<PAGE>
As filed with the Securities and Exchange Commission on July 12, 2000
FileNo.333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WORLDWIDE ENTERTAINMENT & SPORTS CORP.
(Exact name of registrant as specified in its charter)
Delaware 22-3393152
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
276 Fifth Avenue, Suite 1105
New York, New York 10001
(212) 689-7447
(Address, including zip code, and telephone number,
Including area code, of registrant's principal executive offices)
Robert M. Gutkowski, Chief Executive Officer
Worldwide Entertainment & Sports Corp.
276 Fifth Avenue, Suite 1105
New York, New York 10001
(212) 689-7447
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Herbert F. Kozlov, Esq.
Parker Duryee Rosoff & Haft
529 Fifth Avenue
New York, New York 10017
(212) 599-0500
Approximate date of proposed sale to the public: From time to time after
the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
<PAGE>
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
PROPOSED PROPOSED
TITLE OF EACH CLASS OF MAXIMUM MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
====================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, par 3,940,000 $1.0312 $4,062,928 $1,072.61
value $0.01 per share
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</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the high and low sales
prices of the common stock on The Nasdaq SmallCap Market on June 28, 2000.
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.
<PAGE>
SUBJECT TO COMPLETION, DATED JULY 12, 2000
WORLDWIDE ENTERTAINMENT & SPORTS CORP.
3,940,000 Shares of Common Stock
The 3,940,000 of common stock, par value $.01 per share, to which this
prospectus relates are being offered, from time to time, on behalf of and for
the account of stockholders of Worldwide Entertainment & Sports Corp. as
identified below in the section entitled "Selling Stockholders." The shares are
comprised of:
o 2,101,500 shares of common stock which were issued in June, 1999,
March, 2000 and April, 2000 to selling stockholders for services
rendered to us and as incentive compensation ,
o 1,713,500 shares underlying options to purchase common stock
granted by us to selling stockholders as consideration for
services rendered to us and as incentive compensation,
o 125,000 shares underlying a warrant to purchase common stock
granted by us to selling stockholders as consideration for
services rendered to us and as incentive compensation
The distribution of the shares by the selling stockholders, or by pledgees,
donees, distributees, transferees or other successors in interest, may be
effected from time to time by underwriters who may be selected by the selling
stockholders and/or broker-dealers, in one or more transactions on The Nasdaq
SmallCap Market or other over-the-counter markets or, in special offerings, or
secondary distributions under the rules of the over-the-counter markets. Some of
these transactions may involve crosses and block transactions. Sales may be made
in negotiated transactions or otherwise, at market prices prevailing at the time
of sale, at prices related to the prevailing market prices or at negotiated
prices. In connection with the distributions of the shares or otherwise, the
selling stockholders may enter into hedging or option transactions with
broker-dealers and may sell shares short and deliver the shares to close out
those short positions. We have agreed to indemnify the selling stockholders,
underwriters who may be selected by the selling stockholders and some other
persons against some liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Selling Stockholders" and "Plan of Distribution.
These securities involve a high degree of risk. See page 4 for "Risk
Factors."
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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.
We have agreed to pay all expenses of registration in connection with this
offering but will not receive any of the proceeds from the sale of the shares
being offered. The selling stockholders will bear all brokerage commissions and
other similar expenses. The aggregate proceeds to the selling stockholders from
the sale of the shares will be the purchase price of the shares sold, less the
aggregate brokerage commissions and underwriters' discounts, if any, and other
expenses of issuance and distribution not borne by us.
The common stock being offered by means of this prospectus by the selling
stockholders has not been registered for sale under the securities laws of any
state or jurisdiction as of the date of this prospectus. Brokers or dealers
effecting transactions in the common stock should confirm the registration of
the common stock under the securities law of the state in which the transactions
occur, or the existence of any exemption from registration.
The common stock is listed for trading on The Nasdaq SmallCap Market. On
June 28, 2000, the closing bid price of the common stock as reported by The
Nasdaq SmallCap Market was $0.9688 per share.
The date of this prospectus is July __, 2000
<PAGE>
[The following language is located on the left margin of the first page of
the preliminary prospectus]
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
TABLE OF CONTENTS
RISK FACTORS................................................................4
Risks Relating to the Offering Generally....................................4
Risks Relating to the Worldwide Generally...................................6
Risks of Worldwide Sports Agency Business ..................................7
Risks Relating to Sportcut.com and Houseofboxing.com Generally..............8
THIS PROSPECTUS CONTAINS FORWARD LOOKING STATEMENTS.........................9
OTHER CONSIDERATIONS........................................................9
RECENT DEVELOPMENTS.........................................................9
USE OF PROCEEDS............................................................10
SELLING STOCKHOLDERS.......................................................10
PLAN OF DISTRIBUTION.......................................................11
LEGAL MATTERS..............................................................12
EXPERTS....................................................................12
WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION ABOUT WORLDWIDE................12
RISK FACTORS
Before you invest in the common stock, you should be aware that there are
various risks, including those described below. You should carefully consider
these risks as well as the more detailed information contained in this
prospectus and in the documents incorporated in this prospectus by reference,
before making a decision to invest in the common stock offered by means of this
prospectus.
RISKS RELATING TO THE OFFERING GENERALLY
YOU COULD RISK LOSING YOUR ENTIRE INVESTMENT.
The shares of Worldwide stock are speculative in nature and involve a high
degree of risk. We cannot provide you with any assurance that Worldwide's
Internet business can be developed in the manner planned, and, if not, investors
may lose all or a substantial part of their investment. We cannot provide you
with any assurance that Worldwide will become profitable or remain a going
concern. Worldwide's financial condition, including its lack of extensive
financial and other resources and its anticipated losses in the near term, could
result in you losing your entire investment.
4
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FUTURE ISSUANCES OF AUTHORIZED PREFERRED STOCK MAY ADVERSELY AFFECT THE VALUE OF
WORLDWIDE'S COMMON STOCK.
Worldwide's certificate of incorporation authorizes the issuance of "blank
check" preferred stock with such designations, rights and preferences as may be
determined from time to time by Worldwide's board of directors. Accordingly, the
board is empowered, without stockholder approval, to issue preferred stock with
whatever rates of dividends, redemption provisions, liquidation preferences,
voting rights, conversion privileges and other characteristics as it may deem
necessary. If any preferred stock is issued, it could adversely affect the
holders of the common stock. In addition, the preferred stock could discourage,
delay or prevent a takeover of Worldwide. Worldwide has no present intention to
issue any shares of preferred stock, we cannot assure you that we will not do so
in the future
THE PRICE OF OUR COMMON STOCK IS LIKELY TO BE HIGHLY VOLATILE.
The average daily trading volume of the common stock has generally been
low. As a result, the market price has been highly volatile and may not be
indicative of the market price in a more liquid market. Worldwide believes this
has had a significant effect on the historical market price of the common stock.
The price has fluctuated between $4.44 and $0.81 per share since January 1,
1999. The market price of the common stock could be subject to significant
fluctuations in response to a number of factors that may not relate to
Worldwide's performance. These factorsincluding the depth and liquidity of the
market for the common stock, investor perception of Worldwide and general
economic and other conditions.
OUR COMMON STOCK MAY BE DE-LISTED FROM NASDAQ.
The Board of Governors of the National Association of Securities Dealers,
Inc. has established standards for the initial quotation and continued quotation
of a security on NASDAQ. The maintenance requirements for continued quotation
require, among other things, a company to have a minimum bid price of $1.00 and
either $2,000,000 of net tangible assets or market capitalization of $35,000,000
or $500,000 net revenue in its latest fiscal year or in two of its last three
fiscal years. In addition, a company must have two market makers for its
securities and have a public float of at least 500,000 shares. There can be no
assurance that Worldwide will continue to satisfy the requirements for
maintaining a NASDAQ quotation. Our stock has recently traded below $1.00 per
share for several days. In addition, recent proposals that would impose more
strict compliance standards if enacted would make it more difficult to maintain
NASDAQ quotation for Worldwide's common stock. If Worldwide's common stock were
to be excluded from NASDAQ, it would adversely affect the prices of our
securities and the ability of holders to sell them, and Worldwide would be
required to comply with the initial listing requirements to be re-listed on
NASDAQ.
IF WE LOSE OUR NASDAQ LISTING, OUR COMMON STOCK WILL BE CONSIDERED A PENNY
STOCK.
If our common stock were to become delisted from trading on the Nasdaq
SmallCap Market and our common stock trading price were below $5.00 per share,
trading in the common stock would be subject to the requirements of rules under
the Securities Exchange Act of 1934, which require additional disclosure by
broker-dealers or any trades involving a penny stock. A penny stock is generally
defined as any non-Nasdaq equity security that has a market price of less than
$5.00 per share. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock, to deliver a standardized risk disclosure document
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 sales person in the transaction and monthly account
statements showing the market value of each penny stock held in the customer's
account. In addition, the penny stock rules require in general that, prior to a
transaction in a penny stock, the broker-dealer must make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules. Therefore, the additional burdens imposed upon broker-dealers by
these requirements could, in the event the common stock were deemed to be a
penny stock, discourage broker-dealers from effecting transactions in the common
stock which could severely limit the market liquidity of the common stock.
5
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RISKS RELATING TO WORLDWIDE GENERALLY
WE HAVE ALWAYS HAD OPERATING LOSSES.
We have never been profitable. We incurred operating losses of
approximately $10.6 million, $4.1 million and $3.2 million for the years ended
December 31, 1999, 1998 and 1997, respectively. As of December 31, 1999, we had
an accumulated deficit of approximately $20.9 million. Our accountants included
a "going concern" opinion in their report on our December 31, 1999 financial
statements. As of March 31, 2000, we had an accumulated deficit of approximately
$24.2 million. For the three months ended March 31, 2000, Worldwide incurred an
operating loss of $3.3 million. We will continue to incur losses until one or
more of our boxers receives bout purses large enough at least to offset our
operating costs or until we generate significantly increased revenues from our
Internet, agency, marketing or memorabilia businesses. We have taken steps to
reduce operating expenses, including reducing the number of employees at
Sportcut.com. Our future operations may or may not be profitable. Our success
must be considered in light of the difficulties and risks inherent in the
creation and development of businesses which are dependent upon the athletic and
artistic performance of individuals and upon the level of popularity attained by
such individuals with the general public. We cannot guarantee that our boxers'
earnings will increase significantly, that we will attract a sufficient number
of additional professional athletes, or that we will be able to commercially
exploit those currently under contract, such that we will ever achieve
profitable operations.
WE WILL NEED ADDITIONAL CAPITAL IN OUR TO DEVELOP OUR BUSINESS.
Worldwide's capital requirements have been and will continue to be
significant. Worldwide has been dependent primarily on sales of equity
securities to supplement revenues from operations in order to fund its capital
requirements to date. Although we have recently raised approximately $5.5
million in a private placement, we may be required to seek additional equity or
debt financing to fund the costs of our operations. If Worldwide is unable to
obtain additional financing when needed, it will likely be necessary to curtail
Worldwide, Sportcut.com and Houseofboxing.com's planned operations. Any
additional equity financing may involve substantial dilution to Worldwide's
then-existing stockholders
WORLDWIDE IS HIGHLY DEPENDENT UPON ITS CHIEF EXECUTIVE OFFICER AND OTHER
MANAGEMENT.
Worldwide is highly dependent on Robert M. Gutkowski, Worldwide's
president, Charles Koppelman, chairman of the board of directors, Jordan
Schlachter, chief executive officer of Sportcut.com and Gary Randall, president
of Houseofboxing.com. Although Worldwide has entered into a three-year
employment agreement with Mr. Gutkowski expiring in June, 2003, the loss of the
services of Mr. Gutkowski would likely have a material adverse effect on
Worldwide's business. Mr. Koppelman has agreed to be chairman of the board for a
three-year term commencing in June 2000. Mr. Koppelman's experience and contacts
in the entertainment business are very valuable to the growth of Worldwide. In
addition, Jordan Schlachter, the chief executive officer of Sportcut.com is
instrumental in the day-to-day operations of Sportcut.com and in the execution
of its business plan. Both Mr. Koppelman and Mr. Schlachter are essential to the
continued development of Sportcut.com's business and to assure continuity in
such business that are essential to the ability of Sportcut.com to attract
funding for its operations. In addition, Mr. Gary Randall, the founder of
Houseofboxing.com, is critical in the continued operations and growth of
Houseofboxing.com. Mr. Randall recently signed a five-year employment agreement
with Houseofboxing.com.
Furthermore, a corporation cannot be a signatory as a player's
representative in either NFL or NBA player representation agreements. Therefore,
Worldwide depends upon retaining its relationships with the registered agent it
employs to sustain our relationships with the team-sports athletes. The
employment agreements Worldwide has with each of its current and former
registered player agents provide for a sharing of agency fees in the event of a
termination of the agent's employment. The loss of the services of any of these
registered player agents may hamper our business efforts in a given sport. For
example, our effectiveness in professional basketball was reduced when our NBA
player's agent's employment ended.
6
<PAGE>
STOCK OWNERSHIP BY OUR EXECUTIVE OFFICERS AND DIRECTORS MAY AFFECT THE OUTCOME
OF SHAREHOLDER VOTES.
Worldwide's executive officers and directors beneficially own approximately
24.2% of Worldwide's common stock. Consequently, Worldwide's executive officers
and directors have substantial influence on the outcome of any matters submitted
to Worldwide's stockholders for approval, including the election of directors.
OUR DIRECTORS ENJOY LIMITED LIABILITY
Worldwide's certificate of incorporation provides that a director of
Worldwide will not be personally liable to Worldwide or its stockholders for
monetary damages for breach of the fiduciary duty of care as a director,
including breaches that constitute gross negligence, subject to certain
limitations imposed by the Delaware General Corporation Law. Thus, under certain
circumstances, neither Worldwide nor the stockholders will be able to recover
damages even if directors take actions that harm Worldwide.
RISKS OF WORLDWIDE'S SPORTS AGENCY BUSINESSES
WE NEED ADDITIONAL AGENTS, CLIENTS AND MORE-EXPERIENCED PERSONNEL
Our success will be affected by our ability to attract and develop
promising new boxing talent and to expand our sports agency operations so as to
represent both a substantially greater number of athletes and a larger
percentage of athletes and companies with significantly greater earning and
marketing potential. Each of Worldwide's businesses are in their development
stages and will require additional capital to reach profitable levels.
Worldwide's boxing business relies on the revenue it derives from Worldwide's
exclusive management agreements with three professional fighters and from joint
venture agreements Worldwide has entered into with third parties. Through these
joint ventures, Worldwide has financial interests in ten additional heavyweight
boxers. The athletic careers of professional fighters tend to be short and
Worldwide must look to augment its stable of fighters in the near future to
increase revenues from boxing. Our management, on the whole, has less experience
in operating a sports marketing company than many of our competitors, and the
success of the business will depend in large part on its ability to establish
Worldwide as an effective sports marketing company. If this development fails to
materialize or to generate sufficient revenue, we may have to seek additional
employees with more substantial experience. Likewise, Worldwide anticipates that
in order to attract an adequate number and caliber of professional athletes, and
to augment the agents currently working for Worldwide, Worldwide will need to
enter into employment or consulting agreements with additional registered agents
who have existing representation agreements with professional athletes and who
have experience negotiating these types of agreements. In August 1998, Worldwide
and its only registered NBA agent at the time severed their relationship and
Worldwide has been inactive in the basketball agency business since then. There
can be no assurance that Worldwide will be able to attract the quantity or
caliber of agents and/or professional athletes necessary to achieve and sustain
profitable operations. In addition, there can be no assurance that professional
athletes who are currently, or who may in the future be, under management or
representation contracts with Worldwide, will continue to engage in professional
sports through the term of their contracts or will renew their contracts upon
their expiration. Worldwide will need to incur significant promotional,
marketing, travel and entertainment expenses in the recruitment of professional
team sports athletes without any guarantee that the targeted athletes will enter
into representation agreements with Worldwide.
WORLDWIDE DEPENDS UPON ITS ATHLETES.
Because Worldwide's revenues are derived in part from a specified
percentage of the income generated by Worldwide's clients and events, both the
amount of Worldwide's revenues and the likelihood that Worldwide will continue
to receive revenues is dependent upon the professional success of its athletes,
and the continued popularity of professional sports. The income levels of
Worldwide's potential clients, both boxers and team sports athletes, and
therefore the revenues of Worldwide, can be subject to wide fluctuations, in
most cases due to circumstances beyond the control of Worldwide.
7
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WE FACE SIGNIFICANT COMPETITION.
Worldwide's various sports agency businesses each face significant
competition in obtaining and maintaining management relationships with athletes.
While the sports agency market is comprised of numerous registered agents and
business managers, the industry is dominated by a small number of agencies which
manage the more successful and marketable athletes. A great many of these
agencies have significantly greater financial and personnel resources and
recognition in the industry than Worldwide. There can be no assurance that
Worldwide will be able to compete effectively in these markets. Since
Worldwide's October 1996 initial public offering, additional companies such as
SFX Entertainment, Inc. have become public companies and have contributed to a
consolidation of sports management and marketing agencies. In addition,
Worldwide's clients face intense competition in achieving success and
recognition in their respective sports. There can be no assurance that any of
Worldwide's clients will achieve or sustain success or realize the financial
rewards thereof
RISKS RELATING TO SPORTCUT.COM AND HOUSEOFBOXING.COM GENERALLY
OUR SUBSIDIARIES, SPORTCUT.COM AND HOUSEOFBOXING.COM, HAVE NO OPERATING HISTORY
AND THEIR BUSINESS PLANS ARE LARGELY UNPROVEN.
Worldwide incorporated Sportcut.com in April 1999, and as such, it is still
in the initial development stage and has a minimal operating history since its
launch at the end of November 1999. It is anticipated that Sportcut.com will not
achieve any meaningful operating revenues until after it has developed its
business and established relationships with customers or others who will
purchase the products and services it intends to provide. Worldwide expects that
Sportcut.com will incur substantial net losses for the foreseeable future. This
is the first attempt by Worldwide to create and manage an interactive Internet
e-commerce business. There can be no assurance that Worldwide will be able to
successfully effectuate its business plan, that revenue growth will occur once
the plan is enacted, that Sportcut.com will be profitable at any time in the
future or that, once it has achieved profitability, it will be able to sustain
it. Sportcut.com's future performance and prospects must be evaluated and
considered in light of the numerous risks, expenses, problems and difficulties
typically encountered in establishing a new business and launching and expanding
an Internet web environment. Houseofboxing.com was purchased by Worldwide in
February 2000. Houseofboxing.com faces the same risks as described above for
Sportcut.com. Houseofboxing.com has minimal revenues to date and has been
operational since 1997.
OUR BUSINESS PROSPECTS ARE UNCERTAIN.
Sportcut.com's business and Houseofboxing.com's business may fluctuate
significantly as a result of a variety of factors, some of which are outside of
Worldwide's control. These factors include:,
o general economic conditions
o level of general usage of the Internet
o acceptance and use of Sportcut.com and Houseofboxing.com's
products and services
o capital expenditures and other costs relating to the expansion of
operations
o the timing and costs of any acquisitions
o government regulation
o changes in the mix of products and services provided by
Sportcut.com and Houseofboxing.com
o market availability and acceptance of new and enhanced versions
of Sportcut.com or Houseofboxing.com or their competitors'
services
o the introduction of competing products and services and
o the retention and integration of qualified personnel.
Any of these factors could have a material and adverse effect on
Sportcut.com or Houseofboxing.com's business, financial condition or results of
operations.
WE MAY BE ADVERSELY AFFECTED BY GOVERNMENT REGULATION.
8
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Laws and regulations directly applicable to Internet communications,
commerce and advertising are becoming prevalent. The United States Congress has
enacted Internet laws regarding children's privacy, copyright and taxation. Such
legislation could dampen the growth in use of the Internet generally and
decrease the acceptance of the Internet as a communications, commercial and
advertising medium. The laws governing the Internet, however, remain largely
unsettled, even in areas where there has been some legislative action. It may
take years to determine whether and how existing laws such as those governing
intellectual property, privacy, libel and taxation apply to the Internet and
Internet advertising.
The growth and development of the market for internet commerce may prompt
calls for more stringent consumer protections laws, both in the United States
and abroad, that may impose additional burdens on companies conducting business
over the internet.
THE BUSINESS OF THE INTERNET IS VOLATILE AND FAST PACED.
Some of Sportcut.com and Houseofboxing.com's competitors are or will be
more highly financed and better placed to take advantage of such a climate.
There can be no assurance of the commercial success of Worldwide's proposed
Internet business or if successful, Worldwide's ability to maintain it or
protect it from competition.
THIS PROSPECTUS CONTAINS FORWARD LOOKING STATEMENTS
Some of the statements in this prospectus constitute forward-looking
statements. These statements involve known and unknown risks, uncertainties and
other factors that may cause our or our industry's results, levels of activity,
performance or achievements to be significantly different from any future
results, levels of activity, performance or achievements expressed or implied by
the forward-looking statements. These factors include, among others, those
listed under "Risk Factors" and elsewhere in this prospectus. In some cases, you
can identify forward-looking statements by the use of the words "may," "will,"
"should," "expects," "plans," "intends," "anticipates," "believes," "estimates,"
"predicts," "potential," or "continue" or the negative of those terms or other
comparable terminology.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, events, levels of
activity, performance or achievements. We do not assume responsibility for the
accuracy and completeness of the forward-looking statements. We do not intend to
update any of the forward-looking statements after the date of this prospectus
to conform them to actual results.
OTHER CONSIDERATIONS
DIVIDENDS.
We have not paid dividends on the common stock since its inception. We
intend to reinvest any earnings in its business to finance future growth.
Accordingly, the board of directors does not anticipate declaring any cash
dividends in the foreseeable future. In addition, under the terms of our
financing facility, we are prohibited from paying cash dividends.
POSSIBLE FUTURE DILUTION.
Holders of our outstanding options and warrants may be able to purchase
shares of common stock at prices substantially below the then-current market
price of our common stock with a resultant dilution in the interests of the
existing stockholders. In addition, the exercise of outstanding derivative
securities and the subsequent public sales of common stock by holders of these
securities under this prospectus or another registration statement effected at
their demand, under Rule 144 or otherwise, could hurt the market for and price
of our securities.
9
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RECENT DEVELOPMENTS
In March 2000, the Board of Directors issued 100,000 shares of stock to
John D'Angelo for his services as a director of Worldwide and as in-house
counsel to Worldwide and its subsidiaries.
In April 2000, the Board of Directors issued 1,000,000 shares of stock to
Charles Koppelman for his services as a director of Worldwide and chairman of
Sportcut.com.
On April 4, 2000 the Board of Directors approved several option grants to
directors and officers of Worldwide for services to Worldwide. The Board granted
options to acquire 300,000 shares of the common stock of Worldwide to Marc
Roberts and Harvey Silverman, and options to acquire 200,000 shares of Worldwide
shares to Roy Roberts, Allan Cohen and Herbert Kozlov. The exercise price for
these options is $1.666 and they expire on April 10, 2005. The Board also issued
Keith Hutt an option to acquire 100,000 shares of Worldwide's common stock at an
exercise price of $1.666, exercisable for a term of five years.
10
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USE OF PROCEEDS
The shares of common stock being offered by means of this prospectus are
for the account of the selling stockholders. Accordingly, Worldwide will not
receive any of the proceeds from the sale of the shares by the selling
stockholders. However, to the extent that the shares being offered by this
prospectus consist of warrants or options, Worldwide will receive the exercise
price of the warrants or options. Any proceeds received from the exercise of
warrants or options will be used for general corporate purposes, including
working capital.
SELLING STOCKHOLDERS
The table below sets forth information as of the date of this prospectus,
concerning the beneficial ownership of our common stock by each selling
stockholder. The table assumes that all of the shares being offered will be
sold. Because the selling security holders may sell all, some or none of the
shares that he, she or it holds, the actual number of shares held by the selling
security holder before or after this offering may vary. In addition, the number
of shares of common stock that may actually be sold by the selling stockholders
will be determined by the selling stockholders, and may depend upon a number of
factors, including, among other things, the market price of our common stock.
All information concerning beneficial ownership has been furnished by the
selling stockholders or by American Stock Transfer & Trust Company, Worldwide's
transfer agent.
<TABLE>
<CAPTION>
SHARES OF COMMON SHARES OF COMMON SHARES OF COMMON
STOCK OWNED STOCK OFFERED STOCK OWNED
BEFORE OFFERING IN THE OFFERING AFTER OFFERING
--------------- --------------- --------------
NAME OF STOCKHOLDERS NUMBER NUMBER NUMBER PERCENT
-------------------- ------ ------ ------ -------
<S> <C> <C> <C> <C>
Marc Roberts 1,804,966 475,000 1,329,966 5.2%
Roy Roberts 585,834 312,500 273,334 1.1%
Allan Cohen 336,667 200,000 136,667 *
Herbert F. Kozlov 739,000 312,500 426,500 1.7%
Harvey Silverman 532,500 412,500 120,000 *
John D'Angelo 353,125 100,000 253,125 1.0%
Charles Koppelman 2,216,667 1,625,000 591,667 2.4%
DHR International 40,000 40,000 0 *
Bob Aylsworth 45,000 45,000 0 *
David Hoffman 182,500 182,500 0 *
Gary Hollander 122,500 122,500 0 *
Robert Isacco 10,000 10,000 0 *
Christopher Segerdahl 1,000 1,000 0 *
John LaRocca 1,500 1,500 0 *
Keith Hutt 100,000 100,000 0 *
</TABLE>
---------------------
* Less than 1%.
Marc Roberts is the former President, former Chairman, and former Chief
Executive Officer of Worldwide. See our Current Report on Form 8-K, filed with
the SEC on June 29, 2000.
Roy Roberts is the chief financial officer at Worldwide
Allan Cohen is a director of Worldwide.
Herbert Kozlov is a director and secretary of Worldwide and has also rendered
legal services for us.
Harvey Silverman is a director of Worldwide.
John D'Angelo is a director and general counsel of Worldwide.
Charles A. Koppelman is the Chairman of the Board of Directors of Worldwide and
the Chairman of the Board of Directors of Sportcut.com.
11
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders or their pledgees, donees, distributees,
transferees or other successors in interest may sell their shares from time to
time. Sales may be affected from time to time by underwriters who may be
selected by the selling stockholders and/or broker-dealers, in one or more
transactions on The Nasdaq SmallCap Market or other over-the-counter markets or,
in special offerings, or secondary distributions under the rules of the
over-the-counter markets. Some of these transactions may involve crosses and
block transactions. Sales may be made in negotiated transactions or otherwise,
at market prices prevailing at the time of sale, at prices related to the
prevailing market prices or at negotiated prices. In addition, any shares
covered by this prospectus that qualify for sale under Section 4(1) of the
Securities Act of 1933 or SEC Rule 144 may be sold under those provisions rather
than by means of this prospectus. Among other ways, the shares may be sold in
one or more of the following types of transactions:
o a block trade in which a broker-dealer attempts to sell the
shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal;
o an exchange distribution in accordance with the rules of the
specific exchange;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
o face-to-face transactions between sellers and purchasers without
a broker-dealer.
In effecting sales, brokers or dealers engaged by the selling stockholder may
arrange for other brokers or dealers to participate in the resales.
In connection with distributions of the shares or otherwise, the selling
stockholders may enter into hedging transactions. In connection with hedging
transactions, participants may engage in short sales of the shares registered
hereunder in the course of hedging the positions they assume with the selling
stockholders. The selling stockholders may also sell shares short and deliver
the shares to close out their short positions. The selling stockholders may also
enter into option or other transactions. The selling stockholders may also
pledge the shares registered in connection with this prospectus to a broker or
dealer and upon a default, the pledgor may effect sales of the pledged shares by
using this prospectus.
Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling stockholder in amounts to be
negotiated in connection with the sale. These brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933 in connection with sales. Any commission,
discount or concession may be deemed to be underwriting discounts or commissions
under the Securities Act of 1933.
Information as to whether underwriters who may be selected by the selling
stockholders, or any other broker-dealer, is acting as principal or agent for
the selling stockholder, the compensation to be received by underwriters who may
be selected by the selling stockholders, or any broker-dealer, acting as
principal or agent for the selling stockholders and the compensation to be
received by other broker-dealers, in the event the compensation of other
broker-dealers is in excess of usual and customary commissions, will, to the
extent required, be set forth in a supplement to this prospectus. Any dealer or
broker participating in any distribution of the shares may be required to
deliver a copy of this prospectus, including the prospectus supplement, if any,
to any person who purchases any of the shares from or through that dealer or
broker.
Worldwide has advised the selling stockholders that during any time as it
may be engaged in a distribution of the shares included in this prospectus, they
are required to comply with Regulation M under the Securities Exchange Act of
1934. In general, Regulation M precludes the selling shareholders, any
affiliated purchasers and any broker-dealer or other person who participates in
the distribution from bidding for or purchasing, or attempting to induce any
person to bid for or purchase, any security that is the subject of the
distribution until the entire distribution is complete. A "distribution" is
defined in the rules as an offering of securities that is distinguished from
ordinary trading activities and depends on the "magnitude of the offering and
the presence of special selling efforts and selling methods." Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security.
Worldwide anticipates that the selling stockholders will offer all of their
shares for sale. Further, because it is possible that a significant number of
shares could be sold at the same time hereunder, any sales, or the possibility
thereof, may depress the market price of the common stock.
12
<PAGE>
LEGAL MATTERS
Some legal matters in connection with the securities being offered in
this prospectus will be passed upon for Worldwide by Parker Duryee Rosoff &
Haft, New York, New York 10017. Herbert F. Kozlov, a member of that law firm, is
the secretary and a director of Worldwide.
EXPERTS
The consolidated financial statements of Worldwide and its subsidiaries
included in Worldwide's annual report on Form 10-KSB for the year ended December
31, 1999 incorporated in this prospectus by reference have been audited by
Friedman Alpren & Green. These statements are incorporated in this prospectus by
reference in reliance upon the report of that firm given upon the authority of
members of that firm as experts in accounting and auditing.
WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION ABOUT WORLDWIDE
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission ("SEC"). You may read
and copy any of the information on file with the SEC at the SEC's public
reference rooms in Washington, D.C., New York, New York, and Chicago, Illinois.
Copies of the filed documents can be obtained by mail from the Public Reference
Section of the SEC at Room 1024, 450 Fifth Street, N.W. Washington, D.C. 20549
at prescribed rates. You may call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Filed documents are also available to
the public at the SEC's Web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until all of the shares offered are sold:
(a) Our Current Report on 8-K, filed on June 29, 2000.
(b) Our Annual Report on Form 10-KSB for the fiscal year ended December
31, 1999; and
(c) Our Quarterly Report on Form 10-QSB, filed on May 15, 2000.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this prospectus 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 in this prospectus modifies or supersedes
that statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.
You can request, and we will send to you, without charge, copies of
documents that are incorporated by reference in this prospectus but which are
not delivered to you (other than exhibits to documents which are not
specifically incorporated by reference). You may request these copies by writing
or telephoning Robert M. Gutkowski, Chief Executive Officer, Worldwide
Entertainment & Sports Corp., 276 Fifth Avenue, New York, New York 10001;
telephone number (212) 689-7447.
You should rely on the information incorporated by reference or provided in
this prospectus or any prospectus supplement. We have not authorized anyone else
to provide you with different information.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth Worldwide's estimates of the expenses to be
incurred by it in connection with the Common Stock being offered hereby:
SEC Registration Fee................................ $1,072.61
Legal fees and expenses............................. $5,000.00*
TOTAL: $6,072.61
--------------
* Denotes estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The following states the general effect of all statutes, charter
provisions, by-laws, contracts or other arrangement under which any controlling
person, director or officer of Worldwide is insured or indemnified in any manner
against liability which he may incur in his capacity as such:
Article SIXTH of the Certificate of Incorporation of Worldwide provides, in
pertinent part:
(5) The Corporation shall, to the full extent permitted by Section 145 of
the Delaware General Corporation Law, as amended, from time to time, indemnify
all persons whom it may indemnify pursuant thereto.
(6) A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the directors
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
(7) Each person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer, of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another Corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and provided, however, that, except as provided in
paragraph (7) hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such
14
<PAGE>
proceeding (or part thereof) was authorized by the board of directors of the
Corporation. The right to indemnification conferred in this Article SIXTH shall
be a contract right and shall include the right to be paid by the Corporation
the expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that if the Delaware General Corporation Law
requires, the payment of such expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such director or officer
to repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Article SIXTH
or otherwise. The Corporation may, by action of its Board of Directors, provide
indemnification to employees and agents of the Corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
(8) If a claim under paragraph (6) of the Article SIXTH is not paid in full
by the Corporation within thirty days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expenses of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant has
not met such applicable standard or conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
(9) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Article SIXTH shall not be exclusive or any other right which any person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law; agreement, vote of stockholders or disinterested
directors or otherwise.
(10) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another Corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law.
Worldwide's amended and restated By-Laws provide, in pertinent part:
ARTICLE IV. INDEMNIFICATION. Each director or officer who the Corporation
is empowered to indemnity pursuant to the General Corporation Law (or any
applicable law at the time in effect) shall be indemnified by the Corporation to
the full extent permitted thereby. The foregoing right of indemnification shall
not be deemed to be exclusive of any other such rights to which those directors
and officers seeking indemnification from the Corporation may be entitled,
including, but not limited to, any rights of indemnification to which they may
be entitled pursuant to any agreement, insurance policy, other by-law or charter
provision, vote of shareholders or directors, or otherwise. No repeal of
amendment of this Article IV shall adversely affect any rights of any person
pursuant to this Article IV that existed at the time of such repeal or amendment
with respect to acts or omissions occurring prior to such repeal or amendment.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
15
<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
5.01 -- Opinion of Parker Duryee Rosoff & Haft
23.01 -- Consent of Friedman Alpren & Green LLP
23.03 -- Consent of Parker Duryee Rosoff & Haft (included in
Exhibit 5.01 hereof)
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
i. To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in -----------
the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
iii. To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, That paragraphs (a)1(i) and (a)(1)(ii) of this
section do not apply if the registration statement is on Form
S-3, Form S-8 or Form F-3, and the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
4. If the registrant is a foreign private issuer, to file a post-effective
amendment to the registration
16
<PAGE>
statement to include any financial statements required by Rule 3-19 of
this chapter at the start of any delayed offering or throughout a
continuous offering. Financial statements and information otherwise
required by Section 10(a)(3) of the Act need not be furnished, provided
that the registrant includes in the prospectus, by means of a
post-effective amendment, financial statements required pursuant to
this paragraph (a)(4) and other information necessary to ensure that
all other information in the prospectus is at least as current as the
date of those financial statements. Notwithstanding the foregoing, with
respect to registration statements on Form F-3, a post-effective
amendment need not be filed to include financial statements and
information required by Section 10(a)(3) of the Act or Rule 3-19 of
this chapter if such financial statements and information are contained
in periodic reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Form
F-3.
17
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on June 29, 2000.
WORLDWIDE ENTERTAINMENT & SPORTS CORP.
By: /s/ Robert M. Gutkowski
---------------------------------------
Robert M. Gutkowski, Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Marc Roberts 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 and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and the documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.
Signature Title Date
--------- ----- ----
/s/ Robert M. Gutkowski Chief Executive Officer, June 29, 2000
-------------------------- President and Director
Robert M. Gutkowski
/s/ Allan Cohen Director June 29, 2000
--------------------------
Allan Cohen
/s/ Herbert F. Kozlov Director and Secretary June 29, 2000
--------------------------
Herbert F. Kozlov
/s/ Harvey Silverman Director June 29, 2000
--------------------------
Harvey Silverman
/s/ John D'Angelo Director June 29, 2000
--------------------------
John D'Angelo
/s/ Charles A. Koppelman Chairman and Director June 29, 2000
--------------------------
Charles A. Koppelman
/s/ Jordan Schlachter Director June 29, 2000
--------------------------
Jordan Schlachter
18
