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As filed with the Securities and Exchange Commission on November 7, 2000
Registration No. 333-42810
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
AMENDMENT NO. 2
to
FORM S-3
REGISTRATION STATEMENT
under
the Securities Act of 1933
STAN LEE MEDIA, INC.
(Exact name of Registrant as specified in its charter)
Colorado 84-1341980
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
15821 Ventura Boulevard, Suite 675
Encino, CA 91436
(818) 461-1757
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Rick C. Madden
Executive Vice President, General Counsel and Secretary
Stan Lee Media, Inc.
15821 Ventura Boulevard, Suite 675
Encino, CA 91436
(818) 461-4163
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this registration statement becomes effective.
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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 being offered only in connection with dividend or
interest reinvestment plans, please 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
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE> 3
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND THE SELLING STOCKHOLDERS
ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE SUCH
OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED November 7, 2000
PROSPECTUS
2,827,560 SHARES OF COMMON STOCK
STAN LEE MEDIA, INC.
--------------
The stockholders of Stan Lee Media, Inc. listed in this prospectus may
offer for sale, from time to time, 2,827,560 shares of our common stock under
this prospectus. We will not receive any part of the proceeds from such sales.
The price of the offered securities will be determined by the selling
stockholders, and will vary depending upon the method of distribution employed
by the selling stockholder. We believe that the price will be based upon the
price of our common stock reported on the Nasdaq SmallCap Market.
Our common stock is listed on the Nasdaq SmallCap Market under the trading
symbol "SLEE." On November 1, 2000, the closing price of one share of our
common stock on the Nasdaq SmallCap Market was $9.25.
AN INVESTMENT IN OUR COMMON STOCK INVOLVES RISKS. SEE THE "RISK FACTORS"
SECTION BEGINNING ON PAGE 1 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is November 7, 2000.
<PAGE> 4
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Risk Factors..................................................... 1
Special Note Regarding Forward-Looking Statements................ 9
Use of Proceeds.................................................. 9
Selling Stockholders............................................. 10
Plan of Distribution............................................. 12
Experts.......................................................... 13
Legal Matters.................................................... 13
Where You Can Find More Information.............................. 13
Incorporation by Reference....................................... 13
</TABLE>
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RISK FACTORS
You should carefully consider the following risks as well as the other
information contained or incorporated by reference in this prospectus before
purchasing our common stock. If any of the following risks actually occur, our
business, results of operations and financial condition would likely suffer. In
any such case, the market price of our common stock could decline, and you may
lose all or part of the money you paid to buy our common stock.
RISKS RELATED TO OUR BUSINESS
DUE TO OUR LIMITED OPERATING HISTORY, IT WILL BE DIFFICULT FOR YOU TO EVALUATE
OUR BUSINESS.
We commenced operations in August 1999 and launched our "hub" web site
stanlee.net in February 2000. Accordingly, we have only a limited operating
history upon which you can evaluate our business and prospects. An investor in
our common stock must consider the risks, expenses and difficulties frequently
encountered by early stage companies in new and rapidly evolving markets,
including web-based entertainment and merchandising. These risks and
difficulties include our ability to:
- attract a larger audience of users to our web-based entertainment
offerings;
- successfully license our entertainment franchises on offline media
and products;
- increase awareness of our brand;
- strengthen user loyalty and increase the number of registered users;
- offer compelling on-line and off-line content, services and e-commerce
opportunities;
- maintain our current, and develop new, affiliate relationships;
- attract a large number of advertisers who desire to reach our users;
- respond effectively to the offerings of competitive entertainment providers
on the Internet;
- continue to develop and upgrade our technology; and
- attract, retain and motivate qualified personnel.
We also depend on the growing use of the Internet for advertising, commerce
and communication, and on general economic conditions. We cannot assure you that
our business strategy will be successful or that we will successfully address
these risks or difficulties. If we fail to address adequately any of these risks
or difficulties our business would likely suffer.
WE HAVE A HISTORY OF LOSSES AND NEGATIVE CASH FLOW AND ANTICIPATE CONTINUED
LOSSES
As of June 30, 2000, we had an accumulated deficit of $20.8 million. We
have not achieved profitability and expect to continue to incur net losses in
2000 and subsequent fiscal periods. We have not achieved profitability and
expect to continue to incur operating losses for the foreseeable future as we
fund operating and capital expenditures in areas such as expansion of our
network, advertising, brand promotion, content development, sales and marketing,
and operating infrastructure. We will need to generate even more substantial
revenues to achieve profitability, which may not occur. Even if we do achieve
profitability, we may be unable to sustain or increase profitability on a
quarterly or annual basis in the future.
IF WE ARE UNABLE TO ATTRACT ADDITIONAL CAPITAL, OUR GROWTH WILL BE LIMITED.
Our ability to implement our business plans will depend on a number of
factors, including our ability to raise substantial additional capital. If
additional funds are raised through the issuance of equity or convertible debt
securities, the percentage ownership of our stockholders will be reduced, and
these
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3newly-issued securities may have rights, preferences or privileges senior to
those of existing stockholders. We cannot assure you that additional financing
will be available on terms favorable to us, or at all. If adequate funds are not
available or are not available on acceptable terms, our ability to fund our
operations, take advantage of unanticipated opportunities, develop or enhance
content, features or services, or otherwise respond to competitive pressures
would be significantly limited. We have no commitments with respect to any
additional financing and there can be no assurance that any such funds will be
available on acceptable terms or otherwise.
THE CONVERSION OF SOME OF OUR SECURITIES FOR COMMON STOCK COULD RESULT IN
SUBSTANTIAL DILUTION AND A SIGNIFICANT DECLINE IN THE PRICE OF OUR COMMON STOCK
We have issued $2,500,000 initial principal amount of 6% Convertible
Debentures and 4,000 shares of our Series B 4% Cumulative Convertible Preferred
Stock. The holders of these securities have the right convert at a floating
rate based on the market price of our common stock, provided the conversion
price may not exceed $13.13 per share, in the case of the debentures, and
$11.11, in the case of the preferred stock, subject to adjustment. As a result,
the lower the price of our common stock at the time of conversion, the greater
the number of shares of our common stock the holders will receive.
To the extent these securities are converted a significant number of shares
of common stock may be sold into the market, which could decrease the price of
our common stock and encourage short sales by selling securityholders or others.
Short sales could place further downward pressure on the price of our common
stock. In that case, we could be required to issue an increasingly greater
number of shares of our common stock upon future conversions of these
securities, sales of which could further depress the price of our common stock.
The conversion of these securities may result in substantial dilution to
the interests of other holders of our common stock. Even through no selling
securityholder may convert its convertible securities if upon such conversion
the selling securityholder together with its affiliates would have acquired a
number of shares of common stock during the 60-day period ending on the date of
conversion which, when added to the number of shares of common stock held at the
beginning of such 60-day period, would exceed 9.99% of our then outstanding
common stock, excluding for purposes of such determination shares of common
stock issuable upon conversion of series B preferred shares which have not been
converted and upon exercise of warrants which have not been exercised, this
restriction does not prevent a selling securityholder from selling a substantial
number of shares in the market. By periodically selling shares into the market,
an individual selling securityholder could eventually sell more than 9.99% of
our outstanding common stock while never holding more than 9.99% at any specific
time.
THE LOSS OF THE SERVICES OF STAN LEE COULD ADVERSELY AFFECT OUR BUSINESS
A key element of our strategy is to associate our company with Stan Lee,
Chairman of the Board and Chief Creative Officer of our company. We are a party
to an exclusive lifetime agreement with Stan Lee which provides us with
ownership in perpetuity to Mr. Lee's name, likeness, brand and signature
slogans, along with rights to all intellectual property that will hereafter be
created by Stan Lee. We believe that we can use this association to access Stan
Lee's large fan base. While we believe Stan Lee's acceptance by users in
traditional media will transfer to this new web-based entertainment medium, our
product is new and there can be no assurance that it will be embraced similarly.
In addition, Stan Lee is now 77 years old. A loss of Stan Lee's services or a
material reduction in his ability to perform such services could materially
adversely affect our business, results of operations and financial condition.
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A FAILURE TO ESTABLISH AND MAINTAIN STRATEGIC RELATIONSHIPS WITH GLOBALLY
RECOGNIZED LEADERS IN NICHE MARKETS AND OFFLINE PUBLISHING/MEDIA PARTNERS MAY
HARM OUR BUSINESS
We depend on establishing and maintaining strategic relationships for the
co-creation of super hero franchises and brand extensions of globally recognized
leaders in niche markets along with strategic relationships with offline
publishing/media companies in order to diversify our product and audience
demographics. Our business, results of operations and financial condition could
be materially adversely affected if we do not establish additional, and maintain
existing, strategic relationships on commercially reasonable terms or if any of
our strategic relationships do not result in an increase in the number of
visitors to our web site or marketability of our entertainment franchises in
offline markets.
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FAILURE TO EFFECTIVELY MANAGE OUR GROWTH AND EXPANSION COULD ADVERSELY AFFECT
OUR BUSINESS
We have experienced rapid growth in our operations. Our rapid growth has
placed, and our anticipated future growth will continue to place, a significant
strain on our managerial, operational and financial resources. To manage our
growth, we must continue to implement and improve our managerial controls and
procedures and operational and financial systems. In addition, our future
success will depend on our ability to expand, train and manage our workforce, in
particular our content creation, production, advertising, sales and business
development staff. At June 30, 2000, we had a total of 138 full-time employees,
as compared to 85 full-time employees at December 31, 1999. We expect that the
number of our employees will continue to increase in the near term. We will need
to integrate these employees into our workforce successfully. We cannot assure
you that we have made adequate allowances for the costs and risks associated
with this expansion, that our systems, procedures or controls will be adequate
to support our operations, or that our management will be able to successfully
offer and expand our services. If we are unable to manage our growth
effectively, our business, results of operations and financial condition could
be materially adversely affected.
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FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS COULD HARM OUR
BRAND-BUILDING EFFORTS AND ABILITY TO COMPETE EFFECTIVELY
We regard our trademarks, copyrights and similar trade secrets as critical
to our success. To protect our rights to our intellectual property, we rely on a
combination of trademark and copyright law, trade secret protection,
confidentiality agreements and other contractual arrangements with our
employees, consultants, affiliates, clients, strategic partners and others. The
protective steps we have taken may be inadequate to deter misappropriation of
our proprietary information. We may be unable to detect the unauthorized use of,
or take appropriate steps to enforce, our intellectual property rights. We have
registered certain trademarks in the United States and we have pending
applications for such trademarks in certain foreign countries. As we continue to
develop new franchises, we intend to continue our substantial trademark
registration program in the United States and internationally. Effective
trademark, copyright and trade secret protection may not be available in every
country in which we offer or intend to offer our services. Failure to adequately
protect our intellectual property could harm our brand, devalue our proprietary
content and affect our ability to compete effectively. Further, defending our
intellectual property rights could result in the expenditure of significant
financial and managerial resources, which could materially adversely affect our
business, results of operations and financial condition.
WE MAY HAVE TO DEFEND AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS, WHICH
MAY CAUSE SIGNIFICANT OPERATIONAL EXPENDITURES
Other parties may assert infringement claims against us or claims that we
have violated a patent or infringed a copyright, trademark or other proprietary
right belonging to them. We incorporate licensed third-party technology in some
of our services. In these license agreements, the licensors have generally
agreed to defend, indemnify and hold us harmless with respect to any claim by a
third party that the licensed software infringes any patent or other proprietary
right. We cannot assure you that these provisions will be adequate to protect us
from infringement claims. Any infringement claims, even if not meritorious,
could result in the expenditure of significant financial and managerial
resources on our part, which could materially adversely affect our business,
results of operations and financial condition.
ANY FUTURE ACQUISITIONS WE MAKE OF COMPANIES OR TECHNOLOGIES MAY RESULT IN
DISRUPTIONS TO OUR BUSINESS AND/OR THE DISTRACTION OF OUR MANAGEMENT, DUE TO
DIFFICULTIES IN ASSIMILATING ACQUIRED PERSONNEL AND OPERATIONS
We may acquire or make investments in complementary businesses,
technologies, services or products if appropriate opportunities arise. From time
to time we engage in discussions and negotiations with companies regarding our
acquiring or investing in such companies' businesses, products, services or
technologies, and we regularly engage in such discussions and negotiations in
the ordinary course of our business. Some of those discussions also contemplate
the other party making an investment in our
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company. We cannot assure you that we will be able to identify future suitable
acquisition or investment candidates, or if we do identify suitable candidates,
that we will be able to make such acquisitions or investments on commercially
acceptable terms or at all. If we acquire or invest in another company, we could
have difficulty in assimilating that company's personnel, operations, technology
and software. In addition, the key personnel of the acquired company may decide
not to work for us. If we make other types of acquisitions, we could have
difficulty in integrating the acquired products, services or technologies into
our operations. These difficulties could disrupt our ongoing business, distract
our management and employees, increase our expenses and adversely affect our
results of operations. Furthermore, we may incur indebtedness or issue equity
securities to pay for any future acquisitions. The issuance of equity securities
would be dilutive to our existing stockholders. As of the date of this
prospectus, we have no agreement to enter into any material investment or
acquisition transaction.
CONTROL BY PRINCIPAL STOCKHOLDERS, OFFICERS AND DIRECTORS COULD ADVERSELY AFFECT
OUR STOCKHOLDERS
At July 28, 2000, our officers, directors and greater-than-five-percent
stockholders (and their affiliates), in the aggregate, beneficially owned
approximately 53.9% of the outstanding common stock. As a result, these persons,
acting together, will have the ability to control substantially all matters
submitted to our stockholders for approval (including the election and removal
of directors and any merger, consolidation or sale of all or substantially all
of our assets) and to control our management and affairs. Accordingly, this
concentration of ownership may have the effect of delaying, deferring or
preventing a change in control of us, impeding a merger, consolidation, takeover
or other business combination involving us or discouraging a potential acquirer
from making a tender offer or otherwise attempting to obtain control of us,
which in turn could materially adversely affect the market price of the common
stock.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed under the captions "Risk Factors" and "The
Company" and elsewhere in this prospectus or in the information incorporated by
reference constitute forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. Some of the forward-looking statements can be
identified by the use of forward-looking words such as "believes," "expects,"
"may," "will," "should," "seeks," "approximately," "intends," "plans,"
"estimates," or "anticipates" or the negative of those words or other comparable
terminology. The discussion of financial trends, strategy, plans or intentions
may also include forward-looking statements. Forward-looking statements involve
risks and uncertainties that could cause actual results to differ materially
from those projected.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or otherwise.
Readers are cautioned not to rely too heavily on these forward-looking
statements. The forward-looking statements by their nature are not intended to
be definitive predictions of future events.
USE OF PROCEEDS
All net proceeds from the sale of the shares of our common stock will go to
the stockholders who offer and sell their shares. Accordingly, we will not
receive any of the proceeds from the sales of the shares of our common stock by
the selling stockholders. All proceeds received by us from the exercise of
warrants owned by selling stockholders which is estimated to be $3,479,000 shall
be used for general corporate purposes.
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SELLING STOCKHOLDERS
The selling stockholders obtained their shares of our common stock as a
result of private placement transactions. In these private placement
transactions, we agreed to register the shares of our common stock issued to the
selling stockholders as well as shares of our common stock issuable to the
selling stockholders through the exercise of warrants or conversion of
convertible securities, as the case may be. Our registration of shares of our
common stock does not necessarily mean that the selling stockholders will sell
all or any of their shares of our common stock.
The following table sets forth information about the shares of our common
stock that are owned by the selling stockholders as of the date of this
prospectus or which can be acquired by the stockholders, through exercise of
warrants or conversion of other securities. The number of shares of our common
stock owned by the selling stockholders, as set forth in each column below,
assumes that all convertible securities, such as warrants and convertible
preferred stock, acquired by a stockholder, are converted into or exercised for
common stock as of September 18, 2000, without regard to any restrictions or
limitations contained in such securities.
The "Percentage of Outstanding Shares Owned" column is based upon the
13,355,928 shares of common stock as of September 18, 2000. The number of
shares being offered by Augustine Fund, L.P. represents approximately two times
the actual number of shares beneficially owned on the date of this prospectus.
In addition, the number of shares offered by Elliott Associates, L.P. and
Westgate International, L.P. represents approximately one hundred percent of
the actual number of shares of our common stock held by such shareholders plus
two hundred percent of the number of shares of common stock underlying the
preferred stock and warrants held by such shareholders, assuming a conversion
price for such preferred stock equal to 83% of the closing price on Nasdaq for
a share of common stock on September 18, 2000 and no interest accrual. We are
registering these additional shares in accordance with our contractual
obligations to these selling stockholders and in order to ensure that
sufficient shares are registered in the event that the floating conversion
features of the convertible securities held by the stockholders result in a
greater number of shares being issued.
<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES BEING OUTSTANDING
NAME OF SELLING STOCKHOLDER OFFERED SHARES OWNED
------------------------------------------- ------------ -------------
<S> <C> <C>
William & Shrina L. Bauman 16,666 *
Irving C. Siegel & Patricia Q. Siegel JTWROS 60,000 *
Compton Family Trust 55,000 *
Charles J. Blomme 45,000 *
Michael H. Edwards 1994 Revocable Trust 20,000 *
William J. & Patricia J. Wilkinson 33,334 *
Kenneth B. Avery 16,666 *
Kenneth R. & Deborah L. Hubbert 16,666 *
Adrian Turcotte 10,000 *
Steven Patrick 6,666 *
Shannah L. Compton 2,000 *
Cameron L. Compton 2,000 *
Morton Feldman 10,000 *
Frederick W. Howarth 20,000 *
Frances S. Masters 10,000 *
Lynne K. Masters 6,000 *
Lon & Jaye Getlin 6,666 *
Michael Joseph Getlin 666 *
Stanley Compton 2,500 *
Mohammed Soltani 8,666 *
Kenneth G. Montgomery 4,000 *
Kenneth Bald 30,000 *
Charlotte & Donald Bernstein 2,000 *
Eddie Alexander 2,000 *
</TABLE>
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<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES BEING OUTSTANDING
NAME OF SELLING STOCKHOLDER OFFERED SHARES OWNED
------------------------------------------- ------------ -------------
<S> <C> <C>
Kaaren Alexander 2,000 *
Edith A. Pope 6,666 *
Kevork K. Tashjian 16,666 *
Bonner W. Adams, Trustee B.W. Adams Enterprises, Inc.
Defined Benefit Pension Plan 33,333 *
Edward Powell 6,666 *
George Cibaud 6,666 *
Andrew J. Brindock 4,000 *
Broomberg Family Trust 20,000 *
Boyd Willat 13,400 *
William David Hooper, Jr., Trustee,
WWM Part. Trust 2,000 *
Mark L. Hendler 6,666 *
VMR Luxembourg S.A 368,646 2.74%
Jose Abadin 35,365 *
John Galt Fund, L.P. 102,234 *
Asset Management Holdings Co. 28,398 *
Zurich HRR Master Hedge Fund Index Ltd. 11,359 *
Dorodo Capital Partners L.P. 37,865 *
The Balboa Fund L.P. 94,662 *
Carmen Italia 18,932 *
Laurence Dunn 9,466 *
Augustine Fund, L.P. 550,000 2.55
Elliott Associates, L.P. 429,403 2.18
Westgate International, L.P. 429,403 2.18
Toon Boom Technologies, Inc. 30,000 *
World Network, Inc. 37,500 *
Continental Entities 62,500 *
Cyberworld International Corporation 25,000 *
--------- -----
Total 2,827,560 17.11%
</TABLE>
* Less than 1%.
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PLAN OF DISTRIBUTION
We are registering shares of our common stock on behalf of the selling
stockholders. As used herein, "selling stockholders" include donees and pledgees
selling shares received from a named selling stockholder after the date of this
prospectus. The names of any donees or pledgees will be identified in
post-effective amendments to the registration statement of which this prospectus
forms a part. The selling stockholders or their respective successors in
interest may offer their shares of our common stock at various times, depending
on market conditions and other factors, in one or more transactions on any of
the United States securities exchanges where our capital stock is listed, the
Nasdaq Stock Market, in the over-the-counter market or in transactions other
than on such exchanges or in the over-the-counter market or in privately
negotiated transactions. The selling stockholders may sell their shares at
market prices prevailing at the time of the sale, at negotiated prices or at
fixed prices. The selling stockholders may offer their shares of our common
stock in any manner permitted by law, including through underwriters, brokers,
dealers or agents and directly to one or more purchasers. Sales of the shares of
our common stock may involve:
o sales to underwriters who will acquire the shares of our common stock
for their own account and resell them in one or more transactions at
fixed prices or at varying prices determined at the time of sale;
o block transactions in which the broker or dealer engaged will attempt
to sell the shares of our common stock as an agent but may position
and resell a portion of the block as a principal to facilitate the
transaction;
o purchases by a broker or dealer as principal and resale by such broker
or dealer for its account;
o an exchange distribution in accordance with the rules of any such
exchange;
o ordinary brokerage transactions and transactions in which a broker
solicits purchasers; and
o direct sales to purchasers without a broker or dealer.
Brokers and dealers may receive compensation in the form of underwriting
discounts, concessions or commission from the selling stockholders and/or
purchasers of shares of our common stock for whom they may act as agents (which
compensation may be in excess of customary commissions). The selling stockholder
and any broker or dealer that participates in the distribution of shares of our
common stock may be deemed to be underwriters and any commissions received by
them and any profit on the resale of shares of our common stock positioned by a
broker or dealer may be deemed to be underwriting discounts and commissions
under the Securities Act. In the event any selling stockholder engages an
underwriter in connection with the sale of the shares of our common stock, if
required, a prospectus supplement will be distributed, which will set forth the
number of shares of our common stock being offered and the terms of the
offering, including the names of the underwriters, any discounts, commissions
and other items constituting compensation to underwriters, dealers or agents,
the public offering price and any discounts, commissions or concessions allowed
or reallowed or paid by underwriters to dealers.
In addition, the selling stockholders may from time to time sell shares of
our common stock in transactions under Rule 144 promulgated under the Securities
Act, may engage in short sales and other transactions in the common stock or
derivatives thereof, and may pledge, sell, deliver or otherwise transfer the
common stock offered under this prospectus in connection with such transactions.
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In accordance with the terms of the Private Placement Transactions, we will
pay all registration expenses in connection with the registration of the shares
of our common stock. We and the selling stockholders have agreed to indemnify
each other against certain civil liabilities, including certain liabilities
under the Securities Act.
EXPERTS
The consolidated financial statements and related consolidated financial
statement schedule of Stan Lee Media, Inc. and its consolidated subsidiaries
included in Stan Lee Media Inc.'s Annual Report on Form 10-KSB for the year
ended December 31, 1999, which is incorporated by reference in this prospectus
and elsewhere in the registration statement, have been audited by BDO Seidman,
LLP, as stated in their report and have been so included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.
LEGAL MATTERS
Certain legal matters relating to the validity of the securities offered
hereby will be passed upon for us by Brownstein Hyatt & Farber, P.C., Denver,
Colorado.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any documents we file at the
SEC's public reference room in Washington, D.C. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. Our SEC
filings are also available to the public from the SEC's Web site at
"http://www.sec.gov."
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information we later file with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we will make with
the SEC under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act:
1. Annual Report on Form 10-KSB for the fiscal year ended December 31,
1999.
2. Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2000
and June 30, 2000.
3. Current Report on Form 8-K dated July 31, 2000, August 18, 2000,
September 12, 2000 and October 27, 2000.
4. The description of the Company's Common Stock which is contained in
the Company's Registration Statement on Form 10-SB filed with the
Securities and Exchange Commission on July 29, 1996, under Section 12
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), including any amendment or report filed for the purpose of
updating such description.
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You may request a copy of these filings at no cost by writing or
telephoning us at the following address:
Stan Lee Media, Inc.
15821 Ventura Boulevard, Suite 675
Encino, CA 91436
Attn: Corporate Secretary
(818) 461-4163
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. The selling stockholders
will not make an offer of the shares of our common stock in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of those documents.
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[STAN LEE MEDIA, INC. LOGO]
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses (other than the Securities and Exchange Commission (the
"Commission") filing fee) are estimated.
<TABLE>
<S> <C>
Commission registration fee........................................$ 8,377.38
Printing and engraving expenses.................................... 1,500.00
Accountants' fees and expenses..................................... 1,000.00
Attorneys' fees and expenses....................................... 30,000.00
Miscellaneous...................................................... 10,000.00
Total.......................................................$50,877.38
</TABLE>
Stan Lee Media, Inc. (the "Company") will pay all registration expenses in
connection with the registration of the shares of the Company's common stock.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is a Colorado corporation. Section 7-108-402 of the Colorado
Business Corporation Act (the "CBCA"), as amended, allows a corporation to
eliminate or limit the personal liability of a director to the corporation or to
its shareholders for monetary damages for breach of fiduciary duty as a
director; except that a corporation shall not eliminate or limit the liability
of a director to the corporation or to its shareholders for monetary damages for
any breach of the director's duty of loyalty to the corporation or to its
shareholders, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, acts specified in section 7-108-403,
or any transaction from which the director directly or indirectly derived an
improper personal benefit. Sections 7-109-102 to 7-109-110, inclusive, of the
CBCA allows a corporation to indemnify its directors, officers, employees,
fiduciaries and agents against liability incurred in any proceeding to which
they are made parties by reason of being or having served in such capacities,
subject to specified conditions and exclusions; to pay for reasonable expenses
incurred by such persons in such proceedings; to mandate indemnification of
directors and officers who are successful on the merits; and to obtain
directors' and officers' liability insurance.
The Company's Articles of Incorporation provide that no director of the
Company will be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except (i) for any
breach of a director's duty of loyalty to the Company or its stockholders, (ii)
for acts or omissions not in good faith or involving intentional misconduct or a
knowing violation of law, (iii) for voting or assenting to a distribution in
violation of section 7-106-401 of the CBCA or the Articles of Incorporation,
subject to certain limitations and exceptions, or (iv) for any transaction from
which the director derives any improper personal benefit.
The Company's Bylaws provide that the Company shall indemnify, with certain
exceptions, any person who was or is a party or is threatened to be made a party
to any threatened, pending, or completed action, suit or proceeding by reason of
the fact that he is or was a director, officer, employee, fiduciary or agent of
the Company (or another entity at the request of the Company), against
reasonably incurred expenses (including attorneys' fees), judgments, penalties,
fines and amounts paid in settlement
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reasonably incurred by him in connection with such action, suit or proceeding if
it is determined by disinterested directors that such person conducted himself
in good faith and that he reasonably believed (i) in the case of conduct in his
official capacity with the Company, that his conduct was in the Company's best
interest, or (ii) in all other cases (except criminal cases) that his conduct
was at least not opposed to the Company's best interest, or (iii) in the case of
any criminal proceeding, that he had no reasonable cause to believe his conduct
was unlawful. In addition, the Company's Articles of Incorporation provide that
the Company shall have the authority, to the maximum extent permitted by law, to
purchase and maintain insurance providing such indemnification.
The Company has entered or intends to enter into agreements to indemnify
its directors and executive officers, in addition to indemnification provided
for in the Company's Bylaws. These agreements, among other things, will provide
for indemnification of the Company's directors and executive officers for
expenses, judgments, fines and settlement amounts incurred by any such person in
any action or proceeding arising out of the person's services as a director or
executive officer or at the Company's request. The Company believes that these
provisions and agreements are necessary to attract and retain qualified persons
as directors and executive officers.
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ITEM 16. LIST OF EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1** Articles of Incorporation of the Company (Exhibit 3.1 (1)).
4.2 Amendment to the Articles of Incorporation of the Company dated
August 12, 1999 (Exhibit 3.2 (1)).
4.3 Amendment to the Articles of Incorporation of the Company dated
November 5, 1999 (Exhibit 3.3 (1))
4.4 By-Laws of the Company (Exhibit 3.4 (1)).
5.1** Opinion of Brownstein Hyatt & Farber, P.C.
23.1** Consent of Brownstein Hyatt & Farber, P.C. (included in Exhibit
5.1).
23.2* Consent of BDO Seidman LLP.
24.1** Power of Attorney (included on the signature pages hereto).
------------
(1) Incorporated by reference to the designated exhibit to the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1999.
-------------
* Filed herewith.
** Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 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 (i) and (ii) do not apply if 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 Company pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
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(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 the time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered thereby, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the provisions referred to in Item 15 of this
registration statement, or otherwise, the Company 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 of 1933 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.
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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 Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Encino, State of California, on October 31,
2000.
STAN LEE MEDIA, INC.
By /s/ KENNETH S. WILLIAMS
----------------------------------------
Name: Kenneth S. Williams
Title: President and Chief Executive
Officer
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/ KENNETH S. WILLIAMS President and Chief Executive Officer October 31, 2000
----------------------------- and Director (Principal executive
Kenneth S. Williams officer)
/s/ ROBERT M. SCHULTZ* Vice President-Finance October 31, 2000
----------------------------- (Principal Financial and
Robert M. Schultz Accounting Officer)
/s/ STAN LEE* Chairman, Chief Creative Officer October 31, 2000
----------------------------- and Director
Stan Lee
/s/ NELSON S. THALL* Director October 31, 2000
-----------------------------
Nelson S. Thall
</TABLE>
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<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ ARTHUR E. SCHRAMM, JR.* Director October 31, 2000
-----------------------------
Arthur E. Schramm, Jr.
----------------------------- Director
Lars F. Hellmont
</TABLE>
* By Kenneth S. Williams,
As attorney-in-fact.
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
4.1** Articles of Incorporation of the Company (Exhibit 3.1 (1)).
4.2 Amendment to the Articles of Incorporation of the Company dated
August 12, 1999 (Exhibit 3.2 (1)).
4.3 Amendment to the Articles of Incorporation of the Company dated
November 5, 1999 (Exhibit 3.3 (1))
4.4 By-Laws of the Company (Exhibit 3.4 (1)).
5.1** Opinion of Brownstein Hyatt & Farber, P.C.
23.1** Consent of Brownstein Hyatt & Farber, P.C. (included in Exhibit
5.1).
23.2* Consent of BDO Seidman LLP.
24.1** Power of Attorney (included on the signature pages hereto).
------------
(1) Incorporated by reference to the designated exhibit to the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1999.
-------------
* Filed herewith.
** Previously filed.
