Registration No. 33-___________
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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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Network Event Theater, Inc.
(Exact Name of Registrant as Specified in its Charter)
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Delaware 13-3864111
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
529 Fifth Avenue
New York, New York 10017
(212) 622-7300
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
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Harlan D. Peltz
Network Event Theater, Inc.
529 Fifth Avenue
New York, New York 10017
(212) 622-7300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Bertram A. Abrams, Esq.
Proskauer Rose LLP
1585 Broadway
New York, New York 10036-8299
(212) 969-3000
Facsimile No. (212) 969-2900
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Appropriate 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, 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 registration statement for the same
offering. [ ] ___________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
(Continued on the following page)
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CALCULATION OF REGISTRATION FEE
<TABLE>
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Proposed
maximum Proposed
offering maximum
Title of each Amount price aggregate Amount of
class of securities to be per offering registration
to be registered registered(1) share(2) price(2) fee
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<S> <C> <C> <C> <C>
Common Stock,
par value $.01per share................. 1,015,873 shares $5.47 $5,556,826 $1,684
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1. Pursuant to Rule 416 of the Securities Act of 1933, as amended, this
Registration Statement also registers such additional indeterminate number
of shares of Common Stock as may be offered or issued to adjust for any
stock splits, stock dividends or similar transactions.
2. Based on the average high and low trading price on the Nasdaq SmallCap
Market on September 16, 1997. Estimated pursuant to Rule 457(c) under the
Securities Act of 1933, as amended, solely for the purpose of calculating
the registration fee.
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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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The Company is a small business issuer relying on Instruction II.C. to Form S-3.
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Network Event Theater, Inc.
1,015,873 Shares
Common Stock
This Prospectus relates to the offering and sale from time to time by
certain securityholders of Network Event Theater, Inc. (the "Company") of up to
1,015,873 shares of common stock, par value $.01 per share ("Common Stock"), of
the Company. See "Selling Securityholders and Plan of Distribution."
The Company will not receive any proceeds from the sale of the shares
included in the Registration Statement of which this Prospectus forms a part.
The Common Stock is quoted on the Nasdaq SmallCap Market ("Nasdaq") under
the symbol "NETS." On September 19, 1997, the closing sale price of the Common
Stock was $6.50 per share.
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SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
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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.
The date of this Prospectus is ___________, 1997
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AVAILABLE INFORMATION
The Company files periodic reports and other information required to be
filed pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Such periodic reports and other information may be inspected and copied
at the public reference facilities maintained by the Securities and Exchange
Commission (the "Commission") at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 or at certain of the regional offices of the Commission located at 7
World Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, upon payment of the fees prescribed
by the Commission. Copies of such material may be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission also maintains a Web site
(http://www.sec.gov) through which the Company's periodic reports and other
information can be retrieved.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents filed by the Company with
the Commission are incorporated by reference in this Prospectus:
(a) The Company's Transition Report on Form 10-KSB for the transition
period from January 1, 1996 to June 30, 1996;
(b) The Company's Quarterly Reports on Form 10-QSB for the fiscal quarters
ended September 30, 1996, December 31, 1996 and March 31, 1997;
(c) The Company's Current Report on Form 8-K filed September 28, 1996, as
amended by Form 8-K/A filed November 26, 1996; and
(d) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed January 17, 1996.
Each document filed subsequent to the date of this Prospectus by the
Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior
to the termination of the offering of the securities offered hereby shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such document.
Any statement contained in a document, all or a portion of which is
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained or
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.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of all such documents which are incorporated
herein by reference (other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference into the documents that this
Prospectus incorporates). Written or oral requests for copies should be directed
to Bruce L. Resnik, Executive Vice President--Chief Financial Officer, Network
Event Theater, Inc., 529 Fifth Avenue, New York, New York 10017, telephone
number: (212) 622-7300.
THE COMPANY
The Company was incorporated under the law of the State of Delaware in
December 1995 to be the successor to the business of Universal Access Network,
LP (the "Partnership"), a Delaware limited partnership organized in August 1993.
In April 1996, the Partnership effected a reorganization pursuant to which it
assigned all of its assets to the Company in exchange for 6,354,440 shares of
Common Stock and distributed those shares to its partners. In April 1996, the
Company sold 2,300,000 shares of Common Stock and 2,645,000 redeemable warrants
in a public offering in which the Company received approximately $9.7 million of
net proceeds, of which $500,000 was used to repay Company debt.
The Company is engaged in developing or acquiring media and marketing
services businesses that focus on the young adult and college market. The
Company is also engaged in operating a college campus theater network (the
"Network"), through which it delivers entertainment and educational events via
satellite to a nationwide network of electronically linked campus theaters for
display through high resolution video projectors on movie
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theater sized screens; the Network reaches a geographically dispersed audience
of college students, faculty, administrators and community residents. It is the
Company's intention to provide a comprehensive marketing service to advertisers,
sponsors and entertainment companies by helping them reach young adult and
college audiences through a variety of media, some of which are proprietary to
the Company, including the sponsorship of events presented on the Network, the
placement of advertisements in college newspapers, the placement of posters on
general and proprietary bulletin and wallboards on college campuses, and the
distribution of free postcards at selected venues.
On September 13, 1996, the Company, through a newly organized wholly owned
subsidiary of the Company, American Passage Media, Inc. ("American Passage"),
acquired from American Passage Media Corporation ("APMC") substantially all of
APMC's assets relating to its college and high school media and marketing
services business. APMC has been involved in the young adult media and marketing
services business since 1976. The acquired businesses included college newspaper
placement operations, college campus postering operations, high school focused
GymBoard(TM) operations, and various other advertiser and event sponsorship
related activities.
On February 21, 1997, the Company, through its newly organized wholly owned
subsidiary, Campus Voice, L.L.C. (together with its successor, Campus Voice,
Inc., "Campus Voice"), acquired from a wholly owned subsidiary of Sirrom Capital
Corporation substantially all of the assets relating to a business of operating
a national network of proprietary giant wallboards on college campuses. The
network, which was started in 1981, today consists of over 3,400 giant
wallboards located on 391 college campuses across the United States reaching
approximately 3.8 million college students. The posters are replaced each month
and primarily contain editorial content of interest to college students and paid
advertisements.
On April 11, 1997, the Company acquired the assets and certain liabilities
of Posters Preferred, Inc. relating to its business of publishing and
distributing to college students catalogs of wall posters that contain
advertising material and a listing of video cassettes of feature films, and
filling orders for the wall posters and video cassettes contained in the
catalogs. The business is operated under the name "Beyond the Wall." Each year,
Beyond the Wall distributes over 4.0 million of its twice yearly catalogs to
over 800 college campuses.
On April 30, 1997, Pik:Nik Media, LLC (together with its successor,
Pik:Nik Media, Inc., "Pik:Nik"), a newly organized wholly owned subsidiary of
the Company, acquired from Pik:Nik LLC the assets and certain liabilities
relating to its business of producing, marketing and distributing free postcards
containing advertisements. Pik:Nik's postcards are available on its proprietary
racks which are installed in major markets throughout the country, at
restaurants, bars, cafes, clubs, movie theaters, convention sites, record stores
and other high traffic locations predominantly visited by young adults. Pik:Nik
currently distributes free postcards on its proprietary racks located in Los
Angeles, San Francisco, Seattle, Dallas, Austin, San Diego and Portland, Oregon
and through contract distributors in Chicago. The Company is planning to expand
Pik:Nik's network of proprietary racks to New York and other markets such as
South Florida, the District of Columbia, Atlanta and Boston. Pik:Nik is also
currently expanding into certain niche distribution markets throughout the
country in cinemas, on college campuses and at bars and restaurants located near
college campuses.
On May 20, 1997, the Company entered into a revised agreement with The
Fields + Hellman Company ("F+H"). The original agreement between the parties
provided that Freddie Fields ("Fields"), a director of the Company, and Jerome
Hellman ("Hellman") would assist the Company in identifying and establishing
relationships with program providers for its Network. The revised agreement
relieves Fields and Hellman of their obligation to devote a subyAantial portion
of their business time to the Company, but provides that each will continue to
be available to perform consulting services for the Company and that Fields will
continue to serve as a director of the Company at his election. The revised
agreement further provides that the Company will continue to pay F+H the monthly
consulting fees and expense reimbursements provided for in the original
agreement (totaling $412,812 for the period from July 1, 1997 through December
31, 1997), but that the Company may at any time elect to pay 50% of the
remaining balance in a single cash payment and 50% by issuing to Fields and
Hellman registered shares of Common Stock.
On June 24, 1997, pursuant to a Stock Purchase Agreement between the
Company and the Selling Securityholders, the Company sold an aggregate of
1,015,873 shares of Common Stock (the "Selling Securityholders Shares") to
Warburg, Pincus Emerging Growth Fund, Inc. and Warburg, Pincus Institutional
Fund, Inc. -- Small Company Growth Portfolio (the "Selling Securityholders") at
a price of $3.9375 per share. The Company has agreed to include these shares of
Common Stock in the Registration Statement of which this Prospectus forms a
part.
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Effective as of July 1, 1997, the Company completed an internal
organizational restructuring which resulted in (i) the business and assets of
the Network being owned by a newly organized subsidiary of the Company, Network
Event Theater Development, Inc., (ii) the business and assets of Campus Voice
being owned by a newly organized subsidiary of the Company, Campus Voice, Inc.,
and (iii) the business and assets of American Passage, Beyond The Wall and
Pik:Nik being owned, respectively, by American Passage Media, Inc., Beyond The
Wall, Inc. and Pik:Nik Media, Inc., each of which is a subsidiary of the newly
organized subsidiary of the Company, National Campus Media, Inc. Additionally,
the Company organized a subsidiary for the purpose of printing, or contracting
for printing, and distribution in connection with the publishing activities of
the Company's other subsidiaries. The purpose of the restructuring was to
achieve certain efficiencies for the Company in its tax reporting.
The Company has signed a letter of intent to acquire another company
engaged in the free post card distribution business; that transaction is subject
to the completion of due diligence and to the preparation and execution of
definitive agreements. The Company is also currently engaged in discussions with
several other entities that may lead to future acquisitions. There can be no
assurance that the Company will consummate these or any other transactions. The
Company may pay for these or other acquisitions with either cash, Common Stock
or both. The number of shares of Common Stock which might be issued in
connection with these or any future acquisitions could be substantial in
relation to the total number of shares that are presently outstanding. Any such
issuance would result in dilution to the interests of the Company's present
stockholders.
The Company's principal executive offices are located at 529 Fifth Avenue,
New York, New York 10017, and its telephone number is (212) 622-7300.
RISK FACTORS
The securities offered hereby are speculative and involve a high degree of
risk. Prospective investors should carefully consider the following risk factors
before making an investment decision. As used herein, unless the context
otherwise requires, the "Company" means Network Event Theater, Inc. and its
subsidiaries.
1. Uncertainty of Plan of Operation. The Company's plan of operation and
prospects will be dependent upon the success of its Network and the success of
its media and marketing services businesses. The success of the Network will be
dependent upon the Company's ability to enter into and maintain agreements with
a significant number of colleges and universities; establish and maintain
satisfactory relationships with college administrators and student
organizations; successfully obtain and install satellite transmission,
projection and audio equipment on a timely and cost effective basis; and
successfully expand its Network to attract programmers willing to provide
currently popular programming suitable for college student audiences on
commercially reasonable terms. There can be no assurance that the Company will
be able to successfully pursue its business plan with respect to its Network.
In addition, the Company's success in operating the media and marketing
services businesses it has acquired will depend on its ability to integrate such
businesses with its present operations. The Company's prospects with respect to
such businesses will also be significantly affected by its ability to attract
advertisers and sponsors to promote their products using the Company's media and
marketing services. The Company has had only limited experience in operating the
businesses of American Passage, Campus Voice, Beyond the Wall and Pik:Nik. There
can be no assurance that the Company can operate these businesses successfully
or integrate them together in a way that will be attractive to advertisers and
sponsors.
2. Significant and Continuing Losses. For the period from inception to
March 31, 1997, the Company incurred a net loss of $8,476,926. Since March 31,
1997, the Company has continued to incur significant losses and anticipates that
it will continue to incur significant losses until the Company generates
sufficient revenues from its businesses to offset the costs of operating and
growing its businesses. With respect to the Network, there can be no assurance
that the Company will attract and retain a sufficient number of schools and
obtain the necessary programming, or that the Company will attract and retain a
sufficient number of advertisers and sponsors, to generate meaningful revenues.
With respect to the Company's media and marketing services businesses, American
Passage has generated sufficient revenues to meet its expenses and debt service
requirements, but Campus Voice, Beyond the Wall and Pik:Nik, largely due to the
seasonal nature of their businesses, have generated small operating losses since
their respective acquisitions. There can be no assurance that any of these media
and marketing services businesses will be profitable. In particular, the Company
does not expect Pik:Nik to be profitable until it can successfully expand its
network of proprietary racks and achieve a higher base of advertising revenue.
In light of the significant costs
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anticipated in connection with the expansion of the Company's Network and its
media and marketing services businesses, the pursuit of additional acquisition
opportunities, and the operation of the Company's corporate headquarters, there
can be no assurance that the Company and its subsidiaries will ever be
profitable on a consolidated basis.
3. Expenses Related to Expansion of Media and Marketing Services Business.
The Company intends to increase both the size and geographic penetration of the
media and marketing services businesses it has acquired, some significantly, and
may acquire additional media and marketing services businesses. Such expansion
will require a substantial investment on the part of the Company, the risks of
which are described below. There can be no assurance that the Company will
realize returns commensurate with such investment following such expansion or at
all.
4. Need for Additional Financing. The capital requirements relating to
implementation of the Company's plans with respect to its Network and its media
and marketing services business have been and will continue to be significant.
Since inception, the Company has financed the development of its business from
sales of Company securities and from bank debt and financing arrangements. As of
June 30, 1997, the Company had cash, cash equivalents and investments of
approximately $4.2 million, including approximately $4 million derived from the
sale of Common Stock in June 1997 to the Selling Securityholders. In the event
that the Company's current resources and revenues from its Network and media and
marketing services businesses are not sufficient to enable the Company to pay
its operating expenses and the costs of its planned expansion, or those costs
prove to be higher than anticipated, the Company could be required to seek
additional financing. There can be no assurance that any additional financing
will be available to the Company on acceptable terms, or at all. The inability
to obtain additional financing will have a material adverse effect on the
Company, including possibly requiring the Company to significantly curtail or
cease its operations.
5. Economic Conditions; Advertising Trends. With respect to its media and
marketing services business, the Company relies on sales of advertising for its
revenues and its operating results therefore are affected by general economic
conditions, as well as trends in the advertising industry. A reduction in
advertising expenditures available for the Company's media and marketing
services business could result from a general decline in economic conditions, a
decline in economic conditions in particular markets where the Company conducts
business, or a reallocation of advertising expenditures to other available
media, including radio, television and the Internet, by significant users of the
Company's services. Any such reduction could have a material adverse effect on
the Company.
6. Limited Number of Contracts and Installations; Uncertainty of Network
Expansion. The Company's Network is currently installed in a limited number of
campus theaters. The process of identifying and establishing relationships with
school administrators and student organizations and obtaining new contracts is
lengthy and uncertain and Network installation typically requires three months
to complete from the time a new contract is entered into and requires
substantial capital expenditures. While the Company is currently engaged in
discussions with several colleges and universities relating to Network
installation, there can be no assurance that the Company will be successful in
negotiating satisfactory agreements or in identifying colleges and universities
willing to join the Company's Network. Regulations in certain states require
state colleges and universities to award contracts after issuances of requests
for proposals pursuant to competitive bidding, which could delay the Company's
plans in target markets. The Company has limited financial, personnel and other
resources to undertake extensive marketing activities. There can be no assurance
that the Company will be able to successfully expand its Network or that any
expansion will not be subject to unforeseen delays and costs.
7. Dependence on Student Organizations. The Company's Network is dependent
on the efforts of school administrators and student organizations at each
university, over which it does not have absolute control, to promote, sell and
operate the Company's program events and to account for ticket revenues, if any.
Pursuant to the Company's Network agreements, schools are entitled to receive a
percentage of ticket sales as consideration for organizing, promoting and
operating Network events. However, the Company does not anticipate that ticket
revenues will be a material component of the Network's revenues; the Company
expects revenues to be derived principally from the sale of advertising and
sponsorships. Student organizations typically promote other school events and
may not be expected to increase their efforts on behalf of the Company in the
absence of increased incentives or demand. The Company's ability to successfully
promote its events will be largely dependent on the efforts of such student
organizations.
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8. Uncertainty of Programming Availability. The Network's success will be
largely dependent upon the Company's ability to obtain currently popular
programming for its Network suitable for college student audiences. The Company
currently has no specific multi-year arrangements for the acquisition of any
programming and, as a result of this fact and the revision of the agreement with
The Fields + Hellman Company, the Company's ability to obtain programming is
subject to a high degree of uncertainty. Failure to obtain a sufficient number
of popular programming events on acceptable terms would have a material adverse
effect on the Company.
9. New Concept; Uncertainty of Market Acceptance of the Network. The
Company's Network is a new business concept. As is typical in the case of a new
concept in the entertainment industry, the ultimate level of demand for and
market acceptance of the Company's Network is uncertain. The Company will be
required to substantially increase its marketing efforts to create awareness and
demand of the Company's Network by programmers, colleges and students. The
Company's prospects will be significantly affected by its ability to attract
programmers and advertisers to promote their programs and products using the
Network and, at the same time, attract colleges to participate in the Network.
Because programmers operate on a national scale, it will be important for the
Company to achieve a large enough installed base of theaters to reach a critical
mass of potential student audiences. Programmers may be reluctant to participate
in the Network unless the Company has installed its Network in a large number of
campus theaters. Similarly, since college administrators have limited experience
with commercial activities, colleges may be reluctant to use the Network until a
sufficient number of other colleges have committed to its use. The Company will
also be significantly dependent on the level of initial and continued acceptance
by students, which will be essential to market acceptance of the Network.
Inasmuch as demand by programmers, colleges and students are substantially
interrelated, any lack or lessening of demand by any one of these could have an
adverse effect on market acceptance of the Company's Network.
10. Uncertainty of Network Performance; New Technologies. The Company is
currently upgrading its equipment to a fully digital transmission system capable
of delivering High Definition video and may be required to adapt its Network to
other technological changes in the industry in the future. There can be no
assurance that the Company will be able to successfully upgrade its equipment or
adapt its Network to changing technologies or that competitors will not develop
technologies or products that render the Company's Network obsolete or less
marketable.
The Company will be dependent in the development of the Network on third
parties for the satellite transmission of its programming signal to campus
theaters on a cost effective basis. The Company anticipates that it will lease
facilities necessary to transmit the Network's programming. It is possible that
transmission facilities may from time to time experience system interruptions or
equipment failures. System interruptions and equipment failures resulting in
delays could adversely affect consumer confidence and the Company's reputation.
In addition, to the extent that capacity for transmission by third parties is
limited, the Company's inability, for economic or other reasons, to transmit
signals through existing providers or to obtain transmission services from
additional providers could have an adverse affect on the Company.
The Company relies on third-party manufacturers for all of its supply of
satellite dishes and receivers, high resolution video projectors and audio
equipment incorporated into its Network. The Company has not entered into
agreements with any equipment manufacturer and purchases equipment components
pursuant to purchase orders placed from time to time in the ordinary course of
business. The Company is substantially dependent on the ability of its
manufacturers to provide adequate supplies of high quality equipment components
on a timely basis and on favorable terms. There can be no assurance that such
manufacturers will have sufficient production capacity to satisfy the Company's
scheduling requirements during any period of sustained demand or that the
Company will not be subject to the risk of price fluctuations and periodic
delays. Failure or delay by any of the Company's manufacturers in supplying
components to the Company on favorable terms could result in material
interruptions in the Network's operations and adversely affect the Company's
ability to implement Network expansion. The Company's Network will also be
dependent upon third parties for the installation of its equipment.
With respect to its media and marketing services business, the Company must
also adapt to new technologies. Many marketing companies are actively seeking
out new ways to target the college and young adult market, such as via the
Internet. The Company currently has a Web site for Beyond the Wall through which
it sells wall posters and video cassettes. The success of the Company will be
dependent on its ability to expand its use of the Internet and to identify and
capitalize on other new marketing vehicles that are attractive to and reach a
broad range of college students. The Company's failure to do so could have a
material adverse affect on its reputation with advertisers and sponsors and,
consequently, on the Company's business.
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11. Factors Affecting the Entertainment Industry. The Network's activities
are subject to all of the risks generally associated with the entertainment
industry. Program acquisition costs, as well as promotion and marketing expenses
and third-party participations payable to producers and others, which reduce
potential revenues derived from programming events, have increased significantly
in recent years. The Company's future operating results will depend on numerous
factors beyond its control, including the popularity, price and timing of
programming and special events being released and distributed, national,
regional and local economic conditions (particularly adverse conditions
affecting consumer spending), changes in student demographics, the availability
of other forms of entertainment, critical reviews and public tastes and
preferences, which change rapidly and cannot be predicted. The Company's ability
to plan for program development and promotional activities will be significantly
affected by the Company's ability to anticipate and respond to relatively rapid
changes in tastes and preferences of college students. College students also
have finite disposable income, which may make it more difficult for the Company
to price its events at levels which result in profitable operations.
12. Seasonality. The Company expects that its Network and its media and
marketing services business will experience a strong seasonality. Typically, the
Company expects that its operating results will fluctuate between school
semesters and the summer months when most students are on recess. Because a
significant portion of the Company's expenses are fixed, a reduction in revenues
in any quarter is likely to result in a period-to-period decline in operating
performance and net income.
13. Competition. The Company's Network faces intense competition for a
finite amount of student discretionary spending from numerous other businesses
in the entertainment and marketing industries. The Company competes with various
forms of entertainment which provide similar value, both on and off campus, such
as music groups and other entertainers (who tour colleges and universities),
movies, video and audio cassettes, broadcast television, cable programming,
special pay-per-view events, sporting events and other forms of entertainment
which may be less expensive or provide other advantages to college students. The
Company also competes for advertising dollars with traditional media. While the
Company believes that Network Event Theater is the only network of its kind
currently installed on college campuses, there can be no assurance that other
companies are not developing or will not seek to develop similar networks. The
Company is aware that certain closed-circuit television operators are delivering
music videos, current events, sports and campus news in student cafeterias. If
the Network is successful, the Company expects that other companies may seek to
enter or capitalize on college markets and compete directly with the Company.
Many of these companies have substantially greater financial, personnel,
technical and other resources than the Company and have well-established
reputations for success in the development, promotion and marketing of
entertainment events. There can be no assurance that the Company will be able to
compete successfully.
The Company's media and marketing services businesses also face competition
for limited advertising revenues from advertisers and sponsors, as well as from
other media such as radio, television, print media, direct mail marketing and
the Internet. The Company also competes with a wide variety of other advertising
media, the range and diversity of which has increased substantially over the
past several years to include advertising displays in shopping centers and
malls, airports, stadiums, movie theaters and supermarkets, and on taxis,
trains, buses and subways. Some of the Company's competitors, principally in
other media such as radio and television, are substantially larger, better
capitalized and have access to greater resources than the Company. There can be
no assurance that the Company will be able to compete successfully with such
other companies and media.
14. Potential Liability and Insurance. Pursuant to the Company's agreements
with schools that carry its Network, the Company is required to obtain
comprehensive general liability insurance which covers personal injury, libel,
slander and false advertising and which names the school as an additional
insured. The Company currently maintains liability insurance in the aggregate
amount of $4 million, with a limit of $3 million per occurrence. There can be no
assurance that such insurance will be sufficient to cover potential claims or
that an adequate level of insurance will be available in the future at a
reasonable cost. A partially or completely uninsured claim against the Company,
if successful and of sufficient magnitude, would have a material adverse effect
on the Company.
The Company's businesses are subject to the risks of significant
contractual litigation and of human resources claims, such as sexual harassment,
discrimination and worker's compensation claims. The presence of the Company's
media and marketing services business in 48 states also exposes it to potential
tax audits in each state. Any such litigation or tax audit could result in the
diversion of a substantial portion of management's time and the Company's
financial resources, which would have a material adverse effect on the Company.
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Additionally, the Company utilizes the services of a large number of
independent contractors in its media and marketing services business. If it were
determined that any of those independent contractors are in fact employees of
the Company, the Company may be responsible for paying the employer's portion of
the social security tax for such employees, on a retroactive basis, and other
additional amounts.
The Company obtains its programs for the Network from a variety of content
providers and, as such, is subject to the risk of copyright and trademark
infringement claims. The Company looks to indemnities from such content
providers to guard against potential liabilities. The invalidity of any such
indemnity or its failure to provide adequate protection for the Company could
have a material adverse effect on the Company. The Company maintains errors and
omissions insurance for productions.
15. Dependence on Key Personnel. The success of the Company will be
dependent on the efforts of Harlan D. Peltz, its Chairman and Chief Executive
Officer, and other key personnel. Although the Company has entered into an
employment agreement with Mr. Peltz terminating in April 1999, the loss of his
services could have a material adverse effect on the Company's prospects. The
Company anticipates that in addition to its executive officers it will continue
to be dependent on the services of independent consultants. The success of the
Company is also dependent upon its ability to hire and retain additional
qualified marketing, technical, financial and other personnel. Competition for
qualified personnel in the entertainment industry is intense and there can be no
assurance that the Company will be able to hire or retain additional qualified
personnel.
16. Possible Adverse Effect from Future Sales of Restricted Shares. The
Company currently has 9,861,323 shares of Common Stock outstanding, of which
3,959,459 shares of Common Stock are freely tradable without restriction or
further registration under the Securities Act of 1933 (the "Securities Act").
All of the remaining 5,901,864 shares of Common Stock outstanding are
"restricted securities," as that term is defined under Rule 144 promulgated
under the Securities Act, and may be sold in limited amounts without
registration pursuant to such rule as of April 29, 1997. No prediction can be
made as to the effect, if any, that sales of shares of Common Stock or even the
availability of such shares for sale will have on the market prices prevailing
from time to time. The Company also has reserved 4,137,560 shares of Common
Stock for issuance upon the exercise of certain options and warrants of the
Company. The possibility that substantial amounts of Common Stock may be sold in
the public market, or the possibility of the exercise of a substantial amount of
options and warrants, may adversely affect the prevailing market price for the
Common Stock and could impair the Company's ability to raise capital through the
sale of its equity securities.
17. No Assurance of Public Market; Possible Volatility of Market Price of
Common Stock. There can be no assurance that a regular trading market for the
Common Stock will be sustained. The market prices of the Company's securities
may be highly volatile as has been the case with the securities of other
emerging companies. Factors such as the Company's operating results and
announcements by the Company or its competitors may have a significant impact on
the market price of the Company's securities. In addition, in recent years, the
stock market has experienced a high level of price and volume volatility and
market prices for the stock of many companies have experienced wide price
fluctuations which have not necessarily been related to the operating
performance of such companies.
The Common Stock is currently listed on Nasdaq. In order to continue to be
listed on Nasdaq, the Company must meet certain maintenance standards. The
Company's failure to meet Nasdaq's maintenance criteria in the future may result
in the delisting of the Common Stock from Nasdaq, and trading, if any, in the
Company's securities would thereafter be conducted in the non-Nasdaq
over-the-counter market. As a result of such delisting, an investor could find
it more difficult to dispose of, or to obtain accurate quotations as to the
market value of, the Company's securities.
In addition, if the Common Stock were to become delisted from trading on
Nasdaq and the trading price of the Common Stock were to fall below $5.00 per
share, trading in the Common Stock would also be subject to the requirements of
certain rules promulgated under the Exchange Act, which require additional
disclosure by broker-dealers in connection with any trades involving a stock
defined as a penny stock (generally, any non-Nasdaq equity security that has a
market price of less than $5.00 per share, subject to certain exceptions). Such
rules require the delivery, prior to any penny stock transaction, of a
disclosure schedule explaining the penny stock market and the risks associated
therewith, and impose various sales practice requirements on broker-dealers who
sell penny stocks to persons other than established customers and accredited
investors (generally institutions). For these types of transactions, the
broker-dealer must make a special suitability determination for the purchaser
and have received the
8
<PAGE>
purchaser's written consent to the transaction prior to sale. The additional
burdens imposed upon broker-dealers by such requirements may discourage
broker-dealers from effecting transactions in the Common Stock, which could
severely limit the market price and liquidity of the Common Stock and the
ability of purchasers in this offering to sell the Common Stock in the secondary
market.
The Common Stock is not eligible for margin account.
18. Possible Inability to Sell Securities in Certain States. The securities
offered hereby may not be qualified for sale in all states. Prospective
investors should consult their brokers before making any purchase.
Notice to California Investors. Each purchaser of Common Stock in
California must be an "accredited investor," as that term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act, or satisfy one of
the following suitability standards: (i) minimum actual gross income of $65,000
and a net worth (exclusive of home, home furnishings and automobiles) of
$250,000; or (ii) minimum net worth (exclusive of home, home furnishings and
automobiles) of $500,000.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Selling
Securityholders Shares.
SELLING SECURITYHOLDERS AND PLAN OF DISTRIBUTION
An aggregate of 1,015,873 shares of Common Stock may be offered and sold
pursuant to this Prospectus by the Selling Securityholders. None of the Selling
Securityholders has ever held any position or office with the Company or had any
other material relationship with the Company. The Company will not receive any
of the proceeds from the sale of the Selling Securityholders Shares. The
following table sets forth certain information with respect to the Selling
Securityholders:
Beneficial Beneficial
Ownership Ownership
of Common of Common Percentage
Shares Prior Shares Shares Owned
to Sale Offered After Sale After Sale
------------ -------- ---------- ----------
Selling Securityholder
- ------------------
Warburg, Pincus Emerging
Growth Fund, Inc. ............ 761,905 761,905 0 --
Warburg, Pincus Institutional
Fund, Inc.-- Small Company
Growth Portfolio ............. 253,968 253,968 0 --
The Selling Securityholders Shares may be offered and sold from time to
time as market conditions permit in the over-the-counter market, or otherwise,
at prices and terms then prevailing or at prices related to the then-current
market price, or in negotiated transactions. The Selling Securityholders Shares
may be sold by one or more of the following methods, including, without
limitation: (i) a block trade in which a broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (ii) purchases by a broker or
dealer as principal and resale by such broker or dealer for its accounts
pursuant to this Prospectus; (iii) ordinary brokerage transactions and
transactions in which the broker solicits purchases; and (iv) transactions
between sellers and purchasers without a broker/dealer. In effecting sales,
brokers or dealers engaged by the Selling Securityholders may arrange for other
brokers or dealers to participate. Such brokers or dealers may receive
commissions or discounts from the Selling Securityholders in amounts to be
negotiated. Such brokers and dealers and any other participating brokers and
dealers may be deemed to be "underwriters" within the meaning of the Securities
Act in connection with such sales.
In order to comply with certain state securities laws, if applicable, the
Selling Securityholders Shares may be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states, such shares of
Common Stock may not be sold unless such shares have been registered or
qualified for sale in such states or an exemption from registration or
qualification is available and is complied with.
9
<PAGE>
Under the Exchange Act and the regulations thereunder, any person engaged
in a distribution of the securities offered by this Prospectus may not
simultaneously engage in market making activities with respect to the Common
Stock during any applicable "cooling off" periods prior to the commencement of
such distribution. In addition, and without limiting the foregoing, each Selling
Securityholder will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder including, without limitation, Rules 101
and 104, which may limit the timing of purchases and sales of the Selling
Securityholders Shares.
The Registration Statement that includes this Prospectus is filed pursuant
to registration rights granted by the Company in favor of the Selling
Securityholders. The Company has agreed to indemnify the Selling Securityholders
for certain losses, claims and liabilities in connection with the sale of
securities pursuant to the Registration Statement of which this Prospectus forms
a part. The Company also has agreed to pay the expenses in connection with the
Registration Statement that includes this Prospectus. The Selling
Securityholders will pay any brokerage or other fees or commissions, as well as
their incidental expenses, in connection with the offering.
The Company has agreed that if for any reason Harlan D. Peltz ceases to be
an officer and director of the Company, upon the Selling Securityholders'
request at any time thereafter (so long as the Selling Securityholders own the
Selling Securityholders Shares) the Company shall use its best efforts to cause
the election to the Company's board of directors of a person nominated by the
Selling Securityholders.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation eliminates the liability of a
director of the Company for monetary damages for breach of duty as a director,
subject to certain exceptions. In addition, the Certificate of Incorporation
provides for the Company to indemnify each director and officer of the Company
to the fullest extent permitted by the General Corporation Law of the State of
Delaware. The foregoing provisions may reduce the likelihood of derivative
litigation against directors and may discourage or deter stockholders or
management from suing directors for breaches of their duty of care, even though
such an action, if successful, might otherwise benefit the Company and its
stockholders.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
LEGAL MATTERS
The legality of the securities covered by this Prospectus has been passed
upon for the Company by Proskauer Rose LLP, New York, New York.
EXPERTS
The financial statements of Network Event Theater, Inc. appearing in
Network Event Theater, Inc.'s Transition Report on Form 10-KSB for the
transition period from January 1, 1996 to June 30, 1996 have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such financial statements
are incorporated by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The financial statements of Young Adult Marketing Divisions (operating
divisions of American Passage Media Corporation) appearing in Network Event
Theater, Inc.'s Current Report on Form 8-K dated August 2, 1996 have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such financial
statements are incorporated by reference in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
10
<PAGE>
================================================================================
No dealer, salesperson or any other person has been authorized to give any
information or to make any representation not contained in this prospectus, and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company. This prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, any of the securities
offered hereby in any jurisdiction to any person to whom it is unlawful to make
such an offer or solicitation in such jurisdiction. Neither the delivery of this
prospectus nor any sale made hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the Company since
the date hereof or that the information contained herein is correct as of any
time subsequent to the dates as of which such information is furnished.
----------
TABLE OF CONTENTS
Page
----
Available Information ................................................... 2
Incorporation of Certain Documents by
Reference ........................................................... 2
The Company ............................................................. 2
Risk Factors ............................................................ 4
Use of Proceeds ......................................................... 9
Selling Securityholders and Plan of
Distribution ........................................................ 9
Indemnification of Directors and Officers ............................... 10
Legal Matters ........................................................... 10
Experts ................................................................. 10
================================================================================
================================================================================
Network Event
Theater, Inc.
1,015,873 Shares
Common Stock
PROSPECTUS
, 1997
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth all expenses in connection with the sale and
distribution of the securities being registered in the offering described in
this Registration Statement, all of which are payable by the Registrant. All
amounts shown are estimates:
SEC registration fee ................................ $1,684
Nasdaq listing fee .................................. 7,500
Printing and engraving expenses ..................... 3,500
Accounting fees and expenses ........................ 7,500
Legal fees and expenses ............................. 9,500
Miscellaneous expenses .............................. 3,500
-------
Total ........................................... $33,184
=======
Item 15. Indemnification of Directors and Officers
The Company is incorporated in Delaware. Under Section 145 of the General
Corporation Law of the State of Delaware, a Delaware corporation has the power,
under specified circumstances, to indemnify its directors, officers, employees
and agents in connection with actions, suits or proceedings brought against them
by a third party or in the right of the corporation, by reason of the fact that
they were or are such directors, officers, employees or agents, against expenses
incurred in any action, suit or proceeding. The Certificate of Incorporation of
the Company provides for indemnification of directors and officers to the
fullest extent permitted by the General Corporation Law of the State of
Delaware.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision eliminating
or limiting the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director
provided that such provision shall not eliminate or limit the liability of a
director (i) for any breach of the director's 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 (relating to liability for unauthorized acquisitions or redemptions
of, or dividends on, capital stock) of the General Corporation Law of the State
of Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit. The Company's Certificate of Incorporation contains
such a provision.
II-1
<PAGE>
Item 16. Exhibits
Exhibit No. Description of Exhibit
---------- ----------------------
2.1 Form of Contribution Agreement. (1)
2.2 Election to Dissolve. (1)
2.3* Bill of Sale and Agreement dated June 30, 1997 between the
Company and Network Event Theater Development, Inc.
2.4* Bill of Sale and Agreement dated June 30, 1997 between the
Company and Beyond the Wall, Inc.
2.5* Agreement of Merger dated June 30, 1997 between Campus Voice,
L.L.C. and Campus Voice, Inc.
2.6* Agreement of Merger dated June 30, 1997 between Pik:Nik Media,
LLC and Pik:Nik Media, Inc.
4.1 Certificate of Incorporation. (1)
4.2 Form of Certificate of Amendment of Certificate of Incorporation.
(1)
4.3 Bylaws. (1)
5.1* Opinion of Proskauer Rose LLP with respect to the legality of the
securities being registered.
23.1* Consent of Ernst & Young LLP.
23.2* Consent of Ernst & Young LLP.
23.3* Consent of Proskauer Rose LLP (included in Exhibit 5.1).
24.1* Power of Attorney (set forth on page II-4).
- ----------
* Filed herewith.
(1) Previously filed and incorporated by reference to the Registrant's
Registration Statement on Form S-3 (33-80935).
Item 17. Undertakings
(a) 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:
(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 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 a 20 percent 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) 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 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.
II-2
<PAGE>
(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 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
Securities 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 Securities 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.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on September 22, 1997.
NETWORK EVENT THEATER, INC .
By: /s/ HARLAN D. PELTZ
----------------------------
Harlan D. Peltz
Chief Executive Officer and
Chairman of the Board
KNOW ALL MEN BY THESE PRESENTS, that each director and officer whose
signature appears below hereby constitutes and appoints Harlan D. Peltz, Don
Leeds and Bruce L. Resnik, or any of them, as his true and lawful
attorney-in-fact and agent, with full power of substitution, to sign on his
behalf, individually and in any and all capacities (until revoked in writing),
any and all amendments (including post-effective amendments) to this
Registration Statement on Form S-3, and any registration statement relating to
the same offering as this Registration Statement that is to be effective upon
filing pursuant to Rule 462(b) of the Securities Act of 1933, to file the same
with all exhibits thereto and all such other documents in connection therewith
with the Securities and Exchange Commission, granting to such attorneys-in-fact
and agents, and each of them, full power and authority to do all such other acts
and things requisite or necessary to be done, and to execute all such other
documents as they, or any of them, may deem necessary or desirable in connection
with the foregoing, as fully as the undersigned might or could do in person,
hereby ratifying and confirming all that such attorneys-in-fact and agents, or
any of them, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ HARLAN D. PELTZ Chief Executive Officer September 22, 1997
- ------------------------ and Chairman of the Board
Harlan D. Peltz (Principal Executive Officer)
/s/ DON LEEDS President and Director September 22, 1997
- ------------------------
Don Leeds
/s/ BRUCE L. RESNIK Executive Vice President September 22, 1997
- ------------------------ Chief Financial Officer and
Bruce L. Resnik Secretary (Principal Financial
Officer and Principal
Accounting Officer)
/s/ FREDDIE FIELDS Director September 22, 1997
- ------------------------
Freddie Fields
Director September __, 1997
- ------------------------
Jeffrey Berg
II-4
<PAGE>
Signature Title Date
--------- ----- ----
/s/ JAN MILLER Director September 22, 1997
- ------------------------
Jan Miller
/s/ METIN NEGRIN Director September 22, 1997
- ------------------------
Metin Negrin
/s/ JOSEPH TAHL Director September 22, 1997
- ------------------------
Joseph Tahl
/s/ GEORGE LINDEMANN Director September 22, 1997
- ------------------------
George Lindemann
II-5
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
---------- ----------------------
2.1 Form of Contribution Agreement. (1)
2.2 Election to Dissolve. (1)
2.3* Bill of Sale and Agreement dated June 30, 1997 between the
Company and Network Event Theater Development, Inc.
2.4* Bill of Sale and Agreement dated June 30, 1997 between the
Company and Beyond the Wall, Inc.
2.5* Agreement of Merger dated June 30, 1997 between Campus Voice,
L.L.C. and Campus Voice, Inc.
2.6* Agreement of Merger dated June 30, 1997 between Pik:Nik Media,
LLC and Pik:Nik Media, Inc.
4.1 Certificate of Incorporation. (1)
4.2 Form of Certificate of Amendment of Certificate of Incorporation.
(1)
4.3 Bylaws. (1)
5.1* Opinion of Proskauer Rose LLP with respect to the legality of the
securities being registered.
23.1* Consent of Ernst & Young LLP.
23.2* Consent of Ernst & Young LLP.
23.3* Consent of Proskauer Rose LLP (included in Exhibit 5.1).
24.1* Power of Attorney (set forth on page II-4).
- ----------
* Filed herewith.
(1) Previously filed and incorporated by reference to the Registrant's
Registration Statement on Form S-3 (33-80935).
EXHIBIT 2.3
BILL OF SALE AND AGREEMENT
June 30, 1997
The parties to this bill of sale and agreement are Network Event Theater,
Inc., a Delaware corporation ("Transferor"), and Network Event Theater
Development, Inc., a Delaware corporation ("Transferee").
Transferee wishes to acquire from Transferor, and Transferor wishes to
transfer and assign to Transferee, all of the assets of Transferor relating to
its campus theater network and business, including, but not limited to,
agreements with colleges and universities, programming agreements, licensing
agreements, advertising agreements, sponsorship agreements and all equipment
located at college campuses or located elsewhere and relating to Transferor's
campus theater network and business (the "Assets"), in exchange for 100 shares
of common stock, par value $0.01 per share ("Common Stock"), of Transferee, and
Transferee wishes to assume all of the liabilities and obligations of Transferor
relating to Transferor's campus theater network and business.
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Transferor hereby transfers and assigns to Transferee all of the Assets,
of every kind and description, wherever located.
2. Transferee assumes, and agrees to pay, perform and discharge, indemnify
and hold Transferor harmless from and against all liabilities and obligations of
Transferor that relate to Transferor's campus theater network and business,
whether actual or contingent, known or unknown, arising out of any facts, events
or circumstances on or before the date of this agreement.
3. Transferor hereby subscribes for 100 shares of Common Stock of
Transferee (the "Shares"). Transferee hereby accepts the subscription and shall
issue the Shares on the date hereof in exchange for the transfer and assignment
of the Assets.
4. Transferor represents and warrants to Transferee that (a) Transferor has
the full right to enter into and to perform this agreement in accordance with
its terms and is not bound by or subject to any contractual or other obligation
that would be violated by its execution or performance of this agreement, and
(b) Transferor has, and upon signing this agreement Transferee is acquiring,
valid title, free and clear of all claims, liens and encumbrances, to all of the
Assets transferred and assigned to Transferee under this agreement.
5. All of the representations and warranties of Transferor contained in
this agreement shall survive the signing of this agreement.
<PAGE>
6. At any time and from time to time after signing this agreement
Transferor shall, without further consideration, execute and deliver to
Transferee such additional instruments of transfer, and shall take such other
action as Transferee may reasonably request, to carry out the transfer and
assignment of the Assets provided for in this agreement.
7. Transferee acknowledges delivery of the Assets transferred and assigned
to it under this agreement and that it has inspected those Assets, and
Transferee further acknowledges that those Assets have been acquired in the
physical condition in which they now exist, i.e., AS IS, and that Transferor has
not made any representation or warranty with respect to the physical condition
of those Assets or with respect to any other matter other than Transferor's
title to the Assets.
8. This agreement contains a complete statement of all of the arrangements
between the parties with respect to its subject matter, supersedes any previous
agreements between them relating to that subject matter, and cannot be changed
or terminated orally.
9. This agreement shall be governed by the law of the State of New York
without regard to the conflict of laws rules of such state.
Network Event Theater, Inc.
By:/s/ Bruce L. Resnik
Bruce L. Resnik
Executive Vice President and
Chief Financial Officer
Network Event Theater Development, Inc.
By:/s/ Bruce L. Resnik
Bruce L. Resnik
Vice President and Secretary
2
EXHIBIT 2.4
BILL OF SALE AND AGREEMENT
June 30, 1997
The parties to this bill of sale and agreement are Network Event Theater,
Inc., a Delaware corporation ("Transferor"), and Beyond the Wall, Inc., a
Delaware corporation ("Transferee").
Transferee wishes to acquire from Transferor, and Transferor wishes to
transfer and assign to Transferee, all of the assets of Transferor relating to
its business of publishing and distributing catalogs of advertising material to
college students and filling orders for large wall posters of the advertising
material contained in such catalogs (the "Business"), as conducted by a division
of Transferor named "Beyond the Wall" (the "Assets"), in exchange for 100 shares
of common stock, par value $0.01 per share ("Common Stock"), of Transferee, and
Transferee wishes to assume all of the liabilities and obligations of Transferor
relating to the Business.
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Transferor hereby transfers and assigns to Transferee all of the Assets,
of every kind and description, wherever located.
2. Transferee assumes, and agrees to pay, perform and discharge, indemnify
and hold Transferor harmless from and against all liabilities and obligations of
Transferor that relate to the Business, whether actual or contingent, known or
unknown, arising out of any facts, events or circumstances on or before the date
of this agreement.
3. Transferor hereby subscribes for 100 shares of Common Stock of
Transferee (the "Shares"). Transferee hereby accepts the subscription and shall
issue the Shares on the date hereof in exchange for the transfer and assignment
of the Assets.
4. Transferor represents and warrants to Transferee that (a) Transferor has
the full right to enter into and to perform this agreement in accordance with
its terms and is not bound by or subject to any contractual or other obligation
that would be violated by its execution or performance of this agreement, and
(b) Transferor has, and upon signing this agreement Transferee is acquiring,
valid title, free and clear of all claims, liens and encumbrances, to all of the
Assets transferred and assigned to Transferee under this agreement.
5. All of the representations and warranties of Transferor contained in
this agreement shall survive the signing of this agreement.
<PAGE>
6. At any time and from time to time after signing this agreement
Transferor shall, without further consideration, execute and deliver to
Transferee such additional instruments of transfer, and shall take such other
action as Transferee may reasonably request, to carry out the transfer and
assignment of the Assets provided for in this agreement.
7. Transferee acknowledges delivery of the Assets transferred and assigned
to it under this agreement and that it has inspected those Assets, and
Transferee further acknowledges that those Assets have been acquired in the
physical condition in which they now exist, i.e., AS IS, and that Transferor has
not made any representation or warranty with respect to the physical condition
of those Assets or with respect to any other matter other than Transferor's
title to the Assets.
8. This agreement contains a complete statement of all of the arrangements
between the parties with respect to its subject matter, supersedes any previous
agreements between them relating to that subject matter, and cannot be changed
or terminated orally.
9. This agreement shall be governed by the law of the State of New York
without regard to the conflict of laws rules of such state.
Network Event Theater, Inc.
By:/s/ Bruce L. Resnik
Bruce L. Resnik
Executive Vice President
and Chief Financial Officer
Beyond the Wall, Inc.
By:/s/ Bruce L. Resnik
Bruce L. Resnik
Vice President and Secretary
2
EXHIBIT 2.5
AGREEMENT OF MERGER
OF
CAMPUS VOICE, L.L.C.
(a Delaware limited liability company)
AND
CAMPUS VOICE, INC.
(a Delaware corporation)
AGREEMENT OF MERGER entered into on June 30, 1997 by and between Campus Voice,
L.L.C., a Delaware limited liability company (the "LLC"), and approved by
resolution adopted by its board of managers and sole member on said date, and
Campus Voice, Inc., a Delaware corporation (the "Corporation"), and approved by
resolution adopted by its board of directors on said date.
WHEREAS, the LLC, its board of managers and sole member and the Corporation
and its board of directors deem it advisable and to the advantage, welfare and
best interests of said entities to merge the LLC with and into the Corporation,
with the result that the Corporation be the surviving corporation, in accordance
with the provisions of the Limited Liability Company Act of the State of
Delaware upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreement of the parties hereto, being duly entered into by the LLC and approved
by resolution adopted by its board of managers and sole member and being duly
entered into by the Corporation and approved by resolution adopted by its board
of directors, this Agreement of Merger and the terms and conditions hereof and
mode of carrying the same in effect, together with any provisions required or
permitted to be set forth herein, are hereby determined and agreed upon as
hereinafter in this Agreement of Merger set forth.
1. The LLC shall, in accordance with the provisions of the Limited
Liability Company Act of the State of Delaware, merge with and into the
Corporation, with the result that the Corporation be the surviving corporation
(the "surviving corporation"), which shall continue to exist as said surviving
corporation under the name Campus Voice, Inc. The separate existence of the LLC
shall cease at the effective date of the merger in accordance with the
provisions of the Limited Liability Company Act of the State of Delaware.
2. The certificate of incorporation of the surviving corporation, as the
same be in force and effect at the effective date of the merger herein provided
for, shall be the
<PAGE>
certificate of incorporation of the surviving corporation and shall continue in
full force and effect until amended and changed in the manner prescribed by the
provisions of the General Corporation Law of the State of Delaware.
3. The by-laws of the surviving corporation, as the same be in force and
effect at the effective date of the merger herein provided for, shall be the
by-laws of the surviving corporation and shall continue in full force and effect
until amended and changed as therein provided (or in accordance with the
certificate of incorporation) and in the manner prescribed by the provisions of
the General Corporation Law of the State of Delaware.
4. The directors and officers in office of the surviving corporation at the
effective date of the merger shall continue to be the members of the board of
directors and the officers of the surviving corporation, all of whom shall hold
their directorships and offices until the election and qualification of their
respective successors or until their tenure is otherwise terminated in
accordance with the by-laws of the surviving corporation.
5. The sole membership interest in the LLC, which is held by Network Event
Theater, Inc., a Delaware corporation, shall, at the effective date of the
merger, be converted into 100 shares of common stock, par value $0.01 per share,
of the surviving corporation, and these shares shall constitute all of the
surviving corporation's outstanding shares.
6. The parties hereto agree that they will cause to be executed, filed and
recorded any document or documents prescribed by the laws of the State of
Delaware, and that they will cause to be performed all necessary acts therein
and elsewhere to effectuate the merger herein provided for.
7. The board of managers and the officers of the LLC and the board of
directors and the officers of the surviving corporation are hereby authorized,
empowered and directed to do any and all acts and things, and to make, execute,
deliver, file and record any and all instruments, papers and documents that
shall be or become necessary, proper or convenient to carry out or put into
effect any of the provisions of this Agreement of Merger or of the merger herein
provided for.
[END OF TEXT]
2
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, this Agreement of Merger is hereby executed on behalf
of each of the parties hereto on this 30th day of June, 1997.
CAMPUS VOICE, L.L.C.
By: /s/ Bruce L. Resnik
Bruce L. Resnik
Manager
CAMPUS VOICE, INC.
By: /s/ Bruce L. Resnik
Bruce L. Resnik
Vice President and Secretary
3
EXHIBIT 2.6
AGREEMENT OF MERGER
OF
PIK:NIK MEDIA, LLC
(a Delaware limited liability company)
AND
PIK:NIK MEDIA, INC.
(a Delaware corporation)
AGREEMENT OF MERGER entered into on June 30, 1997 by and between Pik:Nik Media,
LLC, a Delaware limited liability company (the "LLC"), and approved by
resolution adopted by its board of managers and sole member on said date, and
Pik:Nik Media, Inc., a Delaware corporation (the "Corporation"), and approved by
resolution adopted by its board of directors on said date.
WHEREAS, the LLC, its board of managers and sole member and the Corporation
and its board of directors deem it advisable and to the advantage, welfare and
best interests of said entities to merge the LLC with and into the Corporation,
with the result that the Corporation be the surviving corporation, in accordance
with the provisions of the Limited Liability Company Act of the State of
Delaware upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreement of the parties hereto, being duly entered into by the LLC and approved
by resolution adopted by its board of managers and sole member and being duly
entered into by the Corporation and approved by resolution adopted by its board
of directors, this Agreement of Merger and the terms and conditions hereof and
mode of carrying the same in effect, together with any provisions required or
permitted to be set forth herein, are hereby determined and agreed upon as
hereinafter in this Agreement of Merger set forth.
1. The LLC shall, in accordance with the provisions of the Limited
Liability Company Act of the State of Delaware, merge with and into the
Corporation, with the result that the Corporation be the surviving corporation
(the "surviving corporation"), which shall continue to exist as said surviving
corporation under the name Pik:Nik Media, Inc. The separate existence of the LLC
shall cease at the effective date of the merger in accordance with the
provisions of the Limited Liability Company Act of the State of Delaware.
2. The certificate of incorporation of the surviving corporation, as the
same be in force and effect at the effective date of the merger herein provided
for, shall be the
<PAGE>
certificate of incorporation of the surviving corporation and shall continue in
full force and effect until amended and changed in the manner prescribed by the
provisions of the General Corporation Law of the State of Delaware.
3. The by-laws of the surviving corporation, as the same be in force and
effect at the effective date of the merger herein provided for, shall be the
by-laws of the surviving corporation and shall continue in full force and effect
until amended and changed as therein provided (or in accordance with the
certificate of incorporation) and in the manner prescribed by the provisions of
the General Corporation Law of the State of Delaware.
4. The directors and officers in office of the surviving corporation at the
effective date of the merger shall continue to be the members of the board of
directors and the officers of the surviving corporation, all of whom shall hold
their directorships and offices until the election and qualification of their
respective successors or until their tenure is otherwise terminated in
accordance with the by-laws of the surviving corporation.
5. The sole membership interest in the LLC, which is held by Network Event
Theater, Inc., a Delaware corporation, shall, at the effective date of the
merger, be converted into 100 shares of common stock, par value $0.01 per share,
of the surviving corporation, and these shares shall constitute all of the
surviving corporation's outstanding shares.
6. The parties hereto agree that they will cause to be executed, filed and
recorded any document or documents prescribed by the laws of the State of
Delaware, and that they will cause to be performed all necessary acts therein
and elsewhere to effectuate the merger herein provided for.
7. The board of managers and the officers of the LLC and the board of
directors and the officers of the surviving corporation are hereby authorized,
empowered and directed to do any and all acts and things, and to make, execute,
deliver, file and record any and all instruments, papers and documents that
shall be or become necessary, proper or convenient to carry out or put into
effect any of the provisions of this Agreement of Merger or of the merger herein
provided for.
[END OF TEXT]
2
<PAGE>
[EXECUTION PAGE]
IN WITNESS WHEREOF, this Agreement of Merger is hereby executed on behalf
of each of the parties hereto on this 30th day of June, 1997.
PIK:NIK MEDIA, LLC
By: /s/ Bruce L. Resnik
Bruce L. Resnik
Manager
PIK:NIK MEDIA, INC.
By: /s/ Bruce L. Resnik
Bruce L. Resnik
Vice President and Secretary
3
EXHIBIT 5.1
PROSKAUER ROSE LLP
1585 Broadway
New York, New York 10036-8299
September 22, 1997
Network Event Theater, Inc.
529 Fifth Avenue
New York, New York 10017
Dear Sirs:
We are acting as counsel to Network Event Theater, Inc., a Delaware corporation
(the "Company"), in connection with the Registration Statement on Form S-3 (the
"Registration Statement") filed by the Company under the Securities Act of 1933
(the "Act") relating to the registration of 1,015,873 shares (the "Shares") of
Common Stock, par value $.01 per share, of the Company.
We have examined such records, documents and other instruments as we have deemed
relevant and necessary as a basis for the opinion hereinafter set forth. We have
also assumed without investigation the authenticity of any document submitted to
us as an original, the conformity to originals of any document submitted to us
as a copy, the authenticity of the originals of such latter documents, the
genuineness of all signatures and the legal capacity of natural persons signing
such documents.
Based upon, and subject to, the foregoing, we are of the opinion that the Shares
are duly authorized, validly issued, fully paid and non-assessable.
The foregoing opinion relates only to matters of the General Corporation Law of
the State of Delaware and does not purport to express any opinion on the laws of
any other jurisdiction.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters." In giving the foregoing consent, we do not admit that we are in the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.
Very truly yours,
/s/ PROSKAUER ROSE LLP
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Network Event
Theater, Inc. for the registration of 1,015,873 shares of its common stock and
to the incorporation by reference therein of our report dated July 30, 1996,
with respect to the financial statements of Young Adult Marketing Divisions
(Operating Divisions of American Passage Media Corporation) included in Network
Event Theater, Inc.'s Current Report on Form 8-K dated August 2, 1996, filed
with the Securities and Exchange Commission.
/s/Ernst & Young LLP
Ernst & Young LLP
New York, New York
September 16, 1997
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Network Event
Theater, Inc. for the registration of 1,015,873 shares of its common stock and
to the incorporation by reference therein of our report dated October 17, 1996,
with respect to the financial statements of Network Event Theater, Inc. included
in its Transition Report (Form 10-KSB) for the period ended June 30, 1996, filed
with the Securities and Exchange Commission.
/s/Ernst & Young LLP
Ernst & Young LLP
New York, New York
September 16, 1997
