As filed with the Securities and Exchange Commission on July 16, 2001
File No.333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MAGNUM SPORTS & ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3393152
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1330 Avenue of the Americas, 39th Floor
New York, New York 10019
(212) 246-7380
(Address, including zip code, and telephone number,
Including area code, of registrant's principal executive offices)
Robert M. Gutkowski, Chief Executive Officer
Magnum Sports & Entertainment, Inc.
1330 Avenue of the Americas, 39th Floor
New York, New York 10019
(212) 246-7380
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Howard S. Jacobs, Esq.
Rosenman & Colin LLP
575 Madison Avenue
New York, New York 10022-2585
(212) 940-8800
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Approximate date of proposed sale to the public: From time to time after the
effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of each
class of Proposed maximum Proposed maximum Amount of
security to be Amount to be offering price aggregate Registration
registered Registered per share offering price Fee
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Common Stock,
par value 7,069,380(1) $0.69 $4,877,872.20(2) $1,219.47
$0.01 per share
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(1) To be offered from time to time by selling stockholders based upon
prevailing market prices.
(2) The proposed maximum aggregate price per share was estimated pursuant to
Rule 457(c) promulgated under the Securities Act of 1933, solely for the
purpose of determining the registration fee, based on the average of high
and low prices of the registrant's common stock as quoted on the Nasdaq
SmallCap Market System on July 12, 2001. 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.
PROSPECTUS SUBJECT TO COMPLETION, DATED JULY 16, 2001
MAGNUM SPORTS & ENTERTAINMENT, INC.
7,069,380 Shares of Common Stock
This prospectus covers the resale of 7,069,380 shares of Magnum's
common stock by the selling stockholders named in this prospectus of which
4,259,501 shares of common stock are issuable upon exercise of currently
exercisable warrants to purchase shares of Magnum's common stock held by the
selling stockholders. See "Selling Stockholders". Magnum will not receive any
proceeds from the sale of any of the 7,069,380 shares by the selling
stockholders, except with respect to those shares that are acquired in
connection with the exercise of warrants by any selling stockholders, requiring
the payment of the exercise price of the warrants by the holder to Magnum in
order to receive the shares underlying the warrants. See "Selling Stockholders"
and "Plan of Distribution."
SEE "RISK FACTORS" BEGINNING ON PAGE 2 FOR A DISCUSSION OF INVESTMENT
RISK FACTORS THAT YOU SHOULD CONSIDER BEFORE YOU INVEST IN THE COMMON STOCK
OFFERED AND SOLD BY THIS PROSPECTUS.
Our common stock is traded on The Nasdaq SmallCap Market System under
the symbol "MAGZ." On July 13, 2001, the last reported sale price of the common
stock was $0.70.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION ("SEC") 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.
July ___, 2001
[The following language is located on the left margin of the first page
of the preliminary prospectus]
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
TABLE OF CONTENTS
Risk Factors..............................................................2
Information About Magnum..................................................8
Use of Proceeds..........................................................13
Selling Stockholders.....................................................13
Plan of Distribution.....................................................17
Legal Proceedings........................................................[]
Legal Matters............................................................18
Experts..................................................................18
Forward-Looking Statements...............................................19
Where You Can find More Information......................................19
RISK FACTORS
Our future operating results depend upon many factors and are subject
to various risks and uncertainties. The known material risks and uncertainties
which may cause our operating results to vary from anticipated results or which
may negatively affect our operating results and profitability are as follows:
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WE HAVE ALWAYS HAD OPERATING LOSSES
We have always had operating losses. We have never been profitable. We
incurred operating losses of $12,749,197 and $10,522,533 for the years ended
December 31, 2000 and December 31, 1999, respectively. As of March 31, 2001, we
had an accumulated deficit of $35,539,754. For the three month period ending
March 31, 2001, we had net continuing operations losses of $1,912,218.
We will continue to incur losses until we are able to make one or more
acquisitions of profitable companies. We presently have very little operating
revenues. We do not expect to be able to generate significant operating revenues
until we are able to complete the acquisition of Ford Models, Inc. However, we
cannot offer any assurances that we will be able to complete the purchase of
Ford Models. The completion of the acquisition of Ford Models, Inc. is subject
to Magnum's entering to into a purchase agreement for this acquisition, Magnum
procuring the necessary financing to complete the purchase, obtaining
stockholder approval and possibly other regulatory approvals and consents. See
"Our Future Success is Dependent in Part on Our Ability to Make Acquisitions "
and "If We Are Unable to Obtain Significant Capital, We will Not Be Able to
Acquire Companies". We anticipate that we will be incurring losses in the
foreseeable future and included in such losses are general administrative
expenses, management salaries and consulting fees and rental expenses. We have
implemented expense reduction initiates principally through the elimination of
several non-profitable businesses that were in existence at the time that
Messrs. Robert Gutkowski and Charles Koppelman assumed their positions as Chief
Executive Officer and Chairman of Magnum, respectively in June 2000. However,
prior to the time as Magnum achieves profitability, we will be required to rely
on equity, debt or other sources of financing in addition to our revenues from
our existing operations. Our limited operating history makes it difficult to
predict accurately our future operating results and we cannot provide any
assurance that any of our business strategies will be successful or that we will
be profitable in any future quarter or period. We believe that we have
sufficient funds to operate the business through the end of November 2001. We
have taken several steps to reduce expenses including the shutting down of our
office in Fort Lee, New Jersey effective July 1, 2001 and the termination of the
two employees operating this office, and the deferral of 50% of salaries of
several members of senior management of Magnum, including its Chief Executive
Officer, Robert Gutkowski, since May 31, 2001. In addition, we are actively
seeking to sell our internet boxing content website, www.houseofboxing.com to
further reduce our expenses. See "Our Other Current Businesses Are Not Currently
Profitable". We have also received revenues from our sports agency business
involved in representing professional football players as well as marketing
income aggregating $115,000 in June 2001 and we reasonably expect to receive
additional revenues from this sports agency business during the months of July
through October 2001 in excess of $150,000. If we are unable to raise additional
funds for our operations, we will have to curtail our operations before the end
of 2001.
GOING CONCERN CONSIDERATION
At December 31, 2001, our independent auditors' report as prepared by
Friedman Alpren & Green LLP and dated March 9, 2001, which appears in the
related Form 10-KSB, includes an explanatory paragraph relating to substantial
doubt as to our ability to continue as a going concern due to our significant
loss from operations in fiscal 2000 and our working capital and stockholders'
deficiencies. Our unaudited financial statements for the three months ended
March 31, 2001 showed a loss from continuing operations of $1,912,218, and we
cannot assure our stockholders and investors that we will achieve profitability
or continue our operations.
OUR RECENTLY COMMENCED MAGNUM PRODUCTIONS HAS A SHORT OPERATING HISTORY
We have just started in February 2001 a new division called Magnum
Productions. This business is at its beginning stage in the
television/cable/film production business and there can be no assurance that we
will be able to operate this business successfully. We currently intend to focus
on opportunities to create entertainment programming in the areas of sports,
music and fashion-oriented programming. We do not presently have the money
available to produce television, cable or film productions and there can be no
assurance that we can obtain financing necessary in the future for the
production of this kind of programming. If we are able to buy Ford Models, we
also will seek to use models represented by Ford Models in entertainment
programming that we seek to produce. We will also seek to be hired by
entertainment companies as a producer for hire to produce programming for third
parties. We believe this will enable us to receive fees as a producer without
having to finance the cost of production of programming. However, we
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can offer no assurance that we will be successful in obtaining any assignments
as a producer for hire. The film/television/cable production business is highly
competitive and there are many companies and individuals involved in such
business who have established track records of success and much greater
financial strength compared to us. Because we are significantly smaller than our
competitors, we may lack the financial resources needed to produce entertainment
programming compared to our competitors.
OUR OTHER CURRENT BUSINESSES ARE NOT PRESENTLY PROFITABLE
Our current businesses in addition to Magnum Productions are an agency
that provides agency services to professional football players, principally in
the form of contract negotiation with National Football League teams and an
Internet boxing content website, www.Houseofboxing.com that we operate through
our wholly-owned subsidiary Magnum Houseofboxing.com, Inc. Each of these
businesses were in operation at the time that Messrs. Gutkowski and Koppelman
assumed their positions as Chief Executive Officer and Chairman of the Board, of
Magnum, respectively, in June 2000. These businesses are currently not
profitable.
We are faced with significant competition in obtaining and maintaining
management relationships with athletes. The sports agency market is comprised of
numerous registered agents and business managers and the industry is dominated
by a small number of agencies which manage more successful and marketable
athletes than we do. A great many of these agencies have significantly greater
financial and personnel resources and recognition in the industry than we do.
Since our initial public offering in October 1996, additional large companies
such as Clear Channel Communications, Inc. and Assante Communications Inc. have
contributed to a consolidation of sports management and marketing agencies and
these companies have far greater resources than we do. Furthermore, because our
sports agency business is in its development stage, our management may have less
experience in operating a sports agency company than many of our competitors and
the success of the business will depend in large part on our ability to attract
new clients. We cannot provide any assurance that professional athletes who are
currently or who may in the future be under management or representation
contracts with us will continue to engage in professional sports through the
term of their contracts.
We are currently evaluating our NFL sports agency business to determine
whether it should be sold, discontinued or retained, although we cannot offer
any assurance that we would be able to locate a suitable buyer in the event that
we determine to sell such NFL agency business.
With respect to our boxing content website, we have determined that it
does not fit with our new management's business strategy. Our boxing content
website focuses on the sport of boxing over the internet, producing high quality
editorial content and audio and video content regarding top flight boxers and
boxing personalities. Sports Illustrated magazine has called our boxing content
website "boxing's premier website". Our boxing content website, however, faces
intense competition from numerous internet sports and entertainment companies
many of which are significantly larger than we are and have far greater
financial resources and have relationships with or are owned by major media
companies such as CBS Sportsline, ESPN and CNN/Sports Illustrated. It addition,
we have been unable to generate material revenues from advertising and/or
sponsorships for our boxing content website. Therefore, we are actively seeking
to find a buyer for our boxing content website, although we cannot provide any
assurance that we will be successful in locating a suitable buyer. If we are
unsuccessful in locating a buyer for our boxing content website, we will either
discontinue the operations or materially reduce its staff in order to reduce the
operating expenses incurred with our boxing content website. We have already
terminated five employees involved with our boxing content website in order to
reduce its operating costs.
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OUR FUTURE SUCCESS IS DEPENDENT IN PART ON OUR ABILITY TO MAKE ACQUISITIONS,
INCLUDING OUR ACQUISITION OF FORD MODELS, INC.
If we are not able to make acquisitions, our operations and liquidity
would be materially adversely affected. Our new management team led by Chief
Executive Officer Robert M. Gutkowski and Chairman of the Board, Charles A.
Koppelman, were appointed to their positions by our Board of Directors in June
2000. They have had track records of success in building other entertainment
companies before they joined our company in June 2000. Under the leadership of
Messrs. Gutkowski and Koppelman, we have developed a new business strategy
revolving around making carefully planned entertainment related acquisitions and
the hiring of individuals who have track records of success in the entertainment
business. The prospects for our success must be considered in light of the
risks, expenses and difficulties frequently encountered in the establishment of
a new business plan. The risks, expenses, and difficulties we will encounter in
executing an acquisition-based strategy for our growth may result in our not
being able to generate significant revenues or net income if we are unsuccessful
in making acquisitions.
We are actively seeking to buy Ford Models, Inc., a company engaged in
representing fashion models with offices in 12 cities located in the United
States, Canada, France, Argentina and Brazil, pursuant to a letter of intent
that we signed with Ford Models dated December 11, 2000. Under the letter of
intent with Ford Models, we are required to pay a purchase price of $22,000,000
in cash to purchase Ford Models. We have to obtain financing in order to pay all
of the purchase price to buy Ford Models and to pay the expenses relating to the
acquisition. We deposited the sum of $630,000 in escrow in connection with our
signing of the letter of intent with Ford Models. We have an executed commitment
letter from Citibank, N.A. dated May 3, 2001 in which Citibank has agreed to
loan us a total of $15,000,000 in connection with our purchase of Ford Models
and to fund working capital if certain conditions are satisfied. Of this amount,
$10,000,000 is a six year term loan which we will use towards the purchase of
Ford Models. The interest rate on this term loan is Citibank's prime rate of
interest plus 2% and the first year of the loan requires payment of interest
only without any payments of the principal of the loan. The principal of the
loan is to be repaid according to a schedule over years 2 through 6 of the term
loan. Citibank's present prime rate of interest is 6 3/4%. The remainder of
$5,000,000 will be a revolving credit loan to fund Ford Models' working capital
which will replace Ford Model's existing revolving credit loan with another
lender and therefore these funds will not be used for the purchase price of Ford
Models. Our commitment letter with Citibank is conditioned upon, among other
things, our executing a loan agreement with Citibank and our executing a
purchase agreement with Ford Models. Citibank's commitment letter is also
conditioned upon there being no material adverse change in Ford Models'
business, financial condition or otherwise. In addition, our commitment letter
with Citibank expires on July 31, 2001 and while we believe that we will be able
to obtain a reasonable extension of this expiration date if necessary, we cannot
offer assurances that we will be able to obtain an extension from Citibank for
its loan commitment. We will need to raise an additional sum of approximately
$12,000,000 in order to have sufficient funds to acquire Ford Models in addition
to the $10,000,000 proposed to be provided in a loan from Citibank. We are
actively attempting to raise this additional sum of $12,000,000. We also have to
sign a purchase agreement with Ford Models and obtain the approval of our
stockholders to acquire Ford Models. Ford Models' Chief Executive Officer, Katie
Ford and the principal stockholders of Ford Models recently agreed to extend the
period until August 11, 2001 during which Ford Models will not negotiate with
any party(other than Magnum) regarding the purchase of Ford Models. In addition,
Ford Models' Chief Executive Officer, Katie Ford and the principal stockholders
of Ford Models have agreed to extend Magnum's exclusive right to buy Ford Models
beyond August 11, 2001 to at least September 11, 2001, provided that Magnum has
deposited in escrow the sum of $10,000,000 by August 11, 2001 to be used towards
the purchase of Ford Models in addition to the funds proposed to be provided by
Citibank. While our management team led by Mr. Koppelman and Mr. Gutkowski has
experience in making acquisitions of entertainment companies, we cannot provide
any assurances that we will be successful in raising the funds necessary to buy
Ford Models, that we will be able to execute a purchase agreement with Ford
Models, obtain shareholder approval and other regulatory approvals and consents
or that we will be able to sign a loan agreement with Citibank.
In addition, although we regularly evaluate potential acquisitions, to
date we have not entered into any agreement with respect to any acquisitions
except for the letter of intent that we signed in December 2000 with Ford Models
to acquire Ford Models
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and we cannot assure you that we will make any acquisition in the future on
acceptable terms or at all.
IF WE ARE UNABLE TO RAISE CAPITAL, WE WILL NOT BE ABLE TO MAKE ACQUISITIONS
Overall, our execution of our strategy to grow our business principally
through carefully planned acquisitions and the hiring of prominent entertainment
executives as well as funding our present management expenses will require
funding substantially in excess of our existing capital. We are presently
dependent upon the proceeds of sales of our securities to fund our activities.
We will need to raise substantial additional capital to fund our future
operations and we may seek such additional funding through public or private
financing or collaborations or other arrangements with corporate partners. We
currently have no current arrangements with respect to sources of additional
financing other than our commitment letter dated May 3, 2001 from Citibank
issued in connection with our proposed acquisition of Ford Models. We cannot
give assurance that we will be able to obtain additional financing on
commercially reasonable terms or at all. If we are unsuccessful in obtaining
additional financing, we will not be able to purchase Ford Models and it will be
necessary for us to curtail our planned operations. See "Our Future Success Is
Dependent In Part Upon Our Ability To Make Acquisitions, Including The
Acquisition of Ford Models, Inc." and "We Have Always Had Operating Losses".
OUR STOCK PRICE IS VOLATILE AND STOCKHOLDERS MAY NOT BE ABLE TO RECOUP THEIR
INVESTMENT
There is a history of significant volatility in the market prices of
companies like ours that are engaged in the entertainment industry. Movements in
the market price of our common stock from time to time have negatively affected
stockholders' ability to recoup their investment in the stock. The price of our
common stock is likely to continue to be highly volatile, and stockholders may
not be able to recoup their investment. If our future revenues or profitability
do not meet expectations, or if we are unable to make any future
acquisitions(including completing the acquisition of Ford Models), the price of
our common stock may be negatively affected. The average daily trading volume of
our common stock has generally been low, which we believe has had a significant
effect on the historical market price of our common stock. We effected a five
for one reverse split of our common stock effective October 19, 2000. Since such
date, our common stock has fluctuated between $1.875 and $0.70. Before this
reverse split, our common stock fluctuated between $35 and $1.55 since October
1996, the month of our initial public offering. As a result, the market price of
our common stock has been highly volatile and may not be indicative of the
market price where the trading volume is substantially higher than the trading
volume of our common stock.
IF OUR SECURITIES WERE DELISTED FROM THE NASDAQ SMALL CAP MARKET, IT MAY
NEGATIVELY IMPACT THE LIQUIDITY OF OUR COMMON STOCK
Our common stock is currently trading on The Nasdaq Small Cap Market. We
meet the current listing criteria for The Nasdaq Small Cap Market. However, no
assurance can be given as to our ongoing ability to meet The Nasdaq Small Cap
Market maintenance requirements. One of the maintenance requirements is that our
common stock continue to trade with a minimum bid price of at least $1.00. Our
common stock has closed below the minimum bid price of $1.00 on numerous trading
days during the months of June and July of 2001. We have not presently received
any notification from the Nasdaq Small Cap Market that we are not in compliance
with its listing requirements.
If our common stock were to be delisted from trading on The Nasdaq
Small Cap Market, trading, if any in the common stock may continue to be
conducted on the OTC Bulletin Board or in the non-Nasdaq over-the-counter
market. Delisting of the common stock would result in limited release of the
market price of our common stock and limited news coverage, and could restrict
investors' interest in the common stock as well as having a materially adverse
affect on the trading market and on the prices for our common stock and our
ability to issue additional securities or to secure additional financing.
"Penny stocks" generally are equity securities with a price of less than
$5.00 per share, which are not registered on certain national securities
exchanges or quoted on the Nasdaq system. If our common stock is delisted from
Nasdaq, we could become subject to the SEC's penny stock rules. These rules,
among other things, require broker-dealers to satisfy special sales practice
requirements, including making individualized written suitability determinations
and receiving a purchaser's written consent prior to any transaction. In
addition, under the penny stock rules, additional disclosure in connection with
trades in the common stock would be required, including the delivery of a
disclosure schedule explaining the nature and risks of the penny stock market.
These requirements could severely limit the liquidity of the common stock.
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FUTURE DILUTION
To the extent that any future financing involves the issuance of our
equity securities or instruments convertible into equity securities, existing
stockholders will be diluted, perhaps substantially, and future investors may be
granted rights superior to those or existing stockholders. Our failure to raise
capital on acceptable terms when needed will have a material adverse effect on
us. In addition, we have in the past and in the future may enter into
transactions with strategic third parties pursuant to which we will issue shares
of our common stock to such third parties for non-cash consideration. Any such
transactions will further dilute the interests of the existing shareholders.
Also, our granting of additional stock options to employees and consultants will
further dilute existing shareholders. Shareholders will experience substantial
dilution in the event that we issue additional shares of our common stock, as
well as if we issue shares of our preferred stock in connection with the raising
of capital necessary to complete the acquisition of Ford Models. In addition, we
have also agreed to issue our common stock or options to acquire common stock
having a market value of $3,000,000 to certain executives of Ford Models and/or
principal stockholders of Ford Models as part of their agreement to continue
being employed by or render services to Ford Models after we acquire Ford
Models. We have agreed with Ford Models that this stock and the options to be
issued to Ford Models executives or stockholders will not be able to be sold,
assigned, transferred or otherwise disposed of by the recipients for a period of
one year from the date of the closing of our purchase of Ford Models. Our
issuance of stock and/or options to Ford Models' executives and stockholders
will substantially dilute our existing stockholders. In addition, the exercise
of the warrants and the subsequent public sales of common stock by holders of
these securities under this prospectus or another registration statement
effected at their demand, under Rule 144 or otherwise, would result in dilution
to our shareholders. Also, we have previously issued warrants to investors in
several private placements of our securities in 1999 and 2000 with exercise
prices ranging from $5.00 per share and higher. We have registered the common
stock underlying these warrants. In the event of the exercise of any of these
warrants and subsequent public sales of common stock by holders of these
securities under prospectus or Rule 144 or otherwise, our shareholders would be
diluted.
CONCENTRATION OF OWNERSHIP
Our executive officers and directors currently beneficially own
approximately 20.41% of our common stock on a fully diluted basis, comprised of
795,074 shares of Magnum common stock and 1,229,001 options to acquires shares
of stock at exercise prices ranging from $1.07 to $11.25 per share. Consequently
our executive officers and directors have substantial influence on the outcome
of any matters submitted to our stockholders for approval, including the
election of directors.
WE HAVE NOT PAID DIVIDENDS
We have not paid dividends on our common stock since our company was
founded in 1995. We intend to reinvest any earnings in our business to finance
our future growth. Accordingly, our Board of Directors does not anticipate
declaring any cash dividends in the foreseeable future. Also, our commitment
letter with Citibank prohibits the payment of dividends by Ford Models.
LOSS OF KEY EMPLOYEES MAY NEGATIVELY IMPACT OUR SUCCESS
Our success depends on our ability to identify, hire and retain skilled
personnel. The entertainment industry is characterized by a high level of
employee mobility and aggressive recruiting among competitors for personnel with
track records of success. We may not be able to attract and retain skilled
personnel or may incur significant costs in order to do so.
In particular, we are highly dependent upon the management services of
Charles Koppelman, Chairman of the Board and Robert Gutkowski, Chief Executive
Officer. Each of Messrs. Koppelman and Gutkowski have extensive experience and
success as chief executive officers of entertainment companies before they
became involved with Magnum. Mr. Gutkowski's experience and contacts in the
sports and entertainment business and Mr. Koppelman's experience and contacts in
the music and entertainment business are very valuable to the growth of Magnum.
If we were to lose either of their services, our business would be negatively
impacted. Although Magnum has entered into a three-year employment agreement
with Mr. Gutkowski expiring June 15, 2003 and has entered into a three-year
agreement with Mr. Koppelman in which he agreed to serve as Magnum's Chairman
through June 15, 2003, they may leave or compete with us in the future. However,
if Mr. Gutkowski voluntarily left his employment, he would be subject to a
period of one year in
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which he could not compete against us. If we are unable to attract additional
qualified employees or retain the services of key personnel, our business could
be negatively impacted.
INFORMATION ABOUT MAGNUM
Magnum, a Delaware corporation, was founded in 1995. Our principal
executive offices are located at 1330 Avenue of the Americas, 39th Floor, New
York, New York 10019 and our main telephone number is (212) 246-7380. Our
Internet website is: http://www.mformagnum.com. Information contained on our
website should not be deemed part of this prospectus.
Our management team is led by two executives with experience in the worlds
of sports, music and entertainment, Chief Executive Officer, Robert M.
Gutkowski, and Chairman of the Board, Charles A. Koppelman, who were appointed
to their positions effective June 15, 2000. We are seeking to create a
multi-dimensional global entertainment company that will encompass content,
marketing, corporate sponsorship, licensing and talent management. By leveraging
our potential brands and clientele across all facets of the rapidly converging
entertainment business, we are seeking to create diversified revenue streams for
ourselves and our clients. As a critical step in implementing our strategy, we
have signed a letter of intent in December 2000 to acquire Ford Models, a
prominent modeling agency company.
Before becoming our Chief Executive Officer, Mr. Gutkowski was formerly
Chief Executive Officer of both Madison Square Garden and The Marquee Group Inc.
Mr. Gutkowski has extensive executive experience in the sports and entertainment
business. In 1991 he was named President of Madison Square Garden. In that
position, he was responsible for the operations of the New York Knickerbockers,
the New York Rangers--winners of the 1994 Stanley Cup Championship--and MSG
Communications, which included the MSG Network. While President of the MSG
Network, Gutkowski negotiated the landmark twelve-year $486 million deal to
telecast New York Yankees baseball while growing the network into the nation's
largest and most profitable regional sports network. In 1994 he founded The
Marquee Group Inc., a worldwide sports and entertainment company, which became a
publicly traded American Stock Exchange company in 1996. During Mr. Gutkowski's
tenure at Marquee, he led an aggressive growth strategy through the acquisition
by Marquee of companies, including Athletes and Artists, Sports Marketing and
Television International, QBQ Entertainment, Tollin-Robbins Entertainment, Park
Associates, Alphabet City Records, Cambridge Golf and ProServ. In 1999, The
Marquee Group Inc. was acquired by SFX Entertainment, Inc., a New York Stock
Exchange listed company, for more than $100 million.
Charles Koppelman is a music and entertainment entrepreneur who, over
a 25-year period beginning in 1965, built and acquired music properties that
were sold for over $400 million in 1989. From 1989 to 1992, Koppelman was
Chairman and CEO of EMI Music Publishing and SBK Records. From 1993 to 1997
Koppelman was Chairman and CEO of EMI Record Group-North America and oversaw all
North American activities of EMI's many record labels and was instrumental in
the careers of Frank Sinatra, Barbra Streisand, Garth Brooks, Tracy Chapman and
others. He is currently Chairman and CEO of CAK Entertainment, Chairman of
Medalist Entertainment, an affiliate of Alliance Entertainment, and is Executive
Chairman of the Office of the Chairman of Steve Madden Ltd.
Strategy
Our strategy for enhancing long-term shareholder value is based on four
entertainment pillars: fashion, music, sports and film/television. We will seek
to be involved in all these sectors, enhance client careers and produce and
co-own content created by our clients. We have made progress at identifying the
industry sectors as well as the companies and individuals who we want to be
involved with in building our company. We intend to grow through the acquisition
of companies and through the addition of key executives who have succeeded in
their respective fields. We are especially interested in acquiring companies
that have strong brand names that we can extend all along the sports and
entertainment spectrum. We will, however, be subject to numerous risks,
expenses, problems and difficulties typically encountered in the implementation
of a new business plan. We can provide no assurance that we will be able to
successfully implement our strategy in light of these uncertainties. In
addition, although we regularly evaluate potential acquisitions, to date we have
not entered into any agreement with respect to any acquisitions except a letter
of intent that we signed in December 2000 with Ford Models to acquire Ford
Models and we cannot assure you that we will make any acquisition in the future
on acceptable terms or at all.
-8-
As an important first step in our acquisition strategy, we announced on
December 12, 2000, that we had signed a letter of intent with Ford Models, Inc.,
a well-known modeling agency to acquire 100% of the capital stock of Ford
Models. Ford Models has been instrumental in the careers of Kim Basinger,
Christie Brinkley, Sharon Stone, Lauren Hutton, Elle MacPherson, Christie
Turlington, Cheryl Tiegs, Rene Russo, Vendela, Ali McGraw, Veronica Webb and
Stephanie Seymour over an illustrious fifty-six year history. Our letter of
intent with Ford Models also provides, among other things, that our purchase
price to buy Ford Models is $22,000,000 in cash. We deposited the sum of
$630,000 in escrow when we signed the letter of intent with Ford Models to be
used towards the purchase price of Ford Models.
Our purchase of Ford Models is subject to a number of conditions,
including, among other things, entering into a purchase agreement with Ford
Models and our obtaining sufficient financing to finance our purchase of Ford
Models. We have an executed commitment letter from Citibank, N.A. dated May 3,
2001 in which Citibank has agreed to loan us a total of $15,000,000 in
connection with our purchase of Ford Models and to fund our working capital, if
certain conditions are satisfied. Of this amount, $10,000,000 is a six year term
loan which we will use towards the purchase of Ford Models. The interest rate on
this term loan is Citibank's prime rate of interest plus 2% and the first year
of the loan requires payment of interest only without any payments of the
principal of the loan. The principal of the loan is to be repaid according to a
schedule over years 2 through 6 of the term loan. Citibank's present prime rate
of interest is 6 3/4%. The remainder of $5,000,000 will be a revolving credit
loan to fund Ford Models' working capital which will replace Ford Model's
existing revolving credit loan with another lender and therefore these funds
will not be used for the purchase price of Ford Models. Our commitment letter
with Citibank is conditioned upon, among other things, our executing a loan
agreement with Citibank and our executing a purchase agreement with Ford Models.
Citibank's commitment letter is also conditioned upon there being no material
adverse change in Ford Models' business, financial condition or otherwise. In
addition, our commitment letter with Citibank expires on July 31, 2001 and while
we believe that we will be able to obtain a reasonable extension of this
expiration date if necessary, we cannot offer assurances that we will be able to
obtain an extension from Citibank for its loan commitment. We will need to raise
an additional sum of approximately $12,000,000 in order to have sufficient funds
to acquire Ford Models in addition to the $10,000,000 to be provided in the term
loan from Citibank. We are attempting to raise this additional sum of
$12,000,000. We also have to sign a purchase agreement with Ford Models and
obtain the approval of our stockholders to acquire Ford Models. Ford Models'
principal stockholders, including Ford Model's Chief Executive Officer, Katie
Ford, recently agreed to extend the period until August 11, 2001 during which
Ford Models will not negotiate with any party(other than Magnum) regarding the
purchase of Ford Models. In addition, Ford Models' principal stockholders,
including Ford Models' Chief Executive Officer, Katie Ford, have agreed to
extend Magnum's exclusive right to buy Ford Models beyond August 11, 2001 to at
least September 11, 2001, provided that Magnum has deposited in escrow the sum
of $10,000,000 by August 11, 2001 to be used towards the purchase of Ford Models
in addition to the funds to be provided by Citibank towards the purchase of Ford
Models. While our management team led by Mr. Koppelman and Mr. Gutkowski has
experience in making acquisitions of entertainment companies, we cannot provide
any assurances that we will be successful in raising the additional sum of
$12,000,000 or that we will be able to execute a purchase agreement with Ford
Models or sign a loan agreement with Citibank.
In the event that we are successful in acquiring Ford Models, we intend
to maintain Ford Models' existing senior management staff, including Katie Ford,
its Chief Executive Officer, who will continue as Chief Executive Officer of
Ford Models as well as join our Board of Directors. We believe that the Ford
Models brand name is very valuable and our goal is to expand the Ford Models
brand name across all facets of the entertainment, fashion, music, sports and
film/television industries. We believe that Ford Models will be an important
part in our implementing our strategy to create a multi-dimensional talent
management, marketing and content company that provides our clients with wide
ranging opportunities across all facets of the entertainment business. Ford
Models presently maintains offices in twelve cities around the world, including
New York, Los Angeles, Miami, Toronto, Paris, Sao Paolo, Rio de Janeiro, and
Buenos Aires and we believe that these offices provide us with a worldwide
platform to implement our business strategy. As it exists today, Ford Models is
a company that specializes in modeling but already has an active sports and
music division representing on a non-exclusive basis such celebrities as Kobe
Bryant, Britney Spears, Enrique Iglesias, the Dixie Chicks, Jessica Simpson,
Christine Aguilera, Sisqo, and Tyrese. Under the guidance of Messrs. Gutkowski
and Koppelman, we believe that we will be able to expand Ford Model's presence
in the worlds of sports, music and entertainment. We anticipate assisting Ford
Models in facilitating career opportunities for its models in film, television
and music, as
-9-
well as endorsement, sponsorship, and licensing opportunities with corporations
in North America, Europe and Asia.
Ford Model's historic model roster provides an example of our
"crossover" strategy. Rene Russo, Lauren Hutton, Kim Basinger, Sharon Stone and
Candice Bergen are among the prominent Ford models who went on to have
successful careers in film and television, but none of them were represented by
Ford Models in Hollywood because Ford Models did not have management
capabilities that extended beyond modeling. Under our business direction, we
believe that Ford Models will be able to service its talent across the
entertainment spectrum and retain commission income and participate in the
ownership of content, such as television programs developed and produced by its
talent.
We believe that the Ford Models brand can be developed into exciting
television programming on a worldwide basis. Twenty years ago, Ford Models
launched the "Supermodel of the World(TM)" contest, which has become one of the
largest and most prestigious model searches in the world. Over the course of a
year, young women from around the world vie for modeling contracts totaling
$500,000 and the opportunity to become one of the world's most recognizable new
faces in modeling. The contest is held in over forty countries culminating in an
international finals held most recently in Puerto Rico. The event attracts top
models, celebrities and recording artists and has been seen on cable television
as a half-hour program. We believe that the Ford "Supermodel of the World(TM)"
is a valuable property which has not been materially commercially exploited to
date. The search leading up to the Ford Supermodels Finals has been developed as
a multi-episode "behind-the-scenes" reality-based television program that
achieved good ratings in the local Australian market. We believe that both the
international finals and the Supermodels search have the potential to be
successful broadcast properties that can draw significant multi-year corporate
sponsorship on both a national and international level, although we cannot
provide any assurances that we can obtain any multi-year corporate sponsorships
on acceptable terms or at all.
As part of our new strategic initiative, we are at the initial stage of
establishing a new division, Magnum Productions. We anticipate that Magnum
Productions will focus on the development, production, licensing and ultimately,
distribution of high quality television programming designed for basic cable,
pay cable, network, and syndicated television distribution in the international
marketplace. Through Magnum Productions, we intend to ultimately utilize the
talent that we manage, such as the Ford model roster (in the event we acquire
Ford Models), to create and package programming assets.
Our philosophy will be the development of programming for specific
distributor needs. We intend to avoid the development of speculative programming
and will seek to minimize our financial exposure on projects. While we intend to
build and/or acquire a library of programming assets, which will become
increasingly valuable as digital broadcast technologies continue to emerge, we
will seek to minimize financial exposure. We intend to maximize our use of
creative funding sources, including pre-sale agreements with domestic and
foreign distributors of basic cable, pay cable, network and syndication
programs, Canadian tax credit programs and co-production treaties. By
pre-negotiating the sale of programming to end-user distribution companies
around the world and using the Canadian system for financing, we intend to
obtain financing commitments for the significant share of its programming
budgets, prior to the commencement of production. The Canadian system of
financing entitles the producer to tax credits provided that certain enumerated
criteria are satisfied. To date, we have not entered into any programming
agreements and there can be no assurance that any of these agreements will be
entered into on acceptable terms or at all.
We intend to focus on opportunities to create television series that
can reach the milestone of 65 episodes, which make shows eligible for daily
strip syndication. We intend to initially focus on family-oriented, sports and
urban television and low-budget theatrical or direct-to-video projects. By
leveraging the strengths of our other proposed divisions, we will seek to
develop sports, music and fashion oriented programming. Through our proposed
sponsorship division, we intend to seek corporate partners in program
development. In addition, we will seek to control the ancillary revenue streams
that we hope our future programming assets may generate, including music
soundtracks, video games and licensing opportunities. We will also seek to earn
packaging fees (i.e. commissions) by placing talent that it represents, such as
Ford models (after the Ford acquisition), into programming that we hope to
produce.
We recently hired Michael Yudin as the President of Magnum Productions.
Mr. Yudin has two decades of experience in the development, marketing, financing
and production of successful television programming. Mr. Yudin joins us from
Telescene Film Group Inc., a
-10-
major independent film and television programming company headquartered in
Montreal. At Telescene, Mr. Yudin was President of Telescene Entertainment for a
four year period where he was instrumental in the development and production of
television programming. Among the successful television series overseen by Mr.
Yudin were Sir Arthur Conan Doyle's The Lost World, (22 episodes completed and
syndicated in the US by New Line Television, with 22 more under production),
Student Bodies (65 episodes, distributed in the US by Twentieth Century Fox
Television), Big Wolf on Campus (36 episodes, with 29 additional ordered, seen
in the US on Fox Family Channel) and Live Through This, the first one-hour
dramatic series ever produced for MTV. Mr. Yudin's career also spans ten years
as a programming executive at Paramount Television Group, Viacom Inc., Reeves
Communications, Inc. and Chelsea Communications, Inc. and ten years in the
marketing and media divisions of major advertising agencies.
Mr. Yudin has experience with respect to complex production financing
structures incorporating multiple licenses, co-production partners, government
benefits, investor equity partners and production debt facilities. In order to
reduce our financial exposure on programming expenditures, Mr. Yudin will
closely monitor foreign tax and film incentive programs and review the ability
to produce our production division's potential future programming through
foreign co-production treaties and inter-provincial co-production treaties on a
case-by-case basis. We contemplate that Mr. Yudin's initial activities on behalf
of our productions division will be to attempt to procure one or more production
assignments as a "producer for hire" on programming that is being produced on
behalf of network or cable broadcast companies, thereby enabling us to earn
up-front producer fees without having to make capital investment in such
programming. We cannot provide any assurance that we will be able to
successfully operate our productions division, including but not limited to
being able to develop any programming of any kind or being able to locate any
financial partners to bear some or all of the financial risk from any kind of
programming that we seek to develop or that we will be hired as a producer for
hire by any third party.
As the modeling agency business is highly fragmented, if we are
successful in acquiring Ford Models, we may seek to acquire one or more other
modeling agencies that would be complementary to the Ford Models name both in
the U.S. and overseas markets. We may also seek to acquire one or more companies
that provide talent management services in the worlds of film, television, music
and sports. We believe that this will enable us to offer our expanding talent
roster a wide range of career opportunities through one company. In addition, we
may seek to acquire one or more companies or hire certain individuals with
expertise in the worlds of corporate sponsorship and product licensing, which we
believe will enable us to link the creative and corporate communities together
to create valuable commercial opportunities. Although we regularly evaluate
potential acquisitions, to date we have not entered into any purchase agreement
regarding any acquisition. There can be no assurance that we will be able to
make any of these kinds of acquisitions or hire these individuals on acceptable
terms or at all, particularly given our current lack of financial resources to
effect these kinds of acquisitions.
As part of our new strategy, we adopted a new name and logo, which were
introduced in October 2000. Our new management inherited a number of businesses
that had poor historical performance and uncertain economic prospects. As part
of our new strategy and transformation, we terminated our boxing management
business in the fourth quarter of 2000. As part of this termination, we
consensually terminated our boxing management agreement with Shannon Briggs, a
heavyweight boxer and two joint venture relationships with Munisteri Sports &
Entertainment, Inc. and Bulldog Boxing Management LLC, respectively. For the
year ended December 31, 2000, Magnum recognized revenues of approximately
$17,000 attributable to our share of our boxers' purses, and from our joint
venture agreements and ticket sales while in December 31, 1999, we recognized
revenues of approximately $64,000 attributable to our share from these
activities. Also, we discontinued the operations of our Internet subsidiary,
Sportcut.com, Inc. during the third quarter of 2000. In addition, we terminated
the employment agreements of our two executives who were operating our
motorsports division in February 2001. As part of our termination of the
employment agreements of these motorsports division executives, we will be
entitled to receive certain percentages of revenues generated prospectively from
clients of the motorsports division without incurring any additional expenses in
the operation of the motorsports division. We cannot, however, provide any
estimate of such prospective revenues. We also sold all remaining items of
sports memorabilia during 2000 that remained in inventory from our memorabilia
division that we had discontinued in 1999.
Existing Businesses
Our remaining current businesses are an agency that provides agency
services to professional football players, principally in the form of contract
negotiation with
-11-
National Football League teams, and an Internet boxing content website,
www.Houseofboxing.com that we operate through our wholly-owned subsidiary Magnum
Houseofboxing.com, Inc. Each of these businesses were in operation at the time
that Messrs. Gutkowski and Koppelman assumed their positions as Chief Executive
Officer and Chairman of the Board, respectively, in June 2000. We presently
employ two agents who are licensed as contract advisors with the NFL Players'
Association to operate our football agency business. Agency fees for negotiation
of professional football contracts are regulated by the NFL Collective
Bargaining Agreement and typically range from 2-3% of the player's contract,
payable after receipt by the player of his compensation from the NFL team(which
includes the player's base salary, signing bonus and any performance bonus
actually received by the player, during the length of the contract which the
agent negotiated for his client with the team. That revenue stream continues for
so long as the player is paid pursuant to such contract, even if the client
changes agents during that span). Our football agency presently represents 40
professional football players, including, among others, Tyrone Wheatley of the
Oakland Raiders, Darren Sharper, safety of the Green Bay Packers who was named
to the 2000 NFL All-Pro Team, Antonio Freeman, wide receiver of the Green Bay
Packers, and O.J. McDuffie, wide receiver of the Miami Dolphins.
In addition, our football agency enjoyed the finest results in its
history in connection with the April 2001 NFL draft in which two of our clients
were selected in the first round: Gerard Warren, defensive lineman from the
University of Florida who was the 3rd player selected in the draft by the
Cleveland Browns, and Rod Gardner, wide receiver, Clemson University who was the
15th player selected in the draft by the Washington Redskins as well as four
other players who were selected in later rounds of the NFL draft--Delawrence
Grant, defensive end from the University of Oregon and Corey Bird, safety from
Virginia Tech who were both selected in the 3rd round of the NFL draft and
Quentin McCord, wide receiver from the University of Kentucky and Anthony
Denman, linebacker from the University of Notre Dame who were both selected in
the 7th round of the NFL draft. We are presently evaluating our NFL agency and
determining whether this agency business should be continued, sold or otherwise
disposed of.
With respect to our boxing content website, we have determined that it
does not fit with our new business strategy. Our boxing content website is a
sports content website that focuses on the sport of boxing, producing high
quality editorial content and audio and video content regarding top flight
boxers and boxing personalities. In an article in August 2000, Sports
Illustrated magazine wrote that our boxing content website is "boxing's premier
website". Our boxing content website, however, faces intense competition from
numerous Internet sports and entertainment companies, many of which are better
capitalized than our boxing content website and/or have relationships or are
owned by major media companies such as CBS Sportsline, ESPN and CNN/SI. It
addition, it has been extremely difficult for our boxing content website to
generate any material revenues from advertising and/or sponsorships.
Accordingly, we are actively seeking to find a buyer for our boxing content
website, although we cannot provide any assurance that we will find any buyer
for our boxing content website or consummate the sale of the website business on
acceptable terms or at all. If we are unable to sell our boxing content website,
we will either discontinue its operations or significantly reduce our staff
operating this website in order to reduce its operating expenses. We have
already reduced the staff operating our boxing content website by five
employees. See "Risk Factors: Our Other Current Businesses Are Not Presently
Profitable".
We recorded net revenues for the three months ended March 31, 2001 of
$123,654, as compared to net revenues of $116,872 for the three months ended
March 31, 2000. During the three months ended March 31, 2001 there was no purse
income, ticket revenues or merchandise revenues as compared to $17,000, $3,465
and $673, respectively for the 2000 period. This was the result of our
eliminating our activities in these areas. During the three months ended March
31, 2001 we generated $121,139 of contract and agency fees, as compared to
$39,734 of contract agency fees reflected during the comparable 2000 period.
This increase was primarily generated by one of our professional football
clients, Darren Sharper executing a new professional football contract with a
substantial signing bonus. This event entitled us to revenue of $105,000. In
addition, during the 2001 period, our endorsement and marketing fee income was
$2,515, as compared to $56,000 for the 2000 period, as a result of our reduced
activities in these areas.
Our total expenses for the three months ended March 31, 2001 decreased
to $2,044,619, as compared to $2,201,432 for the 2000 period. Boxing, training
and related expenses amounted to $3,490 for the three months ended March 31,
2001 compared to $111,262 for the 2000 period. The principal reason for this
decrease is our elimination of boxing management. Promotion and selling, general
and administrative expenses decreased to $2,041,129 for the 2001 three-month
period as compared to $2,088,868 for the corresponding 2000 three-month period.
These decreases were attributable to staff
-12-
reductions and reduced offices expenses offset by an increase in insurance and
travel and entertainment and our commencement of a productions division,
including the hiring of an executive to operate this division.
Our results of operations in the near future will depend in large part upon
whether we are successful in acquiring Ford Models and in successfully operating
our newly formed productions division. There is no guarantee that we can either
acquire Ford Models or successfully operate our productions division. Prior to
the time as Magnum achieves profitability, we will be required to rely on
equity, debt or other sources of financing in addition to our revenues from our
existing operations. We have sufficient funds to operate the business through
the end of November 2001. We have taken several steps to reduce expenses
including the shutting down of our office in Fort Lee, New Jersey effective July
1, 2001 and the termination of the two employees operating this office, and the
deferral of 50% of salaries of several members of senior management of Magnum,
including our Chief Executive Officer Robert Gutkowski, since May 31, 2001. In
addition, we are actively seeking to sell our internet boxing content website,
www.houseofboxing.com to further reduce our expenses. See "Our Other Current
Businesses Are Not Currently Profitable". We have also received revenues from
our sports agency business involved in representing professional football
players as well as marketing income aggregating $115,000 in June 2001 and we
reasonably expect to receive additional revenues from this sports agency
business during the months of July through October 2001 in excess of $150,000.
If we are unable to raise additional funds for our operations, we will have to
curtail our operations before the end of 2001. See "Risk Factors: Our Future
Success Is Dependent In Part On Our Ability To Make Acquisitions , Including Our
Acquisition of Ford Models, Inc." and "Risk Factors: Our Recently Commenced
Magnum Productions Has A Short Operating History."
-------------------------
You should not use historical trends or factors affecting our operating
results and financial condition to anticipate results or trends in future
periods. See "Risk Factors" above. Also you should not consider historical
financial performance as a reliable indicator of future performance.
--------------------------
USE OF PROCEEDS
Magnum will not receive any proceeds from the sale of any of the shares
of its common stock by the selling stockholders. Of the 7,069,380 shares of
common stock covered by this prospectus, 4,259,501 shares of common stock are
issuable upon exercise of currently exercisable warrants to purchase shares of
common stock held by the selling stockholders. To the extent that the shares
being offered by this prospectus consist of warrants, prior to the issuance of
such shares to the selling stockholders and the resale of such shares by the
selling stockholders pursuant to this prospectus, Magnum will receive the
exercise price of the warrants to the extent that such warrants require the
payment of the exercise price in order to exercise the warrants. 1,060,257 of
the warrants that are subject to this prospectus are cashless exercise warrants
that do not require the payment of any exercise price by the selling stockholder
in order to exercise these warrants. Any proceeds received from the exercise of
warrants will be used for general corporate purposes, including working capital.
SELLING STOCKHOLDERS
Beneficial Ownership and Other Information
The following table sets forth information with respect to the shares
of common stock beneficially held by the selling stockholders. All information
concerning beneficial ownership has been furnished by the selling stockholders
or by American Stock Transfer & Trust Company, Magnum's transfer agent.
-13-
Beneficial Shares Beneficially % Owned
Ownership Prior Owned After the After
Name to Offering Shares Being Offered* Offering(1) Offering(2)
- ---- ----------- --------------------- ----------- -----------
Anastasi, Rick 17,700 17,700 0
Argano, Frank 330,019 283,019 50,000
Barron, Arthur** 85,034 84,034 1,000
Bascetta, Richard 88,496 88,496 0
Bateson, Robert 17,700 17,700 0
Collins, Penelope A 75,000 75,000 0
D'Angelo, John*** 108,731 35,398 73,333
Dessen, Stanley B 75,000 75,000 0
DiNardo, Emil 35,398 35,398 0
DiNardo, Joseph 176,992 176,992 0
Elias, David & Barbara 17,700 17,700 0
Esterquest, Thomas G 117,684 88,496 29,188
Frisman, Lawrence J 450,000 450,000 0
Fritz, Stacy**** 300,000 300,000 0
Gioia, Richard 44,248 44,248 0
Greenwood Partners, LP 600,000 600,000 0
Gutkowski, Robert M.***** 256,916 186,916 70,000
Gutman, Edward S 302,500 300,000 2,500
Gutman, Madeline 70,755 70,755 0
HRG Trust 75,000 75,000 0
Josef, Jeffrey M 25,749 88,496 25,749
J & S Investments & Co. 70,755 70,755 0
Karp, Paul 150,000 150,000 0
Katz, Robert 150,000 150,000 0
LAD Equity Partners, LP 176,991 176,991 0
Luckow, Robert W 300,000 300,000 0
Manfredi, Francis 75,000 75,000 0
Minio, John J 300,000 300,000 0
Rechler, Scott 442,478 442,478 0
Roberts, Roy 112,167 54,054 58,113
Sanders, Harvey 176,992 176,992 0
Siegal, Richard 442,478 442,478 0
Schuback, Clark 141,510 141,510 0
Silverman Partners****** 600,000 600,000 0
-14-
Sudack, Robert & Nikki 70,755 70,755 0
The Gutman Family Foundation 75,000 75,000 0
Woodland Partners 323,019 283,019 40,000
Zenna, Alphonse 300,000 300,000 0
Zenna, Gregory 150,000 150,000 0
- ---------------------------------
(1) Assumes that all of the shares covered by this prospectus are sold by the
selling stockholders pursuant to this prospectus. The selling stockholders
may choose to dispose of none or only a portion of the shares held by them
pursuant to this prospectus. The shares beneficially owned after the
offering also includes any options that are exercisable within sixty days.
(2) None of the selling stockholders owns 1% or more of Magnum's securities
after completion of the offering under this registration statement.
*Set forth below is a chart showing the number of shares contained in the
category "Shares Being Offered" in the chart set forth above that are being
offered by each selling stockholder that are issuable upon the exercise of
warrants with the exercise price of the warrants.
** Mr. Barron has been a director of Magnum since September 2000.
*** Mr. D'Angelo has been in-house general counsel of Magnum since April 1998
and a director of Magnum since July 1999.
**** Stacy Fritz is the daughter of Charles Koppelman, the Chairman of Magnum.
Mr. Koppelman disclaims beneficial ownership of Ms. Fritz' shares.
***** Mr. Gutkowski has been Chief Executive Officer and a director of Magnum
since June 2000.
****** Mr. Harvey Silverman is a principal of Silverman Partners and has been a
director of Magnum since July 1996.
Name Shares Being Offered That Are Exercise Price
- ---- Issuable Upon Exercise of Warrants of Warrants
---------------------------------- -----------
Anastasi, Rick 8,850 $1.13
Argano, Frank 94,340 $1.06
Barron, Arthur 42,017 $1.19
Bascetta, Richard 44,248 $1.13
Bateson, Robert 8,850 $1.13
Collins, Penelope A 50,000 $0.75
D'Angelo, John 17,699 $1.13
Dessen, Stanley B 50,000 $0.75
DiNardo, Emil 17,699 $1.13
DiNardo, Joseph 88,496 $1.13
Elias, David & Barbara 8,850 $1.13
Esterquest, Thomas G 44,248 $1.13
Frisman, Lawrence J 300,000 $0.75
Fritz, Stacy 200,000 $0.75
-15-
Gioia, Richard 22,124 $1.13
Greenwood Partners, LP 400,000 $0.75
Gutkowski, Robert M 93,458 $1.07
Gutman, Edward S 200,000 $0.75
Gutman, Madeline 23,585 $0.75
HRG Trust 50,000 $0.75
Josef, Jeffrey M 44,248 $1.13
J & S Investments & Co. 47,170 $0.75
Karp, Paul 100,000 $0.75
Katz, Robert 100,000 $0.75
LAD Equity Partners, LP 88,496 $0.75
Luckow, Robert W 200,000 $0.75
Manfredi, Francis 50,000 $0.75
Minio, John J 200,000 $0.75
Rechler, Scott 221,239 $1.13
Roberts, Roy 36,036 $0.75
Sanders, Harvey 88,496 $1.13
Siegal, Richard 221,239 $1.13
Schuback, Clark 94,340 $0.75
Silverman Partners 400,000 $0.75
Sudack, Robert & Nikki 47,170 $0.75
The Gutman Family Foundation 50,000 $0.75
Woodland Partners 188,679 $0.75
Zenna, Alphonse 200,000 $0.75
Zenna, Gregory 100,000 $0.75
- -------------------------
Private Placement of Units Dated January 19, 2001
Of the shares covered by this prospectus, 2,120,514 shares were
acquired by sixteen selling stockholders: Rick Anastasi, Arthur Barron, Richard
Bascetta, Robert Bateson, John D'Angelo, Emil DiNardo, Joseph DiNardo, David &
Barbara Elias, Thomas Esterquest, Richard Gioia, Robert Gutkowski, Jeffrey M.
Josef, LAD Equity Partners, LP, Scott Rechler, Harvey Sanders, and Richard
Siegal pursuant to a private placement memorandum dated January 19, 2001. In the
January 19, 2001 private placement, Magnum offered for sale units with each unit
comprised of one share of its common stock and one warrant to acquire one share
of its common stock. The exercise prices of the warrants sold in this offering
range from $1.07 to $1.19 per share and each of the warrants has a five year
term during which the warrant can be exercised. Magnum sold an aggregate of
1,060,257 units in the First Private Placement through March 19, 2001. Magnum
agreed in the January 19, 2001 private placement to file a registration
statement with the SEC under the Securities Act of 1933 to register for resale
the shares of common stock comprising the units within six months from the date
of the final closing of the January
-16-
19, 2001 private placement and the shares of common stock underlying the
warrants comprising the units within twelve months from the date of the final
closing of the January 19, 2001 private placement.
Private Placement of Units Dated March 30, 2001
Of the shares covered by this prospectus, 4,648,866 shares were
acquired by twenty three selling stockholders: Frank Argano, Penelope A.
Collins, Stanley B. Dessen, Lawrence J. Frisman, Stacy Fritz, Greenwood
Partners, LP, Edward S. Gutman, Madeline Gutman, HRG Trust, J & S Investments &
Co., Paul Karp, Robert Katz, Robert Luckow, Francis Manfredi, John J. Minio, Roy
Roberts, Clark Schuback, Silverman Partners, Robert & Nikki Sudack, The Gutman
Family Foundation, Woodland Partners, Alphonse Zenna and Gregory Zenna pursuant
to a private placement memorandum dated March 30, 2001. In the March 30, 2001
private placement, Magnum offered for sale units with each unit comprised of one
share of its common stock and two warrants each to acquire one share of common
stock. The exercise price of the warrants sold in this offering is $0.75 and
each of the warrants has a five year term during which the warrant can be
exercised. Magnum sold an aggregate of 1,549,622 units in the March 30, 2001
private placement through May 31, 2001. Magnum agreed in the March 30, 2001
private placement to file a registration statement with the SEC under the
Securities Act of 1933 to register for resale the shares of common stock
comprising the units, including the shares issuable upon exercise of the
warrants, within sixty days from the date of the final closing of the March 30,
2001 private placement and that if Magnum does not file a registration statement
within this sixty day time period, Magnum will issue additional units to the
subscribers in the March 30, 2001 private placement equal to two percent of the
units purchased by such subscribers for each thirty day period that Magnum
failed to file such registration statement.
The shares of common stock and warrants (and shares of common stock
issuable upon exercise of the warrants) issued to each of the selling
stockholders are restricted securities within the meaning of the Securities Act
of 1933 and cannot be offered for sale without an effective registration
statement covering such offer and sale or pursuant to an applicable exemption
from the registration requirements of the Securities Act. Pursuant to the terms
of agreements entered into in connection with the private placements, Magnum
filed the registration statement of which this prospectus is a part and will use
its best efforts to keep the registration statement effective until all of the
shares issued or issuable to the selling stockholders upon exercise of the
warrants held by them are disposed of by them.
PLAN OF DISTRIBUTION
The selling stockholders have not employed an underwriter for the sale
of shares by the selling stockholders. The selling stockholders may offer shares
directly or through pledgees, donees, transferees or other successors in
interest at various times:
o on The Nasdaq SmallCap Market or in any other securities market on which
Magnum's common stock is then listed or traded,
o in negotiated transactions,
o in a combination of any of the above transactions, or
o through any other available market transaction.
The selling stockholders may offer shares at (1) fixed prices, which may be
changed, (2) prices prevailing at the time of sale, (3) prices related to such
prevailing market prices, or (4) at negotiated prices. Sales on or through The
Nasdaq Small Cap Market will be effected at such prices as may be obtainable and
as may be satisfactory to the selling stockholders. No sales or distributions
other than as disclosed in this prospectus will be effected until after this
prospectus shall have been appropriately amended or supplemented, if required,
to set forth the terms of the sale or distribution. The shares held by the
selling stockholders may be sold directly or through brokers or dealers, or in a
distribution by one or more underwriters on a firm commitment or best efforts
basis. The method by which the selling stockholders' shares may be sold include:
o a block trade (which may involve crosses) in which the broker or dealer
so engaged will attempt to sell the securities as agent but may position
and resell a portion of the block as principal to facilitate the
transaction;
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o purchases by a broker or dealer as principal and resale by that broker or
dealer for its account under this prospectus;
o exchange distributions and/or secondary distributions in accordance with
the rules of The Nasdaq SmallCap Market;
o ordinary brokerage transactions in which the broker solicits purchasers;
and
o privately negotiated transactions.
In addition, any shares of common stock that qualify for sale under Rule 144 or
Rule 144A under the Securities Act may be sold under any such rules rather than
under this prospectus.
Brokers or dealers may receive commission or discounts from the selling
stockholders in amounts to be negotiated immediately prior to the sale.
Commission expenses and brokerage fees will be paid by the selling stockholders.
The selling stockholders and any underwriters, dealers or agents that
participate in the distribution of its shares of Magnum's common stock may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
profit on the resale of those shares by them or any discounts, commissions or
concessions received by any such underwriters, dealers or agents may be deemed
to be underwriting discounts and commissions under the Securities Act.
Magnum has agreed to indemnify the selling stockholders, their
officers, directors, shareholders, employees, agents, counsel, and each person
who controls each selling stockholder, as determined under applicable securities
laws, against certain kinds of liability relating to this offering. Types of
liability include liability arising from any untrue statement or alleged untrue
statement in this prospectus or the registration statement of which it is a
part, any omission or alleged omission to state a material fact within this
prospectus or the registration statement of which it is a part, and any
violation under the Securities Act of 1933 or any federal or state securities
law or regulation. The selling stockholders have also agreed to indemnify Magnum
and its officers, directors, shareholders, partners, employees, agents, counsel,
and each person who controls Magnum, as determined under applicable securities
laws, against certain kinds of liability relating to this offering. Types of
liability include liability arising from any untrue statement or alleged untrue
statement in this prospectus or the registration statement of which it is a
part, any omission or alleged omission to state a material fact within this
prospectus or the registration statement of which it is a part, and any
violation under the Securities Act or any federal or state securities law or
regulation, to the extent any of the violations occur in connection with written
information furnished by a selling stockholder in connection with this
prospectus or the registration statement of which it is a part. However, the
total amount payable in indemnity by any selling stockholder shall not exceed
net proceeds received by the selling stockholder in the registered offering out
of which the violation arises. The parties have also agreed to make contribution
in respect of any claims or damages for which indemnification is unavailable.
Expenses of this offering related to this registration statement,
estimated at $35,000, will be borne in full by Magnum. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers, or persons controlling Magnum pursuant to the
foregoing provisions, Magnum has been informed that, in the opinion of the SEC,
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
LEGAL MATTERS
Rosenman & Colin LLP, 575 Madison Avenue, New York, New York 10022 will
pass upon the validity of the shares offered by this prospectus for Magnum.
EXPERTS
The consolidated financial statements of Magnum Sports & Entertainment,
Inc. and subsidiaries as of December 31, 2000 and 1999 and for each of the years
in the two year
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period ended December 31, 2000 have been incorporated by reference in this
prospectus and in the registration statement of which it forms a part in
reliance upon the report of Friedman Alpren & Green LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority of
that firm as experts in accounting and auditing.
The report of Friedman Alpren & Green dated March 9, 2001, contains an
explanatory paragraph that states that Magnum has incurred recurring losses from
operations, and has a working capital and stockholders' deficiency that raises
substantial doubt about its ability to continue as a going concern. The
consolidated financial statements do not include any adjustments that might
result from the outcome of that uncertainty.
FORWARD-LOOKING STATEMENTS
This prospectus includes discussions of future expectations and
contains projections of results of operations or financial condition or other
"forward-looking" information. Those statements are subject to known and unknown
risks and uncertainties that could cause actual results to differ materially
from those contemplated by the statements. For a discussion of important factors
that could cause actual results to differ materially from the forward-looking
statements, see "Risk Factors." Given the significant risks and uncertainties
inherent in the forward-looking statements included in this prospectus, the
inclusion of these statements is not a representation by us or any other person
that our objectives and plans will be achieved.
WHERE YOU CAN FIND MORE INFORMATION
Magnum is required to file periodic reports, proxy and information
statements and other information with the SEC. You may read any materials filed
by us at the SEC's public reference room at 450 Fifth Street, N.W., Washington,
D.C. You may obtain information about the operation of the public reference room
by calling the SEC at 1-800-SEC-0330. Magnum's SEC filings are also available to
the public on the SEC's Internet website located at http://www.sec.gov.
Magnum has filed with the SEC a registration statement on Form S-3
under the Securities Act covering the resale of the common stock. This
prospectus is part of that registration statement. As allowed by SEC rules, this
prospectus does not contain all of the information included in the registration
statement or in the exhibits to the registration statement. For further
information with respect to Magnum and the securities offered by this
prospectus, you should read the registration statement and the exhibits filed
with the registration statement. You may obtain copies of the registration
statement and exhibits from the SEC upon payment of a fee prescribed by the SEC
or examine the documents, free of charge, at the public reference facilities
referred to above. A summary in this prospectus of any document filed as an
exhibit to the registration statement, although materially complete, does not
summarize all of the information in that document. You should read the exhibit
for a more complete understanding of the document or matter involved.
Magnum has also filed the following documents with the SEC under the
Securities Exchange Act of 1934 and they are incorporated into this document by
reference:
(1) Annual Report on Form 10-KSB for the fiscal year ended December 31,
2001 filed on March 28, 2001;
(2) Our Quarterly Report on Form 10-QSB for the period ended March 31,
2001 filed on May 14, 2001; and
(3) The information regarding Magnum's common stock contained in the
Registration Statement on Form 8-A, filed on October 18, 1996.
Any document Magnum files with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and
before the termination of this offering will be deemed to be incorporated by
reference into this prospectus and to be a part of this prospectus from the date
it is filed.
Magnum will provide to each person to whom this prospectus is delivered
and who makes a written or oral request, free of charge, a copy of
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any document referred to above which has been incorporated into this prospectus
by reference, except exhibits to the document. Requests for these documents
should be sent to the Chief Financial Officer, Magnum Sports & Entertainment,
Inc., 1330 Avenue of the Americas, 39th Floor, New York, New York 10019.
Telephone requests for copies should be made to the Chief Financial Officer at
(212) 246-7380.
You should rely only on the information provided in this prospectus or
incorporated by reference into this prospectus. No person has been authorized to
provide you with different information and you should not rely on any
information you receive or representations made that are not contained in, or
incorporated by reference into, this prospectus.
This prospectus is not an offer to sell these securities and this
prospectus is not soliciting an offer to buy these securities in any state where
the offer or sale is not permitted.
The information in this prospectus is accurate as of the date on the
front cover. You should not assume that the information contained in this
prospectus is accurate after the date on the cover page.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Magnum will bear all expenses in connection with the preparation and
filing of this registration statement. Brokers or dealers may receive commission
or discounts from the selling stockholders in amounts to be negotiated
immediately prior to the sale; commission expenses and brokerage fees will be
paid by the selling stockholders.
Item 15. Indemnification of Directors and Officers.
The following states the general effect of all statutes, charter
provisions, by-laws, contracts or other arrangement under which any controlling
person, director or officer of Magnum is insured or indemnified in any manner
against liability which he may incur in his capacity as such:
Article SIXTH of the Certificate of Incorporation of Magnum provides,
in pertinent part:
(5) The Corporation shall, to the full extent permitted by Section 145
of the Delaware General Corporation Law, as amended, from time to time,
indemnify all persons whom it may indemnify pursuant thereto.
(6) A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the directors
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
(7) Each person who was or is made a party or is threatened to be made
a party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer, of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another Corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys fees, judgments, fines, ERISA excise
II-1
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and provided, however, that, except as provided in
paragraph (7) hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation. The right to indemnification conferred in
this Article SIXTH shall be a contract right and shall include the right to be
paid by the Corporation the expenses incurred in defending any such proceeding
in advance of its final disposition; provided, however, that if the Delaware
General Corporation Law requires, the payment of such expenses incurred by a
director or officer in his or her capacity as a director or officer (and not in
any other capacity in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a proceeding, shall be made
only upon delivery to the Corporation of an undertaking, by or on behalf of such
director or officer to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be indemnified under
this Article SIXTH or otherwise. The Corporation may, by action of its Board of
Directors, provide indemnification to employees and agents of the Corporation
with the same scope and effect as the foregoing indemnification of directors and
officers.
(8) If a claim under paragraph (6) of the Article SIXTH is not paid in
full by the Corporation within thirty days after a written claim has been
received by the Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expenses of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it permissible under
the Delaware General Corporation Law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including its Board
of Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant has
not met such applicable standard or conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
(9) The right to indemnification and the payment of expenses incurred
in defending a proceeding in advance of its final disposition conferred in this
Article SIXTH shall not be exclusive or any other right which any person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law; agreement, vote of stockholders or disinterested
directors or otherwise.
(10) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another Corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law.
Magnum's amended and restated By-Laws provide, in pertinent part:
ARTICLE IV. INDEMNIFICATION. Each director or officer who the
Corporation is empowered to indemnity pursuant to the General Corporation Law
(or any applicable law at the time in effect) shall be indemnified by the
Corporation to the full extent permitted thereby. The foregoing right of
indemnification shall not be deemed to be exclusive of any other such rights to
which those directors and officers seeking indemnification from the Corporation
II-2
may be entitled, including, but not limited to, any rights of indemnification to
which they may be entitled pursuant to any agreement, insurance policy, other
by-law or charter provision, vote of shareholders or directors, or otherwise. No
repeal of amendment of this Article IV shall adversely affect any rights of any
person pursuant to this Article IV that existed at the time of such repeal or
amendment with respect to acts or omissions occurring prior to such repeal or
amendment.
Item 16. Exhibits
Exhibit
Number Description
*5 -- Opinion of Rosenman & Colin LLP
*23.1 -- Consent of Friedman Alpren & Green LLP
*23.3 -- Consent of Rosenman & Colin LLP (included in Exhibit 5)
*24. -- Power of Attorney (included on page II-5)
*10.1 -- Form of Warrant in Magnum's private placement of units dated January
19, 2001
*10.2 -- Form of Warrant in Magnum's private placement of units dated March
30, 2001
- ------------------
* Filed herewith.
Item 17. Undertakings.
The undersigned registrant hereby undertakes to file, during any period
in which offers or sales are being made, a post-effective amendment to this
registration statement to include any material information with respect to the
plan of distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement.
The undersigned registrant hereby undertakes 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 herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering hereof.
The undersigned registrant hereby undertakes 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or 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.
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 the City of New York and State of New York on [ ], 2001.
MAGNUM SPORTS & ENTERTAINMENT, INC.
By /s/ Robert M. Gutkowski
--------------------------------------
Robert M. Gutkowski
Chief Executive Officer
II-4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert M. Gutkowski and Raymond Shaetzle
as his true and lawful attorney-in-fact and agents, each acting alone, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments (including
post-effective amendments) to this registration statement, and to file the same,
with all the exhibits thereto, and other documents in connection therewith, with
the SEC, granting unto said attorneys-in-fact and agents, each acting alone,
full power and authority to do and perform each and every act and thing
requisite or 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 attorneys-in-fact and agents, each acting alone, 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.
Signature Title Date
--------- ----- ----
/s/ Robert M. Gutkowski Chief Executive July 16, 2001
- ----------------------------- Officer; Director
Robert M. Gutkowski
/s/ Charles A. Koppelman Chairman of the Board July 16, 2001
- -----------------------------
Charles A. Koppelman
/s/ Arthur Barron Director July 16, 2001
- -----------------------------
Arthur Barron
/s/ John D'Angelo Director; General Counsel July 16, 2001
- -----------------------------
John D'Angelo
/s/ Herbert Kozlov Director; Secretary July 16, 2001
- -----------------------------
Herbert Kozlov
/s/ Harvey Silverman Director July 16, 2001
- -----------------------------
Harvey Silverman
/s/ Chester Simmons Director July 16, 2001
- -----------------------------
Chester Simmons
II-5