<PAGE> 1
As filed with the Securities and Exchange Commission on May 7, 1998
File No. 333-48865
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
----------------
JAKKS PACIFIC, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4527222
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
22761 PACIFIC COAST HIGHWAY, MALIBU, CALIFORNIA 90265 (310) 456-7799
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
JACK FRIEDMAN, CHAIRMAN
JAKKS PACIFIC, INC.
22761 PACIFIC COAST HIGHWAY, MALIBU,
CALIFORNIA 90265 (310) 456-7799
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
----------------
Copies to:
MURRAY L. SKALA, ESQ.
FEDER, KASZOVITZ, ISAACSON, WEBER, SKALA & BASS LLP
750 LEXINGTON AVENUE, NEW YORK, NEW YORK 10022-1200
(212) 888-8200 FAX: (212) 888-7776
----------------
Approximate date of commencement of proposed sale to the public: Not Applicable
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to Offering Price Per Aggregate Amount of
Securities to be Registered be Registered Unit(1) Offering Price(1) Registration Fee
- --------------------------- ------------- ------------------ ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.001 per share............. 2,293,476 Shares $7.875 $18,061,123.50 $5,328.00(2)
618,658 Shares $9.875 $ 6,109,247.75 $1,802.23
Total................................... 2,293,476 Shares $24,170,371.25 $7,130.23(3)
</TABLE>
- ----------
(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457.
(2) Previously paid.
(3) Of which $1,802.23 is being paid concurrently herewith.
================================================================================
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
(Front page of registration statement continued)
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED MAY 7, 1998
PROSPECTUS
2,912,134 SHARES
[JAKKS PACIFIC LOGO]
COMMON STOCK
This Prospectus relates to 2,912,134 shares (the "Shares") of common stock,
par value $.001 per share (the "Common Stock"), of JAKKS Pacific, Inc., a
Delaware corporation (the "Company"), currently outstanding or issuable upon the
conversion of certain outstanding convertible securities of the Company or the
exercise of certain warrants or options of the Company. The Shares may be sold
from time to time by the holders thereof in the open market or in negotiated
transactions. No Shares will be sold by or for the account of the Company and
the Company will not receive any proceeds from the sale of the Shares. The
Company will bear all costs associated with the offering and sale of the Shares,
other than any underwriting discounts, agency fees, brokerage commissions or
similar costs applicable to the sale of any Shares, which costs will be borne by
the holders of such Shares sold hereunder. The Common Stock of the Company is
traded on the Nasdaq National Market under the symbol "JAKK." On May 6, 1998,
the last reported sale price of the Common Stock was $9 7/8.
---------------
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED IN CONNECTION WITH THE PURCHASE OF ANY COMMON STOCK OFFERED
HEREBY.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1998
<PAGE> 4
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING STABILIZING BIDS AND PURCHASES, SYNDICATE SHORT COVERING TRANSACTIONS
AND PENALTY BIDS.
IN CONNECTION WITH THIS OFFERING, CERTAIN SELLING STOCKHOLDERS MAY ENGAGE
IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON NASDAQ IN
ACCORDANCE WITH RULE 103 OF REGULATION M. SEE "SELLING STOCKHOLDERS."
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, included
elsewhere in this Prospectus. Each prospective purchaser is urged to read this
Prospectus in its entirety. Unless the context otherwise requires, as used in
this Prospectus, "JAKKS" or the "Company" refers to JAKKS Pacific, Inc. and its
subsidiaries.
THE COMPANY
JAKKS develops, manufactures and markets toys and related products. The
Company's current principal product categories are (i) action figures featuring
licensed characters, including characters from the World Wrestling Federation
("WWF"), (ii) Road Champs and Remco die cast collectible and toy vehicles, (iii)
Child Guidance pre-school toys, (iv) fashion dolls and accessories, (v)
electronic toys, and (vi) radio-controlled toy vehicles.
The Company was incorporated under the laws of Delaware in January 1995.
The Company's executive offices are located at 22761 Pacific Coast Highway,
Malibu, California 90265 and its telephone number is (310) 456-7799.
THE OFFERING
The Shares are being offered by the holders of 939,998 outstanding Shares
that were issued upon conversion of all of the outstanding shares of the
Company's 4% Redeemable Convertible Preferred Stock, par value $.001 per share
(the "4% Preferred Stock"), and by the respective holders of the Company's 9%
Convertible Debentures, in the aggregate outstanding principal amount of
$6,000,000 (the "Debentures"), 1,000 shares of the Company's Series A Cumulative
Convertible Preferred Stock, par value $.001 per share (the "Series A Preferred
Stock"), and certain outstanding warrants and options, which Debentures, Series
A Preferred Stock, warrants and options are convertible into or exercisable for
an aggregate of 1,972,136 Shares. None of such Debentures, Series A Preferred
Stock, warrants or options are offered hereby; only Shares issuable upon the
conversion or exercise thereof, as the case may be, may be offered or sold
hereunder. See "Selling Stockholders" and "Plan of Distribution."
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<PAGE> 5
<TABLE>
<S> <C>
Common Stock outstanding
before this offering....................................... 5,882,092 shares(1)
Common Stock offered
by the Selling Stockholders................................ 2,912,134 shares
Common Stock to be outstanding
after this offering ....................................... 7,854,228 shares(2)
</TABLE>
- ----------
(1) Includes 939,998 Shares.
(2) Assumes the sale of all Shares offered hereby.
Unless otherwise indicated, all share and per share data and information
contained in this Prospectus relating to or based upon the number of shares of
Common Stock outstanding give effect to the conversion of all the outstanding
shares of 4% Preferred Stock into 939,998 shares of Common Stock, but do not
include: (i) 993,875 shares issuable upon the exercise of outstanding options,
of which 10,000 shares are offered hereby; (ii) 360,000 shares issuable upon the
exercise of outstanding warrants, all of which shares are offered hereby; (iii)
558,658 shares issuable upon the conversion of the Series A Preferred Stock, all
of which shares are offered hereby; and (iv) 1,043,478 shares issuable upon the
conversion of the Debentures, all of which shares are offered hereby.
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<PAGE> 6
DISCLOSURE REGARDING FORWARD LOOKING-STATEMENTS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All statements, other than statements of historical fact,
included in this Prospectus regarding the Company's financial position, business
strategy and other plans and objectives for future operations, and future
product demand, supply, manufacturing, costs, marketing, transportation and
pricing factors are forward-looking statements. The Company believes that the
assumptions and expectations reflected in such forward-looking statements are
reasonable, based on information available to the Company on the date hereof,
but there can be no assurance that such expectations will prove to have been
correct or that the Company will take any actions that may presently be planned.
Certain important factors that could cause actual results to differ materially
from the Company's expectations are disclosed under "Risk Factors" and elsewhere
in this Prospectus. All written or oral forward-looking statements attributable
to the Company or persons acting on its behalf are expressly qualified in their
entirety by such factors.
RISK FACTORS
The factors set forth below should be considered carefully in evaluating an
investment in the shares of Common Stock offered by this Prospectus. An
investment in the Common Stock involves a high degree of risk.
LIMITED NUMBER OF PRODUCT LINES
The Company derives a substantial portion of its revenue from a limited
number of product lines. Sales of the WWF and Road Champs product lines
represented 78% and 76% of the Company's revenue in 1996 and 1997, respectively,
on a pro forma basis. Although the demand for the WWF and Road Champs product
lines has remained strong to date, there can be no assurance that any of the
products in these lines will retain their current popularity. A decrease in the
popularity of the products in either the WWF or Road Champs product lines, or in
the Company's product lines as a whole, could have a material adverse effect on
the Company's business, financial condition and results of operation.
RISKS ASSOCIATED WITH LICENSE AGREEMENTS
Sales of licensed products accounted for 67% and 82% of the Company's net
sales during 1996 and 1997, respectively, on a pro forma basis. Product licenses
confer rights to exploit original characters, designs, concepts and inventions
developed by toy inventors and designers. The Company's license agreements
generally require minimum guarantees, obligating the Company to make specified
royalty payments regardless of sales. If the Company fails to sell
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<PAGE> 7
a sufficient quantity of products under its licenses, the Company might be
unable to retain such licenses, which could have a material adverse effect on
the Company's business, financial condition and results of operations. In 1998,
the minimum guaranteed royalty payments under the Company's existing licenses
are expected to be approximately $1,182,000. The royalty expenses paid under
character and product licenses totaled approximately $762,000 and $2,848,000 for
1996 and 1997, respectively. In addition, certain of the licensors under the
Company's license agreements have the right to review and approve the Company's
use of licensed products or materials, which could prohibit or impede the
Company's development or sale of new products.
The Company's success will depend on its ability to obtain additional
licenses. Competition for desirable licenses is intense. There can be no
assurance that the Company will be able to secure or renew significant licenses
on terms acceptable to the Company, if at all. In addition, as the Company
continues to pursue additional licenses, the Company expects greater pressure to
be placed on its liquidity needs to fund additional royalty advances and
guarantees of royalty payments.
The Company derived a substantial portion of its revenues in 1996 and 1997,
respectively, from sales of products under the WWF license. Accordingly, the
termination of the WWF license could have a material adverse effect on the
Company's business, financial condition and results of operations.
CONSUMER PREFERENCES AND NEW PRODUCT INTRODUCTION
Consumer preferences in the toy industry are continuously changing and
difficult to predict. Products often have short life cycles. In addition,
relatively few new products achieve market acceptance. There can be no assurance
that: (i) new products or product lines introduced by the Company will achieve
any significant degree of market acceptance; (ii) acceptance, if achieved, will
be sustained for any significant amount of time; or (iii) the life cycles of
products developed and marketed by the Company will be sufficient to permit the
Company to recover licensing, manufacturing, marketing and other costs
associated therewith. The Company's success will depend on its ability to
enhance existing product lines and to develop new products and product lines.
Failure of new product lines to achieve or sustain market acceptance could have
a material adverse effect on the Company's business, financial condition and
results of operations. In addition, the success of many of the Company's
character-related products depends on the popularity of characters generated by
movies, television programs and other media. There can be no assurance that
media related to the Company's existing character-related product lines will
continue to be produced as scheduled, that such media will be successful, or
that such success will result in substantial promotional value to the Company's
products. Further, there can be no assurance that the Company will be successful
in obtaining licenses to produce new character-related products in the future.
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<PAGE> 8
COMPETITION
The toy industry is highly competitive. Many of the Company's competitors
are able to price their products more competitively than the Company's products
due to: (i) greater financial resources; (ii) longer operating histories; (iii)
stronger name recognition; (iv) larger sales and marketing and product
development departments; and (v) greater economies of scale. In addition, the
toy industry has nominal barriers to entry. Competition is based primarily on
the ability to design and develop new toys, procure licenses for popular
characters and trademarks, and successfully market products. Many of the
Company's competitors offer similar products or alternatives to the Company's
products. Licenses that overlap the Company's licenses with respect to products,
geographic areas and markets have been and will continue to be granted to
competitors of the Company. There can be no assurance that shelf space in retail
stores will be available to support the Company's existing products or the
expansion of the Company's products and product lines or that the Company will
be able to continue to compete effectively against current and future
competitors.
RISKS ASSOCIATED WITH RAPID GROWTH
The Company experienced significant growth in net sales and net income in
1996 and 1997. As a result, period-to-period comparisons of operating results
may not be meaningful and results of operations from prior periods may not be
indicative of future results. There can be no assurance that the Company will
continue to experience growth in, or maintain its present level of, net sales or
net income. The Company's growth strategy calls for continued development and
diversification of the Company's toy business, including the acquisition of
additional license agreements and further expansion into international markets,
which will place further demands on its management, operational capacity and
financial resources and systems. The increased demand on management may
necessitate the recruitment and retention of additional qualified management
personnel. There can be no assurance that the Company will be able to recruit
and retain qualified personnel or expand and manage its operations effectively
and profitably. The failure to manage growth effectively could have a material
adverse effect on the Company's business, results of operations and financial
condition. In addition, implementation of the Company's growth strategy is
subject to risks beyond the Company's control, including competition, lack of
market acceptance of new products, changes in economic conditions, the inability
to obtain or renew licenses on commercially reasonable terms, and the inability
to finance increased levels of accounts receivable and inventory necessary to
support sales growth, if any. There can be no assurance that the Company's
growth strategy will be implemented successfully.
RISKS ASSOCIATED WITH ACQUISITIONS
In February 1997, the Company acquired Road Champs and in October 1997, the
Company acquired the Child Guidance and Remco trademarks and certain related
trademarks, trade rights and intellectual property (collectively, the
"Intellectual Property Marks"). The acquisition of Road Champs and the
Intellectual Property Marks involves numerous risks,
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<PAGE> 9
including difficulties in the integration and assimilation of distinct product
lines, administrative and sales staff and methods of operation. Such integration
and assimilation has required, and will continue to require, considerable
management time and effort and could result in diversion of management attention
from operation of the business. There can be no assurance that the Company will
be able to integrate successfully the Road Champs operations or the Intellectual
Property Marks.
The Company's growth strategy depends upon a program of continuing
acquisitions of license agreements and other companies. The success of future
acquisitions will depend upon the ability of the Company's management to assess
characteristics of potential target companies, such as financial condition,
attractiveness of products, suitability of distribution channels, management
ability and the degree to which operations can be integrated with those of the
Company. There can be no assurance that the Company will be able to identify
attractive acquisition candidates or to negotiate acquisition terms acceptable
to the Company, and the failure to do so could have a material adverse effect on
the Company's results of operations or its ability to sustain growth. The
Company's acquisition strategy involves a number of risks, each of which could
affect adversely the Company's operating results, including the
diversion of management attention from operation of the business, loss of key
personnel from acquired companies and the failure of an acquired business to
achieve targeted financial results.
CONCENTRATION OF SALES
Sales of the Company's products to its five largest customers accounted
for, in the aggregate, approximately 61.7% of the Company's revenue for 1997
and 1996. The Company does not have written contracts with or commitments from
any of its customers. A substantial reduction in or termination of orders from
any of its largest customers could have a material adverse effect on the
Company's business, financial condition and results of operations. In addition,
pressure by large customers to provide financial incentives to customers,
reduce prices, bear the risks and the cost of carrying inventory, or change
the terms of sale also could have a material adverse effect on the Company's
business, financial condition and results of operations.
DEPENDENCE ON KEY PERSONNEL
The Company's success is largely dependent upon the experience and
continued services of Jack Friedman, its President, and Stephen Berman, its
Executive Vice President and Chief Operating Officer. There can be no assurance
that the Company would be able to find an appropriate replacement for Mr.
Friedman or Mr. Berman if the need should arise, and any loss or interruption of
Mr. Friedman's or Mr. Berman's services could have a material adverse effect on
the Company's business, financial condition and results of operations. In
addition, the holders of the Debentures have the option to require the Company
to redeem all or part of the Debentures in the event of Mr. Friedman's death. In
the event that the holders of the
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Debentures elect to exercise their option, the Company's financial condition
could be materially and adversely affected. The Company maintains key-man life
insurance on Mr. Friedman in the amount of $8,000,000.
RISKS OF CONDUCTING BUSINESS IN CHINA
Substantially all of the Company's products are produced by nonaffiliated
manufacturers located in the People's Republic of China ("China"). As a result,
the Company's operations may be affected by: (i) economic, political,
governmental and labor conditions in China; (ii) China's relationship with the
United States; or (iii) fluctuations in the exchange rate of the dollar against
foreign currency. Furthermore, China currently enjoys "Most Favored Nation"
("MFN") status under United States tariff laws, and products imported from China
are subject to customary import duties. China's MFN status is reviewed annually
by Congress, and the renewal of such status is subject to significant political
uncertainties. The loss of China's MFN status would result in a substantial
increase in the duty on products imported into the United States from China.
China also may be subject to retaliatory trade restrictions imposed by the
United States under various provisions of the Trade Act of 1974. In the past,
the United States has threatened the imposition of punitive 100% tariffs on
selected goods and withdrawn such threat very shortly before sanctions were to
take effect. The imposition by the United States of trade sanctions, and
subsequent actions by China, could result in manufacturing and distribution
disruptions or higher costs to the Company which, in turn, could have a material
adverse effect on the Company's business, financial condition and results of
operations.
The Company maintains an office in Hong Kong to supervise and monitor
manufacturing and production in China. On July 1, 1997, sovereignty over Hong
Kong was transferred from the United Kingdom to China. If Hong Kong's business
climate were to change adversely as a result of the transfer of sovereignty, the
Company's business, financial condition and results of operations could be
materially and adversely affected.
SEASONALITY AND QUARTERLY FLUCTUATIONS
Sales of toys are highly seasonal, with a majority of retail sales
occurring between September and December. As a result, approximately 68% of the
Company's 1997 shipments occurred in the third and fourth quarters. This
seasonality causes the Company's quarterly operating results to fluctuate and
creates an uneven need for working capital. In addition, new product
introductions, advertising by the Company and its competitors and other factors
contribute to the fluctuations of the Company's operating results.
GOVERNMENT REGULATION
The Company's operations are subject to various laws, including the Federal
Hazardous Substances Act, the Consumer Product Safety Act, the Flammable Fabrics
Act and the rules and regulations promulgated thereunder. Such laws are
administered by the Consumer Product Safety Commission, which has the authority
to exclude from the market products that are found
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to be hazardous and can require a manufacturer to repurchase such products under
certain circumstances. There can be no assurance that defects in the Company's
products will not be alleged or found. Any such allegations or findings could
result in product liability claims, loss of revenue, diversion of resources,
damage to the Company's reputation, or increased warranty costs, any of which
could have a material adverse effect on the Company's business, financial
condition and results of operations.
PROPRIETARY RIGHTS
The Company relies on copyright and trade secret protection, nondisclosure
agreements and licensing arrangements to establish, protect and enforce its
proprietary rights in its products. The laws of certain foreign countries may
not protect intellectual property rights to the same extent or in the same
manner as the laws of the United States. There can be no assurance that the
Company or its licensors will be successful in safeguarding and maintaining the
Company's proprietary rights. Further, there can be no assurance that third
parties will not assert intellectual property claims against the Company in the
future. Such claims could divert management attention from operation of the
business, could result in unanticipated legal and other costs and, if proven,
could have a material adverse effect on the Company's business, financial
condition and results of operations.
POSSIBLE VOLATILITY OF MARKET PRICE OF COMMON STOCK
Market prices of the securities of toy companies are often volatile. Many
factors may have an impact on the market price of the Company's securities,
including: (i) fluctuations in the Company's financial results; (ii) the actions
of the Company's customers and competitors (including new product line
announcements and introductions); (iii) new regulations affecting foreign
manufacturing; (iv) other factors affecting the toy industry in general; and (v)
sales of the Common Stock into the public market. In addition, the stock market
periodically has experienced significant price and volume fluctuations which may
have been unrelated to the operating performance of particular companies.
SHARES ELIGIBLE FOR FUTURE SALE
Immediately prior to the commencement of this offering, there were
5,882,092 shares of Common Stock outstanding. An additional 1,972,136 shares of
Common Stock are Shares issuable upon the conversion of the Debentures and the
Series A Preferred Stock and the exercise of certain warrants and options, and
if all such Shares are issued and outstanding, the Company will have 7,854,228
shares of Common Stock outstanding. Other than the Shares, there are 983,875
shares of Common Stock issuable upon the exercise of outstanding warrants and
options, of which 703,791 are currently exercisable. Sales of substantial
amounts of shares of Common Stock in the public market after the Offering, or
the perception that such sales could occur, may adversely affect the market
price of the Common Stock.
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CONTINUING CONTROL BY MANAGEMENT
The Company's directors and executive officers currently beneficially own,
in the aggregate, 1,549,235 shares of Common Stock, representing approximately
25.8% of the Common Stock currently outstanding and approximately 19.4% of the
Common Stock outstanding after this offering, assuming that all the Shares are
sold. Accordingly, such persons, acting together, will have significant control
over matters requiring approval of the stockholders of the Company, including
the election of the Board.
ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER PROVISIONS
The Board of Directors of the Company is empowered to issue preferred stock
in one or more series without stockholder action, which could render more
difficult or discourage an attempt to obtain control of the Company by means of
a tender offer, business combination, proxy contest or otherwise. In addition,
certain provisions of the Delaware General Corporation Law also may discourage
takeover attempts that have not been approved by the Board of Directors.
USE OF PROCEEDS
None of the Shares are to be sold by or for the account of the Company, and
the Company will not receive any proceeds from the sale thereof. 150,000 Shares
are issuable upon the exercise of certain outstanding warrants at an exercise
price of $9.375 per share; 150,000 Shares are issuable upon the exercise of
certain outstanding warrants at an exercise price of $7.50 per share; 60,000
Shares are issuable upon the exercise of certain outstanding warrants at an
exercise price of $7.475 per share; and 10,000 Shares are issuable upon the
exercise of certain options at an exercise price of $6.875 per share. In
addition, 558,658 Shares are issuable upon the conversion of the outstanding
shares of Series A Preferred Stock at a conversion price of $8.95 per share, and
1,043,478 Shares are issuable upon the conversion of the Debentures at a
conversion price of $5.75 per share. Only outstanding Shares issued upon the
exercise of such warrants and/or options or upon the conversion of the
Debentures may be offered or sold hereunder. Accordingly, assuming that all of
such warrants and options are exercised at the currently applicable exercise
prices, the Company would receive proceeds of $3,048,500 from the issuance and
sale of such Shares to the holders of such warrants and options. The net
proceeds of the sale of such Shares, if any of such warrants or options are
exercised, are expected to be used for general working capital or to fund
acquisitions. And, assuming that all of the outstanding Debentures are converted
at the currently applicable conversion price, the Company would have eliminated
$6,000,000 of outstanding indebtedness (representing the principal amount of
such Debentures). The Debentures currently bear interest at the rate of 9% per
annum on the aggregate outstanding principal amount thereof and are due and
payable in monthly installments, each in an amount equal to 1% of the then
remaining principal balance of the Debentures, beginning in December 1999 until
payment in full on December 31, 2003.
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SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of Common Stock by the Selling Stockholders.
<TABLE>
<CAPTION>
Prior to the Offering
Name and Address of --------------------- Number of Shares
Selling Stockholder Number of Shares Percentage Offered Hereby
- --------------------- ---------------- ---------- ----------------
<S> <C> <C> <C>
Renaissance Capital Growth
& Income Fund III, Inc.(1)
8080 North Central Expressway
Dallas, TX 75206 859,934(2) 12.8 859,934
Renaissance US Growth &
Income Trust PLC(1)
8080 North Central Expressway
Dallas, TX 75206 521,739(3) 8.15 521,739
Joseph Charles & Associates, Inc.
9701 Wilshire Boulevard
Beverly Hills, CA 90212 320,000(4) 5.16 270,000
EFO Fund, Ltd.
2626 Cole Avenue, Suite 700
Dallas, TX 75204 250,200 4.25 240,000
CRM Partners, L.P.(5)
707 Westchester Avenue
White Plains, NY 10604 240,000 4.08 240,000
ProFutures Bridge Capital
Fund, L.P.
5350 South Roslyn Street
Englewood, CO 80111 227,613(6) 3.73 223,463
CRM Retirement Partners, L.P.(5)
707 Westchester Avenue
White Plains, NY 10604 166,666 2.83 166,666
Benchmark Partners L.P.
750 Lexington Avenue
New York, NY 10022 170,000 2.89 150,000
Cruttenden Roth Incorporated
18301 Von Karman
Irvine, Ca 92715 98,700(7) 1.66 60,000
Watson Investment Partners, L.P.
237 Park Avenue, Suite 800
New York, NY 10017 50,000 * 50,000
</TABLE>
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<TABLE>
<CAPTION>
Prior to the Offering
Name and Address of --------------------------------- Number of Shares
Selling Stockholder Number of Shares Percentage Offered Hereby
- --------------------- ---------------- ---------- ----------------
<S> <C> <C> <C>
CRM 1997 Enterprise
Fund LLC(5)
707 Westchester Avenue
White Plains, NY 10604 40,000 * 40,000
CRM US Value Fund Ltd.(5)
707 Westchester Avenue
White Plains, NY 10604 20,000 * 20,000
CRM Madison Partners, L.P.(5)
707 Westchester Avenue
White Plains, NY 10604 20,000 * 20,000
Silverman Heller Associates
1100 Glendon Avenue, Suite 1801
Los Angeles, CA 90024 12,000 (8) * 10,000
Cramer Rosenthal
McGlynn, Inc.(5)
707 Westchester Avenue
White Plains, NY 10604 6,666 * 6,666
Star Creations, Ltd.(5)
c/o Larami Ltd.
303 Fellowship Road
Mt. Laurel, NJ 08054 6,666 * 6,666
Steven R. Hinkle
6500 East Berry Avenue
Englewood, CO 80111 6,539 (9) * 6,539
Joseph Lavigne
10493 South Grizzly Gulch
Highlands Ranch, CO 80126 2,949 (9) * 2,949
Ralph Olson
6500 East Ida Circle
Englewood, CO 80111 2,949 (9) * 2,949
Jacob Kuijper
77 Fairway Lane
Littleton, CO 80123 2,257 (9) * 2,257
Richard Lawrence
3000 South Cornell Circle
Englewood, CO 80110 2,142 (9) * 2,142
Terri E. Lowe
8828 Cactus Flower Way
Highlands Ranch, CO 80126 1,909 (9) * 1,909
Clarence L. Bixler, Jr.
8187 East Hunters Hill Drive
Englewood, CO 80112 1,654 (9) * 1,654
David Drennen
5350 South Geneva Street
Englewood, CO 80111 1,500 (9) * 1,500
Edward Larkin
54 Deerwood
Littleton, CO 80127 1,500 (9) * 1,500
Kelly McCarthy
50 Golden Eagle Court
Greenwood Village, CO 80121 1,120 (9) * 1,120
Russell Bean
6276 Collegiate Drive
Highlands Ranch, CO 80126 1,082 (9) * 1,082
Gregory B. Norton
19137 Cloister Lake Lane
Boca Raton, FL 33498 945 (9) * 945
Cheryl Bostater
12127 East Hawaii Drive
Aurora, CO 80012 900 (9) * 900
John Michael McNutt
869 South High Street
Denver, CO 80209 900 (9) * 900
David Lavigne
1946 Mountain Maple
Highlands Ranch, CO 80126 535 (9) * 535
Harold Golz
3804 South Poplar Street
Denver, CO 80237 473 (9) * 473
Rike Wootten
1865 East Cedar Avenue
Denver, CO 80209 300 (9) * 300
Kathleen N. Galvin
7925 West Layton Avenue #308
Littleton, CO 80123 189 (9) * 189
Gary Gossett
3313 East 12th
Spokane, WA 99201 157 (9) * 157
</TABLE>
- ----------
(1) Affiliates under common control.
(2) Includes 521,739 Shares issuable upon conversion of $3,000,000 principal
amount of Debentures and 335,195 Shares issuable upon conversion of 600
shares of Series A Preferred Stock.
(3) Represents Shares issuable upon conversion of $3,000,000 principal amount
of Debentures.
(4) Includes 270,000 Shares issuable upon exercise of warrants and 50,000
shares issuable upon exercise of options.
(5) Affiliates under common control.
(6) Includes 223,463 Shares issuable upon conversion of 400 shares of Series A
Preferred Stock and 4,150 shares owned by affiliates.
(7) Includes 60,000 Shares issuable upon exercise of warrants.
(8) Includes 10,000 Shares issuable upon exercise of options and 2,000 shares
owned by its sole proprietor.
(9) Represents Shares issuable upon exercise of warrants.
* Less than one percent (1%).
12
<PAGE> 15
The Company has engaged Joseph Charles & Associates, Inc. to perform
financial advisory and consulting services under an agreement terminating on
August 28, 2000. Joseph Charles & Associates, Inc. is a market maker in the
Common Stock on the Nasdaq National Market.
The Company has engaged Silverman Heller Associates to serve as a
consultant with respect to investor relations and the financial media under an
agreement terminable on 30 days notice.
CERTAIN INDEMNIFICATION PROVISIONS
The Selling Stockholders have agreed to indemnify the Company and its
directors and officers with respect to certain liabilities under the Securities
Act. In addition, the Company's Certificate of Incorporation provides that the
personal liability of the directors of the Company shall be limited to the
fullest extent permitted by the provisions of Section 102(b)(7) of the General
Corporation Law of the State of Delaware ("DGCL"), so that no director shall be
liable personally to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for (i) any breach of the
director's duty of loyalty to the Company or its stockholders; (ii) acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law; (iii) acts or omissions in respect of certain unlawful
dividend payments or stock redemptions or repurchases; or (iv) any transaction
from which such director derives an improper personal benefit. These limitations
do not affect the ability of the Company or its stockholders to seek nonmonetary
remedies, such as an injunction or rescission, against a director for breach of
his or her fiduciary duty.
The Company's Certificate of Incorporation also provides that the Company
shall, to the fullest extent permitted by Section 145 of the DGCL, indemnify all
persons whom it may indemnify pursuant to Section 145 of the DGCL. In general,
Section 145 of the DGCL permits the Company to indemnify a director, officer,
employee or agent of the Company or, when so serving at the Company's request,
another company who was or is a party or is threatened to be made a party to any
proceeding because of his or her position, if he or she acted in good faith and
in a manner reasonably believed to be in or not opposed to the best interests of
the Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
The Company maintains a directors' and officers' liability insurance policy
covering certain liabilities that may be incurred by any director or officer in
connection with the performance of his or her duties and certain liabilities
that may be incurred by the Company, including the indemnification payable to
any director or officer. This policy provides for $1 million in maximum
aggregate coverage, including defense costs. The entire premium for such
insurance is paid by the Company.
13
<PAGE> 16
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, or persons controlling the Company
pursuant to the foregoing provisions, or otherwise, the Company has been
informed that in the opinion of the Securities and Exchange Commission (the
"Commission"), such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
PLAN OF DISTRIBUTION
The Shares are being offered by the holders of 939,998 outstanding Shares
that were issued upon conversion of all of the outstanding shares of the 4%
Preferred Stock, and by the respective holders of the Debentures, the Series A
Preferred Stock and certain outstanding warrants and options, which Debentures,
Series A Preferred Stock, warrants and options are convertible into or
exercisable for an aggregate of 1,972,136 Shares. None of such Debentures,
Series A Preferred Stock, warrants or options are offered hereby; only Shares
issuable upon the conversion or exercise thereof, as the case may be, may be
offered or sold hereunder. See "Selling Stockholders." No Shares are being
offered or sold by or for the account of the Company and the Company will not
receive any proceeds from the sale of the Shares. The Company will bear all
costs associated with the offering and sale of the Shares, other than any
underwriting discounts, agency fees, brokerage commissions or similar costs
applicable to the sale of any Shares, which costs will be borne by the holders
of such Shares sold hereunder.
The Shares may be offered and sold from time to time to purchasers directly
by the holders thereof or through underwriters, dealers or agents who may
receive underwriting discounts, commissions or concessions from the selling
holder. Any underwriters, dealers or agents who participate in the distribution
of such Shares may be deemed to be "underwriters" under the Securities Act, and
any discounts, commissions or concessions received by them may be deemed to be
underwriting compensation under the Securities Act.
At the time a particular offering of the Shares is made, if required, a
Prospectus Supplement will be distributed that will set forth the number of
Shares being so offered and the terms of the offering, including the name or
names of any underwriters, dealers or agents, the purchase price paid by any
underwriter for securities purchased, any discounts, commissions and other
compensation and any discounts, commissions or concessions allowed or reallowed
or paid to dealers, and the proposed selling price to the public. The Shares may
be sold from time to time in one or more transactions at a fixed offering price,
which may be changed, or at varying prices determined at the time of sale or at
negotiated prices. Such prices will be determined by the holders or by agreement
among the holders or by agreement among the holders and underwriters, dealers or
agents.
14
<PAGE> 17
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated by reference in this Prospectus:
(a) The Company's Annual Report on Form 10-KSB for the year ended December
31, 1997.
(b) The Company's Current Report on Form 8-K filed with the Commission
on April 7, 1998.
(c) The description of the Common Stock set forth in the Company's
Registration Statement on Form 8-A filed March 29, 1996, including any amendment
or report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of this
offering, shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
LEGAL MATTERS
The legality of the Shares offered hereby has been passed upon for the
Company by Feder, Kaszovitz, Isaacson, Weber, Skala & Bass LLP, New York, New
York. Murray L. Skala, a partner of such firm, is a director of the Company and
holds 173,996 shares of Common Stock (of which 147,872 shares are held as the
trustee of certain trusts) and currently exercisable options to purchase 40,450
shares of Common Stock.
15
<PAGE> 18
EXPERTS
The consolidated financial statements of the Company as of December 31,
1997 and 1996 and for the years then ended incorporated by reference in this
Prospectus have been audited by Pannell Kerr Forster, Certified Public
Accountants, A Professional Corporation, Los Angeles, California, independent
auditors, as stated in their report incorporated herein and are included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
ADDITIONAL INFORMATION
The Company is subject to the reporting requirements of the Exchange Act
and in accordance therewith files reports, proxy statements and other
information with the Commission. Reports and other information filed by the
Company may be inspected and copied at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at
the Commission's Regional Offices at 7 World Trade Center, 13th Floor, New York,
New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials can be obtained from the Public Reference Section of
the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, the Commission maintains a web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding issuers that file electronically with the
Commission. The Common Stock is listed on the Nasdaq National Market and
reports and information concerning the Company can also be inspected at Nasdaq.
The Company will provide without charge to each person who receives this
Prospectus, upon written or oral request of such person, a copy of any of the
information that is incorporated by reference in this Prospectus (not including
exhibits to the information that is incorporated by reference unless the
exhibits are themselves specifically incorporated by reference). Such requests
should be directed by mail to Joel M. Bennett, Chief Financial Officer, JAKKS
Pacific, Inc., 22761 Pacific Coast Highway, Suite 226, Malibu, California 90265
or by telephone at (310) 456-7799.
The Company has filed with the Commission a Registration Statement on Form
S-3, including all schedules and exhibits thereto, under the Securities Act with
respect to the Common Stock offered by this Prospectus. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and this
16
<PAGE> 19
offering, reference is made to such Registration Statement, including the
exhibits filed therewith, which may be inspected without charge at the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of the Registration Statement may be obtained from the Commission at its
principal office upon payment of prescribed fees. Statements contained in this
Prospectus as to the contents of any contract or other document are not
necessarily complete and, where the contract or other document has been filed as
an exhibit to the Registration Statement, each such statement is qualified in
all respects by reference to the contract or other document so filed with the
Commission.
17
<PAGE> 20
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company or the Selling
Stockholders. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the Common Stock offered
by this Prospectus, or an offer to sell or a solicitation of an offer to buy any
security by any person in any jurisdiction in which such an offer or
solicitation would be unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, imply that the information
in this Prospectus is correct as of any time subsequent to the date of this
Prospectus.
-----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary................................................. 2
Disclosure Regarding Forward- Looking Statements................... 4
Risk Factors....................................................... 4
Use of Proceeds ................................................... 10
Selling Stockholders............................................... 11
Certain Indemnification Provisions ................................ 13
Plan of Distribution............................................... 14
Incorporation of Certain Information by Reference.................. 15
Legal Matters...................................................... 15
Experts ........................................................... 16
Additional Information............................................. 16
</TABLE>
================================================================================
2,912,134
JAKKS PACIFIC, INC.
COMMON STOCK
----------
PROSPECTUS
----------
________, 1998
================================================================================
<PAGE> 21
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all estimated costs and expenses in
connection with the issuance and distribution of the securities being
registered, other than underwriting discounts. All such expenses will be paid by
the Company; none will be paid by the selling stockholders.
<TABLE>
<S> <C>
SEC Registration fee................................................ $ 7,130
*Blue sky fees and expenses (including legal fees)................... 0
Nasdaq National Market listing fee ................................. 17,500
*Printing and engraving expenses..................................... 5,000
*Legal fees and expenses............................................. 20,000
*Accounting fees and expenses........................................ 0
*Miscellaneous....................................................... 370
-------
*TOTAL..................................................... $50,000
</TABLE>
- ----------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation provides that the personal
liability of the directors of the Company shall be limited to the fullest extent
permitted by the provisions of Section 102(b)(7) of the General Corporation Law
of the State of Delaware ("DGCL"). Section 102(b)(7) of the DGCL generally
provides that no director shall be liable personally to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided that the Certificate of Incorporation does not eliminate the liability
of a director for (i) any breach of the director's duty of loyalty to the
Registrant or its stockholders; (ii) acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law; (iii) acts or
omissions in respect of certain unlawful dividend payments or stock redemptions
or repurchases; or (iv) any transaction from which such director derives an
improper personal benefit. The effect of this provision is to eliminate the
rights of the Registrant and its stockholders to recover monetary damages
against a director for breach of her or his fiduciary duty of care as a director
(including breaches resulting from negligent or grossly negligent behavior)
except in the situations described in clauses (i)
II-1
<PAGE> 22
through (iv) above. The limitations summarized above, however, do not affect the
ability of the Registrant or its stockholders to seek nonmonetary remedies, such
as an injunction or rescission, against a director for breach of her or his
fiduciary duty.
In addition, the Certificate of Incorporation provides that the Registrant
shall, to the fullest extent permitted by Section 145 of the DGCL, indemnify all
persons whom it may indemnify pursuant to Section 145 of the DGCL. In general,
Section 145 of the DGCL permits the Registrant to indemnify a director, officer,
employee or agent of the Registrant or, when so serving at the Registrant's
request, another company who was or is a party or is threatened to be made a
party to any proceeding because of his or her position, if he or she acted in
good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the Registrant and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The Registrant maintains a directors' and officers' liability insurance
policy covering certain liabilities that may be incurred by any director or
officer in connection with the performance of his or her duties and certain
liabilities that may be incurred by the Registrant, including the
indemnification payable to any director or officer. This policy provides for $1
million in maximum aggregate coverage, including defense costs. The entire
premium for such insurance is paid by the Registrant.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, or persons controlling the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
informed that in the opinion of the Commission, such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
ITEM 16 EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
- ------
<S> <C>
4.1 Restated Certificate of Incorporation of the Registrant(1)
4.2.1 JAKKS Pacific, Inc. 9% Convertible Debenture issued to Renaissance Capital
Growth & Income Fund III, Inc. dated December 31, 1996(2)
4.2.2 JAKKS Pacific, Inc. 9% Convertible Debenture issued to
Renaissance US Growth & Income Trust PLC dated December 31,
1996(2)
5.1 Opinion of Feder, Kaszovitz, Isaacson, Weber, Skala & Bass LLP, including
consent (3)
23.1 Consent of Pannell Kerr Forster, Certified Public Accountants, A Professional
Corporation (3)
23.3 Consent of Feder, Kaszovitz, Isaacson, Weber, Skala & Bass LLP (included in
Exhibit 5.1) (3)
</TABLE>
II-2
<PAGE> 23
<TABLE>
<CAPTION>
Exhibit
Number
- ------
<S> <C>
24 Power of Attorney(4)
</TABLE>
- --------
(1) Incorporated herein by reference to the exhibits to the Registrant's
registration statement on Form SB-2 (File No. 333-2048-LA).
(2) Incorporated herein by reference to the exhibits to the Registrant's
registration statement on Form SB-2 (File No. 333-22583).
(3) Filed herewith.
(4) Previously filed.
ITEM 17 UNDERTAKINGS
The Registrant hereby undertakes:
1. The Registrant will:
(a) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement; and 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 the volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) Include any additional or changed material information on the
plan of distribution;
(b) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered and the offering of the securities at that time to be the initial
bona fide offering;
II-3
<PAGE> 24
(c) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
2. The Registrant will:
(a) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act as part of this registration statement as
of the time the Commission declared it effective;
(b) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
3. Insofar as indemnification for liabilities arising under the Securities 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 Securities 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 Securities Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE> 25
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 of filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Malibu, State of California, on May 7, 1998.
JAKKS PACIFIC, INC.
By: /s/ JACK FRIEDMAN*
------------------------------------
Jack Friedman, President
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JACK FRIEDMAN* Chief Executive Officer, Chairman May 7, 1998
- --------------------- and President (Principal Executive
Jack Friedman Officer
/s/ STEPHEN G. BERMAN* Chief Operating Officer, May 7, 1998
- --------------------- Executive Vice President,
Stephen G. Berman Secretary and Director
/s/ JOEL M. BENNETT Chief Financial Officer May 7, 1998
- --------------------- (Principal Financial Officer and
Joel M. Bennett Principal Accounting Officer)
/s/ MICHAEL G. MILLER* Director May 7, 1998
- ---------------------
Michael G. Miller
/s/ MURRAY L. SKALA* Director May 7, 1998
- ---------------------
Murray L. Skala
/s/ ROBERT E. GLICK* Director May 7, 1998
- ---------------------
Robert E. Glick
* By Joel M. Bennett, Attorney-in-Fact.
</TABLE>
II-5
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number
- -------
<S> <C>
4.1 Restated Certificate of Incorporation of the Registrant(1)
4.2.1 JAKKS Pacific, Inc. 9% Convertible Debenture issued to Renaissance Capital
Growth & Income Fund III, Inc. dated December 31, 1996(2)
4.2.2 JAKKS Pacific, Inc. 9% Convertible Debenture issued to
Renaissance US Growth & Income Trust PLC dated December 31,
1996(2)
5.1 Opinion of Feder, Kaszovitz, Isaacson, Weber, Skala & Bass LLP, including
consent (3)
23.1 Consent of Pannell Kerr Forster, Certified Public Accountants, A Professional
Corporation (3)
23.3 Consent of Feder, Kaszovitz, Isaacson, Weber, Skala & Bass LLP (included in
Exhibit 5.1) (3)
24 Power of Attorney (4)
</TABLE>
- --------
(1) Incorporated herein by reference to the exhibits to the Registrant's
registration statement on Form SB-2 (File No. 333-2048-LA).
(2) Incorporated herein by reference to the exhibits to the Registrant's
registration statement on Form SB-2 (File No. 333-22583).
(3) Filed herewith.
(4) Previously filed.
<PAGE> 1
EXHIBIT 5.1
[FEDER KASZOVITZ ISAACSON WEBER SKALA & BASS LLP LETTERHEAD]
May 7, 1998
JAKKS Pacific, Inc.
22761 Pacific Coast Highway
Malibu, CA 90265
Gentlemen:
We have acted as counsel for JAKKS Pacific, Inc., a Delaware corporation
(the "Company"), in connection with the preparation and filing by the Company of
a registration statement on Form S-3, as amended (the "Registration Statement"),
under the Securities Act of 1933, relating to the public offering of 2,912,134
shares of common stock, par value $.001 per share, of the Company. Capitalized
terms are used herein as defined in the Registration Statement.
We have examined the Registration Statement, the Debentures and the
Convertible Loan Agreement relating thereto, the Certificate of Designation and
Preferences of Series A Preferred Stock and the Series A Preferred Stock
Purchase Agreement relating thereto, and the warrants and option agreements upon
the exercise of which Shares are to be issued. We have also examined originals
or copies, certified or otherwise identified to our satisfaction, of the
Company's Certificate of Incorporation and by-laws, records of corporate
proceedings, including minutes of meetings and written consents of the Board of
Directors and stockholders, certificates of public officials or officers or
other authorized representatives of the Company, and such other instruments and
documents, and we have made such examination of law as we have deemed necessary
to form the basis of the opinion expressed below. In such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity to authentic originals of all
documents submitted to us as copies thereof.
Based on the foregoing, we are of the opinion that:
(a) The currently outstanding Shares are duly authorized, validly issued,
fully paid and non-assessable.
(b) The Shares issuable upon conversion of the Debentures or the Series A
Preferred Stock or upon exercise of the warrants or options referred to in the
Registration Statement have been duly authorized and reserved for issuance and
when issued in accordance with the terms of the Debentures, Certificate of
Designation and Preferences of Series A Preferred Stock, warrants or options,
respectively, will be validly issued, fully paid and nonassessable.
<PAGE> 2
JAKKS Pacific, Inc.
Page 2
May 7, 1998
We hereby consent to the reference to this firm in the Registration
Statement under the caption "Legal Matters" and to the filing of this opinion as
an exhibit to the Registration Statement.
Very truly yours,
/S/ Feder, Kaszovitz, Isaacson,
Weber, Skala & Bass LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF PANNELL KERR FORSTER
We hereby consent to the incorporation by reference in the Amendment No. 1
to Registration Statement on Form S-3 of JAKKS Pacific, Inc. of our report dated
February 12, 1998, except for note 17, for which the date is April 1, 1998, on
our audits of the consolidated financial statements of JAKKS Pacific, Inc. as of
December 31, 1997 and 1996, and for the years then ended.
We also hereby consent to the reference to our firm as "Experts" in the
Registration Statement.
/s/ PANNELL KERR FORSTER
PANNELL KERR FORSTER
Certified Public Accountants
A Professional Corporation
Los Angeles, California
May 7, 1998
