As filed with the Securities and Exchange Commission on February 1, 1999
Registration No. 333-36113
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
Network Event Theater, Inc.
(Exact Name of Registrant as Specified in its Charter)
----------
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)
----------
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)
----------
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
----------
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 following page)
<PAGE>
(continued from previous page)
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed
maximum Proposed
aggregate maximum
Amount offering aggregate Amount of
Title of shares to be price per offering registration
to be registered registered(1) share(2) price(2) fee
- --------------------------------------------------------------------------------
Common Stock, par value
$.01 per share 2,947,753 shares $15.50 $29,944,140 $8,325
================================================================================
1. Registration fee of $1,684 was paid with respect to 1,015,873 of these
shares on September 22, 1997. Therefore, calculation of the registration
fee is with respect to 1,931,880 shares only. 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 January 26, 1999. Estimated pursuant to Rule 457(c) under the
Securities Act of 1933, as amended, solely for the purpose of calculating
the registration fee.
----------
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.
----------
The Company is a small business issuer relying on Instruction II.C. to Form S-3.
================================================================================
<PAGE>
Network Event Theater, Inc.
2,947,753 Shares
Common Stock
This Prospectus relates to the offering and sale from time to time by
certain securityholders of Network Event Theater, Inc., a Delaware corporation
(the "Company"), of up to 2,947,753 shares of common stock, par value $.01 per
share ("Common Stock"), of the Company, including 876,280 shares issuable upon
the exercise of warrants. 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 January 26, 1999, the closing sale price of the Common
Stock was $16.8125 per share.
----------
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
----------
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 , 1999
<PAGE>
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 Report on Form 10-KSB for the fiscal year ended June 30,
1998;
(b)The Company's Quarterly Report on Form 10-QSB for the fiscal quarter
ended September 30, 1998; and
(c)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 owns and operates a proprietary national network of theaters on
college campuses (the "Network"). The Network delivers entertainment and
educational events via satellite for display through high-resolution video
projectors on movie theater sized screens reaching a geographically dispersed
audience of college students, faculty, administrators and community residents in
each college community. Additionally, the Company is engaged in developing and
acquiring media and marketing services businesses which, using both on-line and
off-line capabilities, target the young adult and college markets and complement
and enhance the reach of its Network. The Company provides a comprehensive
marketing service to advertisers, sponsors and entertainment companies by
helping them target young adults and college audiences through a variety of
media, both on-line and off-line, some of which are proprietary to the Company,
including the sponsorship of events presented on the Network, the
2
<PAGE>
placement of advertisements in college newspapers, the placement of
advertisements and advertising banners on Internet websites, the placement of
posters on general and proprietary bulletin and wallboards on college campuses,
and the distribution of free postcards at selected venues, both on and off
campuses.
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 had been involved in the young adult media
and marketing services business since 1976. The acquired businesses include
college newspaper print advertisement placement operations, college campus
postering operations, high school focused GymBoards(R) 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 404 college campuses across the United States
reaching approximately 4.0 million college students. Each month, posters
containing editorial content of interest to college students and paid
advertisements are placed in the wallboard units.
On April 11, 1997, the Company acquired the assets and certain liabilities
of Posters Preferred, Inc. relating to its business of publishing and
distributing a twice-yearly catalog to college students entitled Beyond the
Wall. Each year, Beyond the Wall distributes over 4.0 million of its catalogs to
over 600 college campuses. The catalog contains advertising images which are
available in poster-size reproductions, which students can purchase by mail
order as posters to be hung on the walls of their rooms. In addition, Beyond the
Wall maintains a website at which students can download a screen saver with the
same images that are found on the posters.
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 advertising images. As of May 1, 1998, the Company acquired another
company which distributes free postcards in the city of Chicago. Pik:Nik's
postcards are marketed under the HotStampTM brand and are distributed using its
proprietary racks 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 through its proprietary racks located in
New York, Los Angeles, San Francisco, Seattle, Dallas and Chicago and through
contract distributors in Washington, D.C., Boston and Philadelphia. The Company
is planning to expand Pik:Nik's network of proprietary racks to other markets,
including Miami and Atlanta. Pik:Nik also distributes postcards in over 50
secondary cities in the United States through a customized distribution
operation utilizing disposable postcard holders located at high traffic and
point of sale locations.
On May 20, 1997, the Company entered into a revised agreement with The
Fields + Hellman Company. 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
relieved Fields and Hellman of their obligation to serve as the Chairman and
President, respectively, of the Company's Programming Division, but provided
that each would continue to be available to perform consulting services for the
Company at the Company's request and that Fields would continue to serve as a
director of the Company at his election. The revised agreement further provided
that the Company would continue to pay The Fields + Hellman Company 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 could 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. The revised agreement terminated
December 31, 1997.
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
3
<PAGE>
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
a 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.
On December 19, 1995, Freddie Fields, through the Fields Family Living
Trust, received a warrant to purchase 276,280 shares of Common Stock at a price
of $1.58 per share in connection with The Fields + Hellman Company's services to
the Company as consultants. The warrant is exercisable over a ten-year period
from the date of grant.
On June 24, 1997 and February 6, 1998, pursuant to stock purchase
agreements among the Company, Warburg, Pincus Emerging Growth Fund, Inc. and
Small Company Growth Portfolio of Warburg, Pincus Institutional Fund, Inc., the
Company sold 1,015,873 and 888,889 shares of Common Stock at prices of $3.9375
and $4.50 per share, respectively. In addition, in connection with the private
placement of shares to these Warburg, Pincus funds in June 1997, the Company, on
December 16, 1997, issued to each of Whale Securities Co., L.P. and an
individual (whose shares are not registered hereby) warrants to purchase 75,000
shares of Common Stock at a price of $4.50 per share. The warrants are
exercisable over a three-year period from the issue date.
On January 22, 1998, the Company sold in a private placement 111,111
shares of Common Stock at a price of $4.50 per share to Far West Capital
Partners, LLP. On February 9, 1998, the Company sold in a private placement
55,600 shares of Common Stock to Larry Miller at a price of $4.50 per share.
On July 8, 1998, the Company sold $5.0 million face value of subordinated
notes with a five-year maturity to a group of investors. Libra Investments, Inc.
("Libra") served as the placement agent for that offering and received a warrant
to purchase 150,000 shares of Common Stock at an exercise price of $4.125 per
share, exercisable at any time over a five-year period from the date of the
notes offering. Libra distributed a significant portion of these warrants to a
group of 12 individuals and entities. The nine individual subordinated
noteholders also received, in the aggregate, 375,000 warrants to purchase shares
of Common Stock at an exercise price of $4.125 per share. These warrants are
also exercisable over a five-year period from the date of the offering.
The Company has agreed to include the shares of Common Stock described in
the four immediately preceding paragraphs in the Registration Statement of which
this Prospectus forms a part. The securityholders listed above are referred to
in this document as the "Selling Securityholders" and the shares registered
hereby on their behalf are referred to in this document as the "Selling
Securityholders Shares."
In October 1998, the Company, together with a number of individual
investors, formed a subsidiary called Common Places LLC to develop and market a
website aimed at college students. The website will attempt to link within one
hub all of a college student's class registration information, book lists,
extracurricular activities, personal calendar, contact list, e-mail and other
communications. The Company believes that Common Places LLC will generate
revenues from advertisers seeking to target college students and will collect
commissions and other revenues from each click-through and purchase of
textbooks, books, compact discs, movie and rock concert tickets, consumer goods,
travel and other items by students using this website. The Company has not
contributed any capital to this venture, but will provide it with media and
marketing services over the next three years (with access to these services at
favorable rates thereafter) and has contributed two websites to the subsidiary.
On December 28, 1998, the Company called for redemption all of its
outstanding publicly traded warrants at a redemption price of $0.10 per warrant.
These warrants, approximately 2.6 million, were issued in connection with the
Company's initial public offering in April 1996. The warrants permit the holder
to purchase one share of Common Stock at a price of $5.00 per share. The funds
to be received by the Company, assuming the exercise of all outstanding warrants
prior to January 28, 1999, the date of redemption, will be approximately $13.0
million, and will be used by the Company for general corporate purposes, which
could include the early payment of some of the Company's long-term indebtedness.
The Company is not currently engaged in any negotiations relating to future
acquisitions. However, the Company may do so in the future. The Company could
pay for any such future acquisitions with either cash, Common Stock or both. The
number of shares of Common Stock which might be issued in connection with 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.
4
<PAGE>
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 pursue successfully 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 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
September 30, 1998, the Company incurred a net loss of $20,230,000. Since
September 30, 1998, 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, Campus Voice and Beyond the Wall have generated
sufficient revenues to meet their expenses and debt service requirements, but
Pik:Nik has generated operating losses since its acquisition. There can be no
assurance that any of these media and marketing services businesses will remain
or, in the case of Pik:Nik, become profitable. 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 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 in the future.
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
September 30, 1998, the Company had cash, cash equivalents and investments of
approximately $3.4 million. Assuming the exercise of all of the Company's
outstanding publicly traded warrants prior to January 28, 1999, the Company will
receive an additional $13.0 million in cash. 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
<PAGE>
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 (on which the Company only has a
limited presence), 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. In addition, 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 expand successfully 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 promote
successfully its events will be largely dependent on the efforts of such student
organizations.
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 termination of the revised
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 increase substantially its marketing efforts to create awareness of
and demand for the Company's Network by content providers, colleges and
students. The Company's prospects will be significantly affected by its ability
to attract content providers and advertisers to promote their programs and
products using the Network and, at the same time, attract colleges to
participate in the Network. Because content providers 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.
Content providers 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 content providers, 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 has
upgraded its equipment to a fully digital transmission system capable of
delivering high definition video and may be required to adapt its
6
<PAGE>
Network to other technological changes in the industry in the future. There can
be no assurance that the Company will be able to continue to 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, including the
Company, are actively seeking out new ways to target the college and young adult
market, such as via the Internet. The Company currently maintains four websites.
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 effect on its reputation with
advertisers and sponsors and, consequently, on the Company's business.
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
7
<PAGE>
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 an 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.
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.
In addition, some of these independent contractors and some of the
Company's part-time employees who are licensed drivers use their private
automobiles to deliver postcards, posters and other items to college campuses
and other locations. The Company maintains insurance to protect itself against
any losses that may result from automobile accidents involving these
individuals. The Company believes the amount of such insurance is adequate, but
there can be no assurance that it will be sufficient to cover potential claims.
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 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 its own 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
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 and marketing
industries is intense and there can be no assurance that the Company will be
able to hire or retain additional qualified personnel.
8
<PAGE>
The Company has obtained a $2 million key man term life insurance policy
on the life of Mr. Peltz with The Travelers Insurance Company. The Company,
which is the sole beneficiary under this policy, currently pays an annual
premium of approximately $1,800. The Company does not intend to obtain key man
insurance on any other key personnel.
16. Possible Adverse Effect from Future Sales of Restricted Shares. The
Company currently has 12,319,322 shares of Common Stock outstanding, of which
6,927,604 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 5,391,718 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 January 14, 1999. 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 5,364,007 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 currently satisfies such 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 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 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.
9
<PAGE>
SELLING SECURITYHOLDERS AND PLAN OF DISTRIBUTION
An aggregate of 2,947,753 shares of Common Stock may be offered and sold
pursuant to this Prospectus by the Selling Securityholders. None of the Selling
Securityholders other than Freddie Fields, who is a director of the Company, 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:
<TABLE>
<CAPTION>
Beneficial Beneficial
Ownership Ownership
of Common of Common Percentage
Shares Prior Shares Shares Owned
to Sale Offered After Sale After Sale
----------- -------- ---------- ---------
Selling Securityholder
- ---------------------
<S> <C> <C> <C> <C>
Warburg, Pincus Emerging
Growth Fund, Inc. ......................... 1,650,794 1,650,794 0 --
Freddie Fields .............................. 276,280(1) 276,280 0 --
Warburg, Pincus Institutional Fund, Inc. .... 253,968 253,968 0 --
Ravich Revocable Trust of 1989 .............. 252,750(1) 252,750 0 --
TCW Shared Opportunity Fund II, L.P. ........ 112,500(1) 112,500 0 --
Far West Capital Partners LP ................ 111,111 111,111 0 --
Whale Securities Co., L.P. .................. 75,000(1) 75,000 0 --
Larry Miller ................................ 55,600 55,600 0 --
Libra Investments, Inc. ..................... 45,375(1) 45,375 0 --
Shared Opportunity Fund IIB, LLC ............ 37,500(1) 37,500 0 --
Jeff Benjamin ............................... 18,750(1) 18,750 0 --
James B. Upchurch ........................... 18,750(1) 18,750 0 --
Alan Schrager ............................... 6,000(1) 6,000 0 --
Rand Ravich ................................. 5,625(1) 5,625 0 --
Charles Thurnher ............................ 3,750(1) 3,750 0 --
Jean Smith .................................. 3,750(1) 3,750 0 --
Stanley J. Schrager ......................... 3,750(1) 3,750 0 --
Morrish Community Property Trust ............ 3,375(1) 3,375 0 --
Steven F. Mayer ............................. 3,000(1) 3,000 0 --
Forbes W. Burtt ............................. 3,000(1) 3,000 0 --
Jean Smith .................................. 3,000(1) 3,000 0 --
Charles A. Yamarone ......................... 1,500(1) 1,500 0 --
Richard Coppersmith ......................... 1,125(1) 1,125 0 --
Eben Paul Perison ........................... 750(1) 750 0 --
Russell Riopelle ............................ 375(1) 375 0 --
Caroline Sykes .............................. 375(1) 375 0 --
--------- --------- - --
TOTAL 2,947,753 2,947,753
</TABLE>
- --------
(1) Shares issuable upon exercise of warrants.
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 on 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
10
<PAGE>
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.
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 request of the Warburg, Pincus
funds at any time thereafter (so long as the Warburg, Pincus funds own the
shares listed next to their names above) the Company shall use its best efforts
to cause the election to the Company's board of directors of a person nominated
by the Warburg, Pincus funds.
The Company has entered into a lock-up agreement with Freddie Fields under
which Mr. Fields agreed that he will not sell more than one-third of his shares
registered hereby during each of the first two six-month periods following the
effective date of this Registration Statement.
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 consolidated financial statements of Network Event Theater, Inc.
appearing in Network Event Theater, Inc.'s Annual Report (Form 10-KSB) for the
fiscal year ended June 30, 1998 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
11
<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 .............................................................. 5
Use of Proceeds ........................................................... 9
Selling Securityholders and Plan of
Distribution .......................................................... 10
Indemnification of Directors and Officers ................................. 11
Legal Matters ............................................................. 11
Experts ................................................................... 11
================================================================================
================================================================================
Network Event
Theater, Inc.
2,947,753 Shares
Common Stock
----------
PROSPECTUS
----------
, 1999
================================================================================
<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 ..................................... $10,009
Nasdaq listing fee ....................................... 16,000
Printing and engraving expenses .......................... 5,000
Accounting fees and expenses ............................. 7,500
Legal fees and expenses .................................. 12,000
Miscellaneous expenses ................................... 3,500
-------
Total ................................................ $54,009
=======
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.
The Company's Bylaws authorize the Company to indemnify its directors,
officers, incorporators, employees and agents with respect to certain costs,
expenses and amounts incurred in connection with an action, suit or proceeding
by reason of the fact that any such person was serving as a director, officer,
incorporator, employee or agent of the Company. In addition, the Company's
Bylaws permit the Company to provide additional idemnification rights to its
officers and directors and to indemnify them to the fullest extent possible
under the General Corporation Law of the State of Delaware.
Pursuant to Section 145 of the General Corporation Law of the State of
Delaware, the Company maintains a standard form of directors' and officers'
liability insurance policy which provides coverage to the directors and officers
of the Company for certain liabilities, including certain liabilities which may
arise out of this Registration Statement.
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 Certificate of Amendment of Certificate of Incorporation. (1)
4.3 Certificate of Amendment of Certificate of Incorporation, as filed
May 27, 1998 (incorporated by reference to Exhibit 3.3 to the
Company's Form 10-K for the fiscal year ended June 30, 1998).
4.4 Bylaws. (1)
5.1 Opinion of Proskauer Rose LLP with respect to the legality of the
securities being registered. (2)
23.1 Consent of Ernst & Young LLP. (2)
23.3 Consent of Proskauer Rose LLP (included in Exhibit 5.1).
24.1* Power of Attorney.
- ---------
* Previously filed.
(1) Previously filed and incorporated by reference to the Registrant's
Registration Statement on Form S-3 (33-80935).
(2) Filed herewith.
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 February 1, 1999.
NETWORK EVENT THEATER, INC .
By: /s/ HARLAN D. PELTZ
---------------------------------
Harlan D. Peltz
Chief Executive Officer and
Chairman of the Board
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 February 1, 1999
- ------------------------------ and Chairman of the Board
Harlan D. Peltz (Principal Executive Officer)
/s/ DON LEEDS President and Director February 1, 1999
- ------------------------------
Don Leeds
/s/ BRUCE L. RESNIK Executive Vice President February 1, 1999
- ------------------------------ Chief Financial Officer and
Bruce L. Resnik Secretary (Principal Financial
Officer and Principal
Accounting Officer)
* Director February 1, 1999
- ------------------------------
Freddie Fields
/s/ HOWARD KLEIN Director February 1, 1999
- ------------------------------
Howard Klein
* Director February 1, 1999
- ------------------------------
Metin Negrin
* Director February 1, 1999
- ------------------------------
George Lindemann
/s/ Bruce L. Resnik
By:--------------------------- February 1, 1999
Bruce L. Resnik,
Attorney-in-fact
II-4
<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 Certificate of Amendment of Certificate of Incorporation. (1)
4.3 Certificate of Amendment of Certificate of Incorporation, as filed
May 27, 1998 (incorporated by reference to Exhibit 3.3 to the
Company's Form 10-K for the fiscal year ended June 30, 1998).
4.4 Bylaws. (1)
5.1 Opinion of Proskauer Rose LLP with respect to the legality of the
securities being registered. (2)
23.1 Consent of Ernst & Young LLP. (2)
23.3 Consent of Proskauer Rose LLP (included in Exhibit 5.1).
24.1* Power of Attorney.
- ---------------
* Previously filed.
(1) Previously filed and incorporated by reference to the Registrant's
Registration Statement on Form S-3 (33-80935).
(2) Filed herewith.
II-5
EXHIBIT 5.1
PROSKAUER ROSE LLP
1585 Broadway
New York, New York 10036-8299
January 29, 1999
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,
as amended (the "Act"), relating to the registration of 2,947,753 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
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) of Network Event Theater, Inc. for the
registration of 2,947,753 shares of its common stock and to the incorporation by
reference therein of our report dated August 21, 1998, with respect to the
consolidated financial statements of Network Event Theater, Inc. included in its
Annual Report (Form 10-KSB) for the year ended June 30, 1998 filed with the
Securities and Exchange Commission.
Ernst & Young LLP
New York, New York
January 28, 1999
