As Filed with the Securities and Exchange Commission on September 24, 2001
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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GENESISINTERMEDIA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4710370
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
5805 Sepulveda Blvd., 8th Floor
Van Nuys, California 91411
(818) 902-4300
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
Ramy Y. El-Batrawi
GenesisIntermedia, Inc.
5805 Sepulveda Blvd., 8th Floor
Van Nuys, California 91411
(818) 902-4300
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
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Copy to:
Michel S. Tamer, Esq.
5805 Sepulveda Blvd., 8th Floor
Van Nuys, California 91411
(818) 902-4313
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on the form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<s> <c> <c> <c> <c>
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Proposed Maximum Proposed Maximum
Amount to be Aggregate Price Aggregate Offering Amount of
Title of Shares to be Registered Registered per Share(1) Price(1) Registration Fee
---------------------------------------- ------------------- -------------------- -------------------- --------------------
Common Stock, par value $.001 per share 6,467,740 $9.08 $58,727,079 $14,682
======================================== =================== ==================== ==================== ====================
(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the
amount of the registration fee on the basis of the average of the high and
low reported sale prices of a share of common stock of $ 9.08 on September
21, 2001, as reported by the Nasdaq National Market.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until 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. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
(Subject to completion, dated September 24, 2001)
6,467,740 SHARES
GENESISINTERMEDIA, INC.
COMMON STOCK
The shares of common stock of GenesisIntermedia, Inc. covered by this
prospectus may be sold from time to time by the stockholders specified in this
prospectus or their pledgees, donees, transferees or other successors in
interest. This prospectus relates to:
o 6,467,740 shares, of which:
o 1,500,000 are shares which may in the future be issued to
Riverdale LLC upon the exercise of options held by Riverdale LLC;
o 4,000,000 are shares which may in the future be issued to
Riverdale LLC upon the exercise of outstanding warrants held
issued by Genesis;
o 967,740 are shares of outstanding common stock held by Viacom
Outdoor, Inc.; and
o a presently indeterminate number of additional shares that may be
issuable upon stock splits, stock dividends, recapitalizations or
other similar transactions, in accordance with Rule 416 under the
Securities Act of 1933.
The number of shares as to which this prospectus relates is based on the
outstanding shares of common stock and the exercise of warrants and options at
the current applicable exercise rate. Additionally, the number of shares of
common stock issuable upon exercise of the warrants and options held by
Riverdale LLC listed in this prospectus are a maximum number as of the date of
this prospectus. On March 21, 2001, we effected a three-for-one stock split in
the form of a dividend to our stockholders. All share numbers used in this
prospectus reflect this stock split.
The common stock is listed on the Nasdaq National Market under the symbol
"GENI", on the Pacific Exchange under the symbol "GNS," and on the Frankfurt
Stock Exchange under the symbol "GIA." On September 21, 2001, the last sale
price of the common stock on the Nasdaq National Market was $9.08 per share.
Our principal executive offices are located at 5805 Sepulveda Boulevard,
8th Floor, Van Nuys, CA 91411, and our telephone number is (818) 902-4100. Our
website is located at http:\\www.genesisintermedia.com. Information contained in
our website is not a part of this prospectus.
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An investment in the shares offered in this prospectus entails a high
degree of risk. See "Risk Factors" beginning on page 4 for information that
should be considered by prospective investors.
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Neither the Securities and Exchange Commission nor or any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is September __, 2001.
THE COMPANY
GenesisIntermedia, Inc. uses its core competencies to develop technologies
and technology-related companies to market and sell products and services in
strategically identified market segments. We own distinct marketing channels,
and through CENTERLINQ, are a leading provider of public Internet access portals
in shopping malls. We have been establishing an infrastructure to build, develop
and nurture new companies and technologies, with an emphasis on matching
traditional products, services and businesses with compatible technologies. We
market our products and services, which we develop, license exclusively or
distribute for third parties, utilizing traditional media, including network and
cable television, radio, newspapers and magazines, as well as newer
technologies, including the Internet and our CENTERLINQ network. As we have done
with CENTERLINQ, we leverage our strength in operations, marketing and the
deployment of traditional and new media to advance new and innovative
technologies within strategically identified market segments.
Historically, our operation has consisted of the marketing, advertising and
sales of our own products and those of our clients utilizing traditional
marketing channels. While we continue to utilize conventional media to fulfill
our marketing needs and those of our clients, our focus more recently has been
on investing in and bringing to market innovative technology-based concepts that
center around use of emerging technologies, including the Internet.
We intend to continue to search for market segments in which we believe
marketing and technology strategies can be applied to leverage growth and
efficiency. As we identify these segments, we intend to develop, acquire or
otherwise apply technologies or our marketing capabilities to achieve growth and
increased market share. We may do this through the acquisition of businesses, as
we have done with CarRental Direct.com, Inc., through services agreements where
we make our technologies and marketing available to third parties or for our own
products, as we do with Men are From Mars, Woman are From Venus products, or
through the development of new technologies to create new market opportunities,
as we have done with CENTERLINQ.
CENTERLINQ is an integration of equipment and software that creates an
attractive physical presence in retail malls, allowing for interactive
advertising and retailing. CENTERLINQ is also accessible through the Internet at
www.CENTERLINQ.com. Advertising displayed on large screen monitors on and
adjacent to the public access kiosks enhances network usage and revenues. We
have invested heavily to support the operational needs of CENTERLINQ and to
attain a leadership position as a network of public Internet portals.
At August 1, 2001, CENTERLINQ was deployed and operating in 33 shopping
malls across the United States. Traffic at these malls could enable CENTERLINQ
to create up to approximately 46 million impressions per month. We foresee
CENTERLINQ network expansion in additional malls through North America, and we
have actively begin to pursue expansion in Europe, Asia and Latin America.
Even though we are entering emerging markets and have begun to generate
revenue from CENTERLINQ, we continue to rely on marketing production for a
substantial part of our revenues. Proprietary products sold by us through
integrated marketing capabilities including audio and video tapes and companion
material productions based on the book Men Are From Mars, Women Are From Venus,
by John M. Gray, Ph.D., and other new products we have recently acquired. We
expect that revenue from the marketing products will continue to account for a
major percentage of our revenues in the foreseeable future but, while revenues
are expected to rise, the overall percentage of revenues that can be attributed
to the these marketing activities will decline as we make additional investments
and acquisitions and generate additional growth from technology-related
enterprises.
Our CENTERLINQ experience has helped prove our model of how to apply
technology and marketing development standards and resources to targeted
industry segments to achieve an effective rollout of product. We believe our
best opportunity to create and enhance long-term shareholder value will be our
ability to identify targeted market segments, businesses and products where our
marketing and technology capabilities can be a catalyst for rapid growth and
market leadership. In addition to identifying businesses or products that may
benefit by our marketing and technology capabilities, our acquisition candidates
will include companies whose core competencies include the development of
communications and information technologies, networking solutions, interactive
concepts and a variety of other technologies that can be integrated to create
new or significantly expand market opportunities.
Our facilities and executive offices are located at 5805 Sepulveda
Boulevard, 8th Floor, Van Nuys, California 91411, and our telephone number is
(818) 902-4100.
2
RISK FACTORS
This prospectus contains forward-looking statements that involve risks and
uncertainties. Genesis' actual results could differ materially from those
anticipated in these forward-looking statements as a result of numerous factors,
including those set forth in the following risk factors and elsewhere in this
prospectus and the documents incorporated in this prospectus. In evaluating our
business, you should consider carefully the following factors in addition to the
other information set forth or incorporated in this prospectus.
Because our revenues depend on a limited number of products and clients, we must
retain our current products and clients or attract new ones
Our revenues to date have been derived from a relatively small number of
products and clients. If there is a significant reduction in product sales or if
we lose one of our larger products, our business will be adversely impacted. In
addition, a decrease in the marketing expenditures of our clients or the loss of
a major client would also have an adverse affect on our business. In 2000,
approximately 34% of our revenues came from the sale of one product. In
addition, our products and the sales of media time are frequently based on oral
agreements that may be terminated at any time. Our failure to diversify our
product line and expand our client base could adversely affect our results of
operations.
If our new products are not successful or if we are unable to continue to sell
media time to third parties, our business will be adversely affected
We only began to market new products that we acquired from third parties in
1998. Prior to that, in 1997, approximately 41% of our revenues were derived
from media sales to a corporation that is owned by a majority stockholders of
ours. In 1998, approximately 25% of our revenues were derived from media sales
to this corporation. In addition, revenue from telemarketing for products owned
by this client accounted for approximately 78% of our total telemarketing
revenues in 1997 and approximately 90% in 1998. In 2000, none of our media sales
and none of telemarketing revenues were derived from transactions with this
client. We must begin to derive significant revenues from our new products and,
to the extent we continue our media sales business, continue to make media sales
to third parties for our business to succeed.
Recent expansion into new interactive multimedia markets has not yet
generated significant revenue
Since 1998, we have expanded our media offerings to include interactive
multimedia technologies, including the Internet, and interactive kiosks through
the CENTERLINQ network to businesses seeking to conduct electronic commerce. The
expansion included the formation of our Centerlinq, Inc. subsidiary. However,
revenue generated by this subsidiary has not been significant and capital
investments to develop and deploy the CENTERLINQ network have been substantial.
We expended approximately $7 million in 1999 and $17 million in 2000 on
CENTERLINQ network development. We expect that we will continue to invest in the
building of our infrastructure and expansion. As a result, we expect to
experience losses in these areas in 2001.
Our ability to compete effectively will be adversely affected if our marketing
channels and technologies do not gain acceptance
We are developing multidisciplinary marketing that we believe will be
competitive. This development includes choices about the marketing channels we
employ and using the appropriate technology to exploit those channels. If our
marketing channels are not successful or if we fail to effectively exploit those
channels, our business will be adversely affected.
Our ability to expand our business will be significantly limited if we
cannot obtain additional financing
To accomplish our plans to expand CENTERLINQ and purchase new products and
media time to advertise these products, we need substantial additional capital
which we may not be able to obtain. We are currently negotiating with lenders to
obtain additional financing, but this additional financing may not be available
on terms that are favorable to us, or at all. If adequate funds are not
available, or are not available on acceptable terms, our ability to implement
our expansion plans will be significantly limited.
Reliance on external sales force
Our strategy has been to concentrate on developing the infrastructure
supporting CENTERLINQ and the technology needed to make the system work
properly. Efforts are now under way to bolster the management team with
marketing and sales personnel. We have placed significant reliance on our
strategies and the effectiveness in selling advertising on the CENTERLINQ
network. Should we fall short in our expectations or the timing in selling
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advertising be delayed, we could experience a significant decline in our
projected CENTERLINQ operations.
Threat of mall owners sponsoring competing platforms
The real estate community has been characterized by property owner
consortiums and efforts by larger capitalization owners to sponsor their own
e-commerce platforms. There is some risk that kiosk-based platforms will be
offered by mall owners. The Simon Property Group and General Growth Properties
have both announced intentions to sponsor such interactive advertising in their
malls.
Ability to sign up additional malls
We are pursuing to enter into lease contracts with mall owners for
deployment of CENTERLINQ. There is no assurance that we will be successful in
signing additional mall contracts or renewing our existing contracts on
acceptable terms. Failure to enter into new contracts for deployment of
CENTERLINQ on acceptable terms could negatively impact capital raising and could
adversely affect or operating results.
Dependence on a small number of clients and products
A relatively small number of clients and products have historically
contributed significantly to our revenues. If there is a significant reduction
in product sales or in a large client's marketing expenditures or the loss of
one or more of our largest products or clients, and this is not replaced by new
products or client accounts or an increase in business from existing products or
clients, then this will have a significant adverse impact on us. However,
because we intend to continue to rely on broad- or multi-market products like
the Men Are From Mars products, it is possible that the dependence on revenues
from a limited number of products will continue in the future. If we do not
diversify our product lines and client base, we may put ourselves in a position
of risk that the loss or under-performance of a single product or client may
adversely affect us.
Our current business structure may not be successful in addressing
quarterly fluctuations
Our management believes that our business structure of offering
multi-disciplinary marketing for our own and third parties' disparate products
and services is unique. We believe the uniqueness of this structure, as well as
the inherent uncertainty of forecasting product sales generally, will make
quarterly forecasts difficult and quarterly results will fluctuate. These
quarterly fluctuations and resulting deviations from forecast results may cause
volatility in the price for the common stock that may not reflect long-term
results or prospects. We expect these fluctuations to be exaggerated as we
execute our acquisition strategy, which will involve direct expenses, as well as
new product development and marketing expenses. The magnitude and timing of
these expenses will vary. Integration of disparate products, services and
distribution channels that are developed internally, acquired or contracted with
third parties to market will also contribute to the unpredictability of
quarterly results.
Acceptance of marketing channels and technologies are key to our ability
to compete
We are developing multi-disciplinary marketing that we believe will be
competitive. This development includes choices about the right marketing
channel--such as CENTERLINQ and its versatile kiosk system for deployment in
regional shopping malls and other public access areas--and the right technology
to exploit that channel--the Internet and the interface of the kiosks. A number
of factors related to those choices may adversely affect competitiveness,
including:
o rapid technological changes that make these or future offerings
obsolete;
o changes in, or mistakes in gauging user and client requirements and
preferences; and
o frequent new product and service introductions by others or evolving
industry standards and practices in emerging markets that may promote
adoption of technologies other than those chosen by us.
The oral agreements on which much of our business relies are terminable at will
We frequently market products on the basis of oral agreements that may be
terminated by either party at any time, and there are no written contracts
relating to the sale of media time to clients. Because of those terminable
arrangements, any of our clients may discontinue utilizing their services at any
time in the future.
4
Future expansion is dependent on raising additional capital
We are currently negotiating to obtain additional financing for the
expansion of CENTERLINQ. If the negotiations do not materialize and we are
unable to obtain additional financing, the future expansion of CENTERLINQ will
be slowed significantly and will adversely affect us.
We are also seeking additional financing to expand our existing business to
purchase new products and purchase media time to advertise for these products.
If we are unable to obtain this financing, our ability to purchase media time to
advertise our products will be significantly limited.
Future sales of our common stock by existing stockholders or sales by us to new
investors could depress our stock price
As of June 30, 2001, we had 22,252,830 shares of common stock outstanding,
and approximately 3,623,842 additional shares of common stock were issuable upon
the exercise of outstanding employee stock options, of which 2,077,486 were
exercisable. All of the shares underlying those options have been registered for
resale on the SEC's Form S-8. We are registering 6,467,740 shares of our common
stock in the registration statement of which this prospectus is a part, 967,740
of which are currently outstanding restricted shares. All of the shares being
registered in connection with this prospectus may be sold in the public market.
Sales of a substantial number of shares of our common stock in the public
market, or the perception that substantial sales might occur, could cause the
market price of our stock to decrease significantly. This could also make it
more difficult for us to raise capital by selling stock or use our stock as
currency in acquisitions.
International expansion may result in new business risks
If we expand internationally, this expansion could subject us to new
business risks, including:
o adapting to the differing business practices and laws in foreign
commercial markets;
o difficulties in managing foreign operations;
o limited protection for intellectual property rights in some countries;
o difficulty in accounts receivable collection and longer collection
periods;
o costs of enforcement of contractual obligations;
o impact of recessions in economies outside the United States;
o currency exchange rate fluctuations; and
o potentially adverse tax consequences.
The sale of the shares registered in this offering will cause immediate dilution
Assuming the exercise of all of the warrants and options, granted to
Riverdale and no exercise by us for the options granted in our favor in
connection with the Riverdale transaction, the sale of the shares registered in
this offering, which represent approximately 25% of our total outstanding common
stock, will have an immediate dilutive effect on the outstanding shares and may
cause a downward pressure on the trading price of our common stock.
Market volatility may have an adverse effect on our stock price
The trading price of our common stock has fluctuated widely in the past
and, like most stocks, it will continue to fluctuate in the future. The price
could fluctuate widely based on numerous factors, including:
o quarter-to-quarter variations in our operating results;
o changes in analysts' estimates of our earnings or our competitors'
earnings;
o announcements by us or our competitors of technological innovations or
new services;
o general conditions in the commercial real estate industry;
o developments or disputes concerning copyrights or proprietary rights;
o regulatory developments; and o economic or other factors.
In addition, in recent years, the stock market in general, and the shares
of Internet-related and other technology companies in particular, have
experienced extreme price fluctuations. This volatility has had a substantial
effect on the market prices of securities issued by many companies for reasons
unrelated to the operating performance of the specific companies.
5
Our success depends on our ability to retain Ramy El-Batrawi and other
key personnel
We believe that the development of our business to date has been largely
the result of the services of our chief executive officer, Ramy El-Batrawi.
Although we are developing a management team, the loss of Mr. El-Batrawi's
services would have a detrimental impact on the further development of business.
Our success also depends on our ability to hire and retain other qualified
employees. We may not be able to locate and hire those employees because of the
intense competition in our industry for personnel with the requisite skills.
Stock ownership by executive officers and directors provides substantial
influence over matters requiring a vote of stockholders
Our executive officers and directors beneficially own a sufficient number
of our outstanding common stock to exercise substantial influence over the
election of directors and other matters requiring a vote of stockholders. This
concentrated ownership might delay or prevent a change in control and may impede
or prevent transactions in which stockholders might otherwise receive a premium
for their shares.
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
We have made forward-looking statements in this prospectus, all of which
are subject to risks and uncertainties. Forward-looking statements include
information concerning possible or assumed future business success or financial
results. The forward-looking statements are subject to a number of risks,
uncertainties and assumptions about us, including those described in "Risk
Factors."
When we use words like "believe," "expect," "anticipate" or similar words
or terms, we are making forward-looking statements.
You should note that an investment in our common stock involves risks and
uncertainties that could affect our future business success or financial
results. Our actual results could differ materially from those anticipated
expressly or implicitly in these forward-looking statements as a result of many
factors, including those set forth in "Risk Factors" and elsewhere in this
prospectus.
We believe that it is important to communicate our expectations to our
investors. However, there may be events in the future that we are not able to
predict accurately or over which we have no control. You should be aware that
the occurrence of the events described under the heading "Risk Factors" and
elsewhere in this prospectus could adversely affect our business, financial
condition and operating results.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares by the
selling stockholders. If all of the warrants to purchase 4,000,000 of the shares
of our common stock being offered by this prospectus were presently exercised
for cash, we would receive $24,000,000 in cash proceeds from the sale of those
shares to the selling stockholders. In connection with the grant of these
4,000,000 warrants to Riverdale LLC, our principal stockholders issued to us
options to acquire 3,000,000 shares of our common stock held by them at exercise
prices equaling 3,000,000 of Series IA and IC of the 4,000,000 warrants issued
by us to Riverdale LLC. The aggregate exercise price to exercise these options
is $20,000,000. We may use up to that amount of the proceeds of the exercise of
the warrants to exercise some or all of those 3,000,000 options. If all of the
options to purchase 1,500,000 shares of our common stock presently held by Mr.
El-Batrawi and being offered by this prospectus were presently exercised for
cash, Ramy El-Batrawi, our chairman and chief executive officer, would receive
$4,000,000 in cash proceeds from the sale of those shares to Riverdale LLC. Any
net proceeds we receive upon exercise of the warrants and that are not used to
exercise options as discussed above will be used for working capital and other
general corporate purposes. If the warrants are exercised through warrant
conversion, "cashless exercise" or through the surrender of other shares of
stock, the cash proceeds will be reduced.
SELLING STOCKHOLDERS
The following table sets forth, as of August 1, 2001, certain information
regarding the beneficial ownership of the outstanding common stock by the
selling stockholders, consisting of:
o the shares that the selling stockholders presently hold; and
o the shares that the selling stockholders may acquire upon exercise of
options or warrants,
both before the offering of the shares and as adjusted to reflect the sale of
the shares.
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On July 2, 2001, we entered into a conditional commitment letter with
Riverdale LLC relating to acquisition financing loan facility. In connection
with the commitment, we issued three series of warrants, Series IA, IB and IC,
to purchase up to an aggregate of 4,000,000 shares of our common stock for an
aggregate purchase price of $24 million. 1,000,000 shares of our common stock
are subject to Series IA warrants, 1,000,000 shares of our common stock are
subject to Series IB warrants and 2,000,000 shares of our common stock are
subject to Series IC warrants. The warrants are exercisable from July 2, 2001
through July 1, 2005 at an exercise price equal to $2.00 for Series IA, $4.00
for Series IB and $9.00 for Series IC (subject to certain adjustments). In
connection with the commitment, Ramy El-Batrawi, our chairman and chief
executive officer, granted two series of options to Riverdale LLC. Upon exercise
of Series IA options, Riverdale LLC has the right to purchase 1,000,000 shares
of our common stock held by Mr. El-Batrawi at an exercise price of $2.00 per
share and, upon exercise of Series IB options, Riverdale LLC has the right to
purchase 500,000 shares of our common stock held by Mr. El-Batrawi at an
exercise price of $4.00 per share. In connection with the issuance of the
warrants, we entered into a registration rights agreement with the Riverdale
LLC, pursuant to which we are registering the number of shares of common stock
currently underlying the options and the warrants. Riverdale LLC is entitled to
certain liquidated damages and redemption rights in connection with certain
defaults under the registration rights agreement.
To reduce the dilutive effect on existing stockholders, Mr. El-Batrawi and
Ultimate Holdings, Ltd., a principal stockholder, granted options to us to
acquire a total of 3,000,000 shares of common stock, 1,000,000 shares at an
exercise prices of $2.00 and 2,000,000 shares at an exercise price of $9.00 per
share. These options are exercisable if Riverdale LLC exercises the
corresponding series of warrants issued by us. If Riverdale LLC exercises all of
the warrants issued by us and we exercise all of the options issued to us, we
will have issued a net of 1,000,000 shares at $4.00 per share.
We have agreed to initially register 6,467,740 shares for resale by the
selling stockholders. Of those shares, up to 5,500,000 being offered by the
selling stockholders were or will be acquired from us or Mr. El-Batrawi as
follows:
o Warrants--4,000,000 shares upon exercise of warrants issued pursuant
to a warrant agreement by and between us and Riverdale LLC dated July
2, 2001.
o Options--1,500,000 shares upon exercise of options issued pursuant to
an option agreement by and between Ramy El-Batrawi and Riverdale LLC
dated July 2, 2001.
The remaining 967,740 shares were issued to Viacom Outdoor, Inc. on July
31, 2001 when Viacom Outdoor exercised the warrants issued to them under the
terms of a Securities Purchase Agreement between Viacom Outdoor and us dated
June 30, 2000.
Each selling stockholder that purchased securities from us in these
transactions represented to us that it was acquiring the securities and would
acquire the shares of common stock for its own account and with no present
intention of distributing any of the shares except pursuant to this prospectus
or sales exempt from the registration requirements of the Securities Act. Under
our agreements with the selling stockholders, we filed with the SEC, under the
Securities Act, a registration statement on Form S-3, of which this prospectus
forms a part, with respect to the resale of the shares from time to time on the
Nasdaq National Market, the Pacific Exchange or the Frankfurt Stock Exchange or
in privately negotiated transactions. We have agreed to use our best efforts to
keep the registration statement effective until the date on which all securities
covered in the registration statement are eligible for sale without limitations
as to volume pursuant to Rule 144, or the date on which all securities covered
by the registration statement have been sold and the distribution contemplated
thereby has been completed.
The selling stockholders have not held any position or office or had a
material relationship with us or any of our affiliates within the past three
years other than as a result of the ownership of the common stock, debentures or
warrants or options. We may amend or supplement this prospectus from time to
time to update this disclosure.
The number of shares being offered by this prospectus as set forth in the
following table represents the specified number of shares that may be sold by
the selling stockholders under this prospectus. However, under Rule 416 under
the Securities Act, the registration statement of which this prospectus is a
part will also cover any additional shares of common stock that become issuable
in connection with the shares registered for sale in this prospectus by reason
of any stock dividend, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which results in an
increase in our number of outstanding shares of common stock.
7
The numbers set forth in the following table assume that the selling
stockholders will sell all of their shares offered by this prospectus to
unaffiliated third parties under this prospectus. The selling stockholders may
sell all or part of or none of their shares.
<s> <c> <c> <c> <c>
Shares Issuable
Shares Upon Presently Beneficial
Beneficially Convertible or Shares Ownership After
Owned Prior Exercisable Being Offering
Selling Stockholders to Offering Securities Offered
Included in --------------------
Total Number Percent
------------------------------- ------------- ------------------ ------------ -------- --------
Riverdale LLC............... 5,500,000 5,500,000 5,500,000 0 0
Viacom Outdoor, Inc. ....... 967,740 0 967,740 0 0
Total....................... 6,467,740 5,500,000 6,467,740 0 0
PLAN OF DISTRIBUTION
The shares are being offered on behalf of the selling stockholders. Subject
to the contractual restrictions described below, the shares may be sold or
distributed from time to time by the selling stockholders, or by pledgees,
donees or transferees of, or other successors in interest to, the selling
stockholders, directly to one or more purchasers (including pledgees) or through
brokers, dealers or underwriters who may act solely as agents or may acquire
shares as principals, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at negotiated prices, or at fixed
prices, which may be changed.
Subject to contractual restrictions, the sale of the shares may be affected
in one or more of the following methods:
o ordinary brokers' transactions, which may include long or short sales;
o transactions involving cross or block trades or otherwise on the
Nasdaq National Market, the Pacific Exchange or the Frankfurt Stock
Exchange;
o purchases by brokers, dealers or underwriters as principal and resale
by such purchasers for their own accounts under this prospectus;
o "at the market" to or through market makers or into an existing market
for the shares;
o in other ways not involving market makers or established trading
markets, including direct sales to purchases or sales effected through
agents;
o through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise);
o in privately negotiated transactions not involving a broker-dealer; or
o any combination of the foregoing, or by any other legally available
means.
In addition, upon expiration of the restricted period agreed to between the
company and Riverdale, Riverdale or its successors in interest may, after the
effective date of the registration statement of which this prospectus is a part,
enter into hedging transactions with broker-dealers who may engage in short
sales of shares in the course of hedging the positions they assume with the
selling stockholders. Riverdale may, upon expiration of the restricted period
and after the effective date of the registration statement of which this
prospectus is a part, also engage in short sales and other transactions in the
common stock or derivatives thereof, and may pledge, sell, deliver or otherwise
transfer the common stock offered in this prospectus in connection with such
transactions. Riverdale and its successors in interest may, upon expiration of
the restricted period and after the effective date of the registration statement
of which this prospectus is a part, also enter into option or other transactions
with broker-dealers that require the delivery by those broker-dealers of the
shares, which shares may be resold thereafter under this prospectus. The selling
stockholders may also sell the shares in exempt transactions under Rule 144, to
the extent that exemption is available.
Brokers, dealers, underwriters or agents participating in the distribution
of the shares as agents may receive compensation in the form of commissions,
discounts or concessions from the selling stockholders and/or purchasers of the
8
shares for whom the broker-dealers may act as agent, or to whom they may sell as
principal, or both. The compensation as to a particular broker-dealer may be
less than or in excess of customary commissions. The selling stockholders and
any broker-dealers who act in connection with the sale of shares under this
prospectus may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions they receive and proceeds of any sale of
shares may be deemed to be underwriting discounts and commissions under the
Securities Act. Neither we nor any selling stockholders can presently estimate
the amount of that compensation. We know of no existing arrangements between any
selling stockholders, and any other stockholders, broker, dealer, underwriter or
agent relating to the sale or distribution of the shares.
At the time a particular offer of shares is made, if required, a prospectus
supplement will be distributed that will set forth the number of shares being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
commission and other item constituting compensation, any discount, commission or
concession allowed or re-allowed or paid to any dealer, and the proposed selling
price to the public.
We have advised the selling stockholders of the anti-manipulation rules of
Regulation M under the Exchange Act in connection with a distribution of
securities. In addition, we will make copies of this prospectus available to the
selling stockholders and have informed it of the need for delivery of copies of
this prospectus to purchasers at or prior to the time of any sale of the shares
offered by this prospectus. The selling stockholders may indemnify any
broker-dealer that participates in transactions involving the sale of the shares
against certain liabilities, including liabilities arising under the Securities
Act.
Each of the selling stockholders has agreed to contractual restrictions
concerning the distribution of shares. Riverdale has agreed not to offer, sell,
transfer, pledge, hypothecate, contract to sell, grant any option for the sale
of shares or otherwise dispose of, directly or indirectly, any of the shares
until after the end of an agreed restricted period, the latest date for which
would terminate July 2, 2002. Viacom Outdoor has agreed that it will not, at any
time, engage in any short sales under certain conditions and certain type of
pledges involving the company's shares. We have also agreed to indemnify the
selling stockholders and any person controlling those selling stockholders
against certain liabilities, including liabilities under the Securities Act.
Those selling stockholders have agreed to indemnify us and certain related
persons against certain liabilities, including liabilities under the Securities
Act.
We have agreed with the selling stockholders to keep the registration
statement of which this prospectus constitutes a part effective until all the
shares are sold by the selling stockholders or all unsold shares are immediately
saleable without restriction (including without volume limitations) and without
registration under the Securities Act.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered by this
prospectus has been passed upon for us by Michel S. Tamer, Esq., our general
counsel.
EXPERTS
Our consolidated financial statements as of December 31, 2000, and for each
of the years in the three-year period ended December 31, 2000, and all related
schedules, have been incorporated by reference in the registration statement in
reliance upon the report of Singer Lewak Greenbaum & Goldstein, LLP, independent
certified public accountants, incorporated by reference, and upon the authority
of said firm as experts in accounting and auditing.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede previously filed
information, including information contained in this prospectus.
We incorporate by reference the documents listed below and 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 until this offering has been completed:
o The Annual Report on Form 10-K for the period ended December 31, 2000
filed with the Commission on April 16, 2001.
9
o Amendment No. 1 on Form 10-K/A filed with the Commission on April 30,
2001.
o Amendment No. 2 on Form 10-K/A filed with the Commission on May 25,
2001.
o The Current Report on Form 8-K dated June 29, 2001 filed with the
Commission on July 2, 2001.
o The Current Report on Form 8-K dated June 29, 2001 filed with the
Commission on July 2, 2001.
o The Current Report on Form 8-K/A dated June 29, 2001 filed with the
Commission on July 5, 2001.
o The Current Report on Form 8-K dated August 30, 2001 filed with the
Commission on August 31, 2001.
You may request free copies of these filings by writing or calling us at:
GenesisIntermedia, Inc.
5805 Sepulveda Boulevard, 8th Floor
Van Nuys, California 91411
(818) 902-4100
Attn: Investor Relations
This prospectus is part of a registration statement we filed with the SEC.
You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different information.
The selling stockholders are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the document.
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports,
proxy materials and other information with the SEC. You may read and copy these
reports, proxy materials and other information at:
Securities & Exchange Regional Office of SEC
Commission 500 West Madison Street
Public Reference Room Suite 1400
450 Fifth Street, N.W. Chicago, IL 60661-2511
New York, NY 10048
You can request copies of these documents by writing to the SEC and paying
a fee for the copying costs. Please call the SEC at 1-800-SEC-0330 for more
information about the operation of the public reference room. Our SEC filings
are also available at the SEC's Internet web site at http://www.sec.gov. You may
also visit our web site at http:\\www.genesisintermedia.com.
10
No dealer, salesperson, or other person has been authorized to give any
information or to make any representations other than those contained in this
prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized by GenesisIntermedia, Inc. or any
selling stockholders. This prospectus does not constitute an offer to sell or
the solicitation of an offer to buy any securities other than the securities to
which it relates or any offer to sell or the solicitation of an offer to buy
securities in any circumstances in which an offer or solicitation is unlawful.
Neither the delivery of this prospectus nor any sale made under this prospectus
shall, under any circumstances, create any implication that there has been no
change in the affairs of the company since the date of this prospectus or that
the information contained in this prospectus is correct as of any date
subsequent to its date.
TABLE OF CONTENTS
PAGE
Company................................ 2
Risk Factors........................... 3
Information Regarding
Forward-Looking Statements............. 6
Use of Proceeds........................ 6
Selling Stockholders................... 6
Plan of Distribution................... 8
Legal Matters.......................... 9
Experts................................ 9
Information Incorporated By
Reference.......................... 9
Where You Can Find More
Information........................ 10
GENESISINTERMEDIA, INC.
6,467,740 SHARES
COMMON STOCK
PROSPECTUS
__________, 2001
PART II.
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other expenses of issuance and distribution.
The following table sets forth the expenses to be incurred in connection
with the issuance and distribution of the securities being registered hereby.
All expenses other than the SEC registration fee, the Nasdaq National Market,
and the Pacific Exchange listing fee are estimates.
SEC registration fee............................. $ 14,682
Nasdaq National Market listing fee............... 17,500
Pacific Exchange listing fee..................... 7,500
Accounting fees and expenses..................... 10,000
Legal fees and expenses.......................... 20,000
Printing expenses................................ 2,000
Miscellaneous.................................... 5,000
-----------
TOTAL........................................... $ 76,682
Item 15. Indemnification of directors and officers.
Section 102(b)(7) of the Delaware General Corporation Law (the "Delaware
Law") permits a corporation to provide in its certificate of incorporation that
directors of the corporation shall not be personally liable to the corporation
or its shareholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its shareholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for payments of unlawful dividends or unlawful stock repurchases or
redemptions, or (iv) for any transaction from which the director derived an
improper personal benefit. The Registrant's Certificate of Incorporation
contains such a provision.
Section 145 of the Delaware Law provides that a corporation may indemnify
directors and officers as well as other employees and individuals against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement in connection with specified actions, suits or proceedings, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation a "derivative action"), if they acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful. A
similar standard is applicable in the case of derivative actions, except that
indemnification only extends to expenses (including attorneys' fees) incurred in
connection with defense or settlement of such action, and the statute requires
court approval before there can be any indemnification where the person seeking
indemnification has been found liable to the corporation. Under Section 145, a
corporation shall indemnify an agent of the corporation for expenses actually
and reasonably incurred if and to the extent such person was successful on the
merits in a proceeding or in defense of any claim, issue or matter therein.
Section 145 of the Delaware Law provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, bylaws,
disinterested director vote, shareholder vote, agreement or otherwise. The
limitation of liability contained in the Registrant's Certificate of
Incorporation and the indemnification provision included in the Registrant's
Bylaws are consistent with Delaware Law Sections 102(b)(7) and 145. The
Registrant has also entered into separate indemnification agreements with its
directors and officers that could require the Registrant, among other things, to
indemnify them against certain liabilities that may arise by reason of their
status or service as directors and officers and to advance their expenses
incurred as a result of any proceeding against them as to which they could be
indemnified, including liabilities that may arise under the Securities Act of
1933. In addition, the Registrant has purchased directors and officers
insurance.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to such provisions, the Registrant has been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is therefore unenforceable.
II-1
Item 16. Exhibits.
See Index to Exhibits at page II-4.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in
the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii)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 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.
(2) For determining liability under the Securities Act, to treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering the securities at that time to be the initial bona
fide offering.
(3) To file a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(b)For determining any liability under the Securities Act, each filing of
the 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
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Van Nuys, State of California, on September 24, 2001.
GenesisIntermedia, Inc.
By: /s/ Ramy El-Batrawi
-------------------------------
Ramy El-Batrawi
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below hereby constitutes and appoints Ramy El-Batrawi and Douglas E. Jacboson,
or either of them, his or her attorneys-in-fact and agents, each with full power
of substitution for him or her and in his or her name, place and stead, in any
and all capacities, to sign any or all amendments to this Registration Statement
and any registration statements for the same offering effective upon filing
pursuant to Rule 462(b), and to file the same with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each of said attorneys-in-fact and agents full power
and authority to do so and perform each and every act and thing requisite and
necessary to be done in connection with such registration statements, as fully
to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that either of said attorneys-in-fact and agents,
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, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<s> <c> <c>
Signature Title Date
------------ -------- ----------
/s/ Ramy El-Batrawi
_____________________________ Chief Executive Officer, Chairman September 24, 2001
Ramy El-Batrawi
/s/ Douglas E. Jacobson
_____________________________ Chief Financial Officer, Director (Principal September 24, 2001
Douglas E. Jacobson Financial and Accounting Officer) and
Secretary
/s/ Stephen A. Weber
______________________________ Director September 24, 2001
Stephen A. Weber
______________________________ Director September __, 2001
George W. Heyworth
______________________________ Director September __, 2001
Michael Roy Fugler
II-3
INDEX TO EXHIBITS
Exhibit
Number Description
---------- ---------------
10.1 Conditional Commitment Letter by and among the Registrant,
Riverdale LLC, Ramy El-Batrawi and Ultimate Holdings, Ltd.
dated July 2, 2001(1)
10.2 Warrant Agreement entered into by and between the Registrant
and Riverdale LLC dated July 2, 2001(1)
10.3 Registration Rights Agreement by and between the Registrant
and Riverdale LLC dated July 2, 2001(1)
10.4 Amended and Restated Option Agreement entered into by and
between Ramy El-Batrawi and Riverdale LLC dated
September 10, 2001*
10.5 Securities Purchase Agreement by and between the Registrant
and Viacom Outdoor, Inc. dated June 30, 2000(2)
10.6 Option Agreement dated July 2, 2001 between Ramy El-Batrawi
and the Registrant(3)
10.7 Option Agreement dated July 2, 2001 between Ultimate
Holdings, Ltd. and the Registrant(3)
10.8 Amended and Restated Escrow Agreement dated July 26, 2001 by
and between Riverdale LLC, Ramy El-Batrawi, the Registrant and
Wilmington Trust FSB*
5.1 Opinion of counsel*
23.1 Consent of Singer Lewak Greenbaum & Goldstein, LLP*
----------
* Filed herewith
(1) Incorporated by reference to the Exhibits to the Report on Form 8-K filed
by the Registrant on July 2, 2001. (Commission File No.: 001-15029)
(2) Incorporated by reference to the Annual Report on Form 10-K for the period
ended December 31, 2000 filed with the Commission on April 16, 2001.
(Commission File No.: 001-15029)
(3) Incorporated by reference to the Exhibits to the Report on Form 8-K/A filed
by the Registrant on July 5, 2001. (Commission File No.; 001-15029)
II-4