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Filed with the Securities and Exchange Commission on March 11, 1998
Registration No. 333-____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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STUART ENTERTAINMENT, INC.
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(Exact name of registrant as specified in its charter)
Delaware 84-0402207
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(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
3211 Nebraska Avenue, Council Bluffs, Iowa 51501, (712) 323-1488
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(Address, including ZIP code, and telephone number,
including area code, of registrant's principal executive offices)
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Michael A. Schalk
3211 Nebraska Avenue, Council Bluffs, Iowa 51501, (712) 323-1488
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(Name, address, including ZIP code, and telephone number,
including area code, of agent for service)
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COPIES TO:
Warren L. Troupe, Esq.
Morrison & Foerster LLP
370 17th Street, Suite 5200, Denver, Colorado 80202
(303) 592-1500
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on 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, please check the following box. / /
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, please 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 this prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
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Title of each class of securities Amount to be Proposed maximum offering Proposed maximum aggregate Amount of
to be registered registered price per share(1) offering price(1) registration fee
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Common Stock, $.01 par
value per share 300,000 $2.0625 $618,750 $182.53
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
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.
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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.
PROSPECTUS
Subject To Completion
Dated March 11, 1998
300,000 SHARES
STUART ENTERTAINMENT, INC.
COMMON STOCK, $.01 PAR VALUE
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This Prospectus covers 300,000 shares (the Shares of the Common Stock, $.01
par value ("Common Stock"), of Stuart Entertainment, Inc., a Delaware
corporation (the "Company") that may be offered and issued by the Company from
time to time in connection with the acquisition directly or indirectly by the
Company of other businesses or properties or interests therein, and which may
be reserved for issuance pursuant to, or offered and issued upon exercise or
conversion of, warrants, options, convertible notes, or other similar
instruments issued by the Company from time to time in connection with any such
acquisitions.
It is expected that the specific terms of any acquisition involving the
issuance of securities covered by this Prospectus will be determined by direct
negotiations with the owners or controlling persons of the businesses or
properties or interests therein to be acquired by the Company, and that the
shares of Common Stock issued will be valued or prices reasonably related to
market prices current either at the time the terms of the acquisition are
agreed upon or at or about the time of delivery of shares or as such other time
or for such period as may be agreed upon. No underwriting discounts or
commissions will be paid, although finder's fees may be paid from time to time
with respect to specific acquisitions. Any person receiving any such fees may
be deemed to be an underwriter within the meaning of the Securities Act of
1933, as amended (the "Securities Act").
With the consent of the Company, this Prospectus may also be used by persons
who have received or will receive shares of Common Stock covered by this
Prospectus and who may wish to sell such shares under circumstances requiring
or making desirable its use. See "Resale of Securities Covered by this
Prospectus" for information relating to resales pursuant to this Prospectus of
shares of Commons Stock issued under this Registration Statement. The Company
will not receive any proceeds from any such resale of shares. Expenses of this
offering will be paid by the Company.
The common stock is listed for trading on the Nasdaq Stock Market under the
symbol STUA. On March 10, 1998, the last reported sale price of the Common
Stock was $2.0625 per share.
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THESE SECURITIES ARE SUBJECT TO A HIGH DEGREE OF RISK. SEE RISK FACTORS
BEGINNING ON PAGE 3 OF THIS PROSPECTUS FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
INVESTORS IN PURCHASING THE SHARES
OF COMMON STOCK OFFERED HEREBY
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is March __, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities of the Commission located at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
located at 7 World Trade Center, Suite 1300, New York, New York 10048, and at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can also be obtained at prescribed rates from the Public Reference
Section of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission also maintains a website that contains reports, proxy and
information statements and other information regarding the Company. The address
of the site is http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are hereby
incorporated by reference in this Prospectus:
(1) the Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
(2) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997;
(3) the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997;
(4) the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997;
(5) The description of the Common Stock contained in its Registration
Statement on Form 8-A filed with the Commission on October 28, 1982; and
(6) The financial statements of Trade Products, Inc. included in the Company's
Form 8-K/A dated November 13, 1996 filed on January 22, 1997.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15 (d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering covered by this Prospectus will be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained herein
or in any document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST FROM CORPORATE SECRETARY, 3211 NEBRASKA AVENUE, COUNCIL BLUFFS, IOWA
51501, (712) 323-1488. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY
REQUEST SHOULD BE MADE BY _____________, 1998 (5 BUSINESS DAYS PRIOR TO DATE
INVESTMENT DECISION MUST BE MADE).
THIS PROSPECTUS IS ACCOMPANIED BY THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 1996 AND THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1997.
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RISK FACTORS
An investment in the Common Stock offered hereby involves a high degree of
risk. This Prospectus contains "forward- looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and are thus
prospective. Such forward-looking statements are subject to risks,
uncertainties and other factors which could cause actual results to differ
materially from results expressed or implied by such forward-looking
statements. Further, any forward-looking statements speak only as of the date
on which such statements are made, and the Company undertakes no obligation to
update any forward-looking statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. Therefore forward-looking statements should not be
relied upon as a prediction of actual future results. In addition to the other
information contained in this Prospectus, prospective investors should
carefully consider the following risk factors before purchasing the Common
Stock offered hereby.
SUBSTANTIAL LEVERAGE AND ABILITY TO SERVICE AND REFINANCE DEBT
In connection with the Company's acquisition of Trade Products, Inc. ("Trade
Products") in November 1996 (the "Trade Acquisition") and the simultaneous
issuance of $100,000,000 of its 12 1/2% Senior Subordinated Notes due 2001 (the
"Notes"), the Company has incurred a significant amount of indebtedness. In
addition, subject to the restrictions in its current credit facility (the
"Credit Facility") and the indenture related to the Notes (the "Indenture"), the
Company may incur additional indebtedness from time to time to finance
acquisitions or capital expenditures or for other purposes. As of January 6,
1998, the Company had not drawn any amounts under the Credit Facility. The
current borrowing base under the Credit Facility is approximately $29,580,000.
Interest expense, net of interest income, was $5.3 million for the year ended
December 31, 1996 compared to $4.4 million for the year ended December 31, 1995
and $9.4 million for the nine months ended September 30, 1997 compared to $3.3
million for the nine months ended September 30, 1996. At September 30, 1997 the
Company's total indebtedness was $100.4 million. The ratio of total
indebtedness to total capital was 4.0 and the ratio of interest expense to
operating cash flows, prior to the payment of interest, was 1.3. The Company's
average weighted interest rate on the Company's indebtedness is 12.5%.
The level of the Company's indebtedness could have important consequences to
stockholders, including: (a) a substantial portion of the Company's cash flow
(approximately 85% for the nine months ended September 30, 1997) from operations
must be dedicated to debt service and will not be available for other purposes;
(b) the Company's ability to obtain additional debt financing in the future for
working capital, capital expenditures or acquisitions may be limited; and (c)
the Company's level of indebtedness could limit its flexibility in reacting to
changes in the industry and economic conditions generally. Moreover, if the
Company incurs any indebtedness under the Credit Facility, the borrowings will
be at variable rates of interest and, therefore, a substantial increase in
interest rates could adversely affect the Company's ability to service its debt
obligations.
The Company's ability to satisfy its debt obligations will depend upon its
future operating performance, which will be affected by prevailing economic
conditions and financial, business and other factors, certain of which are
beyond its control. The Company believes that cash flow from operations,
together with its other available sources of liquidity, will be adequate to make
required payments of principal and interest on its indebtedness, to fund
anticipated capital expenditures and to meet working capital requirements,
although there is no assurance that this will be the case. To the extent that
cash flow from operations is insufficient to satisfy the Company's cash
requirements, the Company will seek to raise additional cash through debt or
equity (in all such cases to the extent permitted by the Credit Facility and the
Indenture). No assurance can be given that any such financing will be available
to the Company at the time or times needed or on terms acceptable to the
Company, if at all.
EFFECT OF A CHANGE IN CONTROL
The Indenture provides that in the event of a Change in Control (as defined in
the Indenture), each holder of the Notes will have the right to require the
Company to purchase all or a portion of such holders' Notes at a purchase price
equal to 101% of the principal amount thereof plus accrued interest to the date
of purchase. In the event of a Change in Control, there can be no assurance
that the Company will have available funds sufficient for the purchase
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price for all Notes that may be delivered for purchase. In the event the
Company is required to purchase outstanding Notes, the Company expects that it
would seek third party financing to the extent it does not have available funds
to meet its purchase obligations. There can be no assurance that the Company
would be able to obtain such financing.
POSSIBLE DELISTING FROM NASDAQ SMALLCAP MARKET; DISCLOSURE RELATING TO LOW
PRICED STOCKS
On August 22, 1997 the Company was notified that the Common Stock was
delisted from the Nasdaq National Market due to a failure to meet the net
tangible asset requirement. The Common Stock has subsequently been admitted
for trading on the Nasdaq SmallCap Market. The Company was also informed that
it did not meet the net tangible assets/market capitalization/net income
maintenance requirements for the Nasdaq SmallCap Market, which will become
effective on February 23, 1998. There can be no assurance that the Company
will in the future meet the maintenance criteria for continued quotation of the
securities on the Nasdaq SmallCap Market. The new maintenance criteria for the
Nasdaq SmallCap Market include, among other things, $2,000,000 in total assets
or $35.0 million market capitalization or $500,000 of net income in latest
fiscal year or 2 of last 3 fiscal years, a public float of 500,000 shares with
a market value equal to $1,000,000, two market makers and a minimum bid price
of $1.00 per share of common stock. If the Company were removed from the
Nasdaq SmallCap Market, trading, if any, in the Common Stock would thereafter
have to be conducted in the over-the-counter market in the so-called "pink
sheets" or, if then available, the NASD's OTC Electronic Bulletin Board. As a
result, an investor would find it more difficult to dispose of, and to obtain
accurate quotations as to the value of, such securities.
In addition, if the Common Stock is delisted from trading on the Nasdaq
SmallCap Market and the trading price of the Common Stock is less than $5.00
per share at a time when the net tangible assets of the Company are less than
$5,000,000, trading in the Common Stock would also be subject to the
requirements of Rule 15g-9 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Under such rule, broker/dealers who
recommend such low-priced securities to persons other than established
customers and accredited investors must satisfy special sales practice
requirements, including a requirement that they make an individualized written
suitability determination for the purchaser and receive the purchaser's written
consent prior to the transaction. The Securities Enforcement Remedies and
Penny Stock Reform Act of 1990 also requires additional disclosure in
connection with any trades involving a stock defined as a penny stock
(generally, according to recent regulations adopted by the Commission, any
equity security not traded on an exchange or quoted on the Nasdaq SmallCap
Market that has a market price of less than $5.00 per share, subject to certain
exceptions), including the delivery, prior to any penny stock transaction, of a
disclosure schedule explaining the penny stock market and the risks associated
therewith. Such requirements could severally limit the market liquidity of the
Common Stock and the ability for purchasers in this Offering to sell their
securities in the secondary market. There can be no assurance that the Common
Stock will not be delisted or treated as a penny stock.
RESTRICTIONS IMPOSED BY TERMS OF INDEBTEDNESS/ABSENCE OF DIVIDENDS
The Indenture restricts the ability of the Company and its subsidiaries to,
among other things, incur additional indebtedness, incur liens, pay dividends
or make certain other restricted payments or investments, consummate certain
asset sales, enter into certain transactions with affiliates, incur
indebtedness that is subordinate in right of payment to any senior indebtedness
and senior in right of payment to the Notes, imposes restrictions on the
ability of a subsidiary to pay dividends or make certain payments to the
Company or any of its subsidiaries, merge or consolidate with any other person
or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company.
In addition the Credit Facility contains certain affirmative and negative
covenants. A breach of any of these covenants could result in an event of
default under the Credit Facility. If such an event of default occurs, the
lenders could elect to declare all amounts borrowed under the Credit Facility,
together with accrued interest, to be immediately due and payable and to
terminate all commitments under the revolving credit facility. If the Company
were unable to repay all amounts declared due and payable, the lenders could
proceed against the collateral granted to them to satisfy the indebtedness and
other obligations due and payable. Substantially all of the assets of the
Company are pledged as security under the Credit Facility.
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RECENT DEFAULTS ON INDEBTEDNESS
At September 30, 1997, the Company was in default of the net worth
requirement, leverage ratio test, fixed charge ratio and interest coverage
ratio under its old credit facility. Subsequently, the Company entered into
the Credit Facility and such financial covenants are no longer applicable to
the Company. The Company is in full compliance with all covenants under the
Credit Facility.
RELIANCE ON BINGO INDUSTRY
The future profitability and growth of the Company's business is
substantially dependent upon factors beyond the Company's control, including,
among others, the continued popularity of bingo as a leisure activity and as a
means of charitable fundraising. The bingo industry is a mature industry and
there can be no assurance that it will not decline in the future due to an
increase in competing forms of entertainment such as lotteries, on-line gaming
products and the continued expansion of the legalization by the United States
and foreign jurisdictions of casino gaming. During the first half of 1997, the
Company experienced a continuing softness in the U.S. pulltab market due to
such competitive pressures and competition within the pulltab industry.
Management believes that the Company will continue to experience softness in
the U.S. pulltab ticket market throughout at least the remainder of 1997. In
addition, the growth of the use of electronic bingo products could encroach
upon the use of pulltabs, bingo paper and ink products, which represent the
Company's core business. There can be no assurance that the Company will be
able successfully to adapt its core business to such a change in the bingo
industry. As a result of such factors, no assurance can be given of the
Company's continued growth or profitability.
COMPETITION
The markets in which the Company's products compete are extremely
competitive. The principal competitive factors within the bingo paper and
pulltab ticket markets are quality, service and price. The Company's major
competitor in the bingo paper and pulltab markets is Arrow International. The
Company also competes with other forms of entertainment such as lotteries,
on-line gaming products and the continued expansion of the legalization by the
United States and foreign jurisdictions of casino gaming. There can be no
assurances that the Company will continue to remain competitive in these or
other areas.
RELATIONSHIPS WITH DISTRIBUTORS
The Company has enjoyed a history of cooperative relationships with most
distributors of its products. The Company generally does not have written
contracts with its distributors. The failure to maintain these relationships
on a widespread basis may have a material adverse effect on the business of the
Company.
DEPENDENCE ON KEY PERSONNEL
The operations of the Company depend to a great extent on the management
efforts of its officers and other key personnel, especially Albert F. Barber
and Timothy R. Stuart, and on the ability to attract new key personnel and
retain existing key personnel in the future. There can be no assurance that
the Company will be successful in attracting and retaining such personnel, or
that it will not incur increased costs in order to do so. The Company's
failure to attract additional qualified employees or to retain the services of
key personnel could have a material adverse effect on the business of the
Company.
TRADE ACQUISITION
Prior to the Trade Acquisition, which was completed on November 13, 1996,
Stuart and Trade Products were under separate ownership and management, and
their businesses were conducted separately. There can be no assurance that
Stuart will be able to successfully integrate the management, staffs,
operations and accounting and management information systems of Trade Products
with its own. There can also be no assurance that the Company will realize
enhanced product development, manufacturing, marketing, distribution or
management capabilities as a result of the Trade Acquisition.
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GOVERNMENT REGULATION
The Company is subject to regulation by authorities in most jurisdictions
in which its bingo, bingo-related products and electronic gaming systems are
sold or used by persons or entities licensed to conduct gaming activities. The
gaming regulatory requirements vary from jurisdiction to jurisdiction, and
licensing, other approval or finding of suitability processes with respect to
the Company, its personnel and its products can be lengthy and expensive. Many
jurisdictions have comprehensive licensing, reporting and operating
requirements with respect to the sale and manufacture of bingo and
bingo-related products, including bingo paper, ink dabbers and electronic bingo
hall equipment. These licensing requirements have a direct impact on the
conduct of the day-to-day operations of the Company. Generally, gaming
regulatory authorities may deny applications for licenses, other approvals or
findings of suitability for any cause they may deem reasonable. There can be
no assurance that the Company, its products or its personnel will receive or be
able to maintain any necessary gaming licenses, other approvals or findings of
suitability. The loss of a license in a particular state will prohibit the
Company from selling products in that state. The loss of one or more licenses
held by the Company could have an adverse effect on the Company's business.
Loss of one or more licenses for an extended period may have an adverse effect
on the Company's business, and the loss of one license could result in the loss
of other licenses by the Company.
The Indian Gaming Regulatory Act of 1988 ("IGRA") defines Class II gaming
to include "the game of chance commonly known as bingo, whether or not
electronic, computer or other technologic aids are used in connection
therewith," and defines Class III gaming devices to include "electronic or
electromechanical facsimiles of any game of chance or slot machines of any
kind." The Company believes that Power Bingo KingTM and System 12TM, which are
designed to be played in conjunction with traditional paper bingo products,
should properly be classified as Class II games, and has obtained a legal
opinion to the effect that System 12TM is a Class II game. The Company has
applied for an advisory opinion from the National Indian Gaming Commission (the
"NIGC") that System 12TM is a Class II game, as defined by IGRA, but has not
yet received such designation. The Company has not applied for or received any
advisory opinion by the NIGC that Power Bingo KingTM is a Class II game. It is
possible that one or more regulatory authorities could take the position that
Power Bingo KingTM or System 12TM should be classified as Class III devices.
If either of the Company's electronic gaming systems were classified as Class
III devices, these products could not be sold to Indian casinos that did not
meet the requirements of IGRA and their host state for carrying Class III
devices. Such a result would have a material adverse effect on the Company's
sale of its electronic bingo products.
Additionally, state and local laws in the United States, and provincial
laws in Canada, which govern the sale and use of gaming products, are widely
disparate and continually changing due to legislative and administrative
actions and court interpretations. Changes in gaming laws through statutory
enactment or amendment, court interpretation or administrative action, so as to
restrict the manufacture, distribution or use of some or all of the Company's
products could have a material adverse effect on the Company's business.
EXPOSURE TO FLUCTUATIONS IN PAPER
COSTS; RELIANCE ON SUPPLIERS
The principal raw material used in the Company's business is paper, which
is subject to pricing cycles. The Company generally does not have written
contracts with its suppliers. The cyclical nature of paper pricing may have a
material adverse effect on the Company's business.
For certain of its electronic products, the Company is dependent on
suppliers to provide the Company with parts and components in adequate amounts
and on a timely basis. The failure of one or more suppliers to meet the
Company's performance specifications, quality standards or delivery schedules
could have a material adverse effect on the Company's operations.
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INTELLECTUAL PROPERTY RIGHTS/LITIGATION
The Company regards its products as proprietary and relies on a combination
of trademark, copyright and trade secret laws and employee and third-party
nondisclosure agreements to protect its proprietary rights. Defense of
intellectual property rights can be difficult and costly, and there can be no
assurance that the Company will be able effectively to protect its technology
from competitors. In addition, the protections offered by trademark, copyright
and trade secret laws may not prevent a competitor from designing games having
an appearance and function that closely resemble the Company's games.
As the number of electronic gaming products in the industry increases, and
the uses and functions of these products further overlap, electronic gaming
developers may increasingly become subject to infringement claims. The Company
is currently a defendant in two patent infringement cases. The Company may
also become subject to additional infringement claims. Any such claims or
litigation could be costly and could result in a diversion of management's
attention, which could have a material adverse effect on the Company's business
and financial condition. Any settlement of such claims or adverse
determinations in such litigation could also have a material adverse effect on
the Company's business and financial condition.
NEW PRODUCT DEVELOPMENT; RISK OF OBSOLESCENCE
The market for certain of the Company's products, particularly for its
electronic bingo hall equipment and for the products of Video King Gaming
Systems, Inc. products, is characterized by changing technology, new
legislation, evolving industry standards and product innovations and
enhancements. The introduction of products embodying new technology, the
adoption of new legislation, or the emergence of new industry standards could
render existing products obsolete or unmarketable. The Company's continued
ability to anticipate such changes and to develop and introduce or obtain the
rights to technological advancements and new products that will gain customer
acceptance may be a significant factor in the Company's ability to expand,
remain competitive or attract and retain customers. The Company's business may
be adversely affected if the Company incurs delays in developing new products
or enhancements or if such products or enhancements do not gain market
acceptance. In addition, there can be no assurance that products or
technologies developed by others will not render the Company's products or
technologies noncompetitive or obsolete.
CONCENTRATION OF OWNERSHIP
Morgan Lewis Githens & Ahn, Inc., an investment banking firm ("MLGA"), the
officers and directors of the Company and their respective affiliates own
approximately 47.3% of the Company's outstanding common stock (the "Common
Stock"). Therefore, MLGA and management of the Company have effective control
of all matters submitted to the stockholders of the Company, including the
election of the Board of Directors of the Company.
RISK OF INTERNATIONAL OPERATIONS
The Company derived approximately 38% of its revenues in the year ended
December 31, 1996 from sales occurring in Canada. These revenues are subject
to risks normally associated with international operations, including currency
conversion risks, slower and more difficult accounts receivable collection,
greater difficulty and expense in administering business abroad and complying
with foreign laws. The Company also operates a manufacturing facility in
Mexico and is subject to local conditions including union activities.
FORWARD-LOOKING STATEMENTS
The statements contained in this Registration Statement that are not
historical fact are forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995), which can be identified by
the use of forward-looking terminology such as "believes," "expects," "may,"
"will," should," or "anticipates," or the negative thereof or other variations
thereon or comparable terminology, or by discussions of strategy that involve
risks and uncertainties. Management wishes to caution the reader that these
forward-looking statements such as the timing, costs and scope of its
acquisition of, or investments in, the bingo industry and new product
development, and other matters contained in this Registration Statement or the
documents incorporated by reference regarding matters
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that are not historical facts, are only predictions. No assurances can be
given that the future results indicated, whether expressed or implied, will be
achieved. While sometimes presented with numerical specificity, these
projections and other forward-looking statements are based upon a variety of
assumptions relating to the business of the Company, which, although considered
reasonable by the Company, may not be realized. Because of the number and
range of the assumptions underlying the Company's projections and
forward-looking statements, many of which are subject to significant
uncertainties and contingencies that are beyond the reasonable control of the
Company, some of the assumptions inevitably will not materialize, and
unanticipated events and circumstances may occur subsequent to the date of this
Registration Statement or the documents incorporated by reference. These
forward-looking statements are based on current expectations and the Company
assumes no obligation to update this information. Therefore, the actual
experience of the Company and results achieved during the period covered by any
particular projections or forward- looking statements may differ substantially
from those projected. Consequently, the inclusion of projections and other
forward-looking statements should not be regarded as a representation by the
Company or any other person that these estimates and projections will be
realized, and actual results may vary materially. There can be no assurance
that any of these expectations will be realized or that any of the
forward-looking statements contained herein will prove to be accurate.
THE COMPANY
GENERAL
The Company is a leading manufacturer of a full line of bingo and
bingo-related products, including disposable bingo paper, pulltab tickets, ink
dabbers, electronic bingo systems and related equipment and supplies. The
Company enjoys a worldwide reputation for innovation and new product
development and has been a leader in the bingo industry for over 60 years,
having popularized many important breakthroughs in bingo, such as disposable
bingo paper and electronic bingo systems.
Bingo is one of North America's most popular forms of gaming and
entertainment. Many nonprofit organizations sponsor bingo games for
fundraising purposes, while commercial entities, Indian gaming enterprises,
casinos and government sponsored entities operate bingo games for profit. The
Company sells its products to this diverse group of end-users through more than
300 distributors, its direct sales force and Company-owned distribution
outlets.
A wholly-owned subsidiary, Video King Gaming Systems, Inc. ("Video King"),
has developed and is currently manufacturing a line of electronic gaming
products, a comprehensive gaming management tracking system and video lottery
terminals and slot machines. Video King markets its products within the bingo
industry, as well as the domestic and international for-profit gaming market.
The Company was reincorporated in Delaware in 1986, and is a successor, by
merger effective as of January 21, 1987, to a business founded in 1948. The
Company's principal executive officers are located at 3211 Nebraska Avenue,
Council Bluffs, Iowa 51501 and its telephone number is (712) 323-1488.
RECENT DEVELOPMENTS
On November 20, 1997, the Company entered into the Credit Facility. The
Credit Facility consists of two loan and security agreements, one between the
Company and Congress Financial Corporation (Central) (the "US Facility") and
one between Bingo Press & Specialty Limited, a wholly-owned subsidiary of the
Company (the "Canadian Borrower") and Congress Financial Corporation (Canada)
(the "Canadian Facility."). The Credit Facility provides for maximum
borrowings of up to $30.0 million, of which up to $20.0 million may be borrowed
under the US Facility and up to $10.0 million may be borrowed under the
Canadian Facility. The Company and the Canadian Borrower (sometimes referred
to collectively herein as the "Borrowers") are entitled to draw amounts under
the Credit Facility, subject to availability pursuant to a borrowing base
certificate. The borrowing base is based on the eligible accounts receivable,
eligible inventory and equipment value levels of the Company and the Canadian
Borrower, respectively.
8
10
The US Facility provides that loans may be prime rate loans ("Prime Rate
Loans") or Eurodollar loans ("Eurodollar Rate Loans"), at the option of the
Company. The interest rate on Prime Rate Loans is the Prime Rate (defined
below) plus the Applicable Margin (defined below) and the interest rate on
Eurodollar Rate Loans is the Adjusted Eurodollar Rate (defined below) plus the
Applicable Margin. The Prime Rate is the rate announced by CoreStates Bank,
N.A. as its prime rate. The Adjusted Eurodollar Rate is the rate determined by
dividing (a) the Eurodollar Rate (defined below) by (b) a percentage equal to
(i) one minus (ii) the reserve percentage prescribed by any United States or
foreign banking authority for determining the reserve requirement which is or
would be applicable to deposits of United States dollars in a non-United States
bank or an international banking office of the Reference Bank (defined below)
used to fund a Eurodollar Rate Loan or any Eurodollar Rate Loan made with the
proceeds of such deposit, whether or not the Reference Bank actually holds or
has made any such deposits or loans. The Eurodollar Rate is the rate at which
the Reference Bank is offered deposits of United States dollars in the London
interbank market in amounts substantially equal to the principal amount of the
Eurodollar Rate Loan requested by and available to the Company with a maturity
of comparable duration to the interest period selected by the Company. The
Applicable Margin for the Prime Rate Loans can vary from 1/4% to 3/4% and for
the Eurodollar Rate Loans it can vary from 2 1/4% to 2 3/4%. The Reference
Bank is CoreStates Bank, N.A., or such other bank as the lender may from time
to time designate.
The interest rate on Canadian Loans is the Canadian Prime Rate (defined
below) plus the Applicable Canadian Margin (defined below). The Canadian Prime
Rate is the greater of (i) the rate announced by the Canadian Reference Bank as
its prime rate for determining interest rates on Canadian dollars denominated
commercial loans in Canada, and (ii) the annual rate of interest equal to the
sum of (A) the CDOR Rate at any time and (B) one percent per annum. The
Canadian Reference Bank is the Bank of Montreal and the CDOR Rate is the
average rate for Canadian Dollars bankers acceptance having a term of 30 days
appearing on the Reuters Screen CDOR Page at 10:00 a.m. The Canadian
Applicable Margin can vary from 1.25% to 1.75%.
The Credit Facility imposes certain covenants and other requirements on the
Borrowers. In general, the affirmative covenants provide for mandatory
reporting by the Borrowers of financial and other information to the lenders
and notice of certain events. The affirmative covenants also include standard
covenants requiring the Borrowers to operate their business in an orderly
manner and consistent with past practices.
The Credit Facility also contains certain negative covenants and
restrictions on actions by the Borrowers that, among other things, restrict (i)
the incurrence and existence of indebtedness or contingent obligations (ii)
consolidations, mergers and sale of assets, (iii) the incurrence and existence
of liens, (iv) the sale of disposition of assets, (v) investments, loans and
advances, (vi) the payment of dividends and the repurchases of Common Stock,
and (vii) acquisitions by the Borrowers. In addition, under certain
circumstances, the Company must meet a minimum level of net worth.
The Credit agreement further contains customary events of default including
non-payment of principal, interest or fees, violations of covenants, inaccuracy
of representations or warranties in any material respect, cross default to
certain other indebtedness and agreements, bankruptcy and insolvency events,
material judgments and liabilities, and change of control.
USE OF PROCEEDS
This Prospectus relates to shares of Common Stock of the Company that
may be offered and issued by the Company from time to time in connection with
the acquisition of other businesses and properties and interests therein, and
upon exercise or conversion of, warrants, options, convertible debentures, or
other similar instruments issued by the Company from time to time in connection
with any such acquisition. Other than the businesses or properties acquired,
there will be no proceeds to the Company from these offerings. When this
Prospectus is used by a Selling Stockholder in a public reoffering or resale of
Common Stock acquired pursuant to this Prospectus, the Company will not receive
any proceeds from such sale by the Selling Stockholder.
9
11
RESALE OF SECURITIES COVERED BY THIS PROSPECTUS
This Prospectus, as appropriately amended or supplemented, may, with the
consent of the Company, be used from time to time by persons who have received
shares covered by the Registration Statement in acquisitions of business or
properties or interests therein by the Company, or by their transferees (such
persons being referred to herein as "Selling Shareholders") who wish to offer
and sell the Shares in transactions in which they and any broker-dealer through
whom any of the Shares are sold may be deemed to be underwriters within the
meaning of the Securities Act. The Company will receive none of the proceeds
from any such sales. There presently are no arrangements or understandings,
formal or informal, pertaining to the distribution of the Shares.
Agreements with Selling Stockholders permitting use of this Prospectus may
provide that any such offering be effected in an orderly manner through
securities dealers, acting as broker or dealer, selected by the Company; that
Selling Stockholders enter into custody agreements with one or more banks with
respect to such shares; and that sales be made only by one or more of the
methods described in this Prospectus, as appropriately supplemented or amended
when required.
The Company anticipates that resales of the Shares by a Selling Stockholder
may be effected from time to time on the open market in ordinary brokerage
transactions on the Nasdaq National Market, or such other security exchange on
which the Common Stock may be listed, or in private transactions (which may
involve crosses and block transactions). The Shares will be offered for sale at
market prices prevailing at the time of sale or at negotiated prices and on
terms to be determined when the agreement to sell is made or at the time of
sale, as the case may be. The Shares may be offered directly, through agents
designated from time to time, or through brokers or dealers. A member firm of
the National Association of Security Dealers, Inc. may be engaged to act as the
Selling Stockholder's agent in the sale of the Shares by the Selling Stockholder
and/or may acquire Shares as principal. Broker-dealers participating in such
transactions as agent may receive commissions from the Selling Stockholder
(and, if they act as agent for the purchaser of such Shares, from such
purchaser).
Participating broker-dealers may agree with the Selling Stockholder to sell a
specified number of shares at a stipulated price per share and, to the extent
such broker-dealer is unable to do so acting as agent for the Selling
Stockholder to purchase as principal any unsold shares at the price required to
fulfill the broker-dealer's commitment to the Selling Stockholder. In addition
or alternatively, shares may be sold by the Selling Stockholder, and/or by or
through other broker-dealers in special offerings, exchange distributions, or
secondary distributions. Broker-dealers who acquire shares as principal may
thereafter resell such Shares from time to time in transactions (which may
involve cross and block transactions and which may involve sales to and through
other broker-dealers, including transactions of the nature described in the
preceding two sentences) on the Nasdaq National Market or such other security
exchange on which the Common Stock may be listed, in negotiated transactions, or
otherwise, at market prices prevailing at the time of sale or at negotiated
prices, and in connection with such resales may pay to or receive commission's
from the purchasers of such shares.
Upon the Company's being notified by the Selling Stockholder that a
particular offer to sell the Shares is made, 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 any
block trade has taken place, to the extent required, a supplement to this
Prospectus will be delivered together with this Prospectus and filed pursuant
to Rule 424(b) under the Securities Act setting forth with respect to such
offer or trade the terms of the offer or trade; including (i) the name of each
Selling Stockholder, (ii) the number of Shares involved, (iii) the price at
which the Shares were sold, (iv) any participating brokers, dealers, agents or
member firm involved, (v) any discounts, commissions and other items paid as
compensation from, and the resulting net proceeds to, the Selling Stockholder,
(vi) that such broker-dealers did not conduct any investigation to verify the
information set out in this Prospectus, and (vii) other facts material to the
transaction.
Shares may be sold directly by the Selling Stockholder or through agents
designated by the Selling Stockholder from time to time. Unless otherwise
indicated in a supplement to this Prospectus, any such agent will be acting on a
best efforts basis for the period of its appointment.
The Selling Stockholder and any brokers, dealers, agents, member firm or
others that participate with the Selling Stockholder in the distribution of the
Shares may be deemed to be "underwriters" within the meaning of the
10
12
Securities Act, and any commissions or fees received by such persons and any
profit on the resale of the Shares purchased by such person may be deemed to be
underwriting commissions or discounts under the Securities Act.
The Company may agree to indemnify the Selling Stockholder as an underwriter
under the Securities Act against certain liabilities, including liabilities
arising under the Securities Act. Agents may be entitled under agreements
entered into with the Selling Stockholder to indemnification against certain
civil liabilities, including liabilities under the Securities Act.
The Selling Stockholder will be subject to the applicable provisions of the
Exchange Act, and the rules and regulations thereunder, including without
limitation Rules 10b-2, 10b-6, and 10b-7, which provisions may limit the timing
of purchases and sales of any of the Common Stock by the Selling Stockholder.
All of the foregoing may affect the marketability of the Common Stock.
The Company will pay substantially all the expenses incident to this offering
of the Common Stock by the Selling Stockholder to the public other than
brokerage fees, commissions and discounts of underwriters, dealers or agents.
In order to comply with certain states' securities laws, if applicable, the
Common Stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Stock
may not be sold unless the Common Stock has been registered or qualified for
sale in such state or an exemption from registration or qualification is
available and is complied with.
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-4 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act with respect to the Common
Stock offered hereby. This Prospectus does not contain all of the information
set forth in the Registration Statement, certain parts of which have been
omitted in accordance with the rules and regulations of the Commission.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to are not necessarily complete, and in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit or incorporated by reference to the Registration Statement of which
this Prospectus forms a part, each such statement being qualified in all
respects by such reference. For further information with respect to the Company
and the Common Stock offered hereby, reference is made to the Registration
Statement. Copies of the Registration Statement may be inspected, without
charge, at the offices of the Commission, or obtained at prescribed rates from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
LEGAL MATTERS
Certain legal matters relating to the Common Stock to be offered hereby
will be passed upon for the Company by Morrison & Foerster LLP, 370 17th
Street, Suite 5200, Denver, Colorado 80202.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this prospectus by reference from Stuart Entertainment, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1996 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
11
13
================================================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING,
OTHER THAN THOSE MADE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION . . . . . . . . . . . . . 2
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE . . . . . . . . . . . 2
RISK FACTORS . . . . . . . . . . . . . . . . . 3
THE COMPANY . . . . . . . . . . . . . . . . . . 8
USE OF PROCEEDS . . . . . . . . . . . . . . . . 9
RESALE OF SECURITIES COVERED BY
THIS PROSPECTUS . . . . . . . . . . . . . . . . 10
ADDITIONAL INFORMATION . . . . . . . . . . . . 11
LEGAL MATTERS . . . . . . . . . . . . . . . . . 11
EXPERTS . . . . . . . . . . . . . . . . . . . . 11
================================================================================
================================================================================
300,000 SHARES
STUART ENTERTAINMENT, INC.
COMMON STOCK
---------------------
PROSPECTUS
---------------------
MARCH __, 1998
================================================================================
14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law provides generally and
in pertinent part that a Delaware corporation may indemnify its directors and
officers against expenses, judgements, fines and settlements actually and
reasonably incurred by them in connection with any civil suit or action, except
actions by or in the right of the corporation, or any administrative or
investigative proceeding if, in connection with the matters in issue, they
acted in good faith and in a manner they reasonably believed to be in, or not
opposed to, the best interests of the corporation, and in connection with any
criminal suit or proceeding, if in connection with the matters in issue, they
had no reasonable cause to believe their conduct was unlawful. Section 145
further provides that in connection with the defense or settlement of any
action by or in the right of the corporation, a Delaware corporation may
indemnify its directors and officers against expenses actually and reasonably
believed to be in, or not opposed to, the best interests of the corporation.
Section 145 permits a Delaware corporation to grant its directors and officers
additional rights of indemnification through bylaw provisions and otherwise and
to purchase indemnity insurance on behalf of its directors and officers.
Article Eight of the Certificate of Incorporation of the Registrant
requires the Registrant to indemnify, to the fullest extent permitted by
Section 145 of the Delaware General Corporation Law, all directors and officers
of the Registrant, which it has the power to indemnify, from and against any
and all expenses, liabilities or other matters referred to in Section 145.
The Registrant's Certificate of Incorporation also provides in Article
Seven that directors shall not be personally liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of a director's duty of loyalty to the
Registrant or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or knowing violations of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit.
Article III, Section 16 of the Registrant's By-laws provides, in general,
that the Registrant shall indemnify its directors and officers to the fullest
extent permitted by the Delaware General Corporation Law.
The Registrant maintains liability insurance coverage for its directors and
officers.
ITEM 21. EXHIBITS.
The following is a complete list of exhibits filed as part of the
Registration Statement. Exhibit numbers correspond to the numbers in the
Exhibit Table of Item 601 of Regulation S-K.
5.1 Opinion of Morrison & Foerster, LLP as to the legality of the
Common Stock being registered.
23.1 Consent of Morrison & Foerster, LLP (see Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney.
ITEM 22. UNDERTAKINGS.
The Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
15
(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 the volume of securities offered (if the total
dollar value of securities offered would not exceed what was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(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;
(2) 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 section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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 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.
The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for the other items of the applicable form.
The undersigned registrant undertakes that every prospectus: (i) that is
filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to
meet the requirements of Section 10(a)(3) of the Act and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part of
an amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes 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 thereon.
16
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning the transaction, and the
Company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective, to the extent
required by the rules and regulations of the Securities and Exchange
Commission.
17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Council
Bluffs, State of Iowa, on February 28, 1998.
STUART ENTERTAINMENT, INC.
By: /s/ Timothy R. Stuart
--------------------------------
Timothy R. Stuart, President
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KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Timothy R. Stuart, his true and lawful
attorney-in-fact and agent 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 to this Registration Statement on Form S-4 and file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto such
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, to all intents and purposes and as full as they might or could do in
person, hereby ratifying and confirming all that such attorney-in-fact and
agent, or his substitute may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ Sangwoo Ahn
- -------------------------------------- Director February 28, 1998
Sangwoo Ahn
/s/ Albert F, Barber
- -------------------------------------- Vice Chairman of the Board February 28, 1998
Albert F. Barber and Chief Executive Officer
/s/ Perry J. Lewis
- -------------------------------------- Director February 28, 1998
Perry J. Lewis
/s/ Ronald G. Rudy
- -------------------------------------- Director February 28, 1998
Ronald G. Rudy
/s/ Richard D. Spizzirri
- -------------------------------------- Director February 28, 1998
Richard D. Spizzirri
/s/ Ira Starr
- -------------------------------------- Director February 28, 1998
Ira Starr
/s/ Timothy R. Stuart
- -------------------------------------- President, Chief Operating February 28, 1998
Timothy R. Stuart Officer and Director
/s/ Stanley M. Taube
- -------------------------------------- Director February 28, 1998
Stanley M. Taube
/s/ Paul C. Tunink
- -------------------------------------- Vice President-Finance, February 28, 1998
Paul C. Tunink Treasurer and
Chief Financial Officer
19
EXHIBIT INDEX
5.1 Opinion of Morrison & Foerster, LLP as to the legality of the Common Stock being registered.*
23.1 Consent of Morrison & Foerster, LLP (see Exhibit 5.1).*
23.2 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney (included on Signature Page in Form S-4).
- ----------------
* To be filed by amendment