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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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. [ ]
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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
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 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 being registered hereunder are being registered
for resale by the selling stockholders named in the prospectus (the
"Selling Stockholders").
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(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.
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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 by certain stockholders of up to
403,113 shares of our common stock. We will not receive any of the proceeds from
the sale of the registered shares by the selling stockholders. We will 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 11.
Consider carefully the risk factors beginning on page five 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>
The Company........................................4 Selling Stockholders.....................9
Where You Can Find More Information ...............4 Plan of Distribution.....................10
Incorporation of Certain Documents By
Reference..........................................5 Legal Matters............................11
Risk Factors.......................................5 Experts..................................11
Use of Proceeds....................................9
</TABLE>
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THE COMPANY
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 that
provided for the payment of bonus compensation to certain brokers.
During fiscal year 1998, we redirected our focus on retail operations by
divesting our ownership in two of our subsidiaries, L.H. Friend, Weinress,
Franksen & Presson, Inc. and Travis Capital, Inc. We had acquired each company
in fiscal year 1997.
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 with the
public involve solicited trades and approximately 70% of these involve sales of
securities to customers.
WestAmerica, based in Scottsdale, Arizona is a registered securities
broker-dealer providing primarily retail brokerage operations. The majority of
WestAmerica's transactions with the public involve solicited trades.
Our business plan is to achieve growth of our retail brokerage business through
the acquisition and roll-up of complementary businesses. 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 seek additional selective strategic acquisitions.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange Act
of 1934, as amended, and, therefore, 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 under the Securities Act of 1933, omits certain of
the 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 such
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.
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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 under Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act:
- - 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 pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and
before the filing of a post-effective amendment which indicates that all
securities offered under this prospectus have been sold or which deregisters 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 make an
offer of these shares in any state that does not permit the offer. 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.
RISK FACTORS
FORWARD LOOKING STATEMENTS
Except for historical information contained herein, the matters discussed in
this prospectus contains or incorporates certain 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. These securities are speculative and
involve a high degree of risk. You should only purchase these securities if you
can afford to lose your entire investment. You should carefully consider the
following risks prior to purchasing our common stock.
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SECURITY INDUSTRY RISKS
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 internationally.
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.
RISK OF REDUCED REVENUES DUE TO MARKET FLUCTUATIONS
Our revenue and profitability may be adversely affected by declines in the
volume of securities transactions and in market liquidity, which generally
result in lower revenues from commissions. Lower securities price levels may
also result in a reduced volume of transactions, as well as losses from declines
in the market value of securities held for trading purposes. During periods of
declining volume and revenue, our profitability would be adversely affected.
Declines in market values of securities 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.
RISK OF COMPETITION
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. Such
mergers and acquisitions have increased competition from these firms, many of
which have significantly greater capital and 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 services represent a rapidly
expanding segment of the securities industry. 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 financial intermediaries such as 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.
DEPENDENCE ON, AND ABILITY TO RETAIN AND RECRUIT, KEY PERSONNEL
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, whereby they 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.
RISKS ASSOCIATED WITH GROWTH AND EXPANSION
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
such expansion could require significant 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
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necessary for any such expansion, or that any such expansion will be
successful. The failure of any such 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.
RISKS ASSOCIATED WITH SYSTEMS
Our business is highly dependent on communications and information systems,
primarily systems provided by nationally recognized third-party vendors. Any
failure or interruption of our systems or systems provided by third-party
vendors could cause delays or other problems in our securities trading
activities, which could have a material adverse effect on our business,
financial condition, results of operations or cash flows.
National is in the process of implementing a new trade processing system, 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.
RISKS ASSOCIATED WITH MARKET MAKING ACTIVITIES
National acts as a market-maker in odd-lot positions. In such transactions, we
act as a principal, undertaking the risk of a change in the price of such
securities or being unable to resell such securities or cover short positions.
These risks are heightened by the illiquidity of many of the securities that we
trade and or make a market. Any losses from our proprietary 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.
LITIGATION AND POTENTIAL SECURITIES LAW LIABILITY
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.
Broker-dealers are subject to claims by dissatisfied customers, including claims
alleging they were damaged by improper sales practices such as unauthorized
trading, churning, 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 and independent contractors 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 prospectuses or otherwise with
respect to securities offerings. We may be required to contribute to a
settlement, defense costs or a final judgment in certain legal proceedings or
arbitrations involving past underwriting and in actions that may arise in the
future. National carries "Errors and Omissions" insurance to protect against
certain large arbitrations, however, the policy is limited in items and amounts
covered and there can be no assurance that it will cover a certain complaint.
The adverse resolution of any legal proceedings involving us could have a
material adverse effect on its business, financial condition, results of
operations or cash flows.
YEAR 2000 COMPLIANCE
We define a system as Year 2000 compliant as one capable of correct
identification, manipulation and calculation when processing data during the
year change from December 31, 1999 to January 1, 2000. We are addressing the
Year 2000 issue in the following two phases. In phase one, completed in October
1998, we prepared an inventory of all Information Technology ("IT") and non-IT
systems, critical to operations. We tested all of its internal IT systems and
concluded that not all systems are compliant under the above definition. We have
determined the remedies necessary to achieve Year 2000 compliance. We have
retained an outside consulting firm, Washington Web Site Services, which works
on site and will continue working with us, at a minimum, until all IT systems
are Year 2000 compliant. In phase two, we have begun replacing hardware chips,
software and entire components in
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those systems deemed to be non-compliant. We expect to complete phase two by
June 1999. As required by the NASD, National and WestAmerica will be
completing a Year 2000 readiness report. As part of this report, we must
engage our independent accounting firm to perform procedures and report on
our process for addressing Year 2000 problems. These reports are to be filed
by April 30, 1999.
The majority of National's and WestAmerica's trade processing information is
handled through third party vendors. In the first quarter of fiscal 1999,
National negotiated an agreement to change to BETA Systems, Inc. from its prior
vendor. National has begun this conversion process and anticipates that this
conversion will be completed and fully operational by April 1, 1999. As part of
this agreement, BETA Systems, Inc. has represented to us that they will be 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.
We have determined that material costs and resources will not be required to
modify or replace portions of our hardware and software so that its computer
systems will properly utilize dates beyond December 31, 1999. To date, we have
spent approximately $50,000 and estimate we will spend less than $150,000 in
total regarding the Year 2000 issue.
The costs of the project and the date on which we plan to complete the Year 2000
modifications are based on management's best estimates, which were derived
utilizing numerous assumptions of future events including the continued
availability of certain resources, third party modification plans and other
factors. 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.
CONSTRAINTS IMPOSED BY NET CAPITAL REQUIREMENTS
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
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 certain 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.
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<TABLE>
<CAPTION>
Previous Four Quarters
Fiscal Year ended September 25, 26 and 27, (Dollars in thousands) (unaudited)
respectively (Dollars in thousands) -----------------------------------------
-------------------------------------- 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
1998 1997 1996 FYE 99 FYE 98 FYE 98 FYE 98
------------------------------------ -----------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $45,694 $39,994 $34,899 Revenue $8,161 $8,274 $11,846 $10,173
Net income (loss) ($4,666) $ 101 $ 1,735 Net (loss) ($261) ($3,685) ($ 623) ($ 577)
</TABLE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares offered hereby nor
will such proceeds be available for our use or benefit. We will receive proceeds
of approximately $1,756,000 upon the exercise of warrants to acquire an
aggregate of 403,113 shares of our common stock. Such proceeds will 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 offered pursuant to this prospectus. 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(1) completed(2)
- ---------------- ------------- ------------------- ----------------------
<S> <C> <C> <C>
Casull Arms Corporation (3) 40,000 40,000 2.53%
Sugar Friedberg & Felsenthal (4) 10,000 10,000 -
D'Ancona & Pflaum LLC (4) 20,000 20,000 1.26%
FAI General Insurance
Company Limited (5) 80,325 80,325 4.83%
Geller & Friend Capital
Partners (6) 16,538 16,538 1.04%
Merryl H. Tisch, Custodian (7) 78,750 78,750 4.74%
LVE, LLC (8) 157,500 157,500 9.06%
</TABLE>
(1) The number of shares beneficially owned is determined under rules
promulgated by the SEC, and the information does not necessarily indicate
beneficial ownership for any other purpose.
(2) Percent of total shares of our common stock outstanding as of March 10,
1999.
(3) They received these 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.
(4) They are a law firm that represents us in various matters. The shares were
issued in payment of balances owed for past services rendered.
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(5) The 33,075 shares of our common stock beneficially owned by FAI being
registered hereunder represents shares issuable upon the exercise of a
vested five-year warrant to purchase 33,075 shares of our common stock,
which was issued on May 31, 1997, in connection with a financing. The 47,250
shares of our common stock beneficially owned by FAI being registered
hereunder represents shares issuable upon the exercise of a vested five-year
warrant to purchase 47,250 shares of our common stock, which was issued on
November 17, 1997, in connection with a financing.
(6) The 16,538 shares of our common stock beneficially owned by Geller & Friend
Capital Partners being registered hereunder represents shares issuable upon
the exercise of a vested five-year warrant to purchase 16,538 shares of our
common stock, which was issued on July 21, 1997.
(7) The 26,250, 26,250 and 26,250 shares of our common stock beneficially owned
by Merryl H. Tisch as custodian for Jessica S. Tisch, Benjamin J. Tisch and
Samuel A. Tisch, respectively, which are being registered hereunder
representing shares issuable upon the exercise of vested five-year warrants
to purchase 26,250, 26,250 and 26,250 shares of our common stock,
respectively, which were sold by us on November 17, 1997, in connection with
a financing.
(8) The 157,500 shares of our common stock beneficially owned by LVE which is
being registered hereunder represents shares issuable upon the exercise of a
vested five-year warrant to purchase 157,500 shares of our common stock,
which was issued on January 27, 1998, in connection with a financing.
It is unknown if, when or in what amounts the selling stockholders may offer
shares for sale pursuant to this prospectus. Because the selling stockholders
may offer all or some of the shares offered hereby, no estimate can be given as
to the amount of shares offered hereby that they will continue to hold after
this offering is considered complete. However, for purposes of this table above
we have assumed that, after completion of the offering, they will have sold all
of their shares offered hereby.
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 such 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 or other persons acting on the behalf of
parties that participate with such selling stockholders in the distribution of
shares may be deemed to be underwriters 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 of 1933 (the "Securities
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 pursuant to 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.
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At the time that any particular offering of shares is made, to the extent
required by the Securities Act, a prospectus supplement will be distributed,
setting forth the terms of the offering, including the aggregate number of
shares being offered, 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
reallowed 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 offered
hereby. There can be no assurance that the selling stockholders will sell all or
any of the shares offered hereby.
LEGAL MATTERS
The validity of our common stock offered hereby and certain 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 in reliance upon the authority of the above firms as experts in
accounting and auditing.
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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, OR SOLICITATIONS OF
OFFERS TO BUY THEM, WOULD BE UNLAWFUL PRIOR TO THEIR REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF SUCH STATE. INFORMATION CONTAINED IN
THIS PROSPECTUS IS CURRENT AS OF THE DATE OF THIS PROSPECTUS. EVEN IF YOU
RECEIVE A COPY OF THIS PROSPECTUS, NEITHER US NOR ANY OF THE SELLING
STOCKHOLDERS IS MAKING ANY REPRESENTATION ABOUT WHETHER THE INFORMATION
CONTAINED IN THIS PROSPECTUS IS CORRECT AT ANY TIME AFTER THE DATE OF THIS
PROSPECTUS.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Company 4
Where You Can Find More Information 4
Incorporation by of Certain Documents by Reference 5
Risk Factors 5
Use of Proceeds 9
Selling Stockholders 9
Plan of Distribution 10
Legal Matters 11
Experts 11
</TABLE>
403,113 SHARES
OLYMPIC CASCADE
FINANCIAL CORPORATION
COMMON STOCK
PROSPECTUS
MARCH 11, 1999
12
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. 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 15. 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 16. EXHIBITS
<TABLE>
<S> <C>
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)
</TABLE>
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
13
<PAGE>
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
(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.
(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.
14
<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 11th
day of March, 1999.
OLYMPIC CASCADE FINANCIAL CORPORATION
Registrant
By: /s/ Steven A Rothstein
- ---------------------------- Date: March 11, 1999
Steven A. Rothstein
Chairman, Chief Executive
Officer and President
By: /s/ Robert H. Daskal
- ---------------------------- Date: March 11, 1999
Robert H. Daskal
Senior Vice President,
Chief Financial Officer,
Treasurer and Secretary
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>
Chairman, Chief Executive March 11, 1999
/s/ Steven A. Rothstein Officer and President
Steven A. Rothstein
Director and Vice March 11, 1999
/s/ Robert I. Kollack Chairman
Robert I. Kollack
/s/ Gary A. Rosenberg Director March 11, 1999
Gary A. Rosenberg
/s/ James C. Holcomb Director March 11, 1999
James C. Holcomb, Jr.
/s/ D.S. Patel Director March 11, 1999
D.S. Patel
</TABLE>
15
<PAGE>
EXHIBIT 5.1
LEGAL OPINION
March 10, 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 50,000 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.
(d) We are members of the Bar of the State of New York. Our opinions
below are limited solely to the effect of the laws of the State of New York, the
General Corporation Law of the State of Delaware and of the federal laws of the
United States.
On the basis of such examination, we are of the opinion that:
16
<PAGE>
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.
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
17
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use in this Registration Statement on Form S-3 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
March 9, 1999
New York, New York
18
<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 Form S-3 of our report
dated November 14, 1997, 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
Seattle, Washington
March 9, 1999
19
