As filed with the Securities and Exchange Commission on June 10, 2003
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NOVA INTERNATIONAL FILMS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 11-2717273
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
4841
(Primary Standard Industrial
Classification Code Number)
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Suite 805, One Pacific Place,
88 Queensway, Hong Kong
(Address of Principal Executive Offices)
2003 Stock Compensation Plan
Director Compensation Agreements
Consulting Agreements
Suite 805, One Pacific Place,
88 Queensway, Hong Kong
Tel: (852) 2891-3130
Attention: Raymond Ying-Wai Kwan, CEO
(Name, Address, Telephone Number and Facsimile Number
of Agent For Service of Process)
Copies of all Communications to:
David L. Ficksman, Esq.
Loeb & Loeb LLP
10100 Santa Monica Boulevard, Suite 2200
Los Angeles, Delaware 90067-4164
Tel: (310) 282-2350
Fax: (310) 282-2200
CALCULATION OF REGISTRATION FEE
- ---------------------------------- --------------- -------------------- -------------------- ------------------
Title of Each Class of Securities Amount To Be Proposed Maximum Proposed Maximum Amount of
To Be Registered Registered Offering Price Per Aggregate Offering Registration Fee
Share (1) Price (2)
- ---------------------------------- --------------- -------------------- -------------------- ------------------
Common Stock 11,500,000 $.70 $8,050,000 $652
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(1) The number of stated above consists of 10,000,000 shares which may be
sold upon the exercise of options which have been granted and/or may
hereafter be granted under our 2003 Stock Compensation Plan (the
"Plan") or upon the issuance of stock awards which have been granted
and/or may hereafter be granted under the Plan and 1,500,000 issuable
pursuant to certain consutling agreements. In addition, this
Registration Statement covers the resale of 1,176,000 shares previously
issued under the Plan (the "Resale Shares"). Further, pursuant to Rule
416 under the Securities Act of 1933, as amended (the "Securities
Act"), this Registration Statement covers, in addition to the number of
shares stated above, an indeterminate number of shares which may be
subject to grant or otherwise issuable after the operation of any such
anti-dilution and other provisions.
(2) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(c) and (h) of the Securities Act of 1933 based
upon the bid price of the Registrant's common stock as quoted on the
Over-the-Counter Bulletin Board of $.70 on May 22, 2003.
INTRODUCTORY STATEMENT
We prepared this Registration Statement in accordance with the
requirements of Form S-8 under the Securities Act of 1933, as amended, to
register 11,500,000 shares of our common stock, $.00001 par value per share,
issued or issuable pursuant 2003 Stock Compensation Plan (the "2003 Stock
Compensation Plan"), certain Consulting Agreements ("the Consulting Agreements")
and certain Director Compensation Agreements (the "Director Agreements").
PART I
Pursuant to the requirements and Form S-8 and Rule 428, the information
specified in Part I of Form S-8 will be sent to Plan participants as specified
by Rule 428(b)(1). As permitted by General Instruction C for Form S-8, there is
also included as part of Part I. of this Registration Statement a Reoffer
Prospectus relating the resale of up to 1,176,000 shares of common stock being
offered by the selling stockholders.
ii
REOFFER PROSPECTUS
NOVA INTERNATIONAL FILMS, INC.
1,176,000 Shares of Common Stock
This reoffer prospectus relates to the resale of up to 1,176,000,
shares of common stock being offered by the selling stockholders listed on page
10. The shares of our common stock covered by this prospectus were issued or are
issuable pursuant to the terms on our 2003 Stock Compensation Plan.
The prices at which the selling stockholder may sell its shares will be
determined by the prevailing market price for the shares or in privately
negotiated transactions. Information regarding the selling stockholder and the
times and manner in which it may offer and sell the shares under this prospectus
is provided under "Selling stockholder" and "Plan of Distribution" in this
prospectus. Nova will not receive any of the proceeds from the sale of the
shares under this prospectus.
Our common stock trades on the Over-the-Counter Bulletin Board, also
called the OTCBB, under the trading symbol "NIFL". On May 22, 2003, the closing
bid for our common stock as reported on the OTCBB was $.70 per share. As of May
31, 2003 there were 65,114,933 shares of common stock outstanding.
THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the securities or determined that this
prospectus is complete or accurate. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is June 10, 2003
TABLE OF CONTENTS
Available Information..........................................................2
Incorporation by Reference.....................................................2
Corporate Information..........................................................2
Recent Developments............................................................3
Risk Factors...................................................................5
Cautionary Statement Regarding Forward-Looking Information.....................9
Use of Proceeds...............................................................10
Selling Security Holders......................................................10
Plan of Distribution..........................................................11
Indemnification of Directors and Officers.....................................13
Description of Securities.....................................................13
Experts.......................................................................14
Legal Matters.................................................................14
AVAILABLE INFORMATION
We have filed a registration statement on Form S-8 with the Securities
and Exchange Commission under the Securities Act of 1933, as amended. This
Prospectus omits some information and exhibits included in the registration
statement, copies of which may be obtained upon payment of a fee prescribed by
the Commission or may be examined free of charge at the principal office of the
Commission in Washington, D.C.
We are subject to the informational requirements of the Exchange Act of
1934, as amended, and in accordance therewith file reports and other information
with the Commission The reports and other information filed by us with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
In addition, copies may be obtained (at prescribed rates) at the regional
offices of the Commission located at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 11th floor, 5670
Wilshire Boulevard, Los Angeles, California 90036. Copies of that material can
also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,
the Commission maintains a web site that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the Commission at http://www.sec.gov.
INCORPORATION BY REFERENCE
The following documents previously filed by us with the Commission are
incorporated in this Prospectus by reference:
(1) Annual Report, Form 10K-SB as filed with the Commission on February
10, 2003;
(2) Quarterly Report, Form 10-QSB for the quarterly period ended March
31, 2003 as filed with the Commission on May 15, 2003;
(3) Current Report, Form 8-K as filed with the Commission on March 17,
2003
(4) Current Report, Form 8-K as filed with the Commission on May 15,
2003; and
(5) Current Report, Form 8-K/A as filed with the Commission on May 19,
2003.
All reports and other documents that we file pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereunder
have been sold or which deregisters all such securities then remaining unsold
are incorporated by reference in this registration statement and to be a part
hereof from the date of filing of such reports and documents.
Copies of all documents which are incorporated by reference will be
provided without charge to anyone to whom this Prospectus is delivered upon a
written or oral request to Nova International Films, Inc. at Suite 805, One
Pacific Place, 88 Queensway, Hong Kong. Our telephone number at that location is
(852) 2891-3130.
CORPORATE INFORMATION
Our corporate office is located at Suite 805, One Pacific Place, 88
Queensway, Hong Kong. Our telephone number at that location is (852) 2891-3130.
2
RECENT DEVELOPMENTS
Nova International Films, Inc. (the "Company") was incorporated in the
State of Delaware on November 27, 1984. Prior to May 1993, the Company was
principally engaged in the business of developing, financing and producing
motion pictures for distribution. Since May 1993, however, the Company has had
no current business operations and since then has been seeking another business
opportunity.
Pursuant to a Share Exchange Agreement dated as of November 1, 2002, as
amended by the Amended Share Exchange Agreement on February 21, 2003, between
the Company and Martin Rifkin and William Rifkin on the one hand; and Kingston
Global Co. Ltd. ("Kingston") and Sino Concept Enterprises Limited (collectively
the "Sellers"); and Solar Touch Limited ("Solar Touch"), on the other hand, on
February 28, 2003 (the "Closing Date"), the Company acquired (the "Acquisition")
from Kingston all of the issued and outstanding equity interests of Solar Touch
(the "Solar Touch Shares"). As consideration for the Solar Touch Shares, the
Company issued 49,567,002 shares of its common stock to the Sellers. In addition
to the common stock issued to the Sellers, the Company issued 4,760,931 shares
to the Seller's financial consultants. The consideration for the Acquisition was
determined through arm length negotiations between the management of the Company
and the Sellers. As a result of the Acquisition, the Company continued the
operations of Solar Touch.
Solar Touch was incorporated in the British Virgin Islands on May 26,
1999. Solar Touch owns 49% of the issued and outstanding shares of capital stock
on a fully diluted basis of Baoding Pascali Broadcasting Cable TV Integrated
Information Networking Co., Ltd. (the "Joint Venture"). The Joint Venture is a
sino-foreign joint venture established in the People's Republic of China (the
"PRC"), between Solar Touch and Baoding Pascali Multimedia Transmission
Networking Co., Ltd. ("Baoding Multimedia") which is a subsidiary of Baoding
Pascali Group Co., Ltd., a Chinese state-owned enterprise.
The Joint Venture was formed on July 23, 1999, when Baoding Multimedia
and Solar Touch signed a joint venture contact (the "JV Contract") and the
articles of association of the Joint Venture (the "JV Articles"). The JV
Contract and JV Articles provided that the total amount of investment of the
Joint Venture was RMB122.425 million (or US$14.8 million); and that the
registered capital was RMB70 million (or US$8.46 million). The JV Contract and
JV Articles also provided that Baoding Multimedia's contribution to the Joint
Venture was Baoding Multimedia's network and related facilities with a value of
RMB21.7 million, plus intangible assets (including licenses, business goodwill)
valued at RMB14 million which was equal to 51% of the registered capital of the
Joint Venture and that Solar Touch's contribution was an investment of US$4.14
million (or RMB34.3 million) in cash which was equal to 49% of the registered
capital. On July 28, 1999, the Management Commission of the Baoding Hi-Tech
Industrial Development Area approved the JV Contract and JV Articles as well as
the members of the board of directors of the Joint Venture. On August 5, 1999, a
Certificate of Approval for Establishment of Enterprises with Foreign Investment
in the PRC for the Joint Venture was issued and on August 16, 1999, the Business
Licence for the Joint Venture was issued for the operation of the Joint Venture.
On February 23, 2000, Baoding Multimedia and Solar Touch signed another
agreement to increase the Joint Venture's registered capital from RMB70 million
to RMB100 million, provided however, that the parties' respective percentage of
equity interests in the Joint Venture shall remain the same. On February 24,
2000, the Management Commission of the Development Area approved the increase in
the Joint Venture's registered capital from RMB70 million to RMB100 million. On
September 6, 2000, a revised Business Licence to reflect the increase in the
Joint Venture's registered capital was issued.
The Joint Venture operates a cable TV network in the municipality of
Baoding, near Beijing in the PRC. With over 190,000 subscribers in a market with
a population of over 10 million, the Company strongly believes that the Joint
Venture is at present the only sino-foreign joint venture company approved by
the State Administration of Radio, Film and Television to be licensed as a cable
TV network operator in the PRC. It is the first and only joint venture allowed
the foreign investor to invest in and operate the cable TV network in the PRC.
3
As of May 23, 2003, the Joint Venture offered thirty-nine (39) channels
within the Baoding city limits and eight (8) channels to outer areas in the
Baoding metropolitan area. The Joint Venture transmits in both analog and
digital over its fiber optic network and through twenty-two (22) substations. In
addition to its cable TV transmission service, the Joint Venture also offers
Internet access. The Joint Venture expects that it will be able to offer added
value services such as broadband Internet access, virtual private network and
bulk data transmission services by the end of 2003. The Joint Venture currently
generates revenue by charging a one-off installation fee ranging from RMB340
(approximately $41) to RMB600 (approximately $73) and a monthly subscription fee
of RMB13 (approximately $1.60) to household customers and enterprises.
4
RISK FACTORS
You should carefully consider the risks described below before making
an investment in Nova. The risks and uncertainties described below are not the
only ones facing Nova, and there may be additional risks that we do not
presently know of or that we consider immaterial. All of these risks may impair
our business operations. If any of the following risks actually occurs, our
business, financial condition or results of operations could be materially
adversely affected. In such case, the trading price of our common stock could
decline, and you may lose all or part of your investment.
We have a limited operating history.
We have a limited operating history and we are in our emerging stages.
There can be no assurance that we will continue to develop or will be able to
meet our objectives, or that our products will be accepted in the market, or
that we will operate at a profit.
There is a limited public market for shares of our common stock and the market
price for our common stock may be subject to volatility
There is a limited public market for shares of our common stock. We
cannot guaranty that an active public market will develop or be sustained.
Therefore, investors may not be able to find purchasers for their shares of our
common stock. Should there develop a significant market for our shares, the
market price for those shares may be significantly affected by such factors as
our financial results and the overall investment atmosphere.
As a holding company, we have significant limitations on access to cash flow
from our investment in Baoding
We are a holding company that has no significant business operations or
assets other than our interest in Joint Venture. Accordingly, we must rely
entirely upon distributions to generate the funds necessary to meet our
obligations and other cash flow needs, including funds necessary for working
capital. The Joint Venture is a separate and distinct legal entity that has no
contingent or other obligation to make any funds available to us, whether by
dividends, loans or other payments. Any failure to receive distributions from
the Joint Venture would restrict our ability to pay dividends on our shares and
could otherwise have an adverse effect on our operations.
We may face problems with our joint venture partner that may affect the value of
our investment.
We do not have any control over the operations of the Joint Venture and
to the extent that our Joint Venture partner has objectives that are different
than ours, we may have difficulty executing our business plan. For example, our
Joint Venture partner may:
o have economic or business interests or goals that are
inconsistent with our Company;
o take actions contrary to our instructions or requests or
contrary to our policies or objectives with respect to
business development or investment;
5
o be unable or unwilling to fulfill their obligations under the
joint venture agreement; or
o experience financial difficulties.
Although, to date, we have not experienced any significant problems
with our Joint Venture partner, the occurrence of such a problem could have an
adverse effect on the value of your investment.
One stockholder has majority control over our Company, which will allow him to
influence the outcome of matters submitted to stockholders for approval.
As of May 31, 2003, Kingston owned approximately 75% of our Company's
issued voting securities. Kingston is a wholly owned subsidiary of China
Convergent Corporation Limited which in turn is approximately 50% owned through
holdings by Mr. Daxiang Zhang. Mr. Zhang can exercise substantial influence over
our affairs.
It may be difficult to serve us with legal process or enforce judgments against
us or our management.
All or a substantial portion of our assets are located in China. In
addition, three out of four directors and all officers are non-residents of the
United States, and all or substantial portions of the assets of such
non-residents are located outside the United States. As a result, it may not be
possible to effect service of process within the United States upon such
persons. Moreover, there is doubt as to whether the courts of China would
enforce:
o judgments of United States courts against us, our directors or
our officers based on the civil liability provisions of the
securities laws of the United States or any state; or
o in original actions brought in China, liabilities against
non-residents or us based upon the securities laws of the
United States or any state.
The Chinese government could change its policies toward private enterprise or
even nationalize or expropriate it, which could result in the total loss of our
investment in that country.
Our business is subject to significant political and economic
uncertainties and may be adversely affected by political, economic and social
developments in China. Over the past several years, the Chinese government has
pursued economic reform policies including the encouragement of private economic
activity and greater economic decentralization. The Chinese government may not
continue to pursue these policies or may significantly alter them to our
detriment from time to time with little, if any, prior notice.
Changes in policies, laws and regulations or in their interpretation or
the imposition of confiscatory taxation, restrictions on currency conversion,
restrictions or prohibitions on dividend payments to stockholders, devaluations
of currency or the nationalization or other expropriation of private enterprises
could have a material adverse effect on our business. Nationalization or
expropriation could even result in the total loss of our investment in China and
in the total loss of your investment.
If relations between the United States and China worsen, our stock price may
decrease and we may have difficulty accessing U.S. capital markets
At various times during recent years, the United States and China have
had significant disagreements over political and economic issues. Controversies
may arise in the future between these two countries. Any political or trade
controversies between the United States and China, whether or not directly
related to our business, could adversely affect the market price of our common
stock and our ability to access U.S. capital markets.
6
The PRC economic, political and social conditions as well as government policies
could affect our business.
All of our businesses, assets and operations are located in China. The
economy of China differs from the economies of most developed countries in many
respects, including:
o government involvement;
o level of development;
o growth rate;
o control of foreign exchange; and
o allocation of resources.
The economy of China has been transitioning from a planned economy to a
more market-oriented economy. Although in recent years the PRC government has
implemented measures emphasizing the utilization of market forces for economic
reform, the reduction of state ownership of productive assets and the
establishment of sound corporate governance in business enterprises, a
substantial portion of productive assets in China is still owned by the PRC
government. In addition, the PRC government continues to play a significant role
in regulating industry by imposing industrial policies. It also exercises
significant control over China's economic growth through the allocation of
resources, controlling payment of foreign currency-denominated obligations,
setting monetary policy and providing preferential treatment to particular
industries or companies.
The economy of China has experienced significant growth in the past 20
years, but growth has been uneven both geographically and among various sectors
of the economy. The PRC government has implemented various measures from time to
time to control the rate of economic growth. Some of these measures benefit the
overall economy of China, but may have a negative effect on us. For example, our
operating results and financial condition may be adversely affected by:
o changes in the rate or method of taxation;
o imposition of additional restrictions on currency conversion
and remittances abroad;
o reduction in tariff or quota protection and other import
restrictions;
o changes in the usage and costs of state-controlled
transportation services; and
Government control of currency conversion and future movements in exchange rates
may adversely affect our operations and financial results.
We receive substantially all of our revenues in renminbi, the currency
of the PRC. A portion of such revenues will be converted into other currencies
to meet our foreign currency obligations. Foreign exchange transactions under
our capital account, including principal payments in respect of foreign
currency-denominated obligations, continue to be subject to significant foreign
exchange controls and require the approval of the State Administration of
Foreign Exchange. These limitations could affect our ability to obtain foreign
exchange through debt or equity financing, or to obtain foreign exchange for
capital expenditures.
7
Since 1994, the conversion of renminbi into foreign currencies,
including U.S. dollars, has been based on rates set by the People's Bank of
China, which are set daily based on the previous day's PRC interbank foreign
exchange market rate and current exchange rates on the world financial markets.
Since 1994, the official exchange rate for the conversion of renminbi to U.S.
dollars has generally been stable. Our financial condition and results of
operations may also be affected by changes in the value of certain currencies
other than the renminbi in which our earnings and obligations are denominated.
In particular, a devaluation of the renminbi is likely to increase the portion
of our cash flow required to satisfy our foreign currency-denominated
obligations.
The PRC legal system is not fully developed and has inherent uncertainties that
could limit the legal protections available to you.
The PRC legal system is a system based on written statutes and their
interpretation by the Supreme People's Court. Prior court decisions may be cited
for reference but have limited precedential value. Since 1979, the PRC
government has been developing a comprehensive system of commercial laws, and
considerable progress has been made in introducing laws and regulations dealing
with economic matters such as foreign investment, corporate organization and
governance, commerce, taxation and trade. Two examples are the promulgation of
the Contract Law of the PRC to unify the various economic contract laws into a
single code, which went into effect on October 1, 1999, and the Securities Law
of the PRC, which went into effect on July 1, 1999. However, because these laws
and regulations are relatively new, and because of the limited volume of
published cases and their non-binding nature, interpretation and enforcement of
these laws and regulations involve uncertainties. In addition, as the PRC legal
system develops, changes in such laws and regulations, their interpretation or
their enforcement may have a material adverse effect on our business operations.
It may be difficult to serve us with legal process or enforce judgments against
us or our management.
All of our assets are located in China. In addition, three of out of
four directors and all our officers are non-residents of the United States, and
all the assets of such non-residents are located outside the United States. As a
result, it may not be possible to effect service of process within the United
States upon such persons. Moreover, there is doubt as to whether the courts of
China or the Special Administrative Region of Hong Kong would enforce:
o judgments of United States courts against us, our directors or
our officers based on the civil liability provisions of the
securities laws of the United States or any state; or
o in original actions brought in China, liabilities against
non-residents or us based upon the securities laws of the
United States or any state.
Enforcement of regulations in China may be inconsistent.
Although the Chinese government has introduced new laws and regulations
to modernize its securities and tax systems on January 1, 1994, China does not
yet possess a comprehensive body of business law. As a result, the enforcement,
interpretation and implementation of regulations may prove to be inconsistent
and it may be difficult to enforce contracts.
8
We may experience lengthy delays in resolution of legal disputes.
As China has not developed a dispute resolution mechanism similar to
the Western court system, dispute resolution over Chinese projects and joint
ventures can be difficult and there is no assurance that any dispute involving
our business in China can be resolved expeditiously and satisfactorily.
Fluctuations of currency exchange rates between the United States dollar and the
Renminbi could adversely affect our business.
The Chinese government controls its foreign currency reserves through
restrictions on imports and conversion of Renminbi into foreign currency.
Although the Renminbi to United States dollar exchange rate has been stable
since January 1, 1994 and the Chinese government has stated its intention to
maintain the stability of the value of Renminbi, there can be no assurance that
exchange rates will remain stable. The Renminbi could devalue against the United
States dollar. Exchange rate fluctuations may adversely affect distributions
from our investment in Baoding, which are denominated in Renminbi and the value
of our investment in Joint Venture in China.
Our Common Stock is a Penny Stock as defined in the Exchange Act and an investor
may find it more difficult to dispose of or obtain accurate quotations as to the
price of the shares of the Common Stock.
Our Common Stock is classified as penny stock, which is traded in the
over-the-counter market on the OTC Bulletin Board. As a result, an investor may
find it more difficult to dispose of or obtain accurate quotations as to the
price of the shares of the common stock being registered hereby. In addition,
the "penny stock" rules adopted by the Commission under the Exchange Act subject
the sale of the shares of the common stock to certain regulations which impose
sales practice requirements on broker-dealers. For example, broker-dealers
selling such securities must, prior to effecting the transaction, provide their
customers with a document that discloses the risks of investing in such
securities. Furthermore, if the person purchasing the securities is someone
other than an accredited investor or an established customer of the
broker-dealer, the broker-dealer must also approve the potential customer's
account by obtaining information concerning the customer's financial situation,
investment experience and investment objectives. The broker-dealer must also
make a determination whether the transaction is suitable for the customer and
whether the customer has sufficient knowledge and experience in financial
matters to be reasonably expected to be capable of evaluating the risk of
transactions in such securities. Accordingly, the Commission's rules may limit
the number of potential purchasers of the shares of the common stock.
There may be resale restrictions with respect to our common stock.
Various state securities laws impose restrictions on transferring penny
stocks and as a result, investors in the common stock may have their ability to
sell their shares of the common stock impaired. For example, the Utah Securities
Commission prohibits brokers from soliciting buyers for penny stocks, which
makes selling them more difficult.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Under the Private Securities Litigation Reform Act of 1995, companies
are provided with a "safe harbor" for making forward-looking statements about
the potential risks and rewards of their strategies. Forward-looking statements
often include the words "believe," "expect," "anticipate," "intend," "plan,"
"estimate" or similar expressions. In this prospectus supplement,
forward-looking statements also include:
9
o statements about our business plans;
o statements about the potential for the development, regulatory
approval and public acceptance of new services;
o estimates of future financial performance;
o predictions of national or international economic, political
or market conditions;
o statements regarding other factors that could affect our
future operations or financial position; and
o other statements that are not a matter of historical fact.
Our ability to achieve our goals depends on many known and unknown
risks and uncertainties, including changes in general economic and business
conditions. These factors could cause our actual performance and results to
differ materially from those described or implied in forward-looking statements.
Factors that could cause or contribute to such differences include, among
others:
These forward-looking statements speak only as of the date of this
prospectus. We believe it is in the best interest of our investors to use
forward-looking statements in discussing future events. However, we are not
required to, and you should not rely on us to, revise or update these statements
or any factors that may affect actual results, whether as a result of new
information, future events or otherwise.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the securities
offered hereby, except that we will receive funds from the exercise of any
options granted pursuant to the 2003 Stock Compensation Plan which funds will be
used for working capital.
SELLING STOCKHOLDERS
The following table sets forth certain information concerning the
resale of the shares of common stock by the selling stockholders. Unless
otherwise described below, to our knowledge, no selling stockholder nor any of
its affiliates has held any position or office with, been employed by or
otherwise has had any material relationship with us or our affiliates during the
three years prior to the date of this prospectus. Each selling stockholder has
confirmed to us that it is not a broker-dealer or affiliate of a broker-dealer
within the meaning of Rule 405 of the Securities Act, as amended.
A selling stockholder may offer all or some portion of the shares of
the common stock they hold. Accordingly, no estimate can be given as to the
amount or percentage of our common stock that will be held by the selling
stockholder upon termination of sales pursuant to this prospectus. In addition,
the selling stockholder identified below may have sold, transferred or disposed
of all or a portion of its shares since the date on which they provided the
information regarding its holdings in transactions exempt from the registration
requirements of the Securities Act.
As of May 31, 2003, there were 65,114,933 shares of our common stock
outstanding. In compliance with the SEC rules, for purposes of calculating the
percentage of common stock outstanding, any securities not outstanding which are
subject to options, Warrants or conversion privileges are deemed outstanding for
the purposes of computing the percentage of outstanding securities owned by the
selling stockholder. Beneficial ownership includes shares of outstanding common
stock and shares of common stock that a person has the right to acquire within
60 days from May 31, 2003. Unless otherwise indicated, the selling stockholder
has the sole power to direct the voting and investment over the shares owned by
them. We will not receive any proceeds from the resale of the common stock by
the selling stockholder.
10
Ownership of Common stock Prior to
the Offering
-----------------------------------------------------------------
Percentage of Number of Shares Offered
Name of Selling Stockholder Number of Shares Ownership Hereby
- --------------------------- -------------------- ---------------- -------------------------
Raymond Ying-wai Kwan(1) 288,000 0.4% 288,000
Yau-sing Tang (2) 720,000 1.2% 720,000
George Raney (3) 168,000 0.3% 168,000
Total 1,176,000 1.8% 1,176,000
- -------------
(1) Raymond Ying-wai Kwan is the CEO and a director of our company. The shares
subject to this prospectus will be issued to Mr. Kwan pursuant to a Director's
Compensation Agreement whereby so long as Mr. Kwan serves as a director, for the
next two years he will receive 12,000 shares per month as compensation for
serving in the capacity of a director of the company.
(2) Yau-sing Tang is the CFO and the Chairman of the Board of Directors of our
company. The shares subject to this prospectus will be issued to Mr. Tang
pursuant to a Director's Compensation Agreement whereby so long as Mr. Tang
serves as a director, for the next two years he will receive 30,000 shares per
month as compensation for serving in the capacity of a director of the company.
(3) George Raney is a director of our company. The shares subject to this
prospectus will be issued to Mr. Raney pursuant to a Director's Compensation
Agreement whereby so long as Mr. Raney serves as a director, for the next two
years he will receive 7,000 shares per month as compensation for serving in the
capacity of a director of the Company.
PLAN OF DISTRIBUTION
We are registering the shares of common stock on behalf of the selling
stockholders. A selling stockholder and any of its pledges, assignees, and
successors-in-interest may, from time to time, sell any or all of its shares of
common stock on any stock exchange, market, or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. There is no assurance that the selling stockholder will sell
any or all of the common stock in this offering. The selling stockholder may use
any one or more of the following methods when selling shares:
Ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers; Block trades in which the broker-dealer will
attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; Purchases by a broker-dealer
as principal and resale by the broker-dealer for its own account; an exchange
distribution following the rules of the applicable exchange; Privately
negotiated transactions; short sales or sales of shares not previously owned by
the seller; Broker-dealers may agree with the selling stockholder to sell a
specified number of such shares at a stipulated price per share; A combination
of any such methods of sale; or any other lawful method.
Broker-dealers engaged by the selling stockholder might arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from selling stockholder in amounts to be negotiated.
If any broker-dealer acts as agent for the purchaser of shares, the
broker-dealer may receive commission from the purchaser in amounts to be
negotiated. The selling stockholder does not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
11
The Securities and Exchange Commission has rules that regulate
broker-dealer practices in connection with transactions in "penny stocks". Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in that security is provided by the exchange or system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document prepared by the Commission that provides information about
penny stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation. These disclosure requirements may have the
effect of reducing the level of trading activity in the secondary market for our
common stock. As a result of these rules, the selling security holder may find
it difficult to sell its shares of common stock.
Underwriter Status
A selling stockholder and any broker-dealers or agents that are
involved in selling the shares may be considered to be "underwriters" within the
meaning of the Securities Act for such sales. An underwriter is a person who has
purchased shares from an issuer with a view towards distributing the shares to
the public. In such event, any commissions received by such broker-dealers or
agents and any profit on the resale of the shares purchased by them may be
considered to be underwriting commissions or discounts under the Securities Act.
Because the selling stockholder may be deemed to be an "underwriter"
within the meaning of Section 2(11) of the Act of 1933, the selling stockholder
will be subject to the prospectus delivery requirements of the Securities Act.
We have informed the selling stockholder that the anti-manipulative provisions
of Regulation M promulgated under the Securities Exchange Act of 1934 may apply
to its sales in the market.
We are required to pay all fees and expenses incident to the
registration of the shares in this offering. However, we will not pay any
commissions or any other fees in connection with the resale of the common stock
in this offering.
When the selling stockholder notifies us that a material arrangement
has been entered into with a broker-dealer for the sale of shares through a
block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, a supplement to this prospectus will be
filed, if required, pursuant to Rule 424(b) under the Securities Act of 1933,
disclosing:
o the name of the selling stockholder and of the participating
broker-dealers,
o the number of shares involved,
o the price at which the shares were sold,
o the commissions paid or discounts or concessions allowed to
the broker-dealers, where applicable,
o that the broker-dealers did not conduct any investigation to
verify the information set out or incorporated by reference in
this prospectus, and
o other facts material to the transaction
12
A selling stockholder will be indemnified by us against certain claims,
damages and liabilities, including liabilities under the Securities Act in
connection with the resale of the shares, or will be entitled to contribution in
connection therewith. We will be indemnified by the selling stockholder to a
limited extent, against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act in connection with the resale of
the shares, or will be entitled to contribution in connection therewith.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Indemnification of Directors and Officers.
Our Articles of Incorporation include provisions, which limit the
liability of our directors. As permitted by applicable provisions of the
Delaware Law, directors will not be liable to Nova for monetary damages arising
from a breach of their fiduciary duty as directors in certain circumstances.
This limitation does not affect liability for any breach of a director's duty to
Nova or our stockholders (i) with respect to approval by the director of any
transaction from which he or she derives an improper personal benefit, (ii) with
respect to acts or omissions involving an absence of good faith, that the
director believes to be contrary to the best interests of Nova or our
stockholders, that involve intentional misconduct or a knowing and culpable
violation of law, that constitute an unexcused pattern or inattention that
amounts to an abdication of his or her duty to Nova or our stockholders, or that
show a reckless disregard for duty to Nova or our stockholders in circumstances
in which he or she was, or should have been aware, in the ordinary course of
performing his or her duties, of a risk of serious injury to Nova or our
stockholders, or (iii) based on transactions between Nova and our directors or
another corporation with interrelated directors or based on improper
distributions, loans or guarantees under applicable sections of Delaware Law.
This limitation of directors' liability also does not affect the availability of
equitable remedies, such as injunctive relief or rescission.
The Company has been advised that it is the position of the Commission
that insofar as the provision in Nova's Articles of Incorporation, as amended,
may be invoked for liabilities arising under the Securities Act, the provision
is against public policy and is therefore unenforceable.
DESCRIPTION OF SECURITIES
As of the date of this prospectus, our authorized capital stock
consists of 100,000,000 shares $.00001 par value, per share of common stock of
which 65,114,933 shares are issued and outstanding.
The following is a description of our securities taken from provisions
of our Articles of Incorporation and by-laws, each as amended. The following
description is a summary and is qualified in its entirety by the above
referenced provisions of the Articles of Incorporation and by-laws as currently
in effect.
All shares of common stock have one vote and vote together as a single
class. Voting rights are not cumulative, and, therefore, the holders of more
than 50% of the common stock could, if they chose to do so, elect all of the
Directors. Upon liquidation, dissolution or winding up, our assets, after the
payment of our liabilities, will be distributed pro rata to the holders of the
common stock.
Holders of common stock are entitled to share equally in dividends
when, as and if declared by our board of directors, out of funds legally
available for the payment of dividends. We have not paid any cash dividends on
the common stock, and it is unlikely that any dividends will be declared in the
foreseeable future.
13
EXPERTS
The financial statements incorporated herein by reference to the Form 10-KSB
filed with the Commission on February 10, 2003 have been audited by Weinberg &
Company, P.A. The financial statements incorporated herein by reference to the
Form 8-K/A filed with the commission on May 19, 2003 have been audited by Thomas
Leger & Co., L.L.P. Each of the foregoing are independent certified public
accountants to the extent and for the periods set forth in their respective
reports incorporated herein and are referenced in reliance upon such report
given upon the authority of said firm as experts in auditing and accounting.
LEGAL MATTERS
Loeb & Loeb, LLP, Los Angeles, California has passed upon the validity
of the securities being offered hereby for us.
14
NOVA INTERNATIONAL FILMS, INC.
------------------
Reoffer Prospectus
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed by us with the Commission are
incorporated in this Prospectus by reference:
(1) Annual Report, Form 10K-SB as filed with the Commission on February
10, 2003;
(2) Quarterly Report, Form 10-QSB for the quarterly period ended March
31, 2003 as filed with the Commission on May 15, 2003;
(3) Current Report, Form 8-K as filed with the Commission on March 17,
2003
(4) Current Report, Form 8-K as filed with the Commission on May 15,
2003; and
(5) Current Report, Form 8-K/A as filed with the Commission on May 19,
2003.
All reports and other documents that we file pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereunder
have been sold or which deregisters all such securities then remaining unsold
are incorporated by reference in this registration statement and to be a part
hereof from the date of filing of such reports and documents.
Copies of all documents which are incorporated by reference will be
provided without charge to anyone to whom this Prospectus is delivered upon a
written or oral request to Nova International Films, Inc. at Suite 805, One
Pacific Place, 88 Queensway, Hong Kong. Our telephone number at that location is
(852) 2891-3130.
Item 4. Description of Securities.
As of the date of this prospectus, our authorized capital stock
consists of 100,000,000 shares $.00001 par value, per share of common stock of
which 65,114,933 shares are issued and outstanding.
The following is a description of our securities taken from provisions
of our Articles of Incorporation and by-laws, each as amended. The following
description is a summary and is qualified in its entirety by the above
referenced provisions of the Articles of Incorporation and by-laws as currently
in effect.
All shares of common stock have one vote and vote together as a single
class. Voting rights are not cumulative, and, therefore, the holders of more
than 50% of the common stock could, if they chose to do so, elect all of the
Directors. Upon liquidation, dissolution or winding up, our assets, after the
payment of our liabilities, will be distributed pro rata to the holders of the
common stock.
Holders of common stock are entitled to share equally in dividends
when, as and if declared by our board of directors, out of funds legally
available for the payment of dividends. We have not paid any cash dividends on
the common stock, and it is unlikely that any dividends will be declared in the
foreseeable future.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Our Articles of Incorporation include provisions, which limit the
liability of our directors. As permitted by applicable provisions of the
Delaware Law, directors will not be liable to Nova for monetary damages arising
from a breach of their fiduciary duty as directors in certain circumstances.
This limitation does not affect liability for any breach of a director's duty to
Nova or our stockholders (i) with respect to approval by the director of any
transaction from which he or she derives an improper personal benefit, (ii) with
respect to acts or omissions involving an absence of good faith, that the
director believes to be contrary to the best interests of Nova or our
stockholders, that involve intentional misconduct or a knowing and culpable
violation of law, that constitute an unexcused pattern or inattention that
amounts to an abdication of his or her duty to Nova or our stockholders, or that
show a reckless disregard for duty to Nova or our stockholders in circumstances
in which he or she was, or should have been aware, in the ordinary course of
performing his or her duties, of a risk of serious injury to Nova or our
stockholders, or (iii) based on transactions between Nova and our directors or
another corporation with interrelated directors or based on improper
distributions, loans or guarantees under applicable sections of Delaware Law.
This limitation of directors' liability also does not affect the availability of
equitable remedies, such as injunctive relief or rescission.
The Company has been advised that it is the position of the Commission
that insofar as the provision in Nova's Articles of Incorporation, as amended,
may be invoked for liabilities arising under the Securities Act, the provision
is against public policy and is therefore unenforceable.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits
Exhibit
Number Description
------ -----------
4.1 2003 Stock Compensation Plan
4.2 Form of Director's Compensation Agreement
4.3 Consulting Agreement
4.4 Consulting Agreement
5.1 Opinion and Consent of Loeb & Loeb LLP
23.1 Consent of Thomas Leger & Co., L.L.P.
23.2 Consent of Wienberg & Company
ii
Item 9. Undertakings.
We hereby undertake to file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission
pursuant to Rule 424(b) under the Securities Act of 1933 if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(c) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a) and (b) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Securities and
Exchange Commission by us pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
In addition, we hereby undertake:
(a) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(b) 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.
We hereby undertake that, for purposes of determining any liability
under the Securities Act of 1933, each filing of our annual report pursuant to
section 13(a) or 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.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers, and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission this indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by us of expenses incurred or paid by a
director, officer or controlling person of ours in the successful defense of any
action, suit or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, we will,
unless in the opinion of our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
iii
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
NOVA INTERNATIONAL FILMS, INC.
By: /s/ Raymond Ying-Wai Kwan
----------------------------------
Name: Raymond Ying-Wai Kwan
Dated: June 3, 2003 Title: Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
/s/ Raymond Ying-Wai Kwan Dated: June 3, 2003
- --------------------------------------------
Raymond Ying-Wai Kwan
Chief Executive Officer and Director
/s/ Yau-Sing Tang Dated: June 3, 2003
- --------------------------------------------
Yau-Sing Tang
Chief Financial Officer and Chairman of the Board of
Directors
/s/ Jun-Tang Zhao Dated: June 3, 2003
- --------------------------------------------
Jun-Tang Zhao
Director
/s/ George Raney Dated: June 3, 2003
- --------------------------------------------
George Raney
Director