Class A and Class B Common Stock........................................ 9
Selling Stockholders........................................................ 10
Plan of Distribution........................................................ 14
Legal Matters............................................................... 15
Experts..................................................................... 15
2
RISK FACTORS
Prospective investors should consider carefully the following risk factors,
together with the other information contained in this prospectus, in evaluating
a purchase of the common stock offered hereby. The following factors and other
information set forth in this prospectus contain certain forward-looking
statements involving risks and uncertainties. Our actual results may differ
materially from the results anticipated in these forward-looking statements as a
result of certain factors set forth below and elsewhere in this prospectus.
We have a history of losses and uncertainty of future results.
We incurred net losses of $3,218,503 for the year ended September 30, 2001
and $1,476,116 for the transition year ended September 30, 2000. Since our
inception through September 30, 2001, we have lost an aggregate of $9,057,590.
There can be no assurance that we will ever achieve a profitable level of
operations or that profitability, if achieved, can be sustained on an ongoing
basis.
We compete for sport entertainment dollars with other sports and entertainment
venues.
The Orlando Predators, as well as our arena football2 League teams, which
we refer to as af2, compete for sports entertainment dollars with other
professional sports teams and with college teams and with other sports-related
entertainment. During portions of the arena football season, the Predators
compete for attendance and fan support with a professional basketball team in
the Orlando area and with professional hockey and baseball teams in other parts
of Florida. In addition, the colleges and universities in central Florida, as
well as public and private secondary schools, offer a full schedule of athletic
events throughout the year. The Predators also compete for attendance and
advertising revenue with a wide range of other entertainment and recreational
activities available in central Florida, such as Walt Disney World and Universal
Studios. Our af2 teams compete with other entertainment venues in their home
cities. On a broader scale, Arena Football League and af2 teams compete with
football teams fielded by high schools and colleges, the National Indoor
Football League, the National Football League, the Canadian Football League and
the National Football League Europe.
We are subject to League obligations.
The membership agreements with the Arena Football League generally make the
Predators and other teams of the AFL liable on a pro rata basis for the debts
and obligations of the AFL. Any failure of other members of the AFL to pay their
pro rata share of any such debts or obligations could adversely affect the
Predators by requiring us to make additional payments on behalf of failing or
defaulting teams. To date, we have not been required to pay any material debts
or obligations of the AFL. The success of the AFL and its members depends in
part on the competitiveness of the teams in the AFL and their ability to
maintain fiscally sound operations. Certain AFL teams have encountered financial
difficulties in the past, and there can be no assurance that the AFL and its
teams will continue to operate. If the AFL is unable to continue operations, the
Predators and the other teams forming the AFL would be unable to continue their
own operations. In addition, the Predators and their personnel, as well as our
af2 teams, are bound by a number of rules, regulations and agreements imposed
upon them by their Leagues as well as by national television contracts. Any
change in these rules, regulations and agreements will be binding upon our teams
and their personnel, regardless of whether they agree with such changes, and it
is possible that any such change could adversely affect them.
3
We will be subject to increased competition as a result of AFL and af2
expansion.
The AFL and af2 will add additional teams in the future. While such
expansion affords the AFL the opportunity to enter new markets and increase
revenue, it also increases the competition for talented players among AFL teams.
Expansion teams are permitted to select in an expansion draft designated
unprotected players playing for existing AFL teams. There can be no assurance
that the teams will be able to retain all of the team's key players during an
expansion draft or that the rules regarding the expansion draft will not change
to the detriment of the teams. In addition, we may receive less revenue from the
AFL as the result of League expansion since AFL teams share equally in the
revenue generated from national television contracts and sale of AFL
merchandise.
We may need additional capital in the future which could dilute the ownership of
current stockholders or make our cash flow vulnerable to debt repayment
requirements.
Historically, we have raised equity and debt capital to support our
operations. To the extent that we raise additional equity capital, existing
stockholders will experience a dilution in the voting power and ownership of
their common stock, and earnings per share, if any, would be negatively
impacted. Our inability to use our equity securities to finance our operations
could materially limit our growth.
Any borrowings made to finance operations could make us more vulnerable to
a downturn in our operating results, a downturn in economic conditions, or
increases in interest rates on borrowings that are subject to interest rate
fluctuations. If our cash flow from operations is insufficient to meet our debt
service requirements, we could be required to sell additional equity securities,
refinance our obligations, or dispose of assets in order to meet debt service
requirements. There can be no assurance that any financing will be available to
us when needed or will be available on terms acceptable to us. Our failure to
obtain sufficient financing on favorable terms and conditions could have a
material adverse effect on our growth prospects and our business, financial
condition and results of operations.
We depend upon the competitive success of our AFL and af2 teams for ticket and
merchandise sales.
Our financial results depend in part upon our teams achieving game winning
success. By achieving and maintaining such success, we expect to (1) generate
greater fan enthusiasm, resulting in higher ticket and merchandise sales
throughout the regular season and (2) capture a greater share of local
television and radio audiences. Failure to participate in the AFL playoffs would
deprive the teams of additional revenue that may result from sales of tickets
for home playoff games and from media contracts. Revenue is, therefore,
significantly adversely affected by a poor game winning performance, especially
involving losses of home games. The Predators win-loss record for the 2001
season was 8 wins and 7 losses including our playoff game losses and the
Pirates, our af2 team, had seven wins and nine losses.
We depend upon attracting talented players to achieve game winning success.
The success of our teams depends, in part, upon the teams' ability to
attract and retain talented players. Our teams compete with other AFL and af2
teams as well as teams fielded by the National Football League, the Canadian
Football League and the NFL Europe, among others, for available players. There
can be no assurance that our teams will be able to retain players upon
expiration of their contracts or obtain new players of adequate talent to
replace players who retire or are injured, traded or released. Even if our teams
are able to obtain and retain players who have had previously successful
football careers, there can be no assurance of the quality of their future
performance.
4
Our players' salaries may increase in the future, thereby increasing our
operating expenses.
Although our player salaries are low compared to salaries currently paid by
other professional sports teams, there can be no assurance that salaries payable
by us will not increase significantly in the future, thereby increasing our
operating expenses and adversely affecting our financial condition and results
of operations.
Football injuries could adversely affect our financial condition.
Player contracts entitle players to receive their salary even if unable to
play as a result of injuries sustained from arena football-related activities
during the course of employment. Although we carry occupational health,
accidental death and disability insurance on our players, we must pay deductible
portions of the insurance. Payment of insurance premiums, insurance deductibles
and salary payments that must be made directly to injured players could have an
adverse effect upon our financial condition and results of operations.
There are League restrictions on the purchase of our securities.
The AFL Charter and Bylaws contain provisions that may restrict a person
from acquiring our common stock and affect the value of the common stock or the
value of any team, including the Predators. In general, any acquisition of
shares of common stock that will result in a person or group of persons holding
5% or more of our outstanding common stock requires the prior approval of the
AFL, which may be granted or withheld in the sole discretion of the AFL. Failure
by a holder of a 5% or more interest to comply with these restrictions may
result in a forced sale of such holder's interest or the repurchase of such
interests by us. Our Bylaws provide that we may redeem, at the lower of fair
market value or cost, shares held by any person or entity who becomes the owner
of 5% or more of our common stock without the approval of the AFL.
A failure by the AFL to renew broadcast contracts would significantly reduce our
revenue.
The AFL's contracts with cable networks for the national broadcast of
certain AFL games in the United States are renewable annually. A percentage of
the revenue generated from those contracts and any future national or network
media contracts after payment of AFL expenses is divided equally among the
members of the AFL. There can be no assurance that any national broadcaster will
enter into broadcast contracts with the AFL upon the expiration of the current
contracts. Our television and radio contracts for the local broadcast of the
Predators' pre-season, regular season and certain post-season games are also
subject to periodic renewal. The failure to renew national or local television
or radio contracts would significantly reduce our revenue.
Our cash flow is seasonal, limiting our cash resources.
The arena football season begins in April and ends in August. As a result,
we realize a significant portion of our revenue and incur a significant portion
of our expenses during that period. This seasonality can create cash flow
difficulties for us outside our football season.
5
We may issue preferred stock, which could prevent a change in our control.
Our Articles of Incorporation authorize the issuance of up to 1,500,000
shares of preferred stock with such rights and preferences as may be determined
from time to time by our Board of Directors. Accordingly, under the Articles of
Incorporation, the Board of Directors, without shareholder approval, may issue
preferred stock with dividend, liquidation, conversion, voting, redemption or
other rights that could adversely affect the voting power or other rights of the
holders of our common stock. The issuance of any shares of preferred stock,
having rights superior to our common stock, may result in a decrease in the
value or market price of our common stock and could prevent a change in our
control. We have no other anti-takeover provisions in our Articles of
Incorporation or Bylaws. Holders of the preferred stock may also have the right
to receive dividends, certain preferences in liquidation and conversion rights.
One holder of our Class B common stock can elect all of our directors and
controls our operations.
We have issued a total of 1,000 shares of our Class B common stock to two
persons, The New Era Growth and Venture Fund, which owns 925 Class B shares, and
Alan Gagleard, who owns 75 shares. Each share of Class B common stock votes the
equivalent of 10,000 shares of Class A common stock. Accordingly, New Era can
elect all of our directors and control our operations. New Era has entered into
an agreement to sell its Class B shares to Eric A. Margenau, our Chief Executive
Officer, and Brett L. Bouchy, one of our employees. In turn, Mr. Bouchy has
entered into a voting trust agreement with Mr. Margenau, allowing Mr. Margenau
to vote the shares until January 2010. Accordingly, if the sale is consummated,
Mr. Margenau will be able to elect all of our directors and control our
operations.
We do not pay dividends on our common stock.
We have not paid any dividends on our common stock since our inception and
do not anticipate paying dividends in the foreseeable future. We plan to retain
earnings, if any, to finance the development and expansion of our business.
Substantially all of our shares of common stock are freely tradeable.
There are currently outstanding 7,059,110 shares of our Class A common
stock, all of which are freely tradeable as of the date of this prospectus. Sale
of substantial amounts of Class A common stock, or the perception that such
sales could occur, could adversely affect prevailing market prices of the Class
A common stock.
Investors hold options and warrants to acquire a large number of our shares.
A total of 3,000,000 shares of Class A common stock have been reserved for
issuance upon the exercise of options granted or which may be granted under our
1997 Employee Stock Option Plan. Additionally, there are outstanding options to
acquire 1,831,578 shares of Class A common stock at exercise prices ranging from
$1.50 to $3.19 per share. In addition, there are outstanding (1) warrants to
purchase 550,000 shares of Class A common stock at an exercise price of $7.50
per share issued in connection with our 1997 initial public offering and
exercisable at any time until December 10, 2002, (2) unit warrants to purchase
110,000 shares of Class A common stock and 55,000 warrants exercisable at $7.50
each, all at an exercise price of $12.00 per unit warrant, (3) warrants to
purchase 160,000 shares of Class A common stock at $4.50 per share at any time
until December 31, 2002, and (4) other warrants to purchase up to 450,000 shares
at prices ranging from $2.50 to $5.00 per share. During the terms of these
options and warrants, the holders will have the opportunity to profit from an
6
increase in the market price of the Class A common stock. The existence of these
options and warrants may adversely affect the terms on which we can obtain
additional financing, and the holders of such options and warrants can be
expected to exercise the options and warrants at a time when we, in all
likelihood, would be able to obtain additional capital by offering shares of our
capital stock on terms more favorable to us than those provided by the exercise
of such options and warrants.
There are limitations on the liability of our directors and officers.
Our Bylaws substantially limit the liability of our directors and officers
to us and our stockholders for breach of fiduciary or other duties to us.
If we do not continue to be listed on the Nasdaq SmallCap Market, our stock will
become harder to purchase and sell.
Our company's Class A common stock is currently listed on the Nasdaq
SmallCap Market. In order to continue to be included on the Nasdaq SmallCap
Market, a company must maintain (1) at least two market makers, (2) 300 holders
of its common stock, (3) a minimum bid price of $1.00 per share of common stock,
(4) net tangible assets of $2 million (unless a company had net income of
$500,000 in two of the last three years or a market capitalization of $35
million), (5) 500,000 shares in the public float and (6) a market value of the
public float of $1 million. We are currently in compliance with all of the
Nasdaq SmallCap Market listing requirements. However, our failure to meet these
maintenance criteria in the future may result in the discontinuance of our
securities on the Nasdaq SmallCap Market. As a result, an investor may find it
more difficult to purchase, sell or to obtain accurate quotations as to the
market value of our securities.
We can give no assurance as to our future results.
Prospective purchasers of our securities should carefully consider the
information contained in this prospectus before purchasing our securities.
Information contained in this prospectus contains "forward- looking statements,"
which can be identified by the use of forward-looking terminology such as
"believes," "expects," "may," "should" or "anticipates" or the negative thereof
or other variations thereon or comparable terminology, or by discussions of
strategy. As a result of many factors, including those discussed herein under
"Risk Factors," no assurance can be given that the future results discussed by
the forward-looking statements will be achieved.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You can inspect and copy these reports, proxy
statements and other information at the public reference facilities of the SEC,
in Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549; 233 Broadway, New
York, New York 10279; and Suite 1400, Citicorp Center, 500 W. Madison Street,
Chicago, Illinois 60661- 2511. You can also obtain copies of these materials
from the public reference section of the SEC at 450 Fifth Street N.W.,
Washington, D.C. 20549, at prescribed rates. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. The SEC
also maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC at http://www.sec.gov. You can also inspect reports and other
information we file at the office of the National Market System at 9801
Washingtonian Blvd., Gaithersburg, MD 20878.
7
We have filed a registration statement and related exhibits with the SEC
under the Securities Act of 1933, as amended. The registration statement
contains additional information about us and the securities that may be sold by
the selling stockholders. You may inspect the registration statement and related
exhibits without charge at the public reference facilities of the SEC described
above, and may obtain copies from the SEC at prescribed rates. This information
is also available at the SEC's Web site.
INCORPORATION BY REFERENCE
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. We hereby "incorporate by reference" the
documents
listed below, which means that we are disclosing important information to you by
referring you to those documents. The information that we file later with the
SEC will automatically update and in some cases supersede this information.
Specifically, we incorporate by reference:
o Our Annual Report on Form 10-KSB for the year ended September 30,
2001;
o Our Registration Statement on Form 8-A12G filed July 25, 1997 and any
amendments thereto; and
o Any future filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 after the date of
this prospectus and before we stop offering securities (other than
those portions of such documents described in paragraphs (i), (k), and
(1) of Item 402 of Regulation S-K promulgated by the SEC).
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
The Orlando Predators Entertainment, Inc.
4901 Vineland Road, Suite 150
Orlando, Florida 32811
(407) 447-7337
You should rely only on the information incorporated by reference or
provided in this prospectus and any supplement. We have not authorized anyone
else to provide you with other information.
FORWARD-LOOKING STATEMENTS
We make forward-looking statements in this prospectus that are based on the
beliefs and assumptions of our management and on information currently available
to our management. Forward-looking statements include the information about our
possible or assumed future results of operations and statements preceded by,
followed by or that include the words "believe," "expect," "anticipate,"
"intend," "plan," "estimate" or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions.
Actual results may differ materially from those expressed in these
forward-looking statements. We caution you not to rely unduly on any
forward-looking statements.
8
You should understand that there are important factors such as those
included in the "Risk Factors" section of this prospectus and in the documents
incorporated in this prospectus by reference which could cause our results to
differ materially from those expressed in such forward-looking statements.
OUR COMPANY
We are a sports and entertainment company that (1) owns and operates the
Orlando Predators, a professional arena football team of the Arena Football
League, (2) owns an additional approximately 8% net revenue interest in the
League (in addition to our 4% League ownership through the Predators) and (3)
owns rights to the operation of three af2 teams, one of which, the Peoria
Pirates, played in the arena football2 League last year and two of which are
expected to play in 2003. Arena football is played in an indoor arena on a
padded 50-yard long football field using eight players on the field for each
team. Most of the game rules are similar to college or other professional
football game rules with a few exceptions intended to make the game faster and
more exciting.
We derive substantially all of our revenue from the Arena Football
operations of the Predators and Pirates and our approximately 12% net revenue
interest in the League. This revenue is primarily generated from (1) the sale of
tickets to the Predators' and Pirates' home games, (2) the sale of advertising
and promotions to team sponsors, (3) the sale of local and regional broadcast
rights to team games, (4) our share of League media contracts, membership fees
paid by expansion teams and League licensing sales, and (5) the sale of
merchandise carrying the Predators' and Pirates' logos.
USE OF PROCEEDS
We may receive up to $3,239,500 if all of the shares being registered
hereby underlying the common stock purchase warrants are purchased. We will not
receive any proceeds from the sale by the selling stockholders of the common
stock underlying the 775,000 common stock purchase warrants or the 1,467,711
shares which are being registered by this prospectus. Any funds received upon
exercise of the common stock purchase warrants will be added to our working
capital. We will pay all expenses of the registration and sale of the common
stock, except selling commissions and stock transfer fees.
OUR CLASS A AND CLASS B COMMON STOCK
Our Class A common stock, which we refer to as our "common stock," is
traded on the Nasdaq SmallCap Market under the symbol "PRED." Each share is
entitled to one vote on all matters submitted to a vote of stockholders. The
common stock does not have cumulative voting rights. As a result, in an election
of directors, the holders of a majority of shares of common stock, including the
Class B common stock described below, will be able to elect all of the directors
to be elected.
We also have outstanding 1,000 shares of Class B common stock held by two
stockholders which have identical rights to the Class A common stock except that
each Class B share votes the equivalent of 10,000 Class A shares. Accordingly,
our two Class B stockholders are able to elect all of our directors and control
our affairs.
For more information on our Class A and Class B common stock, see our
Registration Statement on Form SB-2, file number 333-31671, which we filed with
the SEC on July 21, 1997. See also "Where You Can Find More Information."
9
SELLING STOCKHOLDERS
The selling stockholders, including their transferees, pledgees, donees or
successors, may from time to time offer and sell all or any of their shares of
common stock they own or which they acquired upon exercise of the common stock
purchase warrants. The selling stockholders may exercise their common stock
purchase warrants and offer all, some or none of the shares of common stock.
Thus, we cannot estimate the number of shares of common stock that will be
offered for sale by the selling stockholders upon termination of any sales.
None of the selling stockholders are affiliates of our company except for
Eric A. Margenau (and his wife, Sara A. Margenau), Jeffrey L. Bouchy, Brett L.
Bouchy, Lyle Reigel and The Monolith Limited Partnership who are executive
officers, directors or principal stockholders of our company.
We are registering the following shares and shares underlying common stock
purchase warrants for sale under this prospectus:
o In connection with our 1997 initial public offering, we issued unit
warrants to purchase 55,000 units of our securities at $12.00 per unit
to our underwriters, each unit consisting of two shares of common
stock and one common stock purchase warrant to purchase an additional
share at $7.50 per share until December 2002. A total of 165,000
shares underlie these unit warrants;
o Between January and July 2001, we sold a total of 1,132,044 shares to
a group of 27 accredited investors;
o We have issued to four of our affiliates 335,667 shares as
consideration for collateralizing a $1,000,000 bank loan for us;
o In 1998 we borrowed $2,020,000 from a group of 14 accredited investors
and issued to them as additional consideration for the loans 160,000
common stock purchase warrants to purchase 160,000 shares exercisable
at $4.50 per share until December 2002;
o In 2000 we issued an aggregate of 350,000 common stock purchase
warrants to purchase 350,000 shares for investment banking services
exercisable at $2.50 per share for 150,000 shares, $3.50 per share for
100,000 shares and $4.50 per share for the remaining 100,000 shares,
all until July 2006.
o In 2000 we issued for cash 50,000 common stock purchase warrants to
each of two individuals exercisable at $2.875 and $5.00 per share,
respectively, until August 2006.
The names of our selling stockholders and the number of Class A shares they
own or may purchase under common stock purchase warrants are as follows:
10
Shares issuable upon exercise of our underwriters' unit warrants:
Percent of
Outstanding
Shares
Total Number to be Owned
Number of Shares of Shares Percent of Total Number After the
Number of Unit Underlying the --------- Outstanding of Shares ----------
Name Warrants Issued Unit Warrants Owned Shares(1) Offered for Sale Offering(1)
---- --------------- ------------- ----- --------- ---------------- -----------
The Investment Company, Inc.(1) 9,531 28,593 * * 9,531 *
James Linna 9,530 28,590 * * 9,530 *
William R. Haese 9,530 28,590 * * 9,530 *
Steven P. Harrington 9,530 28,590 30,100 * 9,530 *
Thomas L. Johnson 620 1,860 * * 620 *
Ted L. Marek 124 372 * * 124 *
Christopher J. Mercer 56 168 * * 56 *
William G. Zeller 2,250 6,750 * * 2,250 *
Robert L. Berry 1,240 3,720 * * 1,240 *
Mr. & Mrs. Ira B. Hall 198 594 100 * 198 *
John E. Hall 198 594 * * 198 *
Judith A. Kersey 198 594 * * 198 *
Michael J. Hall 198 594 * * 198 *
Mary K. Prime 198 594 * * 198 *
Richard C. Jones 471 1,413 * * 471 *
Ronald J. Ruff 62 186 * * 62 *
Dr. & Mrs. Timothy J. Micklos 112 336 * * 112 *
Steven T. Hunt 62 186 * * 62 *
Kevin L. Jones 273 819 * * 273 *
R. Matthew Shino 1,240 3,720 * * 1,240 *
MS. Farrell & Company, Inc.(2) 4,129 12,387 * * 4,129 *
Schneider Securities, Inc.(3) 2,000 6,000 * * 2,000 *
Meridian Capital Holdings, Inc.(4) 750 2,250 * * 750 *
Robert Clawson 750 2,250 * * 750 *
Joseph Charles & Associates(5) 1,250 3,750 * * 1,250 *
Patterson Travis, Inc.(6) 500 1,500 * * 500 *
------- ------- ------- ------- --- ----
TOTALS 55,000 165,000 30,200 * 55,000 *
Shares issued to accredited investors in 2001:
Percent of
Outstanding
Number of Percent of Total Number Shares
--------- Total Number Outstanding of Shares to be Owned
Name Shares Issued of Shares Owned Shares Offered for Sale After the Offering
---- ------------- --------------- ------ ---------------- ------------------
Steven Harrington and Lora Harrington 25,000 30,100 * 25,000 *
Dennis Reed IRA 84,500 84,500 1.2 84,500 *
Reed Development L.L.C.(7) 115,500 115,500 1.6 115,500 *
Lyle Reigel 150,000 293,000 * 150,000 1.8
Ken Sauerberg 23,000 23,000 * 23,000 *
Randall Theobald 67,000 67,000 * 67,000 *
James S. Tiernan 26,500 26,500 * 26,500 *
Michael J. Vandlik and Lynette Vandlik 60,000 72,000 1.1 60,000 *
Nicolet DeRose 70,000 70,000 1.0 70,000 *
11
Percent of
Outstanding
Number of Percent of Total Number Shares
--------- Total Number Outstanding of Shares to be Owned
Name Shares Issued of Shares Owned Shares Offered for Sale After the Offering
---- ------------- --------------- ------ ---------------- ------------------
Charles H. Goodman 37,500 46,000 * 37,500 *
Dennis R. Graue 30,000 77,147 1.1 30,000 *
Jonathan Kind 20,000 20,000 * 20,000 *
Stuart Krasnow 20,000 37,142 * 20,000 *
Brian McCormack 20,000 20,000 * 20,000 *
John P. Montgomery 15,000 23,571 * 15,000 *
Robert A. Musick 81,973 150,000 2.2 81,973 *
Rick Scheer 28,571 28,571 * 28,571 *
Brian Anselmo 25,000 25,000 * 25,000 *
Joseph A. Brois 25,000 25,000 * 25,000 *
Patricia A. Carder 25,000 42,855 * 25,000 *
Ciro Cirrincione 50,000 50,000 * 50,000 *
Jeffrey P. Emrich IRA 12,500 12,860 * 12,500 *
Lafoba & Co.(8) 12,500 12,500 * 12,500 *
Joan E. Nickander Revocable Trust 17,500 17,500 * 17,500 *
Paul D. Paluck 25,000 25,000 * 25,000 *
Performance Staffing, Inc.(9) 40,000 40,000 * 40,000 *
Ted Singer 25,000 25,000 * 25,000 *
------ ------ --- ------ ---
TOTAL 1,132,044 1,459,746 8.2 1,132,044 1.8
Shares issued to four affiliates:
Number of Percent of Total Number Percent of Shares
--------- Total Number Outstanding of Shares to be Owned
Name Shares Issued of Shares Owned Shares Offered for Sale After the Offering
---- ------------- --------------- ------ ---------------- ------------------
Eric A. Margenau 30,273 30,273 * 30,273 *
Sara A. Margenau 69,830 69,830 * 69,830 *
Jeffrey L. Bouchy 64,361 108,561 1.6 64,361 *
Brett L. Bouchy 171,203 181,116 2.6 171,203 *
------- ------- --- ------- ---
TOTAL 335,667 389,780 4.2 335,667 *
Shares issuable on a one for one basis upon exercise of warrants at $4.50 per
share issued for our $2,020,000 loan:
Number of Percent of Total Number Percent of Shares
--------- Total Number Outstanding of Shares to be Owned
Name Warrants Issued of Shares Owned Shares Offered for Sale After the Offering
---- --------------- --------------- ------ ---------------- ------------------
Charles L. Pastorino 12,000 * * 12,000 *
Rudolph and Marsha Reece, Jr. 8,000 * * 8,000 *
Dirk Leverant 4,000 * * 4,000 *
Thomas F. Winters, Jr. 8,000 * * 8,000 *
Alice J. Sianec, Trustee 4,000 17,140 * 4,000 *
Lyle Riegel 8,000 293,000 4.2 8,000 4.2
Robert A. Musik 8,000 150,000 2.2 8,000 2.2
Stephen T. Liesen 8,000 91,000 1.3 8,000 1.3
12
Number of Percent of Total Number Percent of Shares
--------- Total Number Outstanding of Shares to be Owned
Name Warrants Issued of Shares Owned Shares Offered for Sale After the Offering
---- --------------- --------------- ------ ---------------- ------------------
Duane Elsenbeiss 4,000 * * 4,000 *
Jerome R. Laczniak 8,000 40,000 * 8,000 *
Nicolas Sarillo 4,000 * * 4,000 *
C.K. Martin 8,000 40,000 * 8,000 *
Michael Maynard 8,000 40,000 * 8,000 *
The Monolith Limited Partnership(10) 68,000 12,000 * 68,000 *
------- ------- --- ------- ---
TOTAL 160,000 683,140 7.7 160,000 7.7
Shares issuable on a one for one basis upon exercise of warrants issued for
investment banking services exercisable at $2.50 per share:
Number of Percent of Total Number Percent of Shares
--------- Total Number Outstanding of Shares to be Owned
Name Warrants Issued of Shares Owned Shares(1) Offered for Sale After the Offering
---- --------------- --------------- --------- ---------------- ------------------
David Mura 30,000 * * 30,000 *
Brad Donner 30,000 * * 30,000 *
John Rick 30,000 * * 30,000 *
Richard J. Milham, Jr. 30,000 * * 30,000 *
Craig Norton 10,000 * * 10,000 *
Thomas W. Schneider 10,036 * * 10,036 *
Thomas J. O'Rourke 1,876 * * 1,876 *
Siegfried P. Duray-Bito 1,786 * * 1,786 *
Floyd Murray, LLC 3,758 * * 3,758 *
Jay A. Murray 1,696 * * 1,696 *
Richard J. Rouse 848 * * 848 *
------- --- --- ------- ---
TOTAL 150,000 * * 150,000 *
Shares issuable on a one for one basis upon exercise of warrants issued for
investment banking services exercisable at $3.50 per share:
Percent of Shares
to be Owned
Number of Percent of Total Number After the
--------- Total Number Outstanding of Shares ---------
Name Warrants Issued of Shares Owned Shares(1) Offered for Sale Offering(1)
---- --------------- --------------- -------- ---------------- ------------------
David Mura 10,000 * * 10,000 *
Richard J. Milham, Jr. 10,000 * * 10,000 *
Craig Norton 15,000 * * 15,000 *
Thomas W. Schneider 12,545 * * 12,545 *
Thomas J. O'Rourke 2,346 * * 2,346 *
Siegfried P. Duray-Bito 2,232 * * 2,232 *
Floyd Murray, LLC 4,697 * * 4,697 *
Jay A. Murray 2,120 * * 2,120 *
Richard J. Rouse 1,060 * * 1,060 *
Schneider Securities, Inc. 40,000 * * 40,000 *
------- --- --- ------- ---
TOTAL 100,000 * * 100,000 *
13
Shares issuable on a one for one basis upon exercise of warrants issued for
investment banking services exercisable at $4.50 per share:
Percent of Shares
to be Owned
Number of Percent of Total Number After the
--------- Total Number Outstanding of Shares ---------
Name Warrants Issued of Shares Owned Shares(1) Offered for Sale Offering(1)
---- --------------- --------------- -------- ---------------- ------------------
David Mura 5,000 * * 5,000 *
Brad Donner 10,000 * * 10,000 *
John Rick 10,000 * * 10,000 *
Richard J. Milham, Jr. 5,000 * * 5,000 *
James Battaglia 10,000 * * 10,000 *
Thomas W. Schneider 15,054 * * 15,054 *
Thomas J. O'Rourke 2,814 * * 2,814 *
Siegfried P. Duray-Bito 2,679 * * 2,679 *
Floyd Murray, LLC 5,637 * * 5,637 *
Jay A. Murray 2,544 * * 2,544 *
Richard J. Rouse 1,272 * * 1,272 *
Schneider Securities, Inc. 30,000 * * 30,000 *
------- --- --- ------- ---
TOTAL 100,000 * * 100,000 *
Shares issuable on a one for one basis upon exercise of warrants issued for cash
exercisable at $2.875 and $5.00 per share respectively:
Number of Percent of Total Number Percent of Shares
--------- Total Number Outstanding of Shares to be Owned
Name Warrants Issued of Shares Owned Shares(1) Offered for Sale After the Offering
---- --------------- --------------- -------- ---------------- ------------------
Steve Harrington 50,000 30,100 * 50,000 *
Robert Clawson 50,000 * * 50,000 *
------- ------ --- ------- ---
TOTAL 100,000 30,100 * 100,000 *
(*) Less than 1%
----------------
(1) The Investment Company, Inc. is controlled by James Linna.
(2) MS Farrell & Company is controlled by Chris Bowman.
(3) Schneider Securities, Inc. is controlled by David Mura.
(4) Meridian Capital Holdings, Inc. is controlled by Robert Clawson.
(5) Joseph Charles & Associates is controlled by Victor Savilla.
(6) Patterson Travis, Inc. is controlled by Michael Schultz.
(7) Reed Development is controlled by Dennis Reed.
(8) LaFoba & Co. is controlled by Jeffrey P. Emrich.
(9) Performance Staffing, Inc. is controlled by Mark Gigot.
(10) The Monolith Limited Partnership is controlled by Michael Weck.
14
PLAN OF DISTRIBUTION
We are registering the shares of common stock and shares issuable upon
exercise of common stock purchase warrants to permit public secondary sales of
the shares by the selling stockholders from time to time after the date of this
prospectus. If common stock purchase warrants are exercised, we anticipate that
the selling stockholders may sell all or a portion of the common stock from time
to time in one or more of the following transactions:
o on the Nasdaq National Market;
o in the over-the-counter market;
o in transactions other than on the Nasdaq SmallCap Market or in the
over-the-counter market;
o through brokers or dealers, or in direct transactions with purchasers;
o in connection with short sales;
o by pledge to secure debts and other obligations;
o in connection with the writing of options, in hedge transactions, and
in settlement of other transactions in standardized or
over-the-counter options; or
o in a combination of any of the above transactions.
The selling stockholders may sell their shares at prevailing market prices,
at prices related to prevailing market prices, at negotiated prices, or at fixed
prices. There is no assurance that the selling stockholders will sell any or all
of their common stock. The selling stockholders may also elect to sell their
shares pursuant to Rule 144 under the Securities Act of 1933.
The selling stockholders and any broker-dealers who act in connection with
sales of common stock may be deemed to be "underwriters" as that term is defined
in the Securities Act, and any commissions received by them and profit on any
resale of the common stock might be deemed to be underwriting discounts and
commissions under the Securities Act. In effecting sales, broker-dealers engaged
by the selling stockholders may arrange for other broker-dealers to participate.
The selling stockholders will pay all discounts and selling commissions in
connection with the sale of common stock, fees and expenses of counsel. We will
pay the registration fee payable to the SEC to register the common stock, fees
and expenses relating to the registration or qualification of the shares of
common stock under any applicable state securities or "blue sky" laws and the
fees and expenses of our counsel and independent accountants.
The selling stockholders and any other persons participating in the sale or
distribution of these shares of our common stock will be subject to applicable
provisions of the Securities Exchange Act of 1934 and the rules and regulations
thereunder including, without limitation, Regulation M. These provisions may
restrict activities of, and limit the timing of purchases and sales of any of
these shares of our common stock by, the selling stockholders. Furthermore,
pursuant to Regulation M, a person engaged in a distribution of our securities
is prohibited from bidding for, purchasing, or attempting to induce any person
to bid for or purchase our securities for a period beginning five business days
prior to the date of this prospectus throughout the applicable restrictive
period. These regulations may affect the marketability of these shares of our
common stock.
LEGAL MATTERS
The Law Office of Gary A. Agron, Denver, Colorado, will pass upon the
validity of the common stock offered under this prospectus.
EXPERTS
The financial statements incorporated by reference in this prospectus have
been audited by AJ. Robbins, P.C., independent certified public accountants, to
the extent and for the periods set forth in their report incorporated herein by
reference, and are incorporated herein in reliance upon such report given upon
the authority of said firm as experts in auditing and accounting.
15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following is a statement of the estimated expenses to be incurred in
connection with the distribution of the securities registered under this
Registration Statement:
Amount To Be Paid
Securities and Exchange Commission registration fee...... $ 1,933
Legal fees and expenses.................................. 15,000
Accounting fees and expenses............................. 1,000
Printing fees............................................ 1,000
Miscellaneous............................................ 6,067
--------
Total.................................................... $25,000
Item 15. Indemnification of Directors and Officers
Article XIII of the Registrant's Bylaws provides as follows:
"ARTICLE XIII
INDEMNIFICATION
Section 1. Subject to and in accordance with Florida Business Corporation
Act (Sec. 607.0850) and except as may be expressly limited by the Articles of
Incorporation and any amendments thereto, the corporation shall indemnify any
person:
(i) made a party to any proceeding (other than an action by, or in the
right of, the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
corporation's request, as a director, officer, employee or agent of another
corporation, or other enterprise; or
(ii) who was or is a party to any proceeding by or in the right of the
corporation, to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust or other
enterprise.
This indemnification shall be mandatory in all circumstances in which
indemnification is permitted by law.
Section 2. The corporation may maintain indemnification insurance
regardless of its power to indemnify under the Business Corporation Act.
Section 3. The corporation may make any other or further indemnification or
advancement of expenses of any of the directors, officers, employees or agents
under any bylaw, agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in his official capacity and to action in another
capacity while holding such office, except an indemnification against material
criminal or unlawful misconduct as set forth by statute, or as to any
transaction wherein the director derived an improper personal benefit.
II-1
Section 4. Except to the extent reimbursement shall be mandatory in
accordance herewith, the corporation shall have the right to refuse
indemnification, in whole or in part, in any instance in which the person to
whom indemnification would otherwise have been applicable, if he unreasonably
refused to permit the corporation, at its own expense and through counsel of its
own choosing, to defend him in the action, or unreasonably refused to cooperate
in the defense of such action."
Item 16. Exhibits
5.1 Opinion and Consent of Gary A. Agron, counsel to the Registrant (1)
5.2 Opinion and Consent of Gary A. Agron, counsel to the Registrant
23.1 Consent of Gary A. Agron. See 5.1, above. (1)
23.2 Consent of AJ Robbins, P.C. (1)
23.3 Consent of AJ Robbins, P.C.
23.4 Consent of Gary A. Agron. See 5.2 above.
(1) Previously filed as a part of this Registration Statement.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales of its
securities are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) 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;
(iii) 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
II-2
(2) 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.
(3) 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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of such
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of a
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the undersigned 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 such 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.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
II-3
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 Orlando, Florida, on February 4, 2002.
THE ORLANDO PREDATORS
ENTERTAINMENT, INC.
By: /s/ Eric A. Margenau
--------------------------------
Eric A. Margenau
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Eric A.
Margenau as his or her true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for such person and in his or her
name, place and stead, in any and all capacities, to sign any or all further
amendments (including post-effective amendments) to this Registration Statement
(and any additional Registration Statement related hereto permitted by Rule
462(b) promulgated under the Securities Act of 1933 (and all further amendments,
including post-effective amendments, thereto)), and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, and the Power
of Attorney above, this Registration Statement has been signed by the following
persons in the capacities indicated on February 4, 2002.
Signature Title
--------- -----
/s/ Eric A. Margenau Chief Executive Officer and Director
------------------------ (Principal Executive Officer)
Eric A. Margenau
/s/ John Pearce Chief Financial Officer
------------------------ (Principal Accounting Officer)
John Pearce
/s/ Lyle Reigel Director
------------------------
Lyle Reigel
/s/ Kenneth Levy Director
------------------------
Kenneth Levy
/s/ Michael A. Tatoian Director
------------------------
Michael A. Tatoian
/s/ James Ross Director
------------------------
James Ross
/s/ Jeffrey L. Bouchy Director
------------------------
Jeffrey L. Bouchy
II-4