<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2 TO FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OLYMPIC CASCADE FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 36-4128138
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification Number)
875 NORTH MICHIGAN AVENUE, SUITE 1560, CHICAGO, IL 60611, (312) 751-8833
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
STEVEN A. ROTHSTEIN, CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
ROBERT H. DASKAL, CHIEF FINANCIAL OFFICER, TREASURER AND SECRETARY
875 NORTH MICHIGAN AVENUE, SUITE 1560, CHICAGO, IL 60611, (312) 751-8833
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
Please send copies of all communications to:
ALAN I. ANNEX, ESQ., CAMHY KARLINSKY & STEIN LLP, 1740 BROADWAY,
SIXTEENTH FLOOR, NEW YORK, NEW YORK 10019, (212) 977-6600
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED SHARE (1) PRICE(1) REGISTRATION FEE
---------- ---------- --------- -------- ----------------
<S> <C> <C> <C> <C>
Common stock, $0.02 par 70,000
par value(2) $4.09 $1,648,732 $458.35
Common stock, $0.02 333,113
par value(3) -------
Total 403,113
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(c) based on the average of the high and low prices of the
Registrant's Common Stock as reported on the NASDAQ SmallCap Market on
March 10, 1999.
(2) The shares of common stock are being registered for resale by the selling
stockholders named in the prospectus (the "Selling Stockholders").
<PAGE>
(3) To be issued upon exercise of warrants to acquire up to 333,113 shares of
common stock. Includes an indeterminate number of additional shares of
common stock as may from time to time become issuable upon the exercise of
the warrants by reason of stock splits, stock dividends and similar
transactions pursuant to Rule 416 of the Securities Act.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a)
may determine.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 11, 1999
Prospectus
OLYMPIC CASCADE FINANCIAL CORPORATION.
403,113 SHARES COMMON STOCK
This prospectus relates to the offer and sale of up to 403,113 shares of
Olympic Cascade Financial Corporation common stock. Selling stockholders are
offering to sell 70,000 shares of our common stock that they currently own.
The additional 333,113 shares of our common stock may be acquired by selling
stockholders upon the exercise of warrants. We are registering the resale of
these common shares in the event the selling stockholders exercise the
warrant. We will not receive any of the proceeds from the sale of the shares
by the selling stockholders. We would receive proceeds from the exercise of
warrants.
Our common stock is listed on The Nasdaq SmallCap Market under the symbol
"NATS" and The Chicago Stock Exchange under the symbol "OLY". On March 10,
1999 the closing price of our common stock on The Nasdaq SmallCap Market was
$ 4.09 per share.
The selling stockholders may offer these shares through public or private
transactions, in or off the over-the-counter market in the United States at
prevailing market prices, or at privately negotiated prices. For details of
how the selling stockholders may offer their shares, please see the section
of this prospectus entitled "Plan of Distribution" on page 10.
INVESTING IN OUR COMMON STOCK INVOLVES RISK. SEE RISK FACTORS BEGINNING ON
PAGE THREE OF THIS PROSPECTUS.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed on the
adequacy or accuracy of this prospectus. Any representation to the contrary
is a criminal offense.
The date of this prospectus is March 11, 1999.
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
Risk Factors............................2 Selling Stockholders...............7
Olympic Cascade Financial Corporation ..5 Plan of Distribution...............8
Where You Can Find More Information ....6 Legal Matters......................9
Incorporation of Certain Documents By Experts............................9
Reference...............................6
Use of Proceeds.........................7
</TABLE>
1
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RISK FACTORS
CHANGING ECONOMIC, POLITICAL AND MARKET CONDITIONS MAY RESULT IN DECREASED
REVENUES AND MAY INCREASE OUR COST OF DOING BUSINESS
The securities industry is subject to a variety of risks, including declines
in price level and volume of transactions, losses resulting from the trading
or underwriting of securities, volatility of the markets and the failure of
third parties to meet commitments. The securities industry is also affected
by economic, political and market conditions both domestic and international.
Other items affecting the securities industry, include increased
consolidation, increased use of technology, increased use of discount and
online electronic brokerage services and increased regulation. These items
could result in our facing increased competition from larger broker-dealers,
a need for increased investment in technology, or potential loss of customers
or reduction in commission income. There can be no assurance that these
trends or future changes will not have a material adverse effect on our
business, financial condition, results of operations or cash flows.
MARKET FLUCTUATIONS MAY REDUCE OUR REVENUES AND PROFITABILITY
Our revenue and profitability may be adversely affected by declines in the
volume of securities transactions and in market liquidity. Additionally, our
profitability may be adversely affected by losses from the trading or
underwriting of securities or failure of third parties to meet commitments.
National acts as a market-maker in publicly traded common stocks. In market
making transactions, we undertake the risk of price changes or being unable
to resell the common stock we hold or being unable to purchase the common
stock we have sold. These risks are heightened by the illiquidity of many of
the common stocks we trade and or make a market. Any losses from our trading
activities, including as a result of unauthorized trading by our employees,
could have a material adverse effect on our business, financial condition,
results of operations or cash flows.
Lower securities price levels may also result in a reduced volume of
transactions, as well as losses from declines in the market value of common
stocks held for trading purposes. During periods of declining volume and
revenue, our profitability would be adversely affected. Declines in market
values of common stocks and the failure of issuers and third parties to
perform their obligations can result in illiquid markets in which we may
incur losses in our principal trading and market-making activities.
COMPETITION WITH LARGER FINANCIAL FIRMS MAY HAVE A NEGATIVE EFFECT ON OUR
BUSINESS
We compete directly with national and regional full-service broker-dealers
and a broad range of other financial service firms, including banks and
insurance companies. Competition has increased as smaller securities firms
have either ceased doing business or have been acquired by or merged into
other firms. Mergers and acquisitions have increased competition from these
firms, many of which have significantly greater financial resources than us.
Many of these firms offer their customers more products and research than
currently offered by us. We also face competition from companies offering
discount and/or electronic brokerage services, including brokerage services
provided over the Internet, which we are currently not offering. These
competitors may have lower costs or provide more services, and may offer
their customers more favorable commissions, fees or other terms than those
offered by us. Commissions charged to customers of discount and electronic
brokerage services have steadily decreased over the past several years and we
expect such decreases to continue. To the extent that issuers and purchasers
of securities transact business without the assistance of us, our operating
results could be adversely affected. We use direct solicitation of potential
customers as a means of increasing business and furnish investment research
publications in an effort to attract existing and potential clients. Many of
our competitors also engage in advertising programs, which we do not use to
any significant degree. We believe that our ability to compete for retail
customers depends largely upon the skill, reputation and experience of our
retail brokers. However, there can be no assurance that these factors will
continue to enable us to remain competitive.
2
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WE DEPEND ON OUR ABILITY TO RETAIN AND RECRUIT KEY PERSONNEL AND IF WE LOSE
ANY OF OUR KEY PERSONNEL IT COULD BE DIFFICULT TO RECRUIT EFFECTIVE
REPLACEMENTS
Our business depends on the highly skilled, and often highly specialized,
independent contractors and employees. Retention sales, trading, management,
investment banking and administrative professionals are particularly
important to us. At National, the investment executives are primarily
independent contractors and pay their overhead expenses in exchange for a
higher payout percentage. Typically, National's investment executives receive
a net payout percentage of approximately 70%. We feel that this compensation
package along with the flexibility of being independent is very competitive
within the industry. However, there can be no assurance that this
compensation offered by us will continue to be effective in recruiting and
retaining personnel.
GROWTH AND EXPANSION MAY DIVERT MANAGEMENT'S FOCUS FROM OUR EXISTING BUSINESS
We plan to expand through internal growth and, when the opportunity arises,
may expand through acquisitions of related businesses. Additionally, we are
examining the possibility of providing brokerage services over the Internet.
Any expansion will require capital resources and divert management's
attention from our existing businesses. There can be no assurance that we
will be able to attract the personnel or expertise necessary for any
expansion, or that any expansion will be successful. The failure of any
expansion could have a material adverse effect on our business, financial
condition, results of operations or cash flows.
We have experienced increased growth of our current operations over the past
three years. Continued growth will require the addition of retail brokers.
There can be no assurance that management will be able to manage our growth
effectively, and any such failure could have an adverse effect on our
business, financial condition, results of operations or cash flows.
ADVERSE RESULTS OF CURRENT LITIGATION AND POTENTIAL SECURITIES LAW LIABILITY
WOULD RESULT IN FINANCIAL LOSSES AND DIVERT MANAGEMENT'S ATTENTION TO
BUSINESS
Many aspects of our business involve substantial risks of liability. There
has been an increase in litigation and arbitration within the securities
industry in recent years, including class action suits seeking substantial
damages. We are subject to potential claims by dissatisfied customers,
including claims alleging they were damaged by improper sales practices such
as unauthorized trading, sale of unsuitable securities, use of false or
misleading statements in the sale of securities, mismanagement and breach of
fiduciary duty. National and WestAmerica may be liable for the unauthorized
acts of its retail brokers if they fail to adequately supervise their
conduct. As an underwriter, we may be subject to substantial potential
liability under federal and state law and court decisions, including
liability for material misstatements and omissions in securities offerings.
We may be required to contribute to a settlement, defense costs or a final
judgment in legal proceedings or arbitrations involving past underwriting and
in actions that may arise in the future. We carry "Errors and Omissions"
insurance to protect against arbitrations, however, the policy is limited in
items and amounts covered and there can be no assurance that it will cover a
complaint. The adverse resolution of any legal proceedings involving us could
have a material adverse effect on our business, financial condition, results
of operations or cash flows.
THIRD PARTY TRADE PROCESSING AND THE YEAR 2000 PROBLEM MAY DISRUPT OUR
BUSINESS
The majority of National's and WestAmerica's trade processing information is
handled through third party vendors. National is in the process of
implementing a new trade processing system through BETA System, Inc., which
is scheduled to be fully operational by the third quarter of our 1999 fiscal
year. We anticipate that the implementation of this system will improve
operations including execution of orders, trade processing and trade
reporting. However, there can be no assurance that the new system will
perform as expected and any difficulty or significant delay in the
implementation or operation of the new system, or time spent training
personnel, could adversely affect us.
3
<PAGE>
BETA Systems, Inc. has represented to us that they will be Year 2000
compliant and our agreement calls for recourse against BETA Systems, Inc.
should we incur losses from the system not being Year 2000 compliant.
Additionally, we have initiated formal communications with all other
significant data processing and telecommunications vendors to determine the
extent to which we are vulnerable to those third parties failure to remediate
their own Year 2000 Issue. These vendors have represented to us that they
will be compliant with the requirements of the Year 2000. However, if BETA
Systems, Inc. is not Year 2000 compliant and we incur losses there can be no
assurance that BETA Systems, Inc. will have the financial resources to
reimburse us for our losses.
We have determined that material costs and resources will not be required to
modify or replace portions of our internal hardware and software so that
computer systems will properly utilize dates beyond December 31, 1999.
However, even if our systems and our significant vendors are compliant, the
potential impact of the Year 2000 problem on the securities industry as a
whole could be material, as virtually every aspect of the sales of securities
and processing of transactions will be affected. Due to the size of the
problem facing the securities industry and the interdependent nature of the
business, we may be materially adversely affected by this issue.
NET CAPITAL REQUIREMENTS MAY CONSTRAIN OUR BUSINESS ACTIVITIES
The Commission and various other securities exchanges and other regulatory
bodies in the United States have rules with respect to net capital
requirements that affect National and WestAmerica. These rules are designed
to ensure that National and WestAmerica maintain adequate regulatory capital
for their business activities. These rules require that a substantial portion
of a broker-dealer's assets be kept in cash or highly liquid investments.
Failure to maintain the required net capital may subject a firm to suspension
or revocation of its registration by the Commission and suspension or
expulsion by the NASD and other regulatory bodies, and ultimately may require
its liquidation. Compliance by with Net Capital Requirement Rules could limit
certain operations that require intensive use of capital, such as
underwriting or trading activities. Advances, dividend payments and other
equity withdrawals from National or WestAmerica are restricted by the
regulations of the SEC, and other regulatory agencies. These regulatory
restrictions may limit the amounts that these subsidiaries may dividend or
advance to Olympic. In addition, a change in such Net Capital Requirement
Rules or the imposition of new rules affecting the scope, coverage,
calculation or amount of such net capital requirements, or a significant
operating loss or any large charge against net capital, could have similar
adverse effects.
CURRENT OPERATING RESULTS REPORTED LOSSES FOR THE LAST FOUR QUARTERS
During the past four quarters we have reported losses resulting in an
accumulated deficit and there is no assurance that we will become profitable.
Our disappointing fourth quarter of the fiscal year 1998, was primarily
attributed to large operating losses from a former subsidiary, large losses
related to the sale of this subsidiary, the closure of two branch offices and
the write-down and write-off of receivables. In the first quarter of the
fiscal year 1999, we reduced overhead expenses and although, our revenue has
decreased from the previous three quarters our loss in the first quarter of
fiscal 1999 is substantially less than the previous three quarters. We
anticipate that with increased revenues we will return to profitability;
however, there can be no assurance that revenue will increase and
profitability will be achieved. The tables show revenues, net income (loss)
for the last three fiscal years and the last four quarters. As a result of
the recent losses, we have an accumulated deficit of $2,488,000.
<TABLE>
<CAPTION>
Fiscal Year ended September 25, 26 and 27,
respectively (Dollars in thousands)
------------------------------------------
1998 1997 1996
------------------------------------------
<S> <C> <C> <C>
Revenue $45,694 $39,994 $34,899
Net income
(loss) ($4,666) $ 101 $ 1,735
</TABLE>
<TABLE>
<CAPTION>
Previous Four Quarters
(Dollars in thousands) (unaudited)
------------------------------------------
1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
FYE 99 FYE 98 FYE 98 FYE 98
-----------------------------------------
<S> <C> <C> <C> <C>
Revenue $8,161 $8,274 $11,846 $10,173
Net (loss) ($261) ($3,685) ($ 623) ($ 577)
</TABLE>
4
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OLYMPIC CASCADE FINANCIAL CORPORATION
Olympic Cascade Financial Corporation is a financial services organization,
which operates through its two subsidiaries, National Securities Corporation
and WestAmerica Investment Group. We are committed to establishing a
significant presence in the financial services industry by providing
financing options for emerging, small and middle capitalization companies
through research, financial advisory services, and sales and investment
banking services for both public offerings and private placements, and also
providing retail brokerage and trade clearance operations.
In June 1997, we acquired all of the outstanding stock of WestAmerica, a
Scottsdale, Arizona based broker-dealer specializing in retail brokerage
services. WestAmerica was acquired for $443,000 in cash and an agreement to
provide a bonus payment of $207,000 to several WestAmerica brokers.
During fiscal year 1998, we redirected our focus on retail operations by
selling our ownership in two of our subsidiaries, L.H. Friend, Weinress,
Franksen & Presson, Inc. and Travis Capital, Inc. In March 1997, we acquired
L.H. Friend for 250,000 shares of our common stock valued at that time at
$1,375,000. In July 1997, we acquired Travis Capital, for 20,000 shares of
our common stock valued at that time at $90,000. Additionally, we invested
cash of $185,000 into Travis Capital. Upon the sale of L.H. Friend we
received cash of $500,000, 55,509 shares of our common stock and potential
fees resulting from pending corporate finance transactions in exchange for
all of the common stock of L.H. Friend. Upon the sale of Travis Capital we
received a note receivable for $281,000 in exchange for all of the common
stock of Travis Capital.
National conducts a national securities brokerage business through its main
office in Seattle, Washington and in 38 other offices located in 18 states.
Its business includes securities brokerage for individual and institutional
clients, market-making trading activities, asset management and corporate
finance services. National concentrates upon retail brokerage with an
emphasis on personalized service. National's operations, and its largest
sales office, is located in Seattle, Washington. The majority of National's
transactions involve securities trades with individual customers.
WestAmerica, based in Scottsdale, Arizona is a registered securities
broker-dealer providing primarily retail brokerage operations. The majority
of WestAmerica's transactions involve securities trades with individual
customers.
Our business plan is to achieve growth of our retail brokerage business
through acquisitions of individual brokers, groups of brokers and other small
brokerage firms. We believe that consolidation within the industry is
inevitable. Concerns attributable to the strength of the market and increased
competition help explain the increasing number of acquisition opportunities
continuously introduced to us. We are focused on maximizing the profitability
of our existing operations, while we continue to pursue acquisition
opportunities.
Except for historical information contained in this prospectus, the matters
discussed in this prospectus contain or incorporate forward-looking
information. Statements containing terms such as "believes," "does not
believe," "no reason to believe," "expects," "plans," "intends," "estimates,"
"anticipates" are considered to contain uncertainty and are forward-looking
statements. Forward looking statements involve risks and uncertainties that
could cause results to differ materially, including changing market
conditions and other risks detailed in this prospectus and other documents
filed by us with the Securities and Exchange Commission from time to time.
You are cautioned that no forward-looking statement is a guarantee of future
performance and you should not place undue reliance on any forward-looking
statement.
5
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WHERE YOU CAN FIND MORE INFORMATION
We are required by the Securities Exchange Commission to file reports, proxy
statements and other information with the SEC. You can inspect and copy all
of this information at the Public Reference Room maintained by the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
In addition, the SEC maintains a web site that contains reports, proxy
statements and information statements and other information regarding
issuers, such as us, that file electronically with the SEC. The address of
this web site is http:\\www.sec.gov.
This prospectus, which constitutes a part of a registration statement on Form
S-3 filed by us with the SEC, omits information set forth in the registration
statement. Accordingly, you should reference the registration statement and
its exhibits for further information with respect to us and our common stock.
Copies of the registration statement and its exhibits are on file at the
offices of the SEC. Furthermore, statements contained in this prospectus
concerning any document filed as an exhibit are not necessarily complete and,
in each instance, we refer you to the copy of the document filed as an
exhibit to the registration statement. You should rely only on the
information or representations provided in this prospectus and the
registration statement. We have not authorized anyone to provide you with
different information.
INCORPORATION OF CERTAIN DOCUMENTS 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 that we file
later with the SEC will automatically update and supersede the information in
this prospectus. Accordingly, we incorporate by reference the documents
listed below and any future filings we make with the SEC:
- - Annual Report on Form 10-K for the fiscal year ended September 25, 1998;
- - Quarterly Reports on Form 10-Q for the quarters ended December 31, June 26
and March 27, 1998;
- - Definitive Proxy Statement dated February 18, 1999;
- - Registration Statement on Form S-8 dated February 17, 1999 (Registration
No. 333-72477);
- - A description of our common stock contained in our Registration Statement
on Form 8-A, as filed with the SEC on July 31, 1998.
All reports and other documents we subsequently file after the date of this
prospectus and before the filing of a post-effective amendment which
indicates that all securities in this prospectus have been sold or which
de-registers all securities remaining unsold, shall be deemed to be part of
this prospectus from the date of the filing of such reports and documents.
You may request a copy of these filings, at no cost, by writing to us at the
following address: 875 North Michigan Avenue, Suite 1560, Chicago, Illinois
60611, Attention: Robert H. Daskal. The selling shareholders will not sell
these shares in any state in which they are not permitted. You should not
assume that the information in this Prospectus or any supplement is accurate
as of any date other than the date of those documents.
6
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USE OF PROCEEDS
We will not receive any proceeds from the sale of the 70,000 shares offered
nor will any proceeds be available for our use or benefit. We would receive
proceeds of approximately $1,756,000 upon the exercise of warrants to acquire
an aggregate of 333,113 shares of our common stock. These proceeds would be
used by us for reduction of debt and working capital.
SELLING STOCKHOLDERS
The following table sets forth the name of the selling stockholders, the
total number of shares of our common stock beneficially owned by the selling
stockholders as of the date of this prospectus and the number of shares,
which may be sold by the selling stockholders. This information is based upon
information provided by the selling stockholders.
<TABLE>
<CAPTION>
Number of shares Percentage of common
Number of beneficially owned stock beneficially owned
Shares prior to the after the offering is
Name being sold offering completed
- ---------------------------- ---------- ------------------- ------------------------
<S> <C> <C> <C>
Casull Arms Corporation 40,000 40,000 2.53%
Sugar Friedberg & Felsenthal 10,000 10,000 --
D'Ancona & Pflaum LLC 20,000 20,000 1.26%
FAI General Insurance
Company Limited 80,325 80,325 4.83%
Geller & Friend Capital
Partners 16,538 16,538 1.04%
Merryl H. Tisch, Custodian 78,750 78,750 4.74%
LVE, LLC 157,500 157,500 9.06%
</TABLE>
Casull Arms Corporation received shares under a settlement agreement dated
February 9, 1999. This agreement settled a lawsuit brought against National
in September 1997 by Casull alleging breach of contract and other torts.
Sugar Friedberg & Felsenthal and D'Ancona & Pflaum LLC are law firms that
represent us in various matters. These shares were issued in payment of
balances owed for past services rendered.
The shares of our common stock owned by FAI, represents shares issuable upon
the exercise of vested warrants to purchase our common stock. These warrants
were issued in connection with two loans totaling $1,400,000 made to us by
FAI in May 1997 and November 1997.
The shares of our common stock owned by Merryl H. Tisch, custodian represents
shares issuable upon the exercise of vested warrants to purchase our common
stock. These warrants were sold for cash of $75,000 in November 1997.
The shares of our common stock owned by LVE, represents shares issuable upon
the exercise of vested warrants to purchase our common stock. These warrants
were issued in connection with a $1,000,000 loan made to us by LVE in January
1998.
7
<PAGE>
The shares of our common stock owned by Geller & Friend Capital
Partners, represents shares issuable upon the exercise of a vested warrant to
purchase our common stock. This warrant was issued as consideration for a
commitment to provide financing.
It is unknown if, when or in what amount the selling stockholders in this
prospectus may sell these shares. Because the selling stockholders may sell
all or some of their shares, no estimate can be given as to the amount of
shares that they will continue to hold after their sale. For purposes of this
table above we have assumed that the selling stockholders will have sold all
of their shares.
PLAN OF DISTRIBUTION
The distribution of the shares by the selling stockholders may be effected
from time to time in one or more transactions (which may involve block
transactions), in specific offerings, exchange distributions and/or secondary
distributions, negotiated transactions, in settlement of short sales of
common stock or a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to the prevailing market
prices or at negotiated prices by the selling stockholders, their pledges,
donees, transferees or distributees, or respective successors in interest.
Such transactions may be effected on the over-the-counter market or
privately. The selling stockholders may effect such transactions by selling
the shares to or through broker-dealers, and such broker-dealers may receive
compensation in the form of underwriting discounts, concessions or
commissions from the selling stockholders for whom they may act as an agent.
Without limiting the generality of the foregoing, such brokers may act as
dealers by purchasing any and all of the shares covered by this prospectus
either as agents for other or as principals for their own accounts and
reselling such securities pursuant to this prospectus. The selling
stockholders and any broker-dealers that act in connection with the sale of
the Shares might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, and any commissions received or profits realized
by them on the resale of the shares may be deemed to be underwriting
discounts and commissions under the Securities Act. If the selling
shareholders qualify as "underwriters," they will be subject to the
prospectus delivery requirements of Section 5(b)(2) of the 1933 Act. As of
the date of this prospectus, we are not aware of any agreement, arrangement
or understanding between any broker or dealer and the selling stockholders
with respect to the offer or sale of the shares in this prospectus.
Under applicable rules and regulations of the Securities and Exchange
Commission, any person engaged in the distribution of the shares may not bid
for or purchase shares of our common stock during a period which commences
one business day prior to such person's participation in the distribution,
subject to certain exceptions, including passive market making activities.
At the time a sale of shares is made, to the extent required by the
Securities Act, a prospectus supplement will be distributed, setting forth
the terms of the sale, including the aggregate number of shares being sold,
the names of any underwriters, dealers or agents, any discounts, commissions
and other items constituting compensation from the selling stockholders and
any discounts, commissions or concessions allowed or re-allowed or paid to
dealers.
Selling stockholders may also sell their shares pursuant to Rule 144
promulgated under the Securities Act. Each of the selling stockholders may
from time to time pledge the shares owned by it to secure margin or other
loans made to such selling stockholder. Thus, the person or entity receiving
the pledge of any of the shares may sell them, in a foreclosure sale, or
otherwise, in the same manner as described above for such selling
stockholder. We will not receive any of the proceeds from any sale of the
shares by the selling stockholders. There can be no assurance that the
selling stockholders will sell all or any of the shares.
8
<PAGE>
LEGAL MATTERS
The validity of our common stock and other legal matters have been passed
upon for the us by Camhy Karlinsky & Stein LLP, New York, New York.
EXPERTS
The financial statements incorporated in this prospectus by reference to our
Annual Report on Form 10-K for the fiscal year ended September 25, 1998 have
been audited by the following independent public accountants, as indicated in
their attached reports:
Feldman Sherb Ehrlich & Co., P.C., for the Company's fiscal year ended
September 25, 1998.
Moss Adams LLP, for the Company's fiscal years ended September 26, 1997
and September 27, 1996.
These financial statements are included in this Prospectus and the
Registration Statement and we rely upon the authority of the above firms as
experts in accounting and auditing.
9
<PAGE>
NEITHER US, NOR ANY OF THE SELLING STOCKHOLDERS HAS AUTHORIZED ANY DEALER,
SALESMAN OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. IF ANY DEALER,
SALESMAN OR OTHER PERSON GIVES INFORMATION OR MAKES REPRESENTATIONS OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS, YOU SHOULD NOT RELY ON THEM. THIS
PROSPECTUS IS NOT AN OFFER TO SELL SECURITIES AND NEITHER US NOR ANY OF THE
SELLING STOCKHOLDERS ARE SOLICITING OFFERS TO BUY THEM. THESE SECURITIES WILL
NOT BE SOLD IN ANY STATE WHERE THEIR OFFER OR SALE, OLYMPIC CASCADE OR
SOLICITATIONS OF OFFERS TO BUY THEM, WOULD BE FINANCIAL CORPORATION UNLAWFUL
PRIOR TO THEIR REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
SUCH STATE. INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF THE DATE OF THIS
PROSPECTUS. EVEN IF YOU RECEIVE A COPY OF THIS COMMON STOCK PROSPECTUS,
NEITHER US NOR ANY OF THE SELLING STOCKHOLDERS IS MAKING ANY REPRESENTATION
ABOUT WHETHER THE INFORMATION IN THIS PROSPECTUS IS CORRECT AT ANY TIME AFTER
THE DATE OF THIS PROSPECTUS.
403,113 SHARES
OLYMPIC CASCADE
FINANCIAL CORPORATION
COMMON STOCK
PROSPECTUS
MARCH 11, 1999
10
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by the Company and
the selling stockholders in connection with the sale of the Common Stock being
registered. Except for the legal fees and expenses to be paid by the selling
stockholders, all the fees and expenses set forth below will be paid by the
Company. All the amounts shown are estimates except the registration fee.
<TABLE>
<S> <C>
SEC Registration Fee...................................... $ 458.35
Accounting fees and expenses.............................. 2,000.00
Legal fees and expenses to be paid by the Company......... 4,000.00
- --------------------------------------------------------------------------------
Total............................................. $ 6,458.35
================================================================================
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our bylaws provide that we shall indemnify and advance the expenses
of individual directors, officers, employees and agents against costs,
judgments and other financial liability resulting from any action alleged to
have been taken or omitted by such individual. The bylaws permit such
indemnification if, among other things, the proposed indemnity acted in good
faith with reasonable belief that the conduct was in, or at least not opposed
to, the best interests of the Company, and in the case of a criminal
proceeding, with a reasonable belief that the conduct was not unlawful. We
have obtained insurance on behalf of any person who is or was a director,
officer or employee or agent of the Company or is or was serving at the
request of the Company as an officer, employee, or agent of another
corporation, partnership, joint venture, trust other enterprise or employee
benefit plan, against any liability arising out of that person's status as
such, whether or not we would have the power to indemnify that person against
such liability.
ITEM 15. SALES OF UNREGISTERED SECURITIES
In March, 1997 we issued 250,000 unregistered shares of our common
stock in exchange for all of the outstanding stock of L.H. Friend, Weinress,
Frankson & Presson, Inc. Our common stock was valued at $1,375,000 as
consideration for this transaction. The issuance of these securities were
exempt from registration under the Securities Act pursuant to Section 4(2)
thereof on the basis that the transaction did not involve a public offering.
In July 1997 we issued 20,000 unregistered shares of our common
stock in exchange for all of the outstanding stock of Travis Capital, Inc.
Our common stock was valued at $90,000 as consideration for this transaction.
The issuance of these securities were exempt from registration under the
Securities Act pursuant to Section 4(2) thereof on the basis that the
transaction did not involve a public offering.
In May 1997 we issued a five-year warrant to purchase 30,000
unregistered shares of our common stock to FAI General Insurance Company
Limited in connection with a financing. As a result of subsequent stock
dividends, the holder of this warrant can now purchase 33,075 unregistered
shares of our common stock. In November 1997 we issued a five-year warrant to
purchase 45,000 unregistered shares of our common stock to FAI in connection
with a second financing. As a result of subsequent stock dividends, the
holder of this warrant can now purchase 47,250 unregistered shares of our
common stock. The warrants were issued as consideration for loans made to us.
The issuance of these securities were exempt from registration under the
Securities Act pursuant to Section 4(2) thereof on the basis that the
transactions did not involve a public offering. The shares that will be
issued upon the exercise of the warrants are being registered in connection
with this registration statement.
In July 1997 we issued a five-year warrant to purchase 15,000
unregistered shares of our common stock to Geller & Friend Capital Partners. As
a result of subsequent stock dividends, the holder of this warrant
11
<PAGE>
can now purchase 16,538 unregistered shares of our common stock. The warrant
was issued as consideration for a commitment to provide financing. The
issuance of these securities were exempt from registration under the
Securities Act pursuant to Section 4(2) thereof on the basis that the
transaction did not involve a public offering. The shares that will be issued
upon the exercise of the warrant are being registered in connection with this
registration statement.
In November 1997 we issued three five-year warrants to purchase
25,000, 25,000 and 25,000 unregistered shares of our common stock to Merryl
H. Tisch as custodian for Jessica S. Tisch, Benjamin J. Tisch and Samuel A.
Tisch, respectively, in connection with a financing. We received $25,000 for
the issuance of each warrant or $75,000 in total. As a result of subsequent
stock dividends, the holders of these warrants can now purchase 26,250,
26,250 and 26,250 unregistered shares of our common stock, respectively. The
issuance of these securities were exempt from registration under the
Securities Act pursuant to Section 4(2) thereof on the basis that the
transactions did not involve a public offering. The shares that will be
issued upon the exercise of the warrants are being registered in connection
with this registration statement.
In January 1998 we issued a five-year warrant to purchase 157,500
unregistered shares of our common stock to LVE, LLC. The warrant was issued
as consideration for a loan made to us. The issuance of these securities were
exempt from registration under the Securities Act pursuant to Section 4(2)
thereof on the basis that the transaction did not involve a public offering.
The shares that will be issued upon the exercise of the warrant are being
registered in connection with this registration statement.
ITEM 16. EXHIBITS
*5.1 Opinion of Camhy Karlinsky & Stein LLP
23.1 Consent of Feldman Sherb Erhlich & Co., P.C.
23.2 Consent of Moss Adams LLP
23.3 Consent of Camhy Karlinsky & Stein LLP (contained in Exhibit *5.1)
24.1 Powers of Attorney (contained on signature page)
* Previously filed
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereto) 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 the
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)
(s230.424(b) of this Chapter) if, in the aggregate changes in
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; and
12
<PAGE>
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in the
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be new Registration Statement relating to the securities offered
therein, and this offering of such securities at that time shall be
deemed to be the initial bona fide offering itself.
(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.
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 provisions referenced in Item 6 of
this Registration Statement, or otherwise, the Registration has been advised
that in the opinion of the Commission, such 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 the
public policy expressed in the Securities Act and will be governed by the
final adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the lastest annual report to
security holders that is incorporated by reference in the prospectus an
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not
set forth in the prospectus, to deliver, or cause to be delivered to each
person to whom the prospectus is sent or given, the latest quarterly report
that is specifically incorporated by reference in the prospectus to provide
such interim financial information.
For purposes of determining any liability under the Securities Act
of 1933, 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 shall be deemed to be part of this
registration statement as of the time it was declared effective. For the
purpose of determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized on this 5th day of May, 1999.
OLYMPIC CASCADE FINANCIAL CORPORATION
Registrant
By: /s/ Steven A Rothstein
- ---------------------------- Date: May 5, 1999
Steven A. Rothstein
Chairman, Chief Executive
Officer and President
By: /s/ Robert H. Daskal
- ---------------------------- Date: May 5, 1999
Robert H. Daskal
Senior Vice President,
Chief Financial Officer,
Treasurer and Secretary
By: /s/ David M. Williams Date: May 5, 1999
- ----------------------------
David M. Williams
Controller
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on
the dates indicated:
<TABLE>
<CAPTION>
Signature Capacity Date
<S> <C> <C>
/s/ Steven A. Rothstein Chairman, Chief Executive May 5, 1999
Steven A. Rothstein Officer and President
/s/ Gary A. Rosenberg Director May 5, 1999
Gary A. Rosenberg
/s/ James C. Holcomb Director May 5, 1999
James C. Holcomb, Jr.
/s/ D.S. Patel Director May 5, 1999
D.S. Patel
</TABLE>
14
<PAGE>
EXHIBIT 5.1
LEGAL OPINION
April 21, 1999
Olympic Cascade Financial Corporation
875 North Michigan Avenue
Suite 1560
Chicago, Illinois 60611
Re: REGISTRATION STATEMENT ON FORM S-3
Dear Sir/Madam:
We have reviewed the Registration Statement on Form S-3 (the
"Registration Statement") filed under the Securities Act of 1933 as amended
(the "Act"), by Olympic Cascade Financial Corporation, a Delaware corporation
(the "Company"), on February 16, 1999. The Registration Statement has been
filed for the purpose of registering for offer and sale under the Act, up to
70,000 shares (the "Shares") of the Company's Common Stock, $.02 par value
(the "Common Stock") and 333,113 shares (the "Warrant Shares") of the
Company's Common Stock which are issuable upon exercise of certain warrants
(the "Warrants").
We have examined your Certificate of Incorporation as amended, your
Bylaws and such documents, corporate records and questions of law as we have
deemed necessary solely for the purpose of enabling us to render this
opinion. In conducting our examination, we have assumed, without
investigation, the genuineness of all signatures, the correctness of all
certificates, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of such
copies, and the accuracy and completeness of all records made available to us
by the Company, and public officials. In addition, we have assumed, without
investigation, the accuracy of representations and statements as to factual
matters made by officers and employees of the Company.
In addition, the opinions hereinafter expressed are subject to the
following qualifications:
(a) Our opinion in Paragraph 1 below as to the good standing of
the Company and its subsidiaries is based solely upon certificates from
public officials and verbal confirmation from the State of Delaware.
(b) Our opinions below are limited to the matters expressly set
forth in this opinion letter, and no opinion is to be implied or may be
inferred beyond the matters expressly so stated.
(c) We disclaim any obligation to update this letter for events
occurring after the date of this opinion letter.
On the basis of such examination, we are of the opinion that:
1. The Company is a corporation duly organized and validly
existing and in good standing under the laws of the State of Delaware.
2. The Company has an authorized capitalization of 6,100,000
shares of capital stock consisting of 6,000,000 shares of Common Stock, $.02
par value, and 100,000 shares of Preferred Stock, $.01 par value.
<PAGE>
3. The Shares are validly issued, fully paid and nonassessable.
4. The Warrant Shares, when issued pursuant to the terms and
conditions of the Warrants, as described in the Registration Statement, will
constitute legal and binding obligations of the Company in accordance with
their terms.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement. Very truly yours,
CAMHY KARLINSKY & STEIN LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use in this Registration Statement on Form S-3,
Amendment No. 2 of our report dated December 9, 1998 relating to the financial
statements of Olympic Cascade Financial Corporation as of September 25, 1998 and
for the year then ended.
/s/ Feldman Sherb Ehrlich & Co., P.C.
Feldman Sherb Ehrlich & Co., P.C.
Certified Public Accountants
May 5, 1999
New York, New York
17
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration
Statement of Olympic Cascade Financial Corporation on Amendment No. 2 to Form
S-3 (File No. 333-74243) of our report dated November 14, 1997, on the
financial position of Olympic Cascade Financial Corporation and subsidiaries
as of September 26, 1997, and the results of their operations and cash flows
for each of the years in the two year period then ended, appearing in the
Annual Report on Form 10-K of Olympic Cascade Financial Corporation for the
year ended September 25, 1998. We also consent to the reference to us under
the heading "Experts" in the Prospectus, which is part of this Registration
Statement.
/s/ Moss Adams LLP
Moss Adams LLP
Seattle, Washington
May 5, 1999
18
