As filed with the Securities and Exchange Commission on March 2, 1999
Registration No.
====================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
ALPINE ENTERTAINMENT, INC.
---------------------------------
(Exact Name of registrant as specified in its charter)
Delaware 52-2143186 7812
- ---------------- ---------------------- ---------------------
(State or other (I.R.S. Employer (Primary Standard
jurisdiction of Identification Number Classification Code
incorporation Number
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6919 Valjean Avenue
Van Nuys, California 91406
818/909-5207
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Roland Carroll
6919 Valjean Avenue
Van Nuys, California 91406
818/909-5207
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to: Cassidy & Associates, 1504 R Street, N.W.
Washington, D.C. 20009, 202/387-5400
Approximate date of commencement of
proposed sale to the public: As soon as practicable after the
effective date of this Registration
Statement
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, check the following box. / X /
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for
the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. //
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum Amount of
Title of Each Class Amount Offering Aggregate Regis-
of Securities to be to be Price Offering tion
Registered Registered Per Share Price Fee (3)
Common Stock 1,500,000 $5.00 $7,500,000 $2,085
ommon Stock held
by Selling 250,000 $4.00 (2) 1,000,000 278
Securityholders
TOTAL 1,750,000 $8,500,000 $2,363
(1) There is no current market for the securities.
(2) There is no current market for the securities and
the per share book value of the common stock is
$(.0268). Consequently the proposed per share
offering price for the common stock held by the
Selling Securityholders is estimated for purposes
of calculating the amount of registration fee.
(3) Estimated solely for the purpose of calculating
the registration fee based on Rule 457(f)(2).
(4) Paid by electronic transfer.
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, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH
DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
The information contained herein is subject to
completion or amendment. A registration statement
relating to these securities has been filed with the
Securities and Exchange Commission. These securities
may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes
effective. This prospectus shall not constitute an
offer to sell or the solicitation of an offer to buy
nor shall there be any sale of these securities in any
state in which such offer, solicitation or sale would
be unlawful prior to registration or qualification
under the securities laws of any such state.
PROSPECTUS Subject to Completion, Dated March ______, 1999
ALPINE ENTERTAINMENT, INC.
1,500,000 Shares of Common Stock at $5.00 per Share and
250,000 Shares of Common Stock to be Sold by the
Holders thereof
The Registration Statement of which this
Prospectus is a part relates to the offer and sale by
Alpine Entertainment, Inc., a Delaware corporation
(the "Company") of 1,500,000 shares (the "Shares") of
its common stock, $.0001 par value per share (the
"Common Stock") at $5.00 per share. See "DESCRIPTION
OF SECURITIES". The Company is offering a minimum of
300,000 Shares (the "Minimum Offering") and a maximum
of 1,500,000 Shares (the "Maximum Offering"). All
funds received by the Company with respect to the sale
of the first 300,000 Company Shares will be deposited
in a special escrow account to be established by the
Company at a federally insured national bank. If
300,000 Shares are not sold within one hundred eighty
days (180) following the effective date of the
Registration Statement of which this Prospectus is a
part (the "Effective Date"), the offering will
automatically terminate and all funds received from
the sale of the Shares will be returned to the
purchasers thereof. Once funds from the sale of
1,500,000 Shares have been received, the Company will
not accept any further purchasers and any funds
tendered therefor will be returned. There can be no
assurance that the Minimum Offering will be sold. See
"RISK FACTORS--If Minimum Offering Is Not Sold". The
Company intends to offer its Shares through member
firms of the National Association of Securities
Dealers, Inc., but as of the date hereof has not
entered into any agreements or arrangements for such
sale by any firm. There can be no assurance that the
Company will be able to locate any firms that will
sell the Shares. See 'PLAN OF DISTRIBUTION" The
offering price of the Shares was determined
arbitrarily by the Company and the offering price is
not necessarily related to asset or book value, net
worth or any other established criteria of value.
Alpine Entertainment, Inc. is a Delaware
corporation formed in 1998 to distribute domestically
and internationally motion pictures or other
entertainment media programming. The Company
anticipates that it may participate in other aspects
of the film industry, including the acquisition,
production and sale of entertainment media properties
or the acquisition of companies, or the assets of
companies, involved in the development, production,
distribution, acquisition or sale of entertainment
media properties either by itself or through
affiliates or joint venture or other relationships.
On February 10, 1999, the Company acquired its only
operating subsidiary, Alpine Pictures International,
Inc., an operating California independent film
distribution company. (Unless otherwise indicated all
references hereinafter to the "the Company" refer to
Alpine Entertainment, Inc. and its subsidiaries) The
Company focuses on the distribution of quality films
but may also distribute or acquire other entertainment
programming such as made-for-television movies, home
videos, television series, mini-series, CD-ROM
programming and interactive games.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE
SUBSTANTIAL DILUTION. SEE "RISK FACTORS" CONTAINED IN THIS PROSPECTUS
BEGINNING ON PAGE 5 AND "DILUTION" BEGINNING ON PAGE 12.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Registration Statement of which this
Prospectus is a part also relates to the offer and
sale of 250,000 shares of Common Stock of the Company
(the "Selling Securityholders Shares") by the holders
thereof (the "Selling Securityholders"). All costs
incurred in the registration of the Shares and the
Selling Securityholders' Shares are being borne by the
Company.
The Selling Securityholders' Shares will
become tradeable on or about the date of this
Prospectus. Sales of the securities being offered by
Selling Securityholders, or even the potential of such
sales, may likely have an adverse effect on the market
prices of the securities of the Company. The Selling
Securityholders will receive the proceeds from the
sale of the securities being offered by them. The
Company will not receive any of the proceeds from such
sales. The Selling Securityholders, directly or
through agents, dealers or representatives to be
designated from time to time, may sell their
securities on terms to be determined at the time of
sale. See "PLAN OF DISTRIBUTION." The Selling
Securityholders reserve the sole right to accept or
reject, in whole or in part, any proposed purchase of
the Selling Securityholders' Shares being offered by
them pursuant hereto.
Prior to the offering of the securities
described herein, there has been no public market for
the Company's Common Stock, and no assurances can be
given that a public market will develop following
completion of this offering or that, if any such
market does develop, it will be sustained. See "USE
OF PROCEEDS."
Underwriting Proceeds to
Price to Discounts and Company or
Public Commissions(1) Other Persons (2)
Per Share $5.00 $0.50 $4.50
Minimum Offering $1,500,000 $150,000 $1,350,000
300,000 Shares
of Common Stock
Maximum Offering
1,500,000 Shares $7,500,000 $750,000 $6,750,000
of Common Stock
(1) The Company is currently seeking one or more
member firms of the National Association of
Securities Dealers, Inc. to sell the Shares.
There can be no assurance that the Company
will be able to locate any such firm. The
Company anticipates that if, however, a member
firm is used discounts or commissions would
not exceed 10% of the offering price.
(2) Does not include offering costs estimated to
be approximately $156,700.
FOLLOWING THE COMPLETION OF THIS OFFERING,
CERTAIN BROKER-DEALERS MAY BE THE PRINCIPAL MARKET
MAKERS FOR THE SECURITIES OFFERED HEREBY. UNDER THESE
CIRCUMSTANCES, THE MARKET BID AND ASKED PRICES FOR THE
SECURITIES MAY BE SIGNIFICANTLY INFLUENCED BY
DECISIONS OF THE MARKET MAKERS TO BUY OR SELL THE
SECURITIES FOR THEIR OWN ACCOUNT. NO ASSURANCE CAN BE
GIVEN THAT ANY MARKET MAKING ACTIVITIES, IF COMMENCED,
WILL BE CONTINUED.
IN CONNECTION WITH THIS OFFERING, CERTAIN
UNDERWRITERS MAY ENGAGE IN PASSIVE MARKET MAKING
TRANSACTIONS IN THE COMPANY'S COMMON STOCK ON NASDAQ
IN ACCORDANCE WITH RULE 103 OF REGULATION M. SEE
"PLAN OF DISTRIBUTION".
FOR A PERIOD OF AT LEAST ONE YEAR FOLLOWING
CLOSING OF THIS OFFERING, THE COMPANY WILL BE REQUIRED
BY THE SECURITIES EXCHANGE ACT OF 1934 TO FILE
PERIODIC REPORTS AND OTHER INFORMATION WITH THE
SECURITIES AND EXCHANGE COMMISSION. SUCH MATERIAL MAY
BE INSPECTED AT THE COMMISSION'S PRINCIPAL OFFICES AT
JUDICIARY PLAZA, 450 FIFTH STREET, N.W. WASHINGTON,
D.C. 20459 AND COPIES MAY BE OBTAINED ON PAYMENT OF
CERTAIN FEES PRESCRIBED BY THE COMMISSION. THE
COMPANY WILL FURNISH TO HOLDERS OF ITS COMMON STOCK
ANNUAL REPORTS CONTAINING AUDITED FINANCIAL STATEMENTS
EXAMINED AND REPORTED UPON, AND WITH AN OPINION
EXPRESSED BY AN INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANT. THE COMPANY MAY ISSUE OTHER UNAUDITED
INTERIM REPORTS TO ITS SHAREHOLDERS AS IT DEEMS
APPROPRIATE.
The date of this Prospectus is March ____, 1999
PROSPECTUS SUMMARY
The following is a summary of certain
information contained elsewhere in this Prospectus.
Reference is made to, and this summary is qualified
by, the more detailed information set forth in this
Prospectus, which should be read in its entirety.
THE COMPANY
Alpine Entertainment, Inc. (the "Company") is
a Delaware corporation formed in 1998 to distribute
domestically and internationally motion pictures or
other entertainment media programming. The Company
anticipates that it may participate in other aspects
of the film industry, including the acquisition,
production and sale of entertainment media properties
or the acquisition of companies, or the assets of
companies, involved in the development, production,
distribution, acquisition or sale of entertainment
media properties either by itself or through
affiliates or joint venture or other relationships.
On February 10 ,1999, Alpine Entertainment, Inc.
acquired Alpine Pictures International, Inc., an
operating California independent film distribution
company. See "THE COMPANY Alpine Pictures
International, Inc.". The Company is engaged in the
distribution of quality films in domestic and
international markets including theatrical exhibition,
home videos, network television, cable television, pay
per view cable television, and nontheatrical
exhibitors such as airlines, schools, hospitals,
libraries, hotels, syndicated television and related
markets. The Company may also have the right to
license for distribution, pursuant to its distribution
agreements, soundtrack music, CD-ROMs, interactive
games and other merchandising items.
The Company currently only has operations
through its subsidiary, Alpine Pictures International,
Inc. through which it has entered into oral or written
distribution agreements for over ten motion pictures.
Certain of these distribution agreements are for films
produced by affiliates of the Company. See "BUSINESS
Current Operations".
RISK FACTORS
There are substantial risk factors involved in
investment in the Company. Investment in the Company
is speculative and no assurances can be made of any
return to investors. See "CERTAIN RISK FACTORS".
TRANSFER AGENT
The Company is in the process of obtaining a
transfer agent for its securities. See "DESCRIPTION
OF SECURITIES--Transfer Agent and Registrar."
TRADING MARKET
There is currently no trading market for the
Company's securities. The Company intends to apply
initially for admission to quotation of its Securities
on the NASD OTC Bulletin Board and intends to apply
for listing on the Nasdaq SmallCap Market when, and
if, it qualifies therefor. If the Company's securities
are not accepted for admission to quotation on the
NASD OTC, the securities will be quoted on the daily
quotation sheets published by the National Quotation
Bureau, Inc., commonly known as the "pink sheets".
There can be no assurance that the Company will
qualify for quotation of its securities on the NASD
OTC Bulletin Board. See "RISK FACTORS--Absence of
Trading Markets" and "DESCRIPTION OF
SECURITIES--Admission to Quotation on Nasdaq SmallCap
Market or the NASD OTC Bulletin Board".
SELECTED FINANCIAL DATA
The following table sets forth the selected
consolidated financial data for the Company as of
December 31, 1996 and 1997, and September 30, 1998:
Income statement data:
Nine Months
Year Ended Year Ended ended
December 31, December 31 September 30,
1997 1996 1998
Revenues $ 74,532 46,143
Total operating expenses 786,137 77,477 625,627
Net Loss from Operations (711,605) (77,477) (579,484)
Balance sheet data:
December 31, December 31, September 30,
1997 1996 1998
Current Assets 2,759 49,311 14,174
Due from Non-Combined
Affiliate 351,715 98,367 283,714
Fixed and other assets 72,743 4,417 36,366
Total assets 427,217 152,095 334,154
Total Current liabilities 54,086 3,600 190,189
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE IN
NATURE AND INVOLVE A HIGH DEGREE OF RISK. THE
SECURITIES OFFERED HEREBY SHOULD BE PURCHASED ONLY BY
PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE
INVESTMENT. THEREFORE, EACH PROSPECTIVE INVESTOR
SHOULD, PRIOR TO PURCHASE, CONSIDER VERY CAREFULLY THE
FOLLOWING RISK FACTORS, AS WELL AS ALL OF THE OTHER
INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS AND
THE INFORMATION CONTAINED IN THE FINANCIAL STATEMENTS,
INCLUDING ALL NOTES THERETO.
LIMITED OPERATING HISTORY
The Company has recently been formed to
distribute motion pictures and other entertainment
media programming. The Company has no operating
history other than through its subsidiary, Alpine
Pictures International, Inc. which has reflected
losses since it commenced operations in 1996.
RISKS INHERENT IN DISTRIBUTION OF MOTION PICTURES AND
ENTERTAINMENT MEDIA PROGRAMMING
The Company's revenue is derived from the
distribution of motion picture rights which the
Company acquires from others, principally the producer
or owner of the motion picture. The Company's
business is dependent on its ability to continue to
acquire such rights to commercially exploitable motion
pictures. The acquisition of such rights and the
distribution of motion pictures is a highly
speculative business. Because each motion picture is
an individual artistic work and its commercial success
is primarily determined by audience reaction, which is
unpredictable, the revenues derived from a motion
picture do not necessarily correlate to the costs
incurred, and there can be no assurance as to the
economic success of any motion picture. It is
therefore difficult to identify and acquire films
suitable for distribution by the Company on acceptable
terms. The entertainment business, and the film and
video industry in particular, are undergoing
significant changes such that the ancillary markets,
including home video, pay-per-view, cable television
and free television have become increasingly important
sources of revenue. Nevertheless, the traditional
mainstay of a motion picture's economic performance,
its theatrical success, may effect a picture's ability
to generate revenue in ancillary markets. If programs
are not well received in theatrical distribution or
are not exhibited in theaters, their value in the
ancillary markets may also be diminished.
Television distribution is also highly
speculative and inherently risky. The success of the
Company's television distribution business is affected
by some of the same factors described above and may
also be impacted by prevailing advertising rates,
which are subject to fluctuation. Thus, there is a
substantial risk that some or all of the Company's
television projects will not be commercially
successful, resulting in costs not being recouped or
anticipated profits not being realized.
PRIOR LOSSES
The Company has incurred operating losses
since inception. There is no assurance that the
Company's revenues will grow or be earned at current
levels, or that the Company will be profitable. There
is no assurance that the Company will not incur
operating deficits in the future. See "FINANCIAL
STATEMENTS"
IF MINIMUM OFFERING IS NOT SOLD
If the Minimum Offering (300,000 Shares) is
not sold by the Company within 180 days of the
Effective Date, all funds received by the Company will
be returned to the investors thereof with interest at
the same rate as paid by the escrow bank. Investors
should be aware that investment funds will be held in
an escrow account maintained by the Company and
investors will not be entitled to a return of their
investment during such 180 day period.
SUBSTANTIAL CAPITAL REQUIREMENTS, NEED FOR ADDITIONAL
FINANCING
If the Minimum Offering is sold, the Company
will receive $1,500,000 gross proceeds and if the
Maximum Offering is sold, the Company will receive
$7,500,000 in gross proceeds. The acquisition of the
rights and distribution of motion pictures requires
substantial capital. The Company believes that the
net proceeds of the Minimum Offering combined with
current revenues should be adequate to permit the
Company to continue its operations for the next 12
months. However, future events, including the
problems, delays, expenses and difficulties frequently
encountered by movie production companies may lead to
cost increases that could make the net proceeds of
this offering insufficient to fund the Company's
proposed operations. The Company may seek additional
sources of capital, including an additional offering
of its equity securities, an offering of debt
securities or obtaining financing through a bank or
other entity. The Company has not established a limit
as to the amount of debt it may incur nor has it
adopted a ratio of its equity to a debt allowance. If
the Company needs to obtain additional financing,
there is no assurance that financing will be
available, from any source, or that it will be
available on terms acceptable to the Company, or that
any future offering of securities will be successful.
The Company could suffer adverse consequences if it is
unable to obtain additional capital when needed. See
"BUSINESS" and "USE OF PROCEEDS".
The pace of the Company's development of its
business plan and the number of films it is able to
acquire for distribution is directly related to the
amount of capital available to the Company for such
purposes. The greater the number of Shares that are
sold, the greater the amount of proceeds available to
the Company to acquire distribution rights or
otherwise develop its business plan.
LACK OF DIVERSIFICATION
The Company may not have the ability or
sufficient capital to acquire a variety of films for
distribution. If the Company is not able to diversify
and acquire a number of different films for
distribution, then the failure of one or two films
could have a material adverse impact on the Company,
causing shareholders to lose all or a substantial
amount of their investment in the Company.
DOMESTIC THEATRICAL DISTRIBUTION
The Company will attempt to gain distribution
of its motion pictures in all media, including
domestic theatrical distribution. Many feature films
do not gain theatrical distribution. The domestic
theatrical market is dominated by several major motion
picture studios which place their own films and films
they acquire into such theaters. This domination
limits the domestic distribution market for
independently produced feature films. However, the
Company intends to continue to develop its
international distribution of motion pictures and its
domestic distribution of films in other nontheatrical
media forums.
RISKS OF INTERNATIONAL BUSINESS
The Company distributes motion pictures in the
international and domestic market. The Company enters
into distribution agreements with licensees in regard
to each motion picture it distributes. Management of
the Company anticipates that a significant
percentage of the Company's revenues and income, if
any, will be from foreign sources. Accordingly, the
Company is subject to the risks inherent in conducting
business across national borders, including, but not
limited to, currency exchange rate fluctuations,
international incidents, military outbreaks, economic
downturns, government instability, nationalization of
foreign assets, government protectionism and changes
in governmental policy, any of which could have a
material adverse effect on the Company's business
and operations and its prospects for the future.
CONTROL BY MANAGEMENT AND AFFILIATES
Upon the closing of this Offering, the
Company's executive officers and directors, together
with entities affiliated with them, will beneficially
own approximately 84.9% of the outstanding Common
Stock. As a result, these stockholders will be able
to exercise controlling interest over matters
requiring stockholder approval, including the election
of directors and the approval of material corporate
matters such as change of control transactions. The
effects of such control could be to delay or prevent a
change of control of the Company unless the terms are
approved by such stockholders.
SPECULATIVE NATURE OF INVESTMENT.
The entertainment industry is extremely
competitive and the commercial success of any motion
picture or other program is often dependent on factors
beyond the control of the Company, including but not
limited to audience
preference and exhibitor acceptance. The Company may
experience substantial cost overruns in marketing its
programs, and may not have sufficient capital to
successfully complete any of its projects. Competent
subdistributors or licensees may not be available to
assist the Company in its marketing efforts for its
programs. The Company may not be able to sell or
license its programs because of industry conditions,
general economic conditions, competition from other
producers and distributors, or lack of acceptance for
its programs by studios, distributors, exhibitors and
audiences. The Company may also incur uninsured
losses for liabilities which arise in the ordinary
course of business in the entertainment industry, or
which are unforeseen, including but not limited to
copyright infringement, product liability, and
employment liability. See "BUSINESS."
ADVERSE IMPACT OF GOVERNMENT REGULATION
The Company will be subject to and affected
by significant domestic and foreign government
regulation. Restrictions on American programming in
several foreign countries have been imposed by foreign
governments. Domestic regulation governs the content
and rating of motion pictures and other programming.
Motion picture piracy, especially in foreign
countries, may significantly reduce anticipated
revenues. Government laws and regulations, whether
existing today or adopted in the future, could
adversely affect the Company's ability to market and
have exhibited programs, and could impair the
Company's profitability. See "BUSINESS - Regulation."
DEPENDENCE ON KEY PERSONNEL
Ryan Carroll and Roland Carroll are directors
of the Company, officers and directors of its
operating subsidiary, and serve as the Company's Chief
Executive Officer and President, respectively. See
"MANAGEMENT." Virtually all decisions concerning the
conduct of the business of the Company, including the
properties and rights to be acquired by the Company
and the arrangements to be made for such
distribution, are made by or significantly influenced
by Messrs. Carroll. The loss of their services for
any reason would have a material adverse effect on the
Company's business and operations and its prospects
for the future. The Company does not have a "key man"
life insurance on the lives of any of its executive
officers.
CONFLICTS OF INTEREST
The officers or directors of the Company have
participated in and may continue to participate in
other entities which engage in activities similar to
those of the Company. Conflicts of interest may arise
as a result of such officers or directors involvement
with other ventures which may compete directly or
indirectly with the Company. See "MANAGEMENT -
Possible Conflicts of Interest."
COMPETITION
Motion picture production and distribution are
highly competitive. The competition comes from both
companies within the business and companies in other
entertainment media which create alternative forms of
leisure entertainment. The Company's competition for
the acquisition of distribution rights to
entertainment properties, includes major film studios
such as The Walt Disney Company, Paramount Pictures
Corporation, MCA, Columbia Pictures, Tri-Star
Pictures, Twentieth Century Fox, Warner Brothers Inc.
and MGM/UA, which are dominant in the motion picture
industry, as well as numerous independent motion
picture and television companies, broadcast television
networks and pay television systems. Many of these
organizations with which the Company competes have
significantly greater financial and other resources
than does the Company. With greater resources, these
companies are able to pay more to acquire film
properties and to distribute films to a greater market.
ABSENCE OF DIVIDENDS
The Company has never paid cash dividends on
the Common Stock and no cash dividends are expected
to be paid on the Common Stock in the foreseeable
future. The Company anticipates that for the
foreseeable future all of its cash resources and
earnings, if any, will be retained for the operation
and expansion of the Company's business.
SUBSTANTIAL AND IMMEDIATE DILUTION
The initial public offering price of the
Shares is higher than the net tangible book value of
the Company's Common Stock. Investors will sustain
immediate dilution of between $4.02 (based on the
Maximum Offering) and $4.76 (based on the Minimum
Offering) per Share based on the net tangible book
value of the Company as of September 30, 1998.
Existing shareholders acquired their shares of Common
Stock at a price substantially lower than the offering
price and, accordingly, new investors will bear a
disproportionate part of the financial risk associated
with the Company's business. See "DILUTION."
ISSUANCE OF FUTURE SHARES MAY DILUTE PRESENT
INVESTORS' PER SHARE VALUE
The Certificate of Incorporation of the
Company authorizes the issuance of a maximum of
100,000,000 shares of Common Stock, $.0001 par value
and 20,000,000 shares of "non-designated" preferred
stock. As of the date hereof there are 3,475,000
shares of Common Stock outstanding and no shares of
preferred stock outstanding. The future issuance of
all or part of the remaining authorized Common Stock
may result in substantial dilution in the percentage
of the Company's Common Stock held by the Company's
then existing shareholders. Moreover, any Common
Stock issued in the future may be valued on an
arbitrary basis by the Company. The issuance of
Company's shares for future acquisitions, or other
items, may have the effect of diluting the value of
shares held by investors, and might have a material
adverse effect on any trading market, should a trading
market develop for the Company's securities.
SELLING SECURITYHOLDERS MAY SELL SECURITIES AT ANY
PRICE OR TIME
After effectiveness of the Registration
Statement of which this Prospectus forms a part, the
Selling Securityholders may offer and sell their
securities at a price and time determined by the
Selling Securityholder in accordance with applicable
federal and state securities laws. The timing of the
sales and the price at which the securities are sold
by the Selling Securityholders could have an adverse
effect upon the public market for the securities,
should one develop. Selling Securityholders who are
affiliates of the Company will be subject to
limitations of Rule 144, including its volume
limitations in the sale of their securities.
POSSIBILITY OF ISSUANCE OF ADDITIONAL PREFERRED STOCK
COULD DEPRESS MARKET PRICE
The Company has 20,000,000 shares of
non-designated preferred stock authorized which it may
issue from time to time by action of the Board of
Directors. As of the date hereof, the Company has not
issued any shares of preferred stock. The Board may
designate voting and other preferences which
designations may give the holders of the preferred
stock voting control and other preferred rights such
as to liquidation and dividends. The authority of the
Board of Directors to issue such stock without
shareholder consent may have a depressive effect on
the market price of the Company's Common Stock even
prior to any such designation or issuance of the
preferred stock.
POTENTIAL ANTI-TAKEOVER EFFECT OF ISSUANCE OF
PREFERRED STOCK
The Board of Directors has the authority,
without further approval of the Company's
stockholders, to issue preferred stock, having such
rights, preferences and privileges as the Board of
Directors may determine. Any such issuance of shares
of preferred stock, under certain circumstances, could
have the effect of delaying or preventing a change in
control of the Company or other take-over attempt and
could adversely materially affect the rights of
holders of shares of Common Stock.
LIMITATION OF LIABILITY AND INDEMNIFICATION OF
OFFICERS AND DIRECTORS
The Certificate of Incorporation and By-Laws
of the Company provide that the Company shall
indemnify its officers and directors against losses
sustained or liabilities incurred which arise from any
transaction in such officer's or director's respective
managerial capacity unless such officer or director
violates a duty of loyalty, did not act in good faith,
engaged in intentional misconduct or knowingly
violated the law, approved an improper dividend, or
derived an improper benefit from the transaction. The
Company's Certificate of Incorporation and By-Laws
also provide for the indemnification by it of its
officers and directors against any losses or
liabilities incurred as a result of the manner in
which such officers and directors operate the
Company's business or conduct its internal affairs,
provided that in connection with these activities they
act in good faith and in a manner which they
reasonably believe to be in, or not opposed to, the
best interests of the Company, and their conduct does
not constitute gross negligence, misconduct or breach
of fiduciary obligations.
PENNY STOCK REGULATION
The Company has determined to offer the Shares
at $5.00 per share. This price has been arbitrarily
determined by the Company. However, if the Company is
unable to sell its Shares for such price or if the
market price of its Common Stock, if a market for its
Common Stock develops and is maintained, falls below
$5.00 per share, then the Common Stock of the Company
may be considered "penny stock". Penny stocks
generally are equity securities with a price of less
than $5.00 per share other than securities registered
on certain national securities exchanges or quoted on
the Nasdaq Stock Market, provided that current price
and volume information with respect to transactions in
such securities is provided by the exchange or system.
The Company's securities may be subject to "penny
stock" rules that impose additional sales practice
requirements on broker-dealers who sell such
securities to persons other than established customers
and accredited investors (generally those with assets
in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 together with their spouse). For
transactions covered by these rules, the broker-dealer
must make a special suitability determination for the
purchase of such securities and have received the
purchaser's written consent to the transaction prior
to the purchase. Additionally, for any transaction
involving a penny stock, unless exempt, the rules
require the delivery, prior to the transaction, of a
disclosure schedule prescribed by the Commission
relating to the penny stock market. The broker-dealer
also must disclose the commissions payable to both the
broker-dealer and the registered representative and
current quotations for the securities. Finally,
monthly statements must be sent disclosing recent
price information on the limited market in penny
stocks. Consequently, the "penny stock" rules may
restrict the ability of broker-dealers to sell the
Company's securities.
SHARES AVAILABLE FOR RESALE PURSUANT TO RULE 144
All the issued and outstanding shares of the
Company are "restricted securities" as such term is
defined in Rule 144 ("Rule 144") promulgated under the
Securities Act of 1933 (the "1933 Act"). In general,
under Rule 144, if adequate public information is
available with respect to a company, a person who has
satisfied a one year holding period as to his
restricted securities or an affiliate who holds
unrestricted securities may sell, within any three
month period, a number of that company's shares that
does not exceed the greater of one percent of the then
outstanding shares of the class of securities being
sold or, if the security is trading on the Nasdaq
Stock Market or on an exchange, the average weekly
trading volume during the four calendar weeks prior to
such sale. Sales of restricted securities by a person
who is not an affiliate of the company (as defined in
the 1933 Act) and who has satisfied a two year holding
period may be made without any volume limitation. The
outstanding restricted securities of the Company may
become eligible for sale in the public market pursuant
to Rule 144 without additional capital contribution to
the Company. Possible or actual sales of the
Company's outstanding Common Stock by all or some of
the present stockholders may have a material adverse
effect on the market price of the Company's Shares
should a public trading market develop.
LACK OF PRIOR MARKET FOR COMMON STOCK; NO ASSURANCE OF
PUBLIC TRADING MARKET
Prior to this offering, no public trading
market existed for the Common Stock of the Company.
There can be no assurance that a public trading market
for the Common Stock will develop or that a public
trading market, if developed, will be sustained. If
a trading market does in fact develop for the Shares
offered hereby, there can be no assurance that it
will be maintained. Furthermore, if for any reason
the Common Stock is not listed on the NASD OTC
Bulletin Board or a public trading market does not
otherwise develop, purchasers of the Common Stock may
have difficulty in selling their Common Stock should
they desire to do so.
COMPUTER SYSTEMS REDESIGNED FOR YEAR 2000
Many existing computer programs use only two digits
to identify a year in such program's date field.
These programs were designed and developed without
consideration of the impact of the change in the
century for which four digits will be required to
accurately report the date. If not corrected, many
computer applications could fail or create erroneous
results by or following the year 2000 ("Year 2000
Problem"). Many of the computer programs containing
such date language problems have not been corrected by
the companies or governments operating such programs.
Although the Company's operations are not computer
dependent or reliant, the Company could be impacted by
the failure of other domestic and international
companies and countries to timely correct their
computer systems, telephone systems, mail and package
delivery systems, transportation systems, financial
systems, and others. The Company's operations are
dependent on the Internet, the telephone system, and
delivery systems. If any of these systems or systems
of other companies or countries by which the Company
is affected become inoperational the Company will be
directly and significantly affected. The extent or
duration of the problems connected with the Year 2000
Problem are impossible to predict.
THE COMPANY
Alpine Entertainment, Inc. (the "Company") is
a Delaware corporation formed in 1998 to distribute
domestically and internationally motion pictures or
other entertainment media programming. The Company
anticipates that it may participate in other aspects
of the film industry, including the acquisition,
production and sale of entertainment media properties
or the acquisition of companies, or the assets of
companies, involved in the development, production,
distribution, acquisition or sale of entertainment
media properties either by itself or through
affiliates or joint venture or other relationships.
The Company has two subsidiaries, Alpine Pictures
International, Inc., an operating California
independent film distribution company and Alpine
Television, Inc. which is newly-formed and not yet
operational.
The Company is engaged in the distribution of
quality films in domestic and international markets
including theatrical exhibition, home videos, network
television, cable television, pay per view cable
television, and nontheatrical exhibitors such as
airlines, schools, hospitals, libraries, hotels,
syndicated television and related markets. The
Company may also contract for the right to exploit,
pursuant to its distribution agreements, soundtrack
music, CD-ROMs, interactive games and other
merchandising items.
The Company currently only has operations
through its subsidiary, Alpine Pictures International,
Inc. through which it has entered into oral or written
distribution agreements for over ten motion pictures.
Certain of these distribution agreements are for films
produced by affiliates of the Company. See "BUSINESS
Current Operations".
ALPINE PICTURES INTERNATIONAL, INC.
Alpine Pictures International, Inc. ("APII")
is an operating California corporation formed in July,
1996 engaged in the distribution domestically and
internationally of full length motion pictures,
made-for-television movies, home videos, televisions
series, mini-series, CD-ROM programming and
interactive games based on the literary properties it
licenses through its distribution agreements. APII
served as the general partner of Alpine Releasing
Partners I, L.P., formed in July, 1996. On February
18, 1998, the Alpine Releasing Partners I, L.P. was
merged into APII with the issuance of one share of
APII common stock for each $0.85 of limited
partnership interest resulting in a total issuance of
1,344,716 shares of common stock by APII to the
limited partners.
The Company acquired 69.9% of the outstanding
shares of APII on February 10, 1999, through the
exchange of shares of common stock of APII, at a
one-for-one ratio, for shares of Alpine Entertainment,
Inc. APII has an authorized capitalization of
20,000,000 shares of common stock, no par value, of
which 7,180,849 are outstanding to date, including
3,225,000 held by the Company, and 10,000,000 shares
of non-designated preferred stock, no par value, of
which no shares have been designated or issued. The
directors of APII are Tom Hamilton, Rene Torres,
Roland Carroll, Ryan Carroll, and Greg Cozine. Rene
Torres serves as President and Tom Hamilton serves as
Chief Financial Officer and Secretary of APII.
ALPINE TELEVISION, INC.
Alpine Television, Inc. ("ATI") was
incorporated in Delaware in February, 1999, to
distribute and develop entertainment media projects
for presentation on television, including
pay-per-view, pay, network, syndication or basic cable
television. ATI has an authorized capitalization of
100,000,000 shares of common stock of which 1,000
shares are outstanding and 20,000,000 shares of
non-designated preferred stock of which none are
outstanding. The Company owns all 1,000 outstanding
shares of ATI. ATI has no operations to date. Ernani
Di Massa, Jr., serves as chief executive officer of
ATI and David Craddick serves as its president.
EMPLOYEES
The Company has eleven full-time employees,
including its executive officers. The Company
utilizes independent contractors and consultants from
time to time to assist in promoting, marketing, and
distributing motion pictures. The independent
contractors are generally paid on a commission, hourly
or job-related basis, depending on the service being
performed. The Company does not have a collective
bargaining agreement with its employees and is not
aware of any labor disputes.
OFFICES/PROPERTY
The Company is presently leasing approximately
4,000 square feet of office space at 6919 Valjean
Avenue, Van Nuys, California 91406 from Alpine
Pictures, Inc., an affiliate of the Company. The
lease expires in January, 2001, with a right to renew
for five additional years at fair market value rental
rates. The basic rental rate for the office space
allocated to the Company is $6,760 per month, with
annual increases at the same rate as increases in the
Consumer Price Index. The office lease is a modified
gross lease providing for the pass-through to the
tenant of a pro rata portion of property taxes,
assessments, common area charges and other property
operating costs.
USE OF PROCEEDS
If the Maximum Offering is sold, the proceeds
to the Company will be $7,500,000 and if the Minimum
Offering is sold, the proceeds to the Company will be
$1,500,000 not including broker or underwriting
commissions which the Company anticipates will not
exceed 10% of the proceeds. The Company anticipates
that it may utilize certain Shares for use in
acquiring distribution rights to motion pictures or
other entertainment media properties and to develop
its business plan which may include participation in
other aspects of the film industry, including the
acquisition, production and sale of entertainment
media properties or the acquisition of companies, or
the assets of companies, involved in the development,
production, distribution, acquisition or sale of
entertainment media properties either by itself or
through affiliates or joint venture or other
relationships.
The following table sets forth the Company's
anticipated use of proceeds from the offering:
Minimum Offering Maximum Offering
Total Proceeds $ 1,500,000 $ 7,500,000
Commissions or underwriting Fees 150,000 750,000
Offering expenses 160,000 160,000
Administrative expenses 480,000 660,000
Acquisition of entertainment
media properties 461,500 3,854,500
Co-production 142,000 1,186,000
Development 35,500 296,500
Contingency 71,000 593,000
The foregoing represents the Company's best
estimate of the net proceeds of the offering based on
current planning and business conditions. The exact
allocation of the proceeds for the purposes set forth
above and the timing of the expenditures may vary
significantly depending upon the exact amount of funds
raised, the time and cost involved in locating media
properties, and other factors.
The Company believes that the proceeds from
the Minimum Offering in addition to revenues from
operations will be sufficient to fund its operations
for the next 12 months, although such development
would be at a reduced pace than if the Maximum
Offering proceeds were received. If an amount less
than Maximum Offering is raised, the Company may be
required to delay, scale back or eliminate parts of
its development plan or obtain funds through
additional financing, including loans or offerings of
its securities. The Company has no agreements or
understandings with respect to any future financing or
loan agreements.
DILUTION
Purchasers of the Shares will experience
immediate and substantial dilution in the value of
their Shares after purchase. Dilution represents the
difference between the initial public offering price
per share paid by the purchasers in the offering and
the net tangible book value per share immediately
after completion of the offering. Net tangible book
value per share represents the net tangible assets of
the Company (total assets less total liabilities),
divided by the number of shares of Common Stock
outstanding upon closing of the offering. The Company
is a new company without operations or revenues except
through its operating subsidiary. No relevant
determination of dilution can be from the book value
of the Company without assuming the book value of its
subsidiary.
As of September 30, 1998, the Company's
subsidiary had a net tangible book value of $(.0268).
Any purchases of Shares in an amount above that
book value would cause an immediate dilution to the
investor.
The following table sets forth, on a pro forma
basis, the differences between existing shareholders
and new investors in the offering with respect to the
number of shares of Common Stock purchased from the
Company, the total consideration paid to the Company
and the average price per share paid by existing
shareholders and by new investors:
Minimum Offering: Percentage
Percen- of Total Average
tage of Consid- Consider- Price
Outstanding eration ation per
Number Shares Paid Paid Share
Existing
Shareholders 3,475,000 91.4% $423 0.03% $.0001
New Investors 300,000 8.6 1,500,000 99.97% $ 5.00
Total 3,775,000 100% $1,500,423 100%
Maximum Offering:
Percentage
Percen- of Total Average
tage of Consid- Consid- Price
Outstanding eration eration per
Number Shares Paid Paid Share
Existing
Shareholders 3,475,000 69.8% $423 *% $.0001
New Investors 1,500,000 30.1 7,500,000 99.99% $ 5.00
Total 4,975,000 100% $7,500,423 100%
* Less than .01%
DIVIDEND POLICY
The Company presently does not intend to pay
cash dividends on the Common Stock in the
foreseeable future and intends to retain future
earnings, if any, to finance the expansion and
development of its business. Any future decision of
the Company's Board of Directors to pay dividends
will be made in light of the Company's earnings,
financial position, capital requirements and other
relevant factors then existing.
BUSINESS
The Company's current principal business is
the acquisition of distribution and ancillary rights
and the domestic and international distribution of
motion pictures and entertainment media properties.
The Company has operations only through its
subsidiary, Alpine Pictures International, Inc. which
it acquired on February 10, 1999.
MOTION PICTURE INDUSTRY OVERVIEW
The United States motion picture industry is
dominated by the "major" studios, including The Walt
Disney Company, Paramount Pictures Corporation, Warner
Brothers, Inc., MCA, Twentieth Century Fox, Columbia
Pictures, Tri-Star Pictures and MGM/UA. The major
studios are typically large diversified corporations
that have strong relationships with creative talent,
exhibitors and others involved in the entertainment
industry and whose libraries of motion pictures
provide a stable source of earnings which offset the
variations in the financial performance of their
motion picture releases and other aspects of their
motion picture operations. The major studios have
historically produced and distributed the vast
majority of high grossing theatrical motion pictures
released annually in the United States. These major
studios maintain generally control distribution of
pictures produced by their studio and may as well as
obtain the distribution and ancillary rights to motion
pictures and other entertainment media productions
produced by independent or other studios.
In recent years, "independent" films have been
successfully marketed and have received commercial
acclaim. Of the five pictures nominated for "best
picture" by the Academy of Motion Pictures (Oscars) in
1996, four, Fargo, The English Patient, Shine and
Secrets and Lies, were independent films. The
independent film studios earned most of the major
Oscars in 1996, including, best picture, best actor,
best actress, best supporting actress, and best
director. Management of the Company believes that the
success of the independent studios in 1996 may be the
beginning of a greater demand for independent films in
the international and domestic market.
The motion picture industry consists of two
principal activities: production and production
financing and distribution, which involves the
promotion and exploitation of motion pictures in a
variety of media, including theatrical exhibition,
home video, television and other ancillary markets,
both domestically and internationally.
MOTION PICTURE PRODUCTION AND FINANCING
The production of a motion picture usually
involves four steps: development, pre-production,
production and post-production. During development,
the screenplay is commissioned or acquired. The
screenplay may be adapted from an existing work
acquired by the producer or developed as an original
screenplay having its genesis in a story line or
scenario conceived or acquired by the producer. In
the development phase, the producer typically seeks
production financing and tentative commitments from a
director, the principal cast members and other
creative personnel. A proposed production schedule
and budget are also prepared during this phase.
Upon completing the screenplay and arranging
financing commitments, pre-production of the motion
picture begins. In this phase, the producer
engages creative personnel to the extent not
previously committed; finalizes the filming schedule
and production budget; obtains insurance and secures
completion guaranties, if necessary; establishes
filming locations and secures any necessary
studio facilities and stages, and prepares for the
start of actual filming.
The production phase begins when principal
photography begins and continues until completion of
principal photography, generally less than a period of
three months.
Following completion of principal photography
in the post-production phase, the motion picture
is edited, opticals, dialogue, music and any special
effects are added, and voice, effects and music sound
tracks and pictures are synchronized. This
results in the production of the negative from which
release prints of the motion picture are made.
Production costs consist of acquiring or
developing the screenplay, film studio rental,
principal photography, post-production and the
compensation of creative and other production
personnel.
The major studios generally fund production
costs from cash flow generated by motion picture and
related activities or, in some cases, from unrelated
businesses or through off-balance sheet methods.
Substantial overhead costs, consisting largely of
salaries and related costs of the production staff and
physical facilities maintained by the major studios,
also must be funded. Independent production companies
generally avoid incurring overhead costs as
substantial as those incurred by the major studios by
hiring creative and other production personnel and
retaining the other elements required for
pre-production, principal photography and
post-production activities on a picture-by-picture
basis. Sources of funds for independent production
companies may include bank loans, "pre-licensing" of
distribution rights, equity offerings and joint
ventures. Independent production companies generally
attempt to obtain all or a substantial portion of
their financing of a motion picture prior to
commencement of principal photography, at which point
substantial production costs begin to be incurred and
require payment.
Distribution expenses, which consist primarily
of the costs of advertising and preparing release
prints, are not included in direct production costs.
"Pre-licensing" of film rights is often used
by independent film companies to finance all or a
portion of the direct production costs of a motion
picture. By "pre-licensing" film rights, a producer
obtains amounts from third parties in return for
granting such parties a license to exploit the
completed motion picture in various markets and media,
which rights include distribution rights. Production
companies with distribution divisions may retain the
right to distribute the completed motion picture
either domestically or in one or more international
markets. Other production companies may separately
license theatrical, home, video, television and all
other distribution rights among several licensees.
In connection with the production and
distribution of a motion picture, major studios and
independent production companies often grant
contractual rights to actors, directors, screen
writers, and other creative and financial contributors
to share in revenues or net profits (as defined in
their respective agreements) from such motion picture.
Except for the most sought-after talent, these
third-party participators are generally payable after
all distribution fees, marketing expenses, direct
production costs and financing costs are recouped in
full.
MOTION PICTURE DISTRIBUTION
Distribution of a motion picture involves
domestic and international licensing of the picture
for (a) theatrical exhibition, (b) non-theatrical
exhibition, which includes airlines, hotels and armed
forces facilities, (c) video cassettes, (d)
presentation on television, including pay-per-view,
pay, network, syndication or basic cable and (e)
marketing of the other rights in the picture and
underlying literary property, which may include books,
merchandising and soundtracks. In recent years,
revenues from the licensing of rights to distribute
motion pictures in ancillary (i.e., other than
domestic theatrical) markets, particularly
international pay and free television, have increased
significantly.
The distributor typically acquires rights from
the producer to distribute a motion picture in one or
more markets and/or media. For its distribution
rights, the distributor generally agrees to pay to the
producer a certain minimum advance or guarantee upon
the delivery of the completed motion picture, which
amount will be recouped by the distributor out of
revenues generated from the distribution of the motion
picture in the particular media or territories. After
the distributor has recouped the amount advanced (if
any) plus its distribution costs, the distributor is
then entitled to retain ongoing distribution fees
computed as a percentage of the gross revenues
generated from its distribution of the picture. The
producer is thereafter entitled to receive all
remaining revenues in excess of the ongoing
distribution fee retained by the distributor.
A substantial portion of a film's ultimate
revenues are generated in a film's initial
distribution cycle (generally the first five years
after the film's initial domestic theatrical release).
Commercially successful motion pictures, however, may
continue to generate revenues after the film's initial
distribution cycle from the relicensing of
distribution rights in certain media, including
television and home video, and from the licensing of
distribution rights with respect to new media and
technologies.
THEATRICAL DISTRIBUTION
The theatrical distribution of a motion
picture involves the licensing and booking of the
motion picture to theatrical exhibitors, the promotion
of the picture through advertising and publicity
campaigns and the manufacture of release prints from
the film negative. Expenditures on these activities,
particularly on promotion and advertising, are often
substantial and may have a significant impact on the
ultimate success of the film's theatrical release.
Moreover, as the vast majority of these costs
(primarily advertising costs) are incurred prior to
the first weekend of the film's domestic theatrical
release, there is not necessarily a correlation
between these costs and the film's ultimate box office
performance. In addition, the ability to distribute a
picture during peak exhibition seasons, including the
summer months and the Christmas holidays, may affect
the theatrical success of the picture.
While arrangements for the exhibition of a
film vary greatly, there are certain fundamental
economic relationships applicable to domestic
theatrical distribution. Theater owners (the
"exhibitors") retain a portion of the admission paid
at the box office ("gross box office receipts"). The
share of the gross box office receipts retained by an
exhibitor generally includes a fixed amount per week
(in part to cover overhead), plus a percentage of
receipts that escalates over time. The balance ("gross
film rentals") is remitted to the distributor. The
distributor then retains a distribution fee from the
gross film rentals and recoups the costs incurred in
distributing the film which consist primarily of the
cost of advertising and the cost of release prints for
exhibition. The balance of gross film rentals, after
deducting distribution fees and any additional
distribution costs recouped by the distributors ("net
film rentals"), is then remitted to the producer of
the film.
THE ANCILLARY MARKETS
The rights to ancillary markets, including
nontheatrical, video, cable, television, music and
merchandising, are generally sold for distribution
after initial theatrical distribution. The sale or
licensing of ancillary rights continues to be a
growing source of revenue for motion pictures. These
rights can be sold as a package or individually as
follows:
HOME VIDEOS. A motion picture typically
becomes available for videocassette distribution
within four to six months after its initial domestic
theatrical release. Home video distribution consists
of the promotion and sale of video cassettes to local,
regional and national video retailers which rent or
sell video cassettes to consumers primarily for home
viewing. Certain films may never be released to
theaters but be immediately released to the home video
market. The Company anticipates that its films may be
released directly to the home video market.
TELEVISION. Television rights can include the
following:
Pay Television - The right to broadcast the
motion picture over cable systems nationwide as part
of a paid subscription to the cable channels or via
other media such as direct broadcast satellite.
Pay-Per-View Cable - The right to broadcast
the motion picture over cable systems for a fee on a
per-viewing basis.
Network Television - The right to license to
one of the major television networks for one or more
broadcasts of the motion picture.
Syndicated Television - The right to market
television rights on a market-by-market basis to
individual television stations around the country for
a specific number of broadcasts or for an unlimited
number of broadcasts over a period of time.
Television rights are generally licensed first
to pay-per-view for an exhibition period within six to
nine months following initial domestic theatrical
release, then to pay television approximately twelve
to fifteen months after initial domestic theatrical
release, thereafter in certain cases to free
television for an exhibition period, and then to pay
television again. These films are then syndicated to
either independent stations or basic cable outlets.
Pay-per-view allows subscribers to pay for individual
programs. Pay television allows cable television
subscribers to view such services as HBO, Cinemax,
Showtime, The Movie Channel or Encore Media Services
offered by their cable system operators for a monthly
subscription fee. Since groups of motion pictures are
typically packaged and licensed as a group for
exhibition on television over a period of time,
revenues from these television licensing "packages"
may be received over a period that extends beyond five
years from the initial domestic theatrical release of
a particular film. Motion pictures are also "packaged"
and licensed for television broadcast in international
markets.
NON-THEATRICAL. The rights to distribute the
film to the armed services, airlines, schools,
hospitals, cruise ships, correctional facilities,
community groups, libraries, hotels and motels in
other than 35mm gauge release prints or in video format.
OTHER RIGHTS. Music contained in a film may
be licensed for sound recording, public performance
and sheet music publication. Rights in motion pictures
may be licensed to merchandisers for the manufacture
of products such as video games, toys, T-shirts,
posters and other merchandise. Rights may also be
licensed to create novelizations of the screenplay and
other related book publications.
FOREIGN MEDIA. The right to market all of
the above rights, including theatrical exhibition, on
a territory-by-territory basis in foreign countries.
INTERNATIONAL MARKETS
In addition to their domestic distribution
activities, motion picture producers and distributors
generate substantial revenues from distribution of
motion pictures in international markets (in the same
media in which films are distributed in the domestic
market). Through its subsidiary, the Company has
primarily concentrated its distribution operations in
the international market and anticipates that it will
continue to do so.
CURRENT OPERATIONS OF THE COMPANY OVERVIEW
As of the date hereof, the Company's
operations have consisted of the distribution of
motion pictures. The Company primarily concentrates
on the distribution of films ranging between
$1,000,000 to $5,000,000 in production costs. The
Company generally enters into an agreement with an
owner or producer of a motion picture which agreement
provides for the Company to serve as the exclusive
distributor agent for the owner/producer in designated
territories for a specified term (the "Sales Agency
Agreement", also referred to "Distribution
Agreement"). The Sales Agency Agreement may also
grant the Company certain other rights to distribute
the motion picture in all media, including but not
limited to, theatrical exhibition, non-theatrical
exhibition, all forms of television, and home video.
The Company also attempts to acquire the
merchandizing, publication and sound track rights to
the motion picture.
In consideration for these rights, the Company
usually pays the owner/producer of the firm a cash
advance which cash advance is reimbursable from the
gross receipts derived from the film in such
designated territory. The Company usually agrees to
pay for distribution costs, including reworking the
film to meet foreign country standards, technical
materials and other items stipulated in the Sales
Agency Agreement, which are also reimbursed from gross
receipts to a certain agreed upon maximum level.
After reimbursement of the cash advance and
distribution costs, the Company then receives a
percentage of the gross receipts derived from the film
as negotiated in the Sales Agency Agreement ("Sales
Agent Fee"). The remaining gross receipts are paid to
the owner/producer. Under certain Sales Agency
Agreement, the owner/producer receives a certain
percentage from gross receipts prior to the
reimbursement of the cash advance or distribution
costs or payment of the Company's percentage.
Generally, for each picture which the Company
has agreed to distribute, it will enter into
agreements with subdistributors allowing the
subdistributor to license certain rights to the film
in certain specified territories for a designated
period of time (the "License Agreement"). The License
Agreement stipulates exactly which rights are licensed
including, for example, cinematic rights (theatrical,
non-theatrical, public video), video rights (home
video, commercial video), ancillary rights (hotels,
airlines, ships) and/or television rights (cable TV,
free TV, pay-for-view TV). For such licensing rights,
the subdistributor will pay the Company a certain
guaranteed amount. After payment of such guaranteed
amount and recoupment of certain costs by the
subdistributor, the Company will receive a percentage
of the gross receipts received by the subdistributor
in the exploitation of the film.
CURRENT OPERATIONS SPECIFIC PROJECTS
The Company has entered into Sales Agency
Agreements for the following motion pictures.
SALES AGENT
AS PERCENT OF
GROSS REVENUES
FROM THE REIMBURSEMENT
TITLES MOTION PICTURE(1) CEILING (2)
Lord Protector(3)(4) 20% $50,000
Destiny of Marty Fine(4) 25% (of 60% of gross) $50,000
The Maze(4) 25% $70,000
Killers(4) 30% $70,000
Paper Dragon (4) 20% $50,000
Resolution (4) 20% (Domestic) $50,000
25% (Foreign)
Tear It Down (4) 20% $50,000
Salmon Run (4) 25% $75,000
Good Bye Paradise (4) 25% $75,000
Lancelot-Guardian of Time 20% $50,000
An Angel's Gift(3)(5) 20% $50,000
Final Game(3)(5)(6) 20% $50,000
Shalakan (3)(5)(6) 20% $50,000
An Angel on Abbey
Street(3)(5)(6) 20% $50,000
Dead Homiez 30% NA
Rebel(3)(5)(6) 20% $50,000
(1) Pursuant to the typical Sales Agency
Agreement, APII is entitled to receive a
percentage of the gross receipts from the
licensing of the motion picture before the
payment of any other expenses or any
distributions to the producer.
(2) The Sales Agency Agreements typically provide
a ceiling for reimbursable costs. These
expense ceilings do not include cash advances
which may be made by the Company to the
owner/producer which are generally repayable
to the Company from the gross revenues earned
by the motion picture.
(3) This motion pictures was or is being produced
or co-produced by an affiliate of the Company.
(4) This motion pictures is completed.
(5) This motion picture is in pre-production or
production phase.
(6) The capital or financing for the production of
this motion picture has not yet been raised or
is only partially raised as of the date hereof.
LICENSE AGREEMENTS
The Company has entered into the following
License Agreements providing for the international
distribution of its films as follows:
On or about May 14, 1998, APII licensed the
following rights in Poland to Nuvola Corporation
A.V.V. for seven years with respect to "Lancelot:
Guardian of Time" for a licensing fee of U.S. $6,500:
(a) cinematic rights, theatrical, non-theatrical, and
public video; (b) video rights, home video cassette,
commercial video, and home sell-thru; (c) ancillary
rights, hotels, airlines, and ships flying the Polish
flag and without bookings in the United States; (d)
television rights, pay TV (terrestrial, cable, and
satellite), and free TV (terrestrial, cable, and
satellite); and (e) pay per-view rights, residential,
non-residential, and demand view.
On or about May 13, 1998, APII licensed the
following rights in Yugoslavia to TUCK for seven years
with respect to "Tear it Down" and "Killers" for an
aggregate licensing fee of U.S. $6,000: (a) cinematic
rights, theatrical, non-theatrical, and public video;
(b) video rights, home video cassette, commercial
video, and home sell-thru; (c) ancillary rights,
hotels, airlines, and ships flying the Yugoslavian
flag and without bookings in the United States; (d)
television rights, pay TV (terrestrial, cable, and
satellite), and free TV (terrestrial, cable, and
satellite); and (e) pay-per-view rights, residential,
non-residential, and demand view.
On or about May 18, 1998, APII licensed the
following rights in Spain to Telesis, S.L. for seven
years with respect to "Killers" for a licensing fee of
U.S. $15,000: (a) cinematic rights, theatrical,
non-theatrical, and public video; (b) video rights,
home video cassette, commercial video, and home
sell-thru; (c) ancillary rights, hotels, airlines, and
ships flying the Spanish flag and without bookings in
the United States; (d) television rights, pay TV
(terrestrial, cable, and satellite), and free TV
(terrestrial, cable, and satellite); and (e)
pay-per-view rights, residential, non-residential, and
demand view.
On or about May 19, 1998, APII licensed the
following rights in the United Kingdom, Republic of
Ireland, Malta, and Gibraltar to Third Millennium for
seven years with respect to "Killers" for a licensing
fee of U.S. $15,000: video rights, home video
cassette, commercial video, and home sell-thru.
On or about November 3, 1998, APII licensed
the following rights in Spain to V.F. Multimedia, S.L.
for ten years with respect to "Tear It Down,"
"Resolution," "Paper Dragons," "Lord Protector,"
"Lancelot," and "Tiger Street" for a licensing fee of
U.S. $70,000: (a) pay-per-view rights, residential,
non-residential, and demand view; (b) pay TV rights,
terrestrial, cable, and satellite; and (c) free TV
rights, terrestrial, cable, and satellite.
On or about November 3,1998, APII licensed the
following rights in the Philippines to Conrad Luzon
for eight years with respect to "Paper Dragons" and
"Lancelot" for a licensing fee of U.S. $2,000: (a)
video rights, home video cassette, commercial video,
and home sell-thru; (b) pay-per-view rights,
residential, non-residential, and demand view; (c) pay
TV rights, terrestrial, cable, and satellite; and (d)
free TV rights, terrestrial, cable, and satellite.
On or about November 3, 1998, APII licensed
the following rights in Turkey to Inter Medea Teacart,
Ltd. for seven years with respect to "Tear It Down"
for a licensing fee of U.S. $5,000: (a) video rights,
home video cassette, commercial video, and home
sell-thru; (b) ancillary rights, hotels, airlines, and
ships flying with the Turkish flag and without
bookings in the United States; (c) pay-per-view
rights, residential, non-residential, demand view; (d)
pay TV rights, terrestrial, cable, and satellite; and
(e) free TV rights, terrestrial, cable, and satellite.
On or about November 3, 1998, APII licensed
the following rights in Turkey to SAR-An International
Co., Ltd. for five years with respect to "Tiger
Street," "Paper Dragons," and a third film to be named
for a licensing fee of U.S. $10,000: (a) video rights,
home video cassette, commercial video, and home
sell-thru; (b) pay-per-view rights, residential,
non-residential, and demand view; (c) pay TV rights,
terrestrial, cable, and satellite; and (d) free TV
rights, terrestrial, cable, and satellite.
On or about November 3,1998, APII licensed the
following rights in the United Kingdom, Erie, Malta,
and Gibraltar to Marquee Pictures for nine years with
respect to "Dead Homes" for a licensing fee of U.S.
$10,000: (a) video rights, home video cassette,
commercial video, home sell-thru, and DID; (b)
ancillary rights, hotels and ships flying the
territory flag and without bookings in the United
States; and (c) television rights, if Distributor
secures an agreement for all television rights,
Licensor will split minimum guarantee 50/50 with
Distributor.
On or about October 5, 1998, APII licensed the
following rights in the United Kingdom, Republic of
Ireland, Malta, and Gibraltar to Third Millennium
Distribution Ltd. for five years with respect to "Tear
It Down" for a licensing fee of U.S. $15,000: video
rights, home video cassette, commercial video, and
home sell-thru.
On or about March 2, 1998, APII licensed the
following rights in Turkey to Yen Taal Film for seven
years with respect to "Paper Dragons" for a licensing
fee of U.S. $3,000: television rights, pay TV
(terrestrial, cable, and satellite), free TV
(terrestrial, cable, and satellite), pay-per-view
(residential, non-residential, and demand view).
On or about February 27,1998, APII licensed
the following rights in Latin America to Global
Communications for seven years with respect to "Paper
Dragons" for a licensing fee of U.S. $35,000: (a)
video rights, home video cassette, commercial video,
and home sell-thru; (b) pay TV rights, terrestrial,
cable, and satellite; and (c) free TV rights,
terrestrial, cable, and satellite.
On or about March 2, 1998, APII licensed the
following rights in the Philippines with Conrad Luzon
for eight years with respect to "Lord Protector" for a
licensing fee of U.S. $1,500: (a) video rights, home
video cassette, commercial video, and home sell-thru;
(b) pay-per-view rights, residential, non-residential,
and demand view; (c) pay TV rights, terrestrial,
cable, and satellite; and (d) free TV rights,
terrestrial, cable, and satellite.
On or about March 2, 1998, APII licensed the
following rights in Malaysia to Suraya Filem
Production for seven years with respect to "The Gift"
(U.S. $2,000), "Lord Protector" (U.S. $2,000),
"Lancelot" (U.S. $2,000)"Salmon Run" (U.S. $1,000),
and "Goodbye Paradise" (U.S. $1,000) for a licensing
fee of U.S. $8,000: (a) video rights, home video
cassette, commercial video, and home sell-thru; (b)
ancillary rights, hotels, airlines, and ships flying
the Malaysian flag and without booking in the United
States; (c) pay-per-view rights, residential, non
residential, and demand view; (d) pay TV rights,
terrestrial, cable, and satellite; and (e) free TV
rights, terrestrial, cable, and satellite.
On or about February 27, 1998, APII licensed
the following rights in Mexico to Duplitek S.A. De
C.V. for seven years with respect to "Paper Dragons"
for a licensing fee of U.S. $2,500: video rights, home
video cassette, commercial video, and home sell-thru.
On or about February 27, 1998, APII licensed
the following rights in Mexico to Duplitek S.A. De
C.V. for seven years with respect to "Killers" for a
licensing fee of U.S. $7,500: (a) video rights, home
video cassette, commercial video, and home sell-thru;
(b) pay TV rights, cable; and (c) free TV rights,
terrestrial, cable, and satellite.
On or about March 2,1998, APII licensed the
following rights in Hong Kong and Macau to Mel Ah (HK)
Co. Ltd. for seven years with respect to "Killers" and
"Resolution" for a licensing fee of U.S. $7,000: (a)
video rights, home video cassette, commercial video,
home sell-thru, VCD, DID, and LO; (b) ancillary
rights, hotels, airlines, and ships flying the
territory flag and without bookings in the United
States; (c) pay-per-view rights, residential,
non-residential, and demand view; (d) pay TV rights,
terrestrial, cable, and satellite; and (e) free TV
rights, terrestrial, cable, and satellite.
On or about March 1, 1998, APII licensed the
following rights in India to Global Film Distributors,
Inc. for seven years with respect to "Killers" for a
licensing fee of U.S. $6,100: (a) cinematic rights,
theatrical, non-theatrical, and public video; (b)
video rights, home video cassette, commercial video,
and home sell-thru; (c) ancillary rights, hotels,
airlines, and ships flying the Indian flag and without
bookings in the Units States; (d) pay-per-view rights,
residential, non-residential, and demand view; and (e)
pay TV rights, terrestrial, cable, and satellite; and
(0 free TV rights, terrestrial, cable, and satellite.
On or about February 27,1998, APII licensed
the following rights in Russia, CIS, and the Baltic
States in Worldvision Communications for seven years
with respect to "Goodbye Paradise" (U.S. $5,000),
"Paper Dragons" (U.S. $5,000), "Resolution" (U.S.
$5,000), and "Pink As The Day She Was Born" (U.S.
$5,000) for a licensing fee of U.S. $20,000: (a)
cinematic rights, theatrical, non-theatrical, and
public video; (b) video rights, home video cassette
and commercial video; (c) ancillary rights, hotels,
airlines, and ships flying the territory flag and
without bookings in the United States; (d) pay TV
rights, terrestrial, cable, and satellite; and free TV
rights, terrestrial, cable, and satellite.
On or about November 3,1998, APII licensed the
following rights in Malaysia to Suraya Filem
Production for five years with respect to "Tear It
Down" and "Resolution" for a licensing fee of U.S.
$2,500: (a) video rights, home video cassette,
commercial video, and home sell-thru; (b) pay-per-view
rights, residential, non-residential, and demand view;
(c) pay TV rights, terrestrial, cable, and satellite;
and (d) free TV rights, terrestrial, cable, and
satellite.
On or about March 25, 1998, APII licensed the
following rights in Taiwan to Ta Lai Hwa Jaan Films
Co., Ltd. for seven years with respect to "Killers"
for licensing fee of U.S. $7,000: (a) cinematic
rights, theatrical, non-theatrical, and public video;
(b) video rights, home video cassette, commercial
video, home sell-thru, and video gram; (c) ancillary
rights, hotels airlines, and ships flying the
Taiwanese flag and without bookings in the United
States; (d) pay-per-view rights, residential,
non-residential, and demand view; (e) pay TV rights,
terrestrial, cable, and satellite; and (f) free TV
rights, terrestrial, cable, and satellite.
On or about May 20, 1998, APII licensed the
following rights in Taiwan to Hwa Jaan Films Co. for
seven years with respect to "Paper Dragon" for a
licensing fee of U.S. $5,000: (a) video rights, home
video cassette, commercial video, home sell-thru,
video gram, and public video; (b) ancillary rights,
hotels, airlines, and ships flying the Taiwanese flag
and without bookings in the United States; (c)
pay-per-view rights, residential, non-residential and
demand view; (d) pay TV rights, terrestrial, cable,
and satellite; and (e) free TV rights, terrestrial,
cable, and satellite.
The following table categorizes the above information
by motion picture, licensed country, licensee and date:
Lord Protector Italy La Italiana Produzioni SAS 10/30/96
Poland Novola Corp. A.V.V. 10/30/96
Russia Dream Co., Ltd. 10/30/96
Taiwan USR Entertainment, Inc. 10/30/96
Latin America Global Communications 11/18/97
Turkey Yen Guven Filmcilik 11/10/97
Indonesia Indo-American Entertainment 3/18/97
Thailand Right Pictures Co., Ltd. 3/17/97
Hungary Power Video 3/5/97
Malaysia Suaya Film Production 3/2/98
Philippines Conrad Puzonan 3/2/98
The Maze Latin America Global Communications 11/18/97
Russia Worldvision Communications 11/6/97
Italy Glickson Invesments Ltd. 6/2/97
Lancelot Latin America Global Communications 11/18/97
Indonesia Pt. Parkit Films 11/10/97
Turkey Yen Guven Filmcilik 11/10/97
Russia Worldvision Communications 11/6/97
Poland Nuvola Corporation AVV 5/14/98
Malaysia Suraya Film Production 3/2/98
Dead Homes Latin America Global Communications 11/18/97
Thailand Right Pictures Public Company 11/4/97
Destiny of Marty Fine Latin America Global Communications 11/18/97
Killers Uruguay Mark Findley International Co. 11/11/97
France Metropolitan Film Export 6/24/97
Brazil Park Pictures & Entertainment 6/24/97
Germany Splendid Film Gkein BmbH 6/5/97
Benelux Exclusive Film and Video 5/28/97
Peru, Ecuador Aowastar Ltd. 5/28/97
Columbia
Korea Oz Cinema 3/17/97
Thailand Right Pictures Co., Ltd. 3/17/97
Japan Pueblo Film Distribution
Hungary Kft. 3/1/97
United Kingdom Third Millennium 5/19/98
Spain Higher Dreams 9/1/98
Former
Yugoslavia Zvammir Djordavic 6/15/98
Hong Kong Mei Ah International 3/2/98
Taiwan Ta Lai Hwa Jaan Films 3/25/98
India Global Film Dispural 3/1/98
Final Game Indonesia Pt. Parkit Films 11/10/97
Hollywood Blvd. Russia Worldvision Communications 11/6/97
Paper Dragon Taiway HWA Haan Films Co. 5/20/98
Turkey Yen Taal Film 3/2/98
Mexico Duplitek 3/3/98
Russia Worldvision Communications 2/27/98
Latin America Global Communications 2/27/98
The Gift Malaysia Suraya Film Production 3/2/98
Salmon Run Malaysia Suraya Film Production 3/2/98
Goodbye Paradise Malaysia Suraya Film Production 3/2/98
Russia Worldvision Communications 2/27/98
Resolution Russia Worldvision Communications 2/27/98
MARKETING AND SALES PLANS FOR DOMESTIC AND
INTERNATIONAL DISTRIBUTION
The Company intends to distribute programming
in the domestic United States market and throughout
the international market, either directly or through
other distribution companies. The distribution of
films and programs is accomplished by marketing them
to exhibitors in trade shows and by other direct
marketing methods. Distribution agreements typically
provide that the distributor will pay the print and
advertising costs incurred in marketing the films, and
will in return receive reimbursement of its costs from
the first gross revenues earned by the film, as well
as a gross revenue or net profits interest in the
film. Film distributors may give minimum guarantees
for sales volumes and commit to pay a minimum amount
regardless of actual sales. Foreign distributors often
pay a fixed price up front and collect all gross
revenues from the exhibition of the film in their
territory for their own account.
Television programs are generally sold
directly to television stations and networks for
licensing fees, whereby the producer can retain the
right to sell the program in other markets and in
syndication after its initial showing. Once full
length motion pictures have had a theatrical release,
they often can subsequently be distributed to
television stations, cable television operators and
home video sales and rental companies. In this regard,
to the extent feasible, the Company intends to acquire
the licensing rights to all of the ancillary rights to
the programming distributed by it, including the right
to distribute home videos, CD-ROM programs,
interactive games, soundtracks, sequels and other
applications based on the programming. The Company may
distribute projects produced by its affiliates, or by
unaffiliated producers. The terms and conditions of
the Sales Agency Agreement (distribution agreements)
are negotiated by management in arms length
transactions with unaffiliated producers, or
determined in its discretion when entered into with
its affiliates.
A "sales campaign", together with marketing
costs, will comprise the bulk of the distribution
costs for each film or program. The relative cost of
the sales campaign will vary based on the market
potential of the program. The core of the sales
campaign is the cost of copies of the program
including release prints and the cost of advertising
the program in all media. Other elements of the sales
campaign may include a "one" sheet (or posters), the
press sheet (small size poster) and the press kit, the
theatrical trailer, the video promotion reel,
television and radio spots, trade paper, trade
magazine, newspaper and magazine advertising layouts,
and pre and post-release public relations including an
electronic press kit.
An artist is commissioned to create the basic
art for the one-sheet. Specialized editors are
commissioned to create the theatrical trailer, video
promotional reel, and the radio and television spots.
The one-sheet and other sales materials feature the
basic art with the movie title and the
paid-advertising credits. The press sheet is usually a
single page. On the front side it features the same
front cover as the one sheet, while the back contains
a synopsis and a list of credits for both cast and
crew. The theatrical trailer is usually from 90
seconds to three-and-one-half minutes long. An editor
who specializes in trailer cutting is hired with the
goal of creating a trailer which captivates the
viewers and entices them to see the program in its
entirety when released theatrically. The video
promotional reel may be longer than the theatrical
trailer, as it will be used in smaller presentations
(typically on a private basis). Television and radio
advertisements are cut to specific lengths: 15, 30 or
60 seconds. The trade paper and trade magazine
advertisements are designed specifically for full-page
insertion announcing availability of the program. The
press kit contains a complete biographical breakdown
of all key cast and crew members, an extensive
synopsis, a complete list of all credits, six black
and white stills depicting scenes from the picture,
and a copy of the press sheet. All of these elements
are enclosed in a corporate folder for distribution.
TRADE SHOW MARKETING
The Company intends, either by itself or with
an affiliate, to maintain an office at each of the
major film markets (AFM in Los Angeles, during late
February early March; MIP, in Cannes, France during
April; Cannes Film Festival and Market in Cannes,
France during May; MIPCOM in Cannes, France during
early October; and MIFED in Milan, Italy during late
October and early November). The Company anticipates
that it will attempt to establish a presence at the
numerous film festivals and minor markets held
throughout the world each year such as the USA Film
Festival in Park City, Utah and the IFP in New York City.
COMPETITION
The entertainment industry is intensely
competitive. The competition comes from companies
within the same business and companies in other
entertainment media which create alternative forms of
leisure entertainment. The Company competes with
several "major" film studios (the Walt Disney Company,
Paramount Pictures Corporation, Universal Pictures,
Columbia Pictures, Tri-Star Pictures, Twentieth
Century Fox, Warner Brothers, Inc. and MGM/UA) which
are dominant in the motion picture industry, as well
as numerous independent motion picture and television
production and distribution companies, television
networks and pay television systems. These companies
compete for the acquisition of literary properties,
the services of performing artists, directors,
producers and other creative and technical personnel,
and production financing. Many of the organizations
with which the Company competes have significantly
greater financial and other resources than does the
Company.
There can be no assurance of the economic
success of any entertainment project since the
revenues derived from the production and distribution
of motion pictures and programs (which do not
necessarily bear a direct correlation to the
production or distribution costs incurred) depend
primarily upon their acceptance by the public, which
cannot be predicted. The Company's films compete for
audience acceptance and exhibition outlets with motion
pictures produced and distributed by other companies.
As a result, the success of any of the Company's films
is dependent not only on the quality and acceptance of
that particular film, but also on the acceptance of
other competing films released into the marketplace at
or near the same time.
The entertainment industry in general, and the
motion picture industry in particular, are continuing
to undergo significant changes, primarily due to
technological developments. These developments have
resulted in the availability of alternative and
competing forms of leisure time entertainment,
including pay/cable television services and home
entertainment equipment such as videocassette, video
games and computers. Such technological developments
have also resulted in the creation of additional
revenue sources through the licensing of rights with
respect to such new media, and potentially could lead
to future reductions in the costs of producing and
distributing motion pictures. In addition, the
theatrical success of a motion picture remains a
crucial factor in generating revenues in other media
such as videocassette and television. Due to the rapid
growth of technology, shifting consumer tastes, and
the popularity and availability of other forms of
entertainment, it is impossible to predict the overall
effect these factors will have on the potential
revenue from and profitability of feature-length
motion pictures.
There are many companies engaged in the
acquisition, production and the distribution of
feature length motion pictures. Many of these are
seasoned companies with substantially greater
resources, financial and otherwise, and more diverse
or well known motion picture projects than the
Company. The financial resources, established
distribution arrangements, and more diverse or better
known motion picture projects may provide such other
companies with competitive advantages over the
Company. There can be no assurance that the Company
will be able to compete effectively.
The distribution of theatrical motion pictures
is also a highly competitive and speculative business
involving a high degree of risk relative to the
marketing, releasing, distribution, and other
exploitation of films. Furthermore, each market and
territory for the distribution of films is generally
independent of all other markets, so that obtaining an
agreement for the exploitation of films in one market
or territory does not necessarily mean that a similar
agreement will be obtained in other markets and
territories. It is impossible to accurately predict
the effects that any of these competitive factors may
have on the success of films distributed by the
Company. See "RISK FACTORS - Competition."
SEASONALITY
The Company expects to experience seasonality
in its business, especially with respect to the
performance of its motion pictures. Audiences for
motion pictures tend to be larger during holiday
periods and to be smaller during other months.
Domestic theatrical motion picture distributors
compete with on another for access to desirable motion
picture screens, especially during Thanksgiving and
Christmas holidays and the summer season. Foreign
sales of motion pictures and other entertainment
products tend to peak when the major international
film markets are held. These film markets are
generally held in February, May and October with the
exact dates fluctuating from year to year. Video sales
generally decline during the summer months. First run
television programming is generally purchased in the
spring for exhibition in the autumn months.
INTELLECTUAL PROPERTY
The Company may apply for a registered
tradename on the Principal Register of the United
States Patent and Trademark Office for its subsidiary
"Alpine Pictures International, Inc." The Company
intends to pursue registration of its trademarks
wherever possible and to oppose vigorously any
infringement of its marks. The Company is not aware of
any infringing uses that could materially affect its
business or any prior claim to trademarks that would
prevent the Company from using trademarks in its
business.
Copyrights to the motion pictures and programs
will, in almost all cases, remain with the producer of
the film or program. The Company expects that only
the distribution rights relating to the films will be
acquired by it. The Company intends to take all steps
necessary to protect its interest in any copyrights,
including filing a public notice of such interest in
the copyright, if appropriate.
GOVERNMENT REGULATION
In 1994, the United States was unable to reach
agreement with its major international trading
partners to include audiovisual works, such as
television programs and motion pictures, under the
terms of the General Agreement on Trade and Tariffs
Treaty ("GATT"). The failure to include audiovisual
works under GATT allows many countries (including
members of the European Union, which consists of
Belgium, Denmark, Germany, Greece, Spain, France,
Ireland, Italy, Luxembourg, the Netherlands, Portugal
and the United Kingdom) to continue enforcing quotas
that restrict the amount of American programming which
may be aired on television in such countries. The
Council of Europe has adopted a directive requiring
all member states of the European Union to enact laws
specifying that broadcasters must reserve a majority
of their transmission time (exclusive of news, sports,
game shows and advertising) for European works. The
directive does not itself constitute law, but must be
implemented by appropriate legislation in each member
country. In addition, France requires that original
French programming constitute a required portion of
all programming aired on French television. These
quotas generally apply only to television programming
and not to theatrical exhibition of motion pictures,
but quotas on the theatrical exhibition of motion
pictures could also be enacted in the future. There
can be no assurance that additional or more
restrictive theatrical or television quotas will not
be enacted or that countries with existing quotas will
not more strictly enforce such quotas. Additional or
more restrictive quotas or more stringent enforcement
of existing quotas could materially and adversely
affect the business of the Company by limiting its
ability to fully exploit the programs internationally.
Distribution rights to motion pictures are
granted legal protection under the copyright laws of
the United States and most foreign countries. These
laws provide substantial civil and criminal sanctions
for unauthorized duplication and exhibition of motion
pictures. Motion pictures, musical works, sound
recordings, art work, still photography and motion
picture properties are separate works, subject to
copyright under most copyright laws, including the
United States Copyright Act of 1976, as amended. The
Company plans to take appropriate and reasonable
measures to secure, protect and maintain or obtain
agreements to secure, protect and maintain copyright
protection for the programs under the laws of
applicable jurisdictions. Management is aware of
reports of extensive unauthorized misappropriation of
videocassette rights to motion pictures. Motion
picture piracy is an industry-wide problem. The Motion
Picture Association of America, an industry trade
association (the "MPAA"), operates a piracy hotline
and investigates all reports of such piracy. Depending
upon the results of such investigations, appropriate
legal action may be brought by the owner of the
rights. Depending upon the extent of the piracy, the
Federal Bureau of Investigation may assist in these
investigations and related criminal prosecutions.
Motion picture piracy is an international as
well as a domestic problem. Motion picture piracy is
extensive in many parts of the world, including South
America, Asia (including Korea, China and Taiwan), the
countries of the former Soviet Union and the former
Eastern bloc countries. In addition to the MPAA, the
Motion Picture Export Association, the American Film
Marketing Association and the American Film Export
Association monitor the progress and efforts made by
various countries to limit or prevent piracy. In the
past, these various trade associations have enacted
voluntary embargoes of motion picture exports to
certain countries in order to pressure the governments
of those countries to become more aggressive in
preventing motion picture piracy. In addition, the
United States government has publicly considered trade
sanctions against specific countries which do not
prevent copyright infringement of United States
produced motion pictures. There can be no assurance
that voluntary industry embargoes or United States
government trade sanctions will be enacted. If
enacted, such actions could impact the amount of
revenue that the Company realizes from the
international distribution of the programs depending
upon the countries subject to such action and the
duration of such action. If not enacted or if other
measures are not taken, the motion picture industry
(including the Company) may continue to lose an
indeterminate amount of revenues as a result of motion
picture piracy.
The Code and Ratings Administration of the
MPAA assigns ratings indicating age-group suitability
for theatrical distribution of motion pictures. The
Company expects that the program producers will follow
the practice of submitting the programs for such ratings.
United States television stations and
networks, as well as foreign governments, impose
additional restrictions on the content of motion
pictures which may restrict in whole or in part
theatrical or television exhibition in particular
territories. Management's current policy is to
distribute motion pictures for which there will be no
material restrictions on exhibition in any major
territories or media. This policy often requires
production of "cover" shots or different photography
and recording of certain scenes for insertion in
versions of a motion picture exhibited on television
or theatrically in certain territories. There can be
no assurance that current and future restrictions on
the content of the programs may not limit or affect
the Company's ability to exhibit it in certain
territories and media.
MERGER WITH ALPINE RELEASING PARTNERSHIPS L.P.
Alpine Pictures International, Inc. served as
the general partner Alpine Releasing Partners L.P., a
California limited partnership. On February 15, 1998,
Alpine Releasing Partners L.P. ("ARPLP") merged into
Alpine Pictures International Inc. ("APII"). Under
the terms of the merger agreement, APII issued one
share of its common stock for each $0.85 of limited
partnership interests in ARPLP. At the time of the
merger, ARPLP had issued an aggregate of $1,138,000
limited partnership interests. As a result of the
conversion of ARPLP interests into APII's common
stock, APII issued an aggregate of 1,338,824 shares of
the Company to the limited partners of ARPLP.
PLAN OF OPERATION
OVERVIEW
The Company was formed to acquire the rights
to and to distribute in the domestic or international
markets motion pictures or other entertainment media
programming. The Company is engaged in the production
and distribution of quality films in domestic and
international markets including theatrical exhibition,
home videos, network television, cable television, pay
per view cable television, and non-theatrical
exhibitors such as airlines, schools, cruise ships,
correctional facilities, etc. The Company anticipates
that it may participate in other aspects of the film
industry, including the acquisition, production and
sale of entertainment media properties or the
acquisition of companies, or the assets of companies,
involved in the development, production, distribution,
acquisition or sale of entertainment media properties
either by itself or through affiliates or joint
venture or other relationships.
The Company enters into Sales Agency
Agreements with the owners or producers of a motion
picture for the exclusive rights to distribute and
market such film. The Company pays an agreed
production fee to the owner/producer for such rights.
The Company receives reimbursement of this production
fee and reimbursement of its distribution costs (up to
a negotiated ceiling amount) as well as an agreed
percentage of the revenues derived from the
exploitation of the film.
For each motion picture that the Company
intends to distribute, it enters into licensing
agreements with one or more "subdistributors" for
licensing rights in specified geographical locations
to certain specified rights such as theatrical rights,
non-theatrical rights, home video rights, television
rights, or other media rights (sound recording, public
performance, sheet music publication, merchandising).
The Company receives a fee from each "subdistributor"
as well as a percentage of the revenues derived from
the use of the licensed rights.
RESULTS AND PLAN OF OPERATIONS
The Company has three subsidiaries only one of
which has operations, Alpine Pictures International,
Inc. which has suffered losses from operations. Alpine
Pictures International, Inc. has entered into
distribution agreements for over 10 movies and has
entered into over 30 "subdistributor" agreements.
The Company intends to develop operations of
its newly-created subsidiary, Alpine Television, Inc.
The Company anticipates that it may, through
its own development or acquisition of existing
entities, enter into other areas of the entertainment
industry, including motion picture and television
development and production.
LIQUIDITY AND CAPITAL RESOURCES
The Company believes that the proceeds of this
offering in addition to the revenues from its current
operations will be sufficient to fund the Company's
operations for the next 12 months. If the Company
receives revenues greater than the Minimum Offering
amount, then the Company will be able to implement its
business plan more fully and more expeditiously.
The Company anticipates revenues to increase
as a result of acquisitions of higher quality films
and television products made from the proceeds of this
offering. The Company's marketing plan anticipates
that proceeds from this offering will also permit the
Company to increase its national exposure through
attendance at additional trade shows and film festivals.
MANAGEMENT
OFFICERS AND DIRECTORS
The following table sets forth certain
information with respect to the Company's directors,
executive officers and key consultants
NAME POSITION
Ryan Carroll Chief Executive Office, Chairman of Board
Roland Carroll President, Director
Greg Cozine Vice President of Finance and Sales, Director
Paul Miller Vice President of Operations
Rene Torres Vice President of Foreign/Domestic Sales
Tom Hamilton Vice President of Marketing and Production
All directors hold office until the next
annual meeting of stockholders and until their
successors are elected. Officers are elected to serve,
subject to the discretion of the Board of Directors,
until their successors are appointed.
RYAN J. CARROLL, 40, serves as a Chief
Executive Officer and director of the Company. Mr.
Carroll has been a director and principal shareholder
of Alpine Pictures International, Inc. since its
inception in July 1996. Since its inception in
September, 1995, Mr. Carroll has been the secretary, a
director and a principal shareholder of Alpine
Pictures, Inc., an affiliated motion picture
production company. Mr. Carroll is a 50% shareholder
and serves as a director and secretary of Carroll
Media, Inc., an affiliated California corporation
engaged in the entertainment business, since its
inception in January 1994. On November 17, 1997, the
Department of Corporations for the State of California
issued a desist and refrain order against Alpine
Pictures, Inc., Roland Carroll, Ryan Carroll and
Carroll Media, Inc., which requires them to desist and
refrain from the offer or sale in California of any
unqualified or non-exempt security. The order does
not address any specific offering. In 1981, Mr.
Carroll was appointed Artistic Director of Chicago's
Mantisis Theater Company. From 1985 to 1986, Mr.
Carroll served as Artistic Director with Paragon Arts
International, Inc., Los Angeles, California, an
independent finance, production and distribution
company whose credits include Witchboard and Night
Angel. From 1986 to 1988, Mr. Carroll served as
president of G.C.O. Pictures, Incorporated, an
independent film production company he co-founded with
Roland Carroll. Mr. Carroll was an executive producer
of Season of Fear starring Ray Wise, Michael J. Polard
and Clancy Brown, distributed by MGM/UA. Mr. Carroll
received his C.F.A. degree in 1982 from the Goodman
School of Drama at DePaul University in Chicago,
Illinois.
ROLAND CARROLL, 44, serves as President and a
director of the Company. Mr. Roland has been a
principal shareholder and director of Alpine Pictures
International, Inc. since its inception in July 1996.
Since its inception in September 1995, Mr. Carroll has
served as the president, chairman of the board and a
principal shareholder of Alpine Pictures, Inc., an
affiliated motion picture production company. Mr.
Carroll is also a 50% shareholder, chairman of the
board and president of Carroll Media, Inc., an
affiliated California corporation engaged in the
entertainment business, since its inception in January
1994. On November 17, 1997, the Department of
Corporations for the State of California issued a
desist and refrain order against Alpine Pictures,
Inc., Roland Carroll, Ryan Carroll and Carroll Media,
Inc., which requires them to desist and refrain from
the offer or sale in California of any unqualified or
non-exempt security. The order does not address any
specific offering. In 1985, Mr. Carroll co-founded
and served as president of Paragon Arts International,
Los Angeles, California, an independent finance,
production and distribution company whose credits
include Witchboard and Night Angel. From 1986 to
1988, Mr. Carroll served as an executive producer at
G.C.O. Pictures, located in Los Angeles, California,
overseeing the production of the feature length film
Season of Fear. His responsibilities included
financing, selection of key production personnel,
monitoring of production progress and negotiating
distribution of Season of Fear with MGM/UA Studios.
Mr. Carroll has served from time to time as an
independent consultant for the production of
television programming. Mr. Carroll attended the
University Southern California School of
Cinema/Television from 1979 to 1981.
GREG COZINE, 40, serves as a director of the
Company. Mr. Cozine has served as a director of
Alpine Pictures International, Inc. since March, 1997.
Since January 1996, Mr. Cozine has served as a vice
president and a shareholder of Alpine Pictures, Inc.,
an affiliated motion picture production company.
From 1990 to 1992, Mr. Cozine was manager of
operations and senior marketing consultant for Gold
Shore Land Corporation, Los Angeles, California where
he managed all sales for a real estate development
project located north of Los Angeles, California.
From 1987 to 1990, Mr. Cozine was founder and chief
executive officer of NCN Financial Group, Inc. where
he handled various financial products including energy
related joint ventures and feature film venture
capital projects.
PAUL MILLER, 31, serves as a Vice President of
the Company. From April, 1996 to 1998, Mr. Miller was
general partner of Cavalier Partners L.P. and
founder, sole shareholder and director of Desert Star,
Inc., an entertainment production company established
in 1996. In January, 1998, Cavalier Partners L.P.
consented to an order from the State of Michigan to
cease and desist from any violation of the Michigan
securities laws and paid administrative costs in the
amount of $750. From 1995 to 1996, Mr. Miller was the
associate producer of the full length motion picture
Lord Protector for which the Company has distribution
rights. See "BUSINESS Current Operations". From 1992
to 1994, Mr. Miller was the owner of PM Productions, a
Los Angeles, California, entertainment company engaged
in writing, producing and directing commercials,
training videos and infomercials. From 1989 to 1992,
Mr. Miller was a partner in Concept Product Designers
which produced commercials and infomercials for
private label hair care clients primarily directed
toward the Hispanic market. Mr. Miller attended the
University of Southern California from 1985 to 1988
with a major in Communications Arts and Sciences,
including film making.
RENE TORRES , 43, serves as a Vice President
of the Company. Since its inception in July 1996, Mr.
Torres has served as president of Alpine Pictures
International, Inc. From 1996 to 1999, Mr. Torres
served as President of Meridian Pictures, Inc., an
independent film company located in Irvine,
California, which produced the nationally released
feature film Night of the Demons. While at Meridian,
Mr. Torres was responsible for the implementation and
supervision of limited partnership offerings that
funded film production. In 1985, Mr. Torres was a
founding member of Paragon Arts International, Los
Angeles, California, an independent finance,
production and distribution company whose credits
include Witchboard and Night Angel. In 1990, Mr.
Torres served as the president of Box Office Partners,
located in Los Angeles, California, which company
participated in the acquisition of The Kid, starring
C. Thomas Howell, Metamorphosis, The Alien Factor, a
high-tech science fiction film, and The Treasure, a
family adventure. Mr. Torres received his Bachelor of
Arts degree in Marketing from Milwaukee Area Technical
College in 1976.
TOM HAMILTON, 55, serves as a Vice President
of the Company. Mr. Hamilton has served as chief
financial officer, secretary and executive vice
president of Alpine Pictures International, Inc. From
1985 to 1990, Mr. Hamilton has worked at Paragon Arts
International, Los Angeles, California, an independent
finance, production and distribution company whose
credits include Witchboard and Night Angel. as an
associate producer of motion pictures. From 1990 to
1992, Mr. Hamilton was the executive vice
president-director of European operations for
Euro-Films, Inc., a Franco American international film
finance and distribution company. Mr. Hamilton was
based in Paris, France where he was responsible for
all European markets. Mr. Hamilton attended the
University of Grenoble in Grenoble, France in 1969.
CERTAIN RELATIONSHIPS AND POSSIBLE CONFLICT OF INTEREST
Roland Carroll serves as president and a
director, and Ryan Carroll serves as chief financial
officer and a director of Alpine Pictures, Inc., an
operating California motion picture production company
formed in 1995. Messrs. Carroll are controlling
shareholders of Alpine Pictures, Inc. Messrs. Cozine,
Torres and Hamilton are also directors of Alpine
Pictures, Inc. Alpine Pictures, Inc. was a
shareholder of Alpine Pictures International, Inc.,
representing 25% of the then issued and outstanding
shares of Alpine Pictures International, Inc., prior
to acquisition by the Company of such shares.
Alpine Pictures, Inc. has produced or is in
the process of producing the following full length
motion pictures An Angel's Gift, An Angel On Abbey
Street, Shalakan, Rebel, Lancelot - Guardian of Time,
and Lord Protector. Through its subsidiary, the
Company has entered into distribution agreements with
Alpine Pictures, Inc. for the distribution rights of
certain of these films. See "BUSINESS Current
Operations". The Company anticipates that it will
continue to distribute films produced by Alpine
Pictures, Inc. or affiliates thereof. The
distribution agreements entered into will not be
negotiated on an arms'-length basis, but the Company
anticipates that terms of such agreements will be
favorable to the Company.
The officers and directors of the Company may
face a conflict of interest in regard to their
management of the operations of Alpine Pictures, Inc.
and in participation in any other entities which
engage in activities similar to those of the Company.
The Company anticipates that Alpine Pictures, Inc.
will produce motion pictures and other theatrical
projects and the Company will distribute such
projects. However, there is no assurance that certain
opportunities may be presented to Alpine Pictures,
Inc. which because not then available to the Company
would be detrimental to the Company. Such officers
and directors may be subject to various conflicts of
interest, including among others, the negotiation of
agreements between the Company and Alpine Pictures,
Inc. for the distribution rights of films produced by
it. In addition, each of the officers and directors
of the Company has other duties and responsibilities
with Alpine Pictures, Inc. that may conflict with the
time which might otherwise be devoted to the duties
with the Company. The officers and directors of the
Company will endeavor in good faith to satisfy its
fiduciary duties to the Company.
EXECUTIVE COMPENSATION
The Company is a newly formed corporation and
has not paid salaries. The Company has agreed to
compensate Mr. Ryan Carroll as Chief Executive Officer
an annual salary of $91,000 and Roland Carroll as
President an annual salary of $91,000. Directors do
not receive cash compensation for their services to
the Company as directors, but are reimbursed for
expenses actually incurred in connection with
attending meetings of the Board of Directors.
EMPLOYMENT AGREEMENTS AND STOCK OPTION PLAN
The Company has not entered into any
employment agreements with its executive officers or
other employees to date. The Company may enter into
employment agreements with them in the future.
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND
AGENTS
The Certificate of Incorporation and Bylaws of
the Company provide that the Company shall, to the
fullest extent permitted by applicable law, as amended
from time to time, indemnify all directors of the
Company, as well as any officers or employees of the
Company to whom the Company has agreed to grant
indemnification.
Section 145 of the Delaware General
Corporation Law ("DGCL") empowers a corporation to
indemnify its directors and officers and to purchase
insurance with respect to liability arising out of
their capacity or status as directors and officers
provided that this provision shall not eliminate or
limit the liability of a director (i) for any breach
of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or
a knowing violation of law, (iii) arising under
Section 174 of the Delaware General Corporation Law,
or (iv) for any transaction from which the director
derived an improper personal benefit.
The Delaware General Corporation Law provides
further that the indemnification permitted thereunder
shall not be deemed exclusive of any other rights to
which the directors and officers may be entitled under
the corporation's by-laws, any agreement, vote of
shareholders or otherwise.
The effect of the foregoing is to require the
Company to indemnify the officers and directors of the
Company for any claim arising against such persons in
their official capacities if such person acted in good
faith and in a manner that he reasonably believed to
be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his
conduct was unlawful.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, MAY BE
PERMITTED TO DIRECTORS, OFFICERS OR PERSONS
CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING
PROVISIONS, IT IS THE OPINION OF THE SECURITIES AND
EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS
AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS
THEREFORE UNENFORCEABLE.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain
information as of the Effective Date of this
Prospectus regarding the beneficial ownership of the
Company's Common Stock by each officer and director of
the Company and by each person who owns in excess of
five percent of the Company's Common Stock.
Name, Position Shares of Common Percentage of Shares of Class Owned
and Address Stock Beneficially Prior to After
Owned Offering(1) Offering(2)
Ryan Carroll 775,000 22.3% 15.6%
Chief Executive Officer
Chairman of Board
Roland Carroll 775,000 22.3% 15.6%
President, Director
Greg Cozine 350,000 10.1% 7.0%
Vice President, Director
Tom Hamilton
Vice President 350,000 10.1% 7.0%
Rene Torres
Vice President 350,000 10.1% 7.0%
Paul Miller
Vice President 350,000 10.1% 7.0%
All officers and
directors as a group 2,950,000 84.9% 59.3%
(6 persons)
______________
(1) Based upon 3,475,000 shares of Common Stock
outstanding prior to the offering.
(2) Assuming Maximum Offering sold (1,500,000)
resulting in 4,975,000 shares of Common Stock
outstanding.
SALES BY SELLING SECURITYHOLDERS
The Company is registering for offer and sale
by holders thereof (the "Selling Securityholders")
250,000 shares of Common Stock. The Selling
Securityholders will offer their securities for sale
on a continuous or delayed basis pursuant to Rule 415
under the 1933 Act. The Selling Securityholders
Shares registered hereby will become tradeable and/or
exercisable on the Effective Date of the Registration
Statement of which this Prospectus is a part.
The following table sets forth the beneficial
ownership of the securities of the Company held by
each person who is a Selling Securityholder.
Shares of Percentage of Percentage of
Common Stock Class Before Class After
Name, Position and Beneficially Offering (1) Offering (2)
Address Owned
TPG Capital Corporation(3) 125,000 3.6% 0%
1504 R Street, NW
Washington, DC 20009
Brokerlink Capital, 125,000 3.6% 0%
Research and Communications
1875 Century Park East
Suite 700
Los Angeles, California 90067
(1) Based on 3,475,000 shares of Common Stock outstanding.
(2) Based on shares of Common Stock outstanding
after the offering, assuming Maximum Offering
sold, and assumes sales of all Selling
Securityholders' Shares offered herein.
(3) James M. Cassidy, Esq., a principal of the law
firm preparing this registration statement on
behalf of the Company is the director,
president and controlling shareholder of TPG
Capital Corporation.
DESCRIPTION OF SECURITIES
AUTHORIZED CAPITAL
The total number of authorized shares of stock
of the Company is one hundred million (100,000,000)
shares of Common Stock with a par value of $.0001 per
share and twenty million (20,000,000) shares of
non-designated preferred shares with a par value of
$.0001 per share.
INCORPORATION
Alpine Entertainment, Inc. (the "Company") was
incorporated under the laws of Delaware in 1998. The
Company's Certificate of Incorporation, by-laws and
corporate governance, including matters involving the
issuance, redemption and conversion of securities, are
subject to the provisions of the Delaware General
Corporation Law, as amended and interpreted from time
to time.
COMMON STOCK
The Company's Certificate of Incorporation
authorizes the issuance of 100,000,000 shares of
Common Stock, $.0001 value per share, of which
3,475,000 shares were outstanding as of the date hereof.
Holders of shares of Common Stock are entitled
to one vote for each share on all matters to be voted
on by the stockholders. Holders of Common Stock do not
have cumulative voting rights. Holders of Common Stock
are entitled to share ratably in dividends, if any, as
may be declared from time to time by the Board of
Directors in its discretion from funds legally
available therefor. In the event of a liquidation,
dissolution or winding up of the Company, the holders
of Common Stock are entitled to share pro rata all
assets remaining after payment in full of all
liabilities. All of the outstanding shares of Common
Stock are, and the shares of Common Stock offered by
the Company pursuant to this Offering will be, when
issued and delivered, fully paid and non-assessable.
Holders of Common Stock have no preemptive
rights to purchase the Company's Common Stock. There
are no conversion or redemption rights or sinking fund
provisions with respect to the Common Stock.
All outstanding shares of Common Stock are
validly issued, fully paid and nonassessable, and all
Shares to be sold and issued as contemplated hereby
will be fully paid and nonassessable when sold in
accordance with the terms hereof and pursuant to a
valid and current prospectus. The Board of Directors
is authorized to issue additional shares, on such
terms and conditions and for such consideration as the
Board may deem appropriate without further stockholder
action.
NONCUMULATIVE VOTING
Each holder of Common Stock is entitled to one
vote per share on all matters on which such
stockholders are entitled to vote. Shares of Common
Stock do not have cumulative voting rights. The
holders of more than 50 percent of the shares voting
for the election of directors can elect all the
directors if they choose to do so and, in such event,
the holders of the remaining shares will not be able
to elect any person to the Board of Directors.
PENNY STOCK REGULATION
The Company has determined to offer the Shares
at $5.00 per share. This price has been arbitrarily
determined by the Company. However, if the Company is
unable to sell its Shares for such price or if the
market price of its Common Stock, if a market for its
Common Stock develops and is maintained, falls below
$5.00 per share, then the Common Stock of the Company
may be considered "penny stock". Penny stocks
generally are equity securities with a price of less
than $5.00 per share other than securities registered
on certain national securities exchanges or quoted on
the Nasdaq Stock Market, provided that current price
and volume information with respect to transactions in
such securities is provided by the exchange or system.
The Company's securities may be subject to "penny
stock" rules that impose additional sales practice
requirements on broker-dealers who sell such
securities to persons other than established customers
and accredited investors (generally those with assets
in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 together with their spouse). For
transactions covered by these rules, the broker-dealer
must make a special suitability determination for the
purchase of such securities and have received the
purchaser's written consent to the transaction prior
to the purchase. Additionally, for any transaction
involving a penny stock, unless exempt, the rules
require the delivery, prior to the transaction, of a
disclosure schedule prescribed by the Commission
relating to the penny stock market. The broker-dealer
also must disclose the commissions payable to both the
broker-dealer and the registered representative and
current quotations for the securities. Finally,
monthly statements must be sent disclosing recent
price information on the limited market in penny
stocks. Consequently, the "penny stock" rules may
restrict the ability of broker-dealers to sell the
Company's securities.
PREFERRED STOCK
The Company's Certificate of Incorporation
authorizes the issuance of 20,000,000 shares of
preferred stock, $.0001 par value per share. As of
the date hereof, no preferred stock has been
designated or issued. The designation of such issued
preferred stock provides that each such share of
preferred stock will have one vote on all matters on
which shareholders are entitled to vote. Preferred
stock provides for liquidation and dividend
preference, if any dividends were to be declared by
the Board of Directors.
In the case of voluntary or involuntary
liquidation, dissolution or winding up of the Company,
holders of shares of preferred stock are entitled to
receive the liquidation preference before any payment
or distribution is made to the holders of Common Stock
or any other series or class of the Company's stock
hereafter issued that ranks junior as to liquidation
rights to the preferred stock, but holders of the
shares of the preferred stock will not be entitled to
receive the liquidation preference of such shares
until the liquidation preference of any other series
or class of the Company's stock hereafter issued that
ranks senior as to liquidation rights to the preferred
stock ("senior liquidation stock") has been paid in
full. The holders of preferred stock and all series or
classes of the Company's stock hereafter issued that
rank on a parity as to liquidation rights with the
preferred stock are entitled to share ratable, in
accordance with the respective preferential amounts
payable on such stock, in any distribution (after
payment of the liquidation preference of the senior
liquidation stock) which is not sufficient to pay in
full the aggregate of the amounts payable thereon.
After payment in full of the liquidation preference of
the shares of the preferred stock, the holders of such
shares will not be entitled to any further
participation in any distribution of assets by the
Company. Neither a consolidation or merger of the
Company with another corporation, nor a sale or
transfer of all or part of the Company's assets for
cash, securities or other property will be considered
a liquidation, dissolution or winding up of the Company.
The Board of Directors is authorized to
provide for the issuance of additional shares of
preferred stock in series and, by filing a certificate
pursuant to the applicable law of the State of
Delaware, to establish from time to time the number of
shares to be included in each such series, and to fix
the designation, powers, preferences and rights of the
shares of each such series and the qualifications,
limitations or restrictions thereof without any
further vote or action by the shareholders. Any shares
of preferred stock so issued would have priority over
the Common Stock with respect to dividend or
liquidation rights. Any future issuance of preferred
stock may have the effect of delaying, deferring or
preventing a change in control of the Company without
further action by the shareholders and may adversely
affect the voting and other rights of the holders of
Common Stock. At present, the Company has no plans to
issue any preferred stock nor adopt any series,
preferences or other classification of preferred stock.
ADDITIONAL INFORMATION DESCRIBING STOCK
The above descriptions concerning the stock of
the Company do not purport to be complete. Reference
is made to the Company's Certificate of Incorporation
and by-laws which are included in the Registration
Statement of which this Prospectus is a part and which
are available for inspection at the Company's offices.
Reference is also made to the applicable statutes of
the State of Delaware for a more complete description
concerning rights and liabilities of shareholders.
ADMISSION TO QUOTATION ON NASDAQ SMALLCAP MARKET OR
NASD OTC BULLETIN BOARD
If the Company meets the qualifications, the
Company intends to apply for quotation of its
Securities on the NASD OTC Bulletin Board. Until the
Company meets such qualifications, its Securities will
be quoted in the daily quotation sheets of the
National Quotation Bureau, Inc., commonly known as the
"pink sheets". If the Company's Securities are not
quoted on the NASD OTC Bulletin Board, a
securityholder may find it more difficult to dispose
of, or to obtain accurate quotations as to the market
value of, the Company's Securities. The
over-the-counter market ("OTC") differs from national
and regional stock exchanges in that it (1) is not
cited in a single location but operates through
communication of bids, offers and confirmations
between broker-dealers and (2) securities admitted to
quotation are offered by one or more broker-dealers
rather than the "specialist" common to stock
exchanges. To qualify for quotation on the NASD OTC
Bulletin Board, an equity security must have one
registered broker-dealer, known as the market maker,
willing to list bid or sale quotations and to sponsor
such a Company listing. If it meets the
qualifications for trading securities on the NASD OTC
Bulletin Board the Company's Securities will trade on
the NASD OTC Bulletin Board until such future time, if
at all, that the Company applies and qualifies for
admission for listing on the Nasdaq SmallCap Market.
There can be no assurance that the Company will
qualify or if qualified that it will be accepted for
listing of its securities on the NASD SmallCap Market.
To qualify for admission for listing on the
Nasdaq SmallCap Market, an equity security must, in
relevant summary, (1) be registered under the
Securities Exchange Act of 1934; (2) have at least
three registered and active market makers, one of
which may be a market maker entering a stabilizing
bid; (3) for initial inclusion, be issued by a company
with $4,000,000 in net tangible assets, or
$50,000,0000 in market capitalization, or $750,000 in
net income in two of the last three years (if
operating history is less than one year then market
capitalization must be at least $50,000,000); (4) have
at a public float of at least 1,000,000 shares with a
value of at least $5,000,000; (5) have a minimum bid
price of $4.00 per share; and (6) have at least 300
beneficial shareholders.
TRADING OF SHARES
There are no outstanding options, options to
purchase, or securities convertible into, the shares
of the Company which are not being registered hereby.
The Company has not agreed with any shareholders, to
register their shares for sale, other than for this
registration. The Company does not have any other
public offerings in process or proposed.
TRANSFER AGENT AND REGISTRAR
The Company currently serves as its own
transfer agent.
REPORTS TO SHAREHOLDERS
The Company will furnish to holders of the
Shares annual reports containing audited financial
statements examined and reported upon, and with an
opinion expressed by, an independent certified public
accountant. The Company may issue other unaudited
interim reports to its shareholders as it deems
appropriate.
PLAN OF DISTRIBUTION
The Company will receive proceeds from the
sale of the Shares, aggregating a maximum of
$5,000,000 if all such Shares are sold. The Company
will not receive the proceeds of any sale of the
securities by the Selling Securityholders. The
Company will pay all of the expenses incident to the
registration of the securities (including registration
pursuant to the securities laws of certain states)
other than commissions, expenses, reimbursements and
discounts of underwriters, dealers or agents, if any,
made pursuant to the sale by the Selling Securityholders.
MINIMUM OFFERING AND ESCROW ACCOUNT
All funds received by the Company with respect
to the sale of the first 300,000 Shares will be
deposited in a special escrow account to be
established by the Company at federally funded
national bank. If 300,000 Shares are not sold within
one hundred eighty days (180) following the effective
date of the registration statement of which this
Prospectus is a part, the offering will automatically
terminate and all funds received from the sale of the
Shares will be returned to the purchasers thereof with
interest, at the same rate as paid by the escrow bank.
At the time that the 300,000 Shares have been sold
(the Minimum Offering) prior to the 180-day period,
the Company will release the funds from the escrow
account for deposit into the working account of the
Company. Although the Company will continue to sell
the offering to attempt to reach the Maximum Offering
(1,500,000 Shares), such released funds will be used
at that time by the Company as described herein.
The Company is seeking one or more member
firms of the National Association of Securities
Dealers, Inc. to sell the Shares. As of the date
hereof, the Company has not entered into any
agreements or arrangements for the sale of the Shares
with any broker, dealer or sales agent. Any
underwriters, dealers or agents who participate in the
distribution of the Shares may be deemed to be
"underwriters" under the Securities Act and any
discounts, commissions or concessions received by any
such underwriters, dealers or agents may be deemed to
be underwriting discounts and commissions under the
Securities Act. The Company anticipates that it will
pay a commission or underwriting fee to such brokers
or dealers of no more than 10%.
If, at some time, the Company meets the
requirements of the Nasdaq SmallCap Market it will
apply for listing thereon. If is should be accepted
for listing thereon, then certain underwriters may
engage in passive market making transactions in the
Company's Common Stock in accordance with Rule 103 of
Regulation M.
In order to comply with the applicable
securities laws, if any, of certain states, the
securities will be offered or sold in such states
through registered or licensed brokers or dealers in
those states. In addition, in certain states, the
securities may not be offered or sold unless they have
been registered or qualified for sale in such states
or an exemption from such registration or
qualification requirement is available and with which
the Company has complied.
ARBITRARY DETERMINATION OF OFFERING PRICE
The offering price of the Shares has been
determined arbitrarily by the Company. Among the
factors considered were the Company's potential
operations, current financial conditions and financial
requirements of the Company, estimates of the business
potential and prospects of the Company, the domestic
and international market demand for motion pictures
and other entertainment media projects, the general
condition of the equities market, and other factors.
LIMITED STATE REGISTRATION
The Company anticipates that it will primarily
sell the Shares in a limited number of states,
depending on the location and registration of any
selling broker or dealer that it locates. The Company
will initially qualify or register the sales of the
Shares in the states of New York, California, Florida,
Illinois, and Nevada. The Company will not accept
subscriptions from investors resident in other states
unless the Company effects a registration therein or
determines that no such registration is required.
SALES BY SELLING SECURITYHOLDERS
The Selling Securityholder Shares may be sold
to purchasers from time to time directly by and
subject to the discretion of the Selling
Securityholders. The Selling Securityholders may from
time to time offer their securities for sale through
underwriters, dealers or agents, who may receive
compensation in the form of underwriting discounts,
concessions or commissions from the Selling
Securityholders and/or the purchasers of the
securities for whom they may act as agents. Any
underwriters, dealers or agents who participate in the
distribution of the securities may be deemed to be
"underwriters" under the 1933 Act and any discounts,
commissions or concessions received by any such
underwriters, dealers or agents may be deemed to be
underwriting discounts and commissions under the 1933
Act. The securities sold by the Selling
Securityholders may be sold from time to time in one
or more transactions at an offering price that is
fixed or that may vary from transaction to transaction
depending upon the time of sale or at prices otherwise
negotiated at the time of sale. Such prices will be
determined by the Selling Securityholders or by
agreement between the Selling Securityholders and any
underwriters.
Any underwriters, dealers or agents who
participate in the distribution of the securities may
be deemed to be "underwriters" under the Securities
Act and any discounts, commissions or concessions
received by any such underwriters, dealers or agents
may be deemed to be underwriting discounts and
commissions under the Securities Act.
At the time a particular offer is made by or
on the behalf of the Selling Securityholders, a
prospectus, including any necessary supplement
thereto, will be distributed which will set forth the
number of shares of Common Stock and other securities
being offered and the terms of the offering, including
the name or names of any underwriters, dealers or
agents, the purchase price paid by any underwriter for
the Shares purchased from the Selling Securityholders,
any discounts, commissions and other items
constituting compensation from the Selling
Securityholders, any discounts, commissions or
concessions allowed, reallowed or paid to dealers, and
the proposed selling price to the public.
USE OF A BROKER-DEALER
The Company is seeking to locate a
broker-dealer to offer and sell the Shares on terms
acceptable to the Company. If the Company determines
to use a broker-dealer, such broker-dealer must be a
member in good standing of the National Association of
Securities Dealers, Inc. and registered, if required,
to conduct sales in those states in which it would
sell the Shares. The Company anticipates that it
would not pay in excess of 10% as a sales commission
for any sales of the Shares. If a broker-dealer were
to sell the Shares, it is likely that such
broker-dealer would be deemed to be an underwriter of
the securities as defined in Section 2(11) of the
Securities Act and the Company would be required to
obtain a no-objection position from the National
Association of Securities Dealers, Inc. regarding the
underwriting and compensation terms entered into
between the Company and such potential broker-dealer.
In addition, the Company would be required to file a
post-effective amendment to the registration statement
of which this Prospectus is a part to disclose the
name of such selling broker-dealer and the agreed
underwriting and compensation terms. In order to
comply with the applicable securities laws, if any, of
certain states, the securities will be offered or sold
in such states through registered or licensed brokers
or dealers in those states.
Pursuant to Regulation M of the General Rules
and Regulations of the Securities and Exchange
Commission, any person engaged in a distribution of
securities, including on behalf of a selling security
holder, may not simultaneously bid for, purchase or
attempt to induce any person to bid for or purchase
securities of the same class for a period of five
business days prior to the commencement of such
distribution and continuing until the selling security
holder (or other person engaged in the distribution)
is no longer a participant in the distribution.
If, at some time, the Company meets the
requirements of the Nasdaq SmallCap Market it will
apply for listing thereon. If is should be accepted
for listing thereon, then certain underwriters may
engage in passive market making transactions in the
Company's Common Stock in accordance with Rule 103 of
Regulation M.
LEGAL MATTERS
LEGAL PROCEEDINGS
The Company is not a party to any litigation
and management has no knowledge of any threatened or
pending litigation against the Company.
SECURITIES AND EXCHANGE COMMISSION AND STATE
INVESTIGATIONS OF AFFILIATE
Alpine Pictures, Inc., an affiliated company,
is the focus of a formal investigation conducted by
the United States Securities and Exchange Commission
to determine whether any federal securities laws were
violated in connection with the offering of securities
by Alpine Pictures, Inc. and several partnerships in
which it was involved. In March, 1998, Alpine
Pictures, Inc. and several of its officers, including
Roland Carroll and Ryan Carroll, were subpoenaed and
provided documents and oral testimony to the
Securities and Exchange Commission. No further action
has been taken since that date.
In January, 1998, Cavalier Partners L.P.
consented to an order from the State of Michigan to
cease and desist from any violation of the Michigan
securities laws and paid administrative costs in the
amount of $750. Paul Miller, an officer of the
Company, served as general partner of Cavalier
Partners L.P.
On November 17, 1997, the Department of
Corporations for the State of California issued a
desist and refrain order against Alpine Pictures,
Inc., Roland Carroll, Ryan Carroll and Carroll Media,
Inc., which requires them to desist and refrain from
the offer or sale in California of any unqualified or
non-exempt security. The order does not address any
specific offering.
LEGAL OPINION
Cassidy & Associates, Washington, D.C. has
given its opinion as attorneys-at-law that the Shares,
when sold pursuant to the terms hereof and pursuant to
a valid and current prospectus in which those shares
are registered, will be fully paid and non-assessable.
James M. Cassidy, a principal of Cassidy &
Associates, is an officer and director and controlling
shareholder of TPG Capital Corporation, a Selling
Securityholder herein and which owns 125,000 shares of
Common Stock of the Company.
EXPERTS
The financial statements in this Prospectus
have been included in reliance upon the report of
Weinberg & Company, P.A., Certified Public
Accountants, and upon the authority of such firm as
expert in accounting
AVAILABLE INFORMATION
The Company has filed with the Securities and
Exchange Commission (the "Commission") a Registration
Statement on Form SB-2 (the "Registration Statement")
under the Securities Act with respect to the
securities offered hereby. This Prospectus does not
contain all the information contained in the
Registration Statement. For further information
regarding the Company and the securities offered
hereby, reference is made to the Registration
Statement, including all exhibits and schedules
thereto, which may be inspected without charge at the
public reference facilities of the Commission's
Washington, D.C. office, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Each statement contained in
this Prospectus with respect to a document filed as an
exhibit to the Registration Statement is qualified by
reference to the exhibit for its complete terms and
conditions.
The Company will be subject to the
informational requirements of the Securities Exchange
Act of 1934 ("Exchange Act") and in accordance
therewith will file reports and other information with
the Commission. Reports, proxy statements and other
information filed by the Company can be inspected and
copied on the Commission's home page on the World Wide
Web at http://www.sec.gov or at the public reference
facilities of the Commission, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as
the following Regional Offices: 7 World Trade Center,
Suite 1300, New York, N.Y. 10048; and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago,
Illinois. 60661-2511. Such material can also be
inspected at the New York, Boston, Midwest, Pacific
and Philadelphia Stock Exchanges. Copies can be
obtained from the Commission by mail at prescribed
rates. Request should be directed to the Commission's
Public Reference Section, Judiciary Plaza, 450 Fifth
Street, NW., Washington DC 20549.
The Company intends to furnish its stockholders with annual
reports containing audited financial statements and such
ofther reports as may be required by law.
FINANCIAL STATEMENTS
The combined audited financial statements for the fiscal years
ended December 31, 1997 and December 31, 1996 for Alpine Pictures
International, Inc. and affiliate and the audited financial
statements for the fiscal year ended December 31, 1998 for Alpine
Entertainment, Inc. (Delaware), and the unaudited financial
statements for the period ended September 30, 1998 follow herewith.
ALPINE ENTERTAINMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENT
AS OF DECEMBER 31, 1998
ALPINE ENTERTAINMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 - INDEPENDENT AUDITORS' REPORT
PAGE 2 - BALANCE SHEET AS OF DECEMBER 31, 1998
PAGE 3 - 5 - NOTES TO BALANCE SHEET AS OF DECEMBER 31, 1998
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Alpine Entertainment, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Alpine
Entertainment, Inc.(a development stage company) as of December 31,
1998. This financial statement is the responsibility of the
Company's management. Our responsibility is to express an opinion
on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
balance sheet is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet
presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the balance sheet referred to above presents fairly
in all material respects, the financial position of Alpine
Entertainment, Inc. (a development stage company) as of December 31,
1998, in conformity with generally accepted accounting principles.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
February 4, 1999 (except for Notes 4A and 4B
as to which the date is February 10, 1999)
ALPINE ENTERTAINMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF DECEMBER 31, 1998
ASSETS
ASSETS
Cash $ 100
TOTAL CURRENT ASSETS $ 100
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES $ -
STOCKHOLDERS' EQUITY
Preferred Stock, $.0001 par value, 20 million
shares authorized, zero issued and outstanding -
Common Stock, $.0001 par value, 100 million
shares authorized, 250,000 shares issued and
outstanding 25
Additional paid-in capital 75
Total Stockholders' Equity -
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 100
See accompanying notes to financial statements
2
ALPINE ENTERTAINMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO BALANCE SHEET
AS OF DECEMBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization and Business Operations
Alpine Entertainment, Inc.(a development stage company) ("the
Company") was incorporated in Delaware on November 5, 1998 to serve
as a vehicle to effect a merger, exchange of capital stock, asset
acquisition or other business combination with a domestic or foreign
private business. At December 31, 1998, the Company had not yet
commenced any formal business operations. The Company's fiscal year
end is December 31.
The Company's ability to commence operations is contingent upon its
ability to identify a prospective target business and raise the
capital it will require through the issuance of equity securities,
debt securities, bank borrowings or a combination thereof. (See Note 4)
B. Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
NOTE 2 - STOCKHOLDERS' EQUITY
A. Preferred Stock
The Company is authorized to issue 20,000,000 shares of preferred
stock at $.0001 par value, with such designations, voting and other
rights and preferences as may be determined from time to time by the
Board of Directors.
B. Common Stock
The Company is authorized to issue 100,000,000 shares of common
stock at $.0001 par value. The Company issued for cash 125,000
shares to TPG Capital Corporation and Brokerlink Capital Research
and Communications, respectively.
3
ALPINE ENTERTAINMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO BALANCE SHEET
AS OF DECEMBER 31, 1998
NOTE 3 - RELATED PARTIES
Legal counsel to the Company is a firm owned by a director of the
Company who also is a beneficial owner of over 50% of the
outstanding stock of TPG Capital Corporation.
NOTE 4 - SUBSEQUENT EVENTS
A. Acquisition
Under an agreement dated February 9, 1999 effective February 10,
1999 the Company acquired all of the issued and outstanding shares
of capital stock of Alpine Pictures International, Inc. in exchange
for common stock of the Company. Under the terms of the agreement,
the outstanding shares were exchanged at a ratio of one share of the
Company for every share of Alpine Pictures International, Inc. As a
result of the exchange, Alpine Pictures International, Inc. (A.P.I.,
Inc.) became a wholly owned subsidiary of the Company, and the
shareholders of A.P.I., Inc. became shareholders of approximately
69.9% of the Company. Generally accepted accounting principles
require that the Company whose shareholders retain a majority
interest in a combined business be treated as an acquirer for
accounting purposes. As a result, the merger will be treated as an
acquisition of the Company by A.P.I., Inc. and a recapitalization of
A.P.I.,Inc. using the purchase method of accounting for financial
reporting purposes. Accordingly, the Company's financial statements
immediately following the merger will be as follows: (1) The balance
sheet will consist of A.P.I., Inc.'s net assets at historical cost
and (2) the statement of operations will include the A.P.I.,Inc's
operations for the period presented and the operations of the
Company from the date of acquisition.
B. Formation of New Subsidiary
In February 1999, a wholly-owned subsidiary, Alpine Television, Inc.
was incorporated Inc. in Delaware. Alpine Television, Inc. ("ATI")
was formed to distribute and develop entertainment media projects
for presentation on television, including pay-per-view, pay network,
syndication or basic cable television.
4
ALPINE ENTERTAINMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO BALANCE SHEET
AS OF DECEMBER 31, 1998
NOTE 4 - SUBSEQUENT EVENTS - (CONT'D)
ATI has authorized capitalization of 100,000,000 shares of common
stock of which 1,000 shares are outstanding and 20,000,000 shares of
non-designated preferred stock, of which none are outstanding. ATI
has no operations to date.
C. Registration Statement Filing
The Company is in process of preparing and filing a Form SB-2
Registration Statement under the Securities Act of 1933 to offer up
to 1,500,000 shares of common stock at $5.00 per share. The offering
also registers 250,000 shares of common stock held by selling
security holders. (See Note 2B).
5
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
COMBINED INTERIM STATEMENT OF OPERATIONS
FOR THE 9 MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
Revenues
Film license fees 46,143
Total Revenue 46,143
Operating Expenses
Salaries and Wages 274,101
Professional Fees 9,415
General and Administrative 46,069
General Marketing 11,615
Direct Film Marketing,
Advertising, Distribution and
Rework Expenses 247,730
Rental Expenses 36,697
Total Operating Expenses 625,627
Net Loss From Operations (579,484)
Net Loss (579,484)
Number of Shares Outstanding 5,376,020
Net loss per common share (0.11)
See accompanying notes to combined financial statements
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
COMBINED INTERIM STATEMENT OF OPERATIONS
FOR THE 9 MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
Corpora- Partner-
tion ship Subscrip-
Common Stock Part- Accum- Accum- tions
Number nership Interest ulated ulated Receiv-
of Shares Amount Units Amount Deficit Deficit able Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
12/31/1997 3,447,700 133,885 228.60 1,024,742 (724,909) (60,264) (323) 373,131
Issuance of
Common Stock/
Private
Placement 588,937 588,937 - - - - - 588,937
Issuance of
Common Stock
for Partner-
ship Units 1,339,383 964,478 - - - - - 964,478
Cancelation of
Limited Part-
nership Units - - (228.60) (1,024,742) - 60,264 - (964,478)
Write-off of
deferred
offering costs - (238,619) - - - - - (238,619)
Net Loss
1/1/1998 to
9/30/1998 - - - - (579,484) - - (579,484)
Balance
9/30/1998 5,376,020 1,448,681 - - (1,034,393) - (323) 143,965
</TABLE>
See accompanying notes to combined financial statements
ALPINE PICTURES INTERNATIONAL, INC.
INTERIM BALANCE SHEET
AS OF SEPTEMBER 30, 1998 (UNAUDITED)
ASSETS
Current Assets
Cash and cash equivalents 100
Employee Advances 7,019
Prepaid Taxes 800
Prepaid Expenses 6,255
Total Current Assets 14,174
Due from Affiliates 283,714
Property Plant and Equipment, Net 13,166
Other Assets
Deferred Offering Costs 23,100
Total Assets 334,154
LIABILITIES AND EQUITY
Current Liabilities
Bank Overdraft 2,221
Accounts Payable 186,768
Distributor Deposits 1,200
Total Current Liabilities 190,189
Total Liabilities 190,189
Equity 143,965
Total Liabilities and Equity 334,154
See accompanying notes to combined financial statements
ALPINE PICTURES INTERNATIONAL, INC.
INTERIM BALANCE SHEET
AS OF SEPTEMBER 30, 1998 (UNAUDITED)
Cash flows from operating activities:
Net loss (579,484)
Changes in operating assets and
liabilities:
(Increase) decrease in:
Prepaid Expenses (6,255)
Increase (decrease) in:
Bank overdrafts (4,298)
Accounts payable and accrued
expenses 149,799
Other liabilities (8,591)
Distributor deposits (806)
Total adjustments 129,849
Net cash used in operating
activities (449,635)
Cash flows from investing activities:
Employee advances (5,060)
Due from non-combined affiliates 68,000
Purchase of property and equipment (5,638)
Net cash used in investing
activities 57,302
Cash flows from financing
activities:
Proceeds from the issuance
of common stock 350,318
Proceeds from the issuance
of limited partnership units -
Deferred offering costs 42,115
Net cash provided by financing
activities 392,433
Net increase (decrease) in cash 100
Cash and Cash equivalents-beginning -
Cash and Cash equivalents-Ending 100
See accompanying notes to combined financial statements
Notes to combined financial statements
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited combined
financial statements have been prepared
in accordance with generally accepted
accounting principles and the rules and
regulations of the Security and
Exchange Commission for the interim
financial information. Accordingly,
they do not include all the information
and footnotes necessary for a
comprehensive presentation of financial
position and results of operations.
It is management's opinion, however
that all material adjustments
(consisting of normal recurring
adjustments) have been made which are
necessary for a fair financial
statements presentation. The results
for the interim period are not
necessarily indicative of the results
to be expected for the year.
For further information, refer to the
audited combined financial statements
and footnotes included in the company's
Form SB-2 for the years ended December
31, 1997 and 1996.
NOTE 2 - MERGER OF AFFILIATE
Alpine Releasing Partners, LLP merged
into Alpine Pictures International,
Inc. on February 15, 1998. Therefor,
the Statement of Operations, the
Statement of Changes in Equity, and the
Statement of Cash Flow reflect both
companies' activities. Since as of the
date September 30, 1998 Alpine
Releasing Partners, LLP did not exist,
the Balance Sheet reflects only Alpine
Pictures International, Inc.'s position.
NOTE 3 CHANGES IN CAPITALIZATION
Alpine Pictures International, Inc.
completed a private offering in the 9
months ended September 30,1998. Alpine
Pictures International, Inc. issued
stock to the individual partners of
Alpine Releasing Partners, LLP in
proportion to their interest in the
partnership.
NOTE 4 SUBSEQUENT EVENT
A. Merger with Alpine Entertainment, Inc.
Under an agreement dated February 9, 1999 effective
February 10, 1999 Alpine Entertainment, Inc, (AEInc.) a
new corporation formed on November 5, 1998 under the
laws of Delaware, acquired all of the issued and
outstanding shares of capital stock of the company in
exchange for shares of AEInc. Under the terms of the
agreement, the Company's shares were exchange at a ratio
of one share of AEInc. for every share of the company.
As a result of the exchange, the Company became a wholly
owned subsidiary of AEInc., and the shareholders of the
Company became shareholders of approximately 96% of
AEInc. Generally Accepted Accounting Principles require
that the company whose shareholders retain a majority
interest in a combined business be treated as the
aquirer for accounting purposes. As a result, the
merger will be treated as an acquisition of AEInc. By
the Company, and a recapitalization of the Company. The
Company's financial statements immediately following the
acquisition will be as follows: (1) The Balance Sheet
will consist of the Company's net assets at historical
cost and (2) the Statement of Operations will include
the Company's operations for the period presented and
AEInc.'s operations from the date of acquisition.
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
COMBINED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
CONTENTS
PAGE 1 - REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS
PAGE 2 - COMBINED BALANCE SHEETS AS OF DECEMBER 31,
1997 AND 1996
PAGE 3 - COMBINED STATEMENTS OF OPERATIONS FOR THE
YEARS ENDED DECEMBER 31, 1997 AND 1996
PAGE 4 - COMBINED STATEMENT OF CHANGES IN EQUITY FOR
THE YEARS ENDED DECEMBER 31, 1997 AND 1996
PAGE 5 - COMBINED STATEMENTS OF CASH FLOWS FOR THE
YEARS ENDED DECEMBER 31, 1997 AND 1996
PAGE 6 - 14 - NOTES TO COMBINED FINANCIAL STATEMENTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of:
Alpine Pictures International, Inc.
and Affiliate (a limited partnership)
We have audited the accompanying combined balance sheets
of Alpine Pictures International, Inc. and Affiliate (a
limited partnership) as of December 31, 1997 and 1996
and the related combined statements of operations,
changes in equity (deficit), and cash flows for the
years then ended. These financial statements are the
responsibility of the Company's management. Our
responsibility is to express an opinion on these
combined financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are
free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles
used and significant estimates made by management, as
well as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the combined financial statements
referred to above present fairly, in all material
respects, the financial position of Alpine Pictures
International, Inc. and Affiliate (a limited
partnership) as of December 31, 1997 and 1996 and the
results of their operations and their cash flows for the
two years then ended in conformity with generally
accepted accounting principles.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
December 7, 1998 (Except for Note 10B as
to which the date is February 10, 1999)
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
COMBINED BALANCE SHEETS
AS OF DECEMBER 31, 1997 AND 1996
ASSETS
1997 1996
CURRENT ASSETS
Cash and cash equivalents $ - $ 49,311
Employee advances 1,959 -
Prepaid taxes 800 -
Total Current Assets 2,759 49,311
DUE FROM NON-COMBINED AFFILIATES 351,715 98,367
PROPERTY AND EQUIPMENT, NET 7,528 -
OTHER ASSETS
Deferred offering costs 65,215 4,417
Total Other Assets 65,215 4,417
TOTAL ASSETS $ 427,217 $ 152,095
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Bank overdraft $ 6,518 $ -
Accounts payable and accrued
expenses 36,971 3,600
Other current liabilities 8,591 -
Distributor deposits 2,006 -
Total Current Liabilities 54,086 3,600
TOTAL LIABILITIES 54,086 3,600
COMMITMENTS AND CONTINGENCIES
EQUITY 373,131 148,495
TOTAL LIABILITIES AND EQUITY $ 427,217 $ 152,095
See accompanying notes to combined financial statements.
2
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1997 1996
REVENUES
Film license sales $ 74,532 $ -
Total Revenues 74,532 -
OPERATING EXPENSES
Salaries and wages 229,527 -
Commissions 20,628 8,171
Professional fees 101,787 18,250
General and administrative 138,146 22,082
General marketing 10,953 -
Direct film marketing,
advertising, distribution
and rework expenses 270,554 26,664
Rental expenses 12,744 2,310
Depreciation 1,798 -
Total Operating Expenses 786,137 77,477
NET LOSS FROM OPERATIONS (711,605) (77,477)
OTHER INCOME
Other income 3,909 -
NET LOSS $ (707,696) $ (77,477)
Weighted average number of
shares outstanding during
the period 386,849 350,000
Net loss per common share
and equivalents $ (1.8294) $ (.2214)
See accompanying notes to combined financial statements.
3
ALPINE PICTURES INTERNATIONAL, INC. AND AFFILIATE
COMBINED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
CORPORA- PARTNER-
TION SHIP SUBSCRIP-
COMMON STOCK PART- ACCUM- ACCUM- TION
NUMBER NERSHIP INTEREST ULATED ULATED RECEIV-
OF SHARES AMOUNT UNITS AMOUNT DEFICIT DEFICIT ABLE TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of
Common Stock 350,000 $ 35 - $ - $ - $ - $ (35) $ -
Issuance of
limited part-
nership units - - 48.93 244,668 - - - 244,668
Write-off of
deferred offering
costs - - - (18,696) - - - (18,696)
Net loss 1996 - - - - (53,289) (24,188) - (77,477)
BALANCE,
DECEMBER 31,
1996 350,000 $ 35 48.93 $225,972 $(53,289) $(24,188) - $148,495
Issuance of
common stock
under private
placement 222,700 222,700 - - - - - 222,700
Issuance of
limited part-
nership units - - 179.67 898,341 - - - 898,341
Issuance of
common stock
to employees 2,875,000 288 - - - - (288) -
Write-off of
deferred
offering costs - (89,138) - (99,571) - - - (188,709)
Net loss 1997 - - - - (671,620) (36,076) - (707,696)
BALANCE,
DECEMBER 31,
1997 3,447,700 $133,885 228.60 $1,024,742 $(724,909) $(60,264) $(323) $373,131
</TABLE>
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
COMBINED STATEMENTS OF CASH FLOWS
AS OF DECEMBER 31, 1997 AND 1996
1997 1996
Cash flows from operating
activities:
Net loss $ (707,696) $ (77,477)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation 1,798 -
Changes in operating assets and
liabilities:
(Increase) decrease in:
Prepaid taxes (800) -
Increase (decrease)in:
Bank overdrafts 6,518 -
Accounts payable and accrued
expenses 33,371 3,600
Other liabilities 8,591 -
Distributor deposits 2,006 -
Total adjustments 51,484 3,600
Net cash used in operating
activities (656,212) (73,877)
Cash flows from investing
activities:
Employee advances (1,959) -
Due from non-combined affiliates (253,348) (98,367)
Purchase of property and equipment (9,326) -
Net cash used in investing
activities (264,633) (98,367)
Cash flows from financing
activities:
Proceeds from the issuance
of common stock 133,562 -
Proceeds from the issuance
of limited partnership units 798,770 225,972
Deferred offering costs (60,798) (4,417)
Net cash provided by financing
activities 871,534 221,555
Net increase (decrease) in cash (49,311) 49,311
Cash and cash equivalents-beginning 49,311 -
CASH AND CASH EQUIVALENTS-ENDING $ - $ 49,311
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
INFORMATION:
During 1996 and 1997 the Company issued 350,000 and 2,875,000
shares, respectively of common stock to certain directors and
officers of the Company which was recorded as a subscription
receivable at December 31, 1997 and 1996.
See accompanying notes to combined financial statements.
5
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
Alpine Pictures International, Inc. (the "Corporation") is a California
corporation formed in August 1996 and engaged in the business of
distributing, marketing, licensing, and selling motion pictures in all
markets, including domestic and international theatrical exhibition,
home video, network television, cable television, pay per view cable
television, nontheatrical exhibitors such as airlines, schools,
hospitals, libraries, hotels, syndicated television and related markets.
The Corporation may also have the right to license the ancillary rights
for motion pictures for which it enters into distribution agreements
including soundtrack music and merchandising items. The Corporation
enters into distribution agreements with affiliated and unaffiliated
motion picture producers. The distribution agreements generally provide
for the Corporation to be allocated a percentage of gross revenues from
the motion pictures which it licenses and distributes, as well as to be
repaid advances, if any, which it makes to producers and to be
reimbursed its distribution and film rework expenses. (See Note 7).
Alpine Releasing Partners I, L.P., the Corporation's controlled
affiliate, is a California Limited Partnership (the "Partnership")
formed in July 1996 to finance the acquisition and distribution of
certain feature length motion pictures principally in conjunction with
the Corporation who is the general partner. The partnership was merged
into the Corporation in February 1998. (See Note 10).
Principles of Combination
The combined financial statements include the accounts of the
Corporation and its controlled affiliate, Alpine Releasing Partners I,
L.P. (together referred to as "the Company"). All significant
intercompany balances and transactions have been eliminated in
combination.
Use of Estimates
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the date of
the financial statements and revenues and expenses during the reported
period. Actual results could differ from those estimates.
6
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED
Cash and Cash Equivalents
For purpose of the cash flow statements, the Company considers all
highly liquid investments with original maturities of three months or
less at time of purchase to be cash equivalents.
Property and Equipment
Property and equipment are stated at cost, less accumulated
depreciation. Expenditures from maintenance and repairs are charged to
expense as incurred. Depreciation is provided using the straight-line
method over the estimated useful life's of the assets as follows:
Equipment 5 years
Furniture and fixtures 7 years
Income taxes
The Company accounts for income taxes under the Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 109.
"Accounting for Income Taxes" ("Statement No.109"). Under Statement 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax basis. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in
which those measured using enacted tax rates expected to be recovered or
settled. Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates in recognized is income in the
period that includes the enactment date.
Revenue Recognition
The Company recognizes revenue in accordance with Statement of Financial
Standards No. 53, "Financial Reporting by Producers and Distributors of
Motion Picture Films" ("SFAS 53"). Under SFAS 53, a producer or
distributor recognizes revenue when the license fee is known, the film
costs have been reasonably determined, the film has been shipped and
accepted by the sub-licensee distributor and is available for showing,
and collectibility of the full license fee is assured. Based on Company
experience, collectibility of the full license fee is assured only upon
cash receipt from the sub-licensee distributor. Therefore, under the
Company's flat fee type contracts, revenue is recognized upon receipt of
final payment
7
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP
NOTES TO COMBINED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
from and the shipment to and acceptance by the sub-licensee distributor.
Under revenue sharing type contracts, revenue is recognized as payments
are received from the sub-licensee distributor. Initial deposits on
sub-licensee distributor contracts are recorded as distributor deposits
and recognized when the final payment is received and the film is
shipped to and accepted by the sub-licensee distributor.
Direct Film Marketing, Advertising Distribution and Rework Expense
The Company incurs certain film pre-release and post-release marketing
and advertising expenses, distribution expensem and film rework expenses
such as adding subtitles or dubbing, or other editing required to
prepare the films for distribution in foreign geographic markets. The
Company considers such expenses to be period costs and accordingly
expenses them in the period incurred. Contractural terms with each film
producer allow the Company to recoup its marketing, advertisingm
distribution and rework costs, subject to limitations as defined in each
contract, from future revenues generated from the film. Such recoupment
amounts, when received, are recorded as an offset against the current
film marketing, advertising and rework expense.
Concentrations
There were no financial instruments which potentially subject the
Company to significant concentration of credit risk at December 31, 1997
and 1996.
The following is an approximate summary of the percentage of film sales
by geographic region.
1997 1996
Italy 45% 79%
Germany 19% -
Russia 18% 21%
Indonesia 8% -
Poland 7% -
Thailand 2% -
Peru 1% -
100% 100%
8
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Per Share Data
Net loss per common share for the year ended December 31, 1997 and 1996
is computed by dividing net loss by the weighted average common shares
outstanding during the year as defined by Financial Accounting
Standards, No. 128, "Earnings per Share". The assumed exercise of
common share equivalents was not utilized since the effect was
anti-dilutive.
Long-Lived Assets
During 1995, Statement of Financial Accounting Standards No.121,
"Accounting for the Impairment of Long-lived Assets and for Long-lived
Assets to be Disposed Of" ("SFAS 121"), was issued. SFAS 121 requires
the Company to review long-lived assets and certain identifiable assets
related to those assets for impairment whenever circumstances and
situations change such that there is an indication that the carrying
amounts may not be recoverable. If the undiscounted future cash flows
of the enterprise are less than their carrying amounts, their carrying
amounts are reduced to fair value and an impairment loss is recognized.
The adoption of this pronouncement did not have a significant impact on
the Company's financial statements as of December 31, 1997 and 1996.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment at December 31, 1997 and 1996 consists of the
following:
1997 1996
Equipment $ 8,142 $ -
Furniture and fixtures 1,184 -
9,326 -
Less accumulated depreciation (1,798) -
$ 7,528 -
NOTE 3 - EQUITY
In July 1997 the Corporation amended its articles of incorporation to
increase the authorized no par value common shares to 20,000,000 from
10,000,000 and to authorize 2,000,000 shares of no par value preferred
stock.
9
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 3 - EQUITY - (CONT'D)
The Board of Directors of the Corporation may designate different series
of preferred stock and may fix the authorized number of shares for each
series. The holders of each series of preferred stock shall have such
rights, preferences and privileges as may be determined by the Board of
Directors prior to the issuance of such shares.
As of December 31, 1997, there were no preferred shares issued or
outstanding.
Pursuant to a merger with the Partnership, the Corporation issued
additional shares of common stock in February 1998 (See Note 10).
NOTE 4 - PARTNERSHIP AGREEMENT
A limited partnership was formed known as Alpine Releasing Partners I,
L.P. as of the first day of July 1996. Alpine Pictures International,
Inc. was named as general partner. Under the terms of the agreement, (a)
the partnership shall continue for ten (10) years unless terminated
sooner by the partners, (b) in general, income and loss shall be
allocated annually to the general partner 1% and limited partners 99%.
In February 1998 Alpine Releasing Partners I, L.P. was merged into
Alpine Pictures International, Inc. (See Note 10)
NOTE 5 - PRIVATE PLACEMENTS
In July 1997 the Corporation issued a Private Placement Memorandum (the
"Placement") pursuant to the Securities and Exchange Commission
Regulation CE Section 3(b), Rule 1001, of the Securities Act of 1933, as
amended, and under Section 25102(n) of the California corporations code
to offer 980,000 shares of its common stock, no par value, with an
option to increase the offering by up to an additional 120,000 shares
for a maximum offering of 1,100,000 shares. Under terms of the
Placement, the shares were offered on a "best efforts" basis at $1.00
per share in minimum units of 20,000 shares with no minimum
capitalization required by the Corporation. Under the Placement, which
terminated in 1998, the Corporation issued 222,700 shares of common
stock with gross proceeds to the Corporation of $ 222,700 as of December
31, 1997. Offering costs of the Placement approximated $ 89,138 and were
charged against equity in 1997 resulting in net proceeds to the
Corporation of $133,562.
During 1998, prior to termination of the Placement, the Corporation
raised an approximate additional $589,000 less related costs through the
Private Placement.
10
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 5 - PRIVATE PLACEMENTS- (CONT'D)
In July 1996, the Partnership issued a Private Placement Memorandum (the
"Placement") under Rule 506 of Regulation D under Section 4(2) of the
Securities Act of 1933, as amended, and under Section 25102(n) of the
California corporations code to offer, on a "best efforts" basis, 200
limited partnership units at a subscription price of $5,000 per unit.
Under terms of the Placement, the minimum investment was 5 units or
$25,000 and no minimum capitalization was required. Additionally, the
general partner was required to make a capital contribution equal to 1%
of aggregate partnership capital at the termination of the offering.
Under the Placement, the Partnership raised approximately $244,668 and
$898,341 in 1996 and 1997, respectively, and the placement was
terminated in June 1997. Offering costs of the placement aggregated
$118,267 of which $18,696 and $99,571 were charged against equity in
1996 and 1997, respectively, resulting in net proceeds to the
Partnership of $1,024,742.
NOTE 6 - INCOME TAXES
There was no current income tax expense or benefit in 1997 and 1996 due
to the Company's net losses.
At December 31, 1997, the Company had net operating loss carryforwards
of approximately $594,000, which expire from 2011 through 2012, subject
to certain prescribed annual rate limitations. The deferred tax asset
resulting from these net operating losses approximates $202,000 and
$12,700 at December 31, 1997 and 1996, respectively, and has been fully
offset by a valuation allowance at those dates.
NOTE 7 - OPERATING AGREEMENTS
Agreements with Producers/Owners
As part of its primary operations, the Company enters into agreements
with various producers/owners (the "owner") of feature films (the
"film") to act as distributor agent of the owner for the sales,
collections and servicing of the film in specified media and geographic
territories, for a stipulated term. Under the agreements, various
provisions exist for extension and/or cancellation of the contracts,
limited reworking of the film to meet local country requirements, and
sublicensing of distribution by the Company. The Company generally
retains a percentage fee based on gross receipts from film sales, as
defined in the agreements, and is allowed reimbursement of out-of-pocket
sales, marketing, distribution, servicing, rework, technical
materials, and other customary
11
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 7 - OPERATING AGREEMENTS - (CONT'D)
expenses incurred up to a stipulated cap from the remaining gross
receipts. The balance after the Company's fee and out-of-pocket
expenses is payable to the owner. Under certain agreements the owner is
paid a stipulated percentage out of gross receipts prior to any fee
and/or expense distributions to the Company.
Agreements with Distributors
The Company enters into agreements with distributors for distribution of
films for which the Company is the agent of producers/owners, as
discussed in Note 7. The agreements generally stipulate a fixed fee and
less commonly, royalty fees or a combination thereof allowing the
distributor to distribute certain films within a specified territory.
The Company generally obtains a deposit from distributors which is
recorded as a deposit liability until the film is delivered to and
balance received from the distributor.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
The Company is aware of the issues associated with the programming code
in existing computer systems as the millennium (year 2000) approaches.
The "year 2000" problem is pervasive and complex as virtually every
computer operation will be affected in some way by the rollover of the
two-digit year to 00. The issue is whether computer systems will
properly recognize date-sensitive information when the year changes to
2000. Systems that do not properly recognize such information could
generate erroneous data or cause a system to fail.
Although management believes that none of the Company's systems are
affected by this problem, the Company could be impacted by the failure
of other companies to timely correct their computer systems. The
Company's operations are dependent on the world wide telecommunications
networks including computer systems, telephone systems, and delivery
systems. If any of these systems become inoperational, the Company will
be directly and significantly effected. Management has not assessed the
potential effect on the Company's earnings.
12
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 9 - RELATED PARTY TRANSACTIONS
During 1997 and 1996 the Company purchased investor lead lists from its
Non-Combined affiliate, First National Information Network, Inc. for
$96,417 and $3,000, respectively. The Company used such investor lists
in its marketing campaign to sell shares of the Company's common stock
under the private placements (See Note 5). Accordingly, $44,853 and
$3,000 was charged against equity in 1997 and 1996, respectively. The
remaining $51,564 will be charged against equity in 1998.
The Company's affiliate, Alpine Pictures, Inc. borrows funds from and
pays certain shared office expenses of the Company. The net effect of
these transactions aggregating $351,751 and $98,367 is included in Due
from Non-Combined Affiliates at December 31, 1997 and 1996, respectively.
The Company periodically enters into distribution agreements with its
Non-Combined affiliate, Alpine Pictures, Inc. to distribute films
produced by such affiliate.
NOTE 10 - SUBSEQUENT EVENTS
A. Merger of Alpine Pictures International, Inc.
and Alpine Releasing Partners I, L.P.
On December 17, 1997, the Corporation entered into an Agreement of
Merger (the "Agreement") to merge the Partnership into the Corporation
with the Corporation as the surviving entity. Under the terms of the
Agreement the effective date of the merger was February 15, 1998, and
the Corporation issued one share of its common stock for each $0.85 of
limited partnership interest resulting in a total issuance by the
Company of 1,344,716 shares of its common stock to the limited partners.
B. Merger with Alpine Entertainment, Inc.
Under an agreement dated February 9, 1999 effective February 10, 1999
Alpine Entertainment, Inc., ("AEInc.") a new corporation formed on
November 5, 1998 under the laws of Delaware, acquired all of the issued
and outstanding shares of capital stock of the Company in exchange for
common stock of AEInc. Under the terms of the agreement, the Company's
shares were exchanged at a ratio of one share of AEInc. for every share
of the Company. As a result of the exchange, the Company became a wholly
owned subsidiary of AEInc., and the shareholders of the Company became
shareholders of approximately 69.9% of AEInc. Generally Accepted
Accounting Principles require that the Company whose shareholders retain
13
ALPINE PICTURES INTERNATIONAL, INC.
AND AFFILIATE (A LIMITED PARTNERSHIP)
NOTES TO COMBINED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 10 - SUBSEQUENT EVENTS - (CONT'D)
a majority interest in a combined business be treated as the acquirer
for accounting purposes. As a result, the merger will be treated as an
acquisition of AEInc. by the Company, and a recapitalization of the
Company. The Company's financial statements immediately following the
acquisition will be as follows: (1) The Balance Sheet will consist of
the Company's net assets at historical cost and AEInc.'s net assets at
historical cost and (2) the Statement of Operations will include the
Company's operations for the period presented and AEInc.'s operations
from the date of acquisition.
14
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is incorporated in Delaware. Under Section 145 of the
General Corporation Law of the State of Delaware, a Delaware corporation
has the power, under specified circumstances, to indemnify its directors,
officers, employees and agents in connection with actions, suits or
proceedings brought against them by a third party or in the right of the
corporation, by reason of the fact that they were or are such directors,
officers, employees or agents, against expenses incurred in any action,
suit or proceeding. The Certificate of Incorporation and the By-laws of
the Company provide for indemnification of directors and officers to the
fullest extent permitted by the General Corporation Law of the State of
Delaware.
The General Corporation Law of the State of Delaware provides that a
certificate of incorporation may contain a provision eliminating the
personal liability of a director to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director provided
that such provision shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 (relating to liability for unauthorized
acquisitions or redemptions of, or dividends on, capital stock) of the
General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit.
The Company's Certificate of Incorporation contains such a provision.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS OR
PERSONS CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT
IS THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS
THEREFORE UNENFORCEABLE.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses in connection with this
Registration Statement. All of such expenses are estimates, other than the
filing fees payable to the Securities and Exchange Commission.
Filing Fee - Securities and Exchange Commission $2,200
Fees and Expenses of Accountants 40,000
Fees and Expenses of legal counsel 100,000
Blue Sky Fees and Expenses 3,500
Printing and Engraving Expenses 10,000
Miscellaneous Expenses 1,000
Total $156,700
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
As listed below, the Company issued shares of its Common Stock par
value $.0001 per share to the following individuals or entities for the
consideration as listed in cash or services. All sales made within the
United States or to United States citizens or residents, were made in
reliance upon the exemption from registration provided by Section 4(2) of
the Securities Act of 1933.
Date Shareholder Number of Shares Consideration
12/1/98 TPG Capital Corporation 125,000 $50
12/1/98 Brokerlink Capital, Research and
Communication 125,000 50
2/10/99 Rene Torres 350,000 35*
2/10/99 Ryan Carroll 775,000 77.50*
2/10/99 Roland Carroll 775,000 77.50*
2/10/99 Tom Hamilton 350,000 35*
2/10/99 Greg Cozine 350,000 35*
2/10/99 Paul Miller 350,000 35*
2/10/99 Linda McArthur 150,000 15*
2/10/99 Phil Hammond 25,000 2.50*
2/10/99 Neil Kaufman 25,000 2.50*
2/10/99 Barnard Natalino 25,000 2.50*
2/10/99 Jack Larson 25,000 2.50*
2/10/99 Jack Phelan 25,000 2.50*
* These shares were originally purchased from Alpine Pictures
International, Inc. and exchanged for shares of Alpine Entertainment, Inc.
on February 10, 1999 at a share exchange ratio of one-for-one.
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
3.1 Certificate of Incorporation
3.2 By-Laws of the Company
4.1* Form of Common Stock Certificate
5.1* Opinion of Cassidy & Associates
10.1* Sample Sales Agency Agreement
10.2* Sample Licensing Agreement
21.1* Subsidiaries of the Company
24.1 Consent of Weinberg & Company, certified public accountants
24.2* Consent of Cassidy & Associates (included in Exhibit 5)
27* Financial Data Schedule
---------------
* To be filed by Amendment.
(b) The following financial statement schedules are included in
this Registration Statement.
None.
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(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.
(b) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted
to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission is that
such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question
whether such indemnification by it is against public
policy as expressed in the Act and will be governed by
the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes that:
(i) 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 497(h) under the Securities Act shall
be deemed to be part of this registration statement as of
the time it was declared effective.
(ii) 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.
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933, as amended, Alpine Entertainment, Inc. certifies
that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form SB-2 and has
duly caused this Registration Statement on Form SB-2 to
be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Van Nuys, California on
the 22nd day of February, 1999.
ALPINE ENTERTAINMENT, INC.
By: /s/ Roland Carroll
President and as
Chief Financial Officer
Pursuant to the requirements of the Securities Act
of 1933, as amended, this Registration Statement has been
signed below by the following persons in the capacities
and on the dates indicated.
Signature Title Date
/s/ Ryan Carroll Chief Executive Officer February 22, 1999
/s/ Roland Carroll President, Director February 22, 1999
/s/ Greg Cozine Director February 22, 1999
Certificate of Incorporation
CERTIFICATE OF INCORPORATION
OF
ALPINE ENTERTAINMENT, INC.
ARTICLE ONE
Name
The name of the Corporation is Alpine Entertainment, Inc.
ARTICLE TWO
Duration
The Corporation shall have perpetual existence.
ARTICLE THREE
Purpose
The purpose for which this Corporation is organized is to
engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
ARTICLE FOUR
Shares
The total number of shares of stock which the Corporation shall
have authority to issue is 120,000,000 shares, consisting of
100,000,000 shares of Common Stock having a par value of $.0001 per
share and 20,000,000 shares of Preferred Stock having a par value of
$.0001 per share.
The Board of Directors is authorized to provide for the
issuance of the shares of Preferred Stock in series and, by filing a
certificate pursuant to the applicable law of the State of Delaware,
to establish from time to time the number of shares to be included
in each such series, and to fix the designation, powers, preferences
and rights of the shares of each such series and the qualifications,
limitations or restrictions thereof.
The authority of the Board of Directors with respect to each
series of Preferred Stock shall include, but not be limited to,
determination of the following:
A. The number of shares constituting that series and the
distinctive designation of that series;
B. The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or dates,
and the relative rights of priority, if any, of payment of dividends
on share of that series;
C. Whether that series shall have voting rights, in addition
to the voting rights provided by law, and, if so, the terms of such
voting rights;
D. Whether that series shall have conversion privileges, and,
if so, the terms and conditions of such conversion, including
provision for adjustment of the conversion rate in such events as
the Board of Directors shall determine;
E. Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such redemption,
including the date or dates upon or after which they shall be
redeemable, and the amount per share payable in case of redemption,
which amount may vary under different conditions and at different
redemption dates;
F. Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the
terms and amount of such sinking fund;
G. The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, and the relative rights of priority, if any, of
payment of shares of that series; and
H. Any other relative rights, preferences and limitations of
that series.
ARTICLE FIVE
Commencement of Business
The Corporation is authorized to commence business as soon as
its certificate of incorporation has been filed.
ARTICLE SIX
Principal Office and Registered Agent
The post office address of the initial registered office of the
Corporation and the name of its initial registered agent and its
business address is
The Prentice-Hall Corporation System, Inc.
1013 Centre Road
Wilmington, Delaware 19805 (County of New Castle)
The initial registered agent is a resident of the State of
Delaware.
ARTICLE SEVEN
Incorporator
Lee W. Cassidy, 1504 R Street, N.W., Washington, D.C. 20009.
ARTICLE EIGHT
Pre-Emptive Rights
No Shareholder or other person shall have any pre-emptive
rights whatsoever.
ARTICLE NINE
By-Laws
The initial by-laws shall be adopted by the Shareholders or the
Board of Directors. The power to alter, amend, or repeal the
by-laws or adopt new by-laws is vested in the Board of Directors,
subject to repeal or change by action of the Shareholders.
ARTICLE TEN
Number of Votes
Each share of Common Stock has one vote on each matter on which
the share is entitled to vote.
ARTICLE ELEVEN
Majority Votes
A majority vote of a quorum of Shareholders (consisting of the
holders of a majority of the shares entitled to vote, represented in
person or by proxy) is sufficient for any action which requires the
vote or concurrence of Shareholders, unless otherwise required or
permitted by law or the by-laws of the Corporation.
ARTICLE TWELVE
Non-Cumulative Voting
Directors shall be elected by majority vote. Cumulative voting
shall not be permitted.
ARTICLE THIRTEEN
Interested Directors, Officers and Securityholders
A. Validity. If Paragraph (B) is satisfied, no contract or
other transaction between the Corporation and any of its directors,
officers or securityholders, or any corporation or firm in which any
of them are directly or indirectly interested, shall be invalid
solely because of this relationship or because of the presence of
the director, officer or securityholder at the meeting of the Board
of Directors or committee authorizing the contract or transaction,
or his participation or vote in the meeting or authorization.
B. Disclosure, Approval, Fairness. Paragraph (A) shall apply
only if:
(1) The material facts of the relationship or interest of each
such director, officer or securityholder are known or disclosed:
(a) to the Board of Directors or the committee and it
nevertheless authorizes or ratifies the contract or transaction by a
majority of the directors present, each such interested director to
be counted in determining whether a quorum is present but not in
calculating the majority necessary to carry the vote; or
(b) to the Shareholders and they nevertheless authorize or
ratify the contract or transaction by a majority of the shares
present, each such interested person to be counted for quorum and
voting purposes; or
(2) the contract or transaction is fair to the Corporation as
of the time it is authorized or ratified by the Board of Directors,
the committee or the Shareholders.
ARTICLE FOURTEEN
Indemnification and Insurance
A. Persons. The Corporation shall indemnify, to the extent
provided in Paragraphs (B), (D) or (F) and to the extent permitted
from time to time by law:
(1) any person who is or was director, officer, agent or
employee of the Corporation, and
(2) any person who serves or served at the Corporation's
request as a director, officer, agent, employee, partner or trustee
of another corporation or of a partnership, joint venture, trust or
other enterprise.
B. Extent--Derivative Suits. In case of a suit by or in the
right of the Corporation against a person named in Paragraph (A) by
reason of his holding a position named in Paragraph (A), the
Corporation shall indemnify him, if he satisfies the standard in
Paragraph (C), for expenses (including attorney's fees but excluding
amounts paid in settlement) actually and reasonably incurred by him
in connection with the defense or settlement of the suit.
C. Standard--Derivative Suits. In case of a suit by or in the
right of the Corporation, a person named in Paragraph (A) shall be
indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the
subject of the suit, and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the Corporation.
However, he shall not be indemnified in respect of any claim, issue
or matter as to which he has been adjudged liable for negligence or
misconduct in the performance of his duty to the Corporation unless
(and only to the extent that) the court in which the suit was
brought shall determine, upon application, that despite the
adjudication but in view of all the circumstances, he is fairly and
reasonably entitled to indemnity for such expenses as the court
shall deem proper.
D. Extent--Nonderivative Suits. In case of a suit, action or
proceeding (whether civil, criminal, administrative or
investigative), other than a suit by or in the right of the
Corporation against a person named in Paragraph (A) by reason of his
holding a position named in Paragraph (A), the Corporation shall
indemnify him, if he satisfies the standard in Paragraph (E), for
amounts actually and reasonably incurred by him in connection with
the defense or settlement of the suit as
(1) expenses (including attorneys' fees),
(2) amounts paid in settlement
(3) judgments, and
(4) fines.
E. Standard--Nonderivative Suits. In case of a nonderivative
suit, a person named in Paragraph (A) shall be indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the
subject of the nonderivative suit, and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the
Corporation and , with respect to any criminal action or proceeding,
he had no reason to believe his conduct was unlawful. The
termination of a nonderivative suit by judgement, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the person failed to
satisfy this Paragraph (E) (2).
F. Determination That Standard Has Been Met. A determination
that the standard of Paragraph (C) or (E) has been satisfied may be
made by a court of law or equity or the determination may be made by:
(1) a majority of the directors of the Corporation (whether or
not a quorum) who were not parties to the action, suit or
proceeding, or
(2) independent legal counsel (appointed by a majority of the
directors of the Corporation, whether or not a quorum, or elected by
the Shareholders of the Corporation) in a written opinion, or
(3) the Shareholders of the Corporation.
G. Proration. Anyone making a determination under Paragraph
(F) may determine that a person has met the standard as to some
matters but not as to others, and may reasonably prorate amounts to
be indemnified.
H. Advance Payment. The Corporation may pay in advance any
expenses (including attorney's fees) which may become subject to
indemnification under paragraphs (A) - (G) if:
(1) the Board of Directors authorizes the specific payment and
(2) the person receiving the payment undertakes in writing to
repay unless it is ultimately determined that he is entitled to
indemnification by the Corporation under Paragraphs (A) - (G).
I. Nonexclusive. The indemnification provided by Paragraphs
(A) - (G) shall not be exclusive of any other rights to which a
person may be entitled by law or by by-law, agreement, vote of
Shareholders or disinterested directors, or otherwise.
J. Continuation. The indemnification and advance payment
provided by Paragraphs (A) - (H) shall continue as to a person who
has ceased to hold a position named in paragraph (A) and shall inure
to his heirs, executors and administrators.
K. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who holds or who has held any
position named in Paragraph (A) against any liability incurred by
him in any such positions or arising out of this status as such,
whether or not the Corporation would have power to indemnify him
against such liability under Paragraphs (A) - (H).
L. Reports. Indemnification payments, advance payments, and
insurance purchases and payments made under Paragraphs (A) - (K)
shall be reported in writing to the Shareholders of the Corporation
with the next notice of annual meeting, or within six months,
whichever is sooner.
M. Amendment of Article. Any changes in the General
Corporation Law of Delaware increasing, decreasing, amending,
changing or otherwise effecting the indemnification of directors,
officers, agents, or employees of the Corporation shall be
incorporated by reference in this Article as of the date of such
changes without further action by the Corporation, its Board of
Directors, of Shareholders, it being the intention of this Article
that directors, officers, agents and employees of the Corporation
shall be indemnified to the maximum degree allowed by the General
Corporation Law of the State of Delaware at all times.
ARTICLE FIFTEEN
Limitation On Director Liability
A. Scope of Limitation. No person, by virtue of being or
having been a director of the Corporation, shall have any personal
liability for monetary damages to the Corporation or any of its
Shareholders for any breach of fiduciary duty except as to the
extent provided in Paragraph (B).
B. Extent of Limitation. The limitation provided for in this
Article shall not eliminate or limit the liability of a director to
the Corporation or its Shareholders (i) for any breach of the
director's duty of loyalty to the Corporation or its Shareholders
(ii) for any acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law (iii) for any
unlawful payment of dividends or unlawful stock purchases or
redemptions in violation of Section 174 of the General Corporation
Law of Delaware or (iv) for any transaction for which the director
derived an improper personal benefit.
IN WITNESS WHEREOF, the incorporator hereunto has executed this
certificate of incorporation on this 4th day of November, 1998.
Lee W. Cassidy, Incorporator
By-Laws
ALPINE ENTERTAINMENT, INC.
BY-LAWS
ARTICLE I
The Stockholders
SECTION 1.1. ANNUAL MEETING. The annual meeting of the
stockholders of Alpine Entertainment, Inc. (the "Corporation") shall
be held on the third Thursday in May of each year at 10:30 a.m.
local time, or at such other date or time as shall be designated
from time to time by the Board of Directors and stated in the notice
of the meeting, for the election of directors and for the
transaction of such other business as may come before the meeting.
SECTION 1.2. SPECIAL MEETINGS. A special meeting of the
stockholders may be called at any time by the written resolution or
request of two-thirds or more of the members of the Board of
Directors, the president, or any executive vice president and shall
be called upon the written request of the holders of two-thirds or
more in amount, of each class or series of the capital stock of the
Corporation entitled to vote at such meeting on the matters(s) that
are the subject of the proposed meeting, such written request in
each case to specify the purpose or purposes for which such meeting
shall be called, and with respect to stockholder proposals, shall
further comply with the requirements of this Article.
SECTION 1.3. NOTICE OF MEETINGS. Written notice of each
meeting of stockholders, whether annual or special, stating the
date, hour and place where it is to be held, shall be served either
personally or by mail, not less than fifteen nor more than sixty
days before the meeting, upon each stockholder of record entitled to
vote at such meeting, and to any other stockholder to whom the
giving of notice may be required by law. Notice of a special
meeting shall also state the purpose or purposes for which the
meeting is called and shall indicate that it is being issued by, or
at the direction of, the person or persons calling the meeting. If,
at any meeting, action is proposed to be taken that would, if taken,
entitle stockholders to receive payment for their stock, the notice
of such meeting shall include a statement of that purpose and to
that effect. If mailed, notice shall be deemed to be delivered when
deposited in the United States mail or with any private express mail
service, postage or delivery fee prepaid, and shall be directed to
each such stockholder at his address, as it appears on the records
of the stockholders of the Corporation, unless he shall have
previously filed with the secretary of the Corporation a written
request that notices intended for him be mailed to some other
address, in which case, it shall be mailed to the address designated
in such request.
SECTION 1.4. FIXING DATE OF RECORD. (a) In order that the
Corporation may determine the stockholders entitled to notice of or
to vote at any meeting of stockholders, or any adjournment thereof,
the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record
date shall not be more than sixty nor less than ten days before the
date of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to
notice of, or to vote at, a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice
is given, or if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of, or to
vote at, a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix
a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing
without a meeting (to the extent that such action by written consent
is permitted by law, the Certificate of Incorporation or these
By-Laws), the Board of Directors may fix a record date, which record
date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which date
shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of
Directors. If no record date has been fixed by the Board of
Directors, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors is required by law, shall be
the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation
by delivery to its registered office in its state of incorporation,
its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has
been fixed by the Board of Directors and prior action by the Board
of Directors is required by law, the record date for determining
stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior
action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders entitled
to exercise any rights in respect of any change, conversion or
exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than
sixty days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall
be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
SECTION 1.5. INSPECTORS. At each meeting of the
stockholders, the polls shall be opened and closed and the proxies
and ballots shall be received and be taken in charge. All questions
touching on the qualification of voters and the validity of proxies
and the acceptance or rejection of votes, shall be decided by one or
more inspectors. Such inspectors shall be appointed by the Board of
Directors before or at the meeting, or, if no such appointment shall
have been made, then by the presiding officer at the meeting. If
for any reason any of the inspectors previously appointed shall fail
to attend or refuse or be unable to serve, inspectors in place of
any so failing to attend or refusing or unable to serve shall be
appointed in like manner.
SECTION 1.6. QUORUM. At any meeting of the stockholders,
the holders of a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum of the
stockholders for all purposes, unless the representation of a larger
number shall be required by law, and, in that case, the
representation of the number so required shall constitute a quorum.
If the holders of the amount of stock necessary to constitute
a quorum shall fail to attend in person or by proxy at the time and
place fixed in accordance with these By-Laws for an annual or
special meeting, a majority in interest of the stockholders present
in person or by proxy may adjourn, from time to time, without notice
other than by announcement at the meeting, until holders of the
amount of stock requisite to constitute a quorum shall attend. At
any such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the
meeting as originally notified.
SECTION 1.7. BUSINESS. The chairman of the Board, if any,
the president, or in his absence the vice-chairman, if any, or an
executive vice president, in the order named, shall call meetings of
the stockholders to order, and shall act as chairman of such
meeting; provided, however, that the Board of Directors or executive
committee may appoint any stockholder to act as chairman of any
meeting in the absence of the chairman of the Board. The secretary
of the Corporation shall act as secretary at all meetings of the
stockholders, but in the absence of the secretary at any meeting of
the stockholders, the presiding officer may appoint any person to
act as secretary of the meeting.
SECTION 1.8. STOCKHOLDER PROPOSALS. No proposal by a
stockholder shall be presented for vote at a special or annual
meeting of stockholders unless such stockholder shall, not later
than the close of business on the fifth day following the date on
which notice of the meeting is first given to stockholders, provide
the Board of Directors or the secretary of the Corporation with
written notice of intention to present a proposal for action at the
forthcoming meeting of stockholders, which notice shall include the
name and address of such stockholder, the number of voting
securities that he holds of record and that he holds beneficially,
the text of the proposal to be presented to the meeting and a
statement in support of the proposal.
Any stockholder who was a stockholder of record on the
applicable record date may make any other proposal at an annual
meeting or special meeting of stockholders and the same may be
discussed and considered, but unless stated in writing and filed
with the Board of Directors or the secretary prior to the date set
forth herein above, such proposal shall be laid over for action at
an adjourned, special, or annual meeting of the stockholders taking
place sixty days or more thereafter. This provision shall not
prevent the consideration and approval or disapproval at the annual
meeting of reports of officers, directors, and committees, but in
connection with such reports, no new business proposed by a
stockholder, qua stockholder, shall be acted upon at such annual
meeting unless stated and filed as herein provided.
Notwithstanding any other provision of these By-Laws, the
Corporation shall be under no obligation to include any stockholder
proposal in its proxy statement materials or otherwise present any
such proposal to stockholders at a special or annual meeting of
stockholders if the Board of Directors reasonably believes the
proponents thereof have not complied with Sections 13 or 14 of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder; nor shall the Corporation be required to
include any stockholder proposal not required to be included in its
proxy materials to stockholders in accordance with any such section,
rule or regulation.
SECTION 1.9. PROXIES. At all meetings of stockholders, a
stockholder entitled to vote may vote either in person or by proxy
executed in writing by the stockholder or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the secretary
before or at the time of the meeting. No proxy shall be valid after
eleven months from the date of its execution, unless otherwise
provided in the proxy.
SECTION 1.10. VOTING BY BALLOT. The votes for directors,
and upon the demand of any stockholder or when required by law, the
votes upon any question before the meeting, shall be by ballot.
SECTION 1.11. VOTING LISTS. The officer who has charge of
the stock ledger of the Corporation shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and
the number of shares of stock registered in the name of each
stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary
business hours for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the
meeting, or if not so specified, at the place where the meeting is
to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof and may be
inspected by any stockholder who is present.
SECTION 1.12. PLACE OF MEETING. The Board of Directors may
designate any place, either within or without the state of
incorporation, as the place of meeting for any annual meeting or any
special meeting called by the Board of Directors. If no designation
is made or if a special meeting is otherwise called, the place of
meeting shall be the principal office of the Corporation.
SECTION 1.13. VOTING OF STOCK OF CERTAIN HOLDERS. Shares of
capital stock of the Corporation standing in the name of another
corporation, domestic or foreign, may be voted by such officer,
agent, or proxy as the by-laws of such corporation may prescribe, or
in the absence of such provision, as the board of directors of such
corporation may determine.
Shares of capital stock of the Corporation standing in the
name of a deceased person, a minor ward or an incompetent person may
be voted by his administrator, executor, court-appointed guardian or
conservator, either in person or by proxy, without a transfer of
such stock into the name of such administrator, executor,
court-appointed guardian or conservator. Shares of capital stock of
the Corporation standing in the name of a trustee may be voted by
him, either in person or by proxy.
Shares of capital stock of the Corporation standing in the
name of a receiver may be voted, either in person or by proxy, by
such receiver, and stock held by or under the control of a receiver
may be voted by such receiver without the transfer thereof into his
name if authority to do so is contained in any appropriate order of
the court by which such receiver was appointed.
A stockholder whose stock is pledged shall be entitled to
vote such stock, either in person or by proxy, until the stock has
been transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote, either in person or by proxy, the
stock so transferred.
Shares of its own capital stock belonging to this Corporation
shall not be voted, directly or indirectly, at any meeting and shall
not be counted in determining the total number of outstanding stock
at any given time, but shares of its own stock held by it in a
fiduciary capacity may be voted and shall be counted in determining
the total number of outstanding stock at any given time.
ARTICLE II
Board of Directors
SECTION 2.1. GENERAL POWERS. The business, affairs, and the
property of the Corporation shall be managed and controlled by the
Board of Directors (the "Board"), and, except as otherwise expressly
provided by law, the Certificate of Incorporation or these By-Laws,
all of the powers of the Corporation shall be vested in the Board.
SECTION 2.2. NUMBER OF DIRECTORS. The number of directors
which shall constitute the whole Board shall be not fewer than one
nor more than five. Within the limits above specified, the number
of directors shall be determined by the Board of Directors pursuant
to a resolution adopted by a majority of the directors then in
office.
SECTION 2.3. ELECTION, TERM AND REMOVAL. Directors shall be
elected at the annual meeting of stockholders to succeed those
directors whose terms have expired. Each director shall hold office
for the term for which elected and until his or her successor shall
be elected and qualified. Directors need not be stockholders. A
director may be removed from office at a meeting expressly called
for that purpose by the vote of not less than a majority of the
outstanding capital stock entitled to vote at an election of directors.
SECTION 2.4. VACANCIES. Vacancies in the Board of
Directors, including vacancies resulting from an increase in the
number of directors, may be filled by the affirmative vote of a
majority of the remaining directors then in office, though less than
a quorum; except that vacancies resulting from removal from office
by a vote of the stockholders may be filled by the stockholders at
the same meeting at which such removal occurs provided that the
holders of not less than a majority of the outstanding capital stock
of the Corporation (assessed upon the basis of votes and not on the
basis of number of shares) entitled to vote for the election of
directors, voting together as a single class, shall vote for each
replacement director. All directors elected to fill vacancies shall
hold office for a term expiring at the time of the next annual
meeting of stockholders and upon election and qualification of his
successor. No decrease in the number of directors constituting the
Board of Directors shall shorten the term of an incumbent director.
SECTION 2.5. RESIGNATIONS. Any director of the Corporation
may resign at any time by giving written notice to the president or
to the secretary of the Corporation. The resignation of any
director shall take effect at the time specified therein and, unless
otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
SECTION 2.6. PLACE OF MEETINGS, ETC. The Board of Directors
may hold its meetings, and may have an office and keep the books of
the Corporation (except as otherwise may be provided for by law), in
such place or places in or outside the state of incorporation as the
Board from time to time may determine.
SECTION 2.7. REGULAR MEETINGS. Regular meetings of the
Board of Directors shall be held as soon as practicable after
adjournment of the annual meeting of stockholders at such time and
place as the Board of Directors may fix. No notice shall be
required for any such regular meeting of the Board.
SECTION 2.8. SPECIAL MEETINGS. Special meetings of the
Board of Directors shall be held at places and times fixed by
resolution of the Board of Directors, or upon call of the chairman
of the Board, if any, or vice-chairman of the Board, if any, the
president, an executive vice president or two-thirds of the
directors then in office.
The secretary or officer performing the secretary's duties
shall give not less than twenty-four hours' notice by letter,
telegraph or telephone (or in person) of all special meetings of the
Board of Directors, provided that notice need not given of the
annual meeting or of regular meetings held at times and places fixed
by resolution of the Board. Meetings may be held at any time
without notice if all of the directors are present, or if those not
present waive notice in writing either before or after the meeting.
The notice of meetings of the Board need not state the purpose of
the meeting.
SECTION 2.9. PARTICIPATION BY CONFERENCE TELEPHONE. Members
of the Board of Directors of the Corporation, or any committee
thereof, may participate in a regular or special or any other
meeting of the Board or committee by means of conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such
participation shall constitute presence in person at such meeting.
SECTION 2.10. ACTION BY WRITTEN CONSENT. Any action
required or permitted to be taken at any meeting of the Board of
Directors, or of any committee thereof, may be taken without a
meeting if prior or subsequent to such action all the members of the
Board or such committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of
the proceedings of the Board or committee.
SECTION 2.11. QUORUM. A majority of the total number of
directors then in office shall constitute a quorum for the
transaction of business; but if at any meeting of the Board there be
less than a quorum present, a majority of those present may adjourn
the meeting from time to time.
SECTION 2.12. BUSINESS. Business shall be transacted at
meetings of the Board of Directors in such order as the Board may
determine. At all meetings of the Board of Directors, the chairman
of the Board, if any, the president, or in his absence the
vice-chairman, if any, or an executive vice president, in the order
named, shall preside.
SECTION 2.13. INTEREST OF DIRECTORS IN CONTRACTS. (a) No
contract or transaction between the Corporation and one or more of
its directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in
which one or more of the Corporation's directors or officers, are
directors or officers, or have a financial interest, shall be void
or voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the Board
or committee which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if:
(1) The material facts as to his relationship or interest
and as to the contract or transaction are disclosed
or are known to the Board of Directors or the
committee, and the Board or committee in good faith
authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be
less than a quorum; or
(2) The material facts as to his relationship or interest
and as to the contract or transaction are disclosed
or are known to the stockholders entitled to vote
thereon, and the contract or transaction is
specifically approved in good faith by vote of the
stockholders; or
(3) The contract or transaction is fair as to the
Corporation as of the time it is authorized, approved
or ratified, by the Board of Directors, a committee
of the Board of Directors or the stockholders.
(b) Interested directors may be counted in determining
the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.
SECTION 2.14. COMPENSATION OF DIRECTORS. Each director of
the Corporation who is not a salaried officer or employee of the
Corporation, or of a subsidiary of the Corporation, shall receive
such allowances for serving as a director and such fees for
attendance at meetings of the Board of Directors or the executive
committee or any other committee appointed by the Board as the Board
may from time to time determine.
SECTION 2.15. LOANS TO OFFICERS OR EMPLOYEES. The Board of
Directors may lend money to, guarantee any obligation of, or
otherwise assist, any officer or other employee of the Corporation
or of any subsidiary, whether or not such officer or employee is
also a director of the Corporation, whenever, in the judgment of the
directors, such loan, guarantee, or assistance may reasonably be
expected to benefit the Corporation; provided, however, that any
such loan, guarantee, or other assistance given to an officer or
employee who is also a director of the Corporation must be
authorized by a majority of the entire Board of Directors. Any such
loan, guarantee, or other assistance may be made with or without
interest and may be unsecured or secured in such manner as the Board
of Directors shall approve, including, but not limited to, a pledge
of shares of the Corporation, and may be made upon such other terms
and conditions as the Board of Directors may determine.
SECTION 2.16. NOMINATION. Subject to the rights of holders
of any class or series of stock having a preference over the common
stock as to dividends or upon liquidation, nominations for the
election of directors may be made by the Board of Directors or by
any stockholder entitled to vote in the election of directors
generally. However, any stockholder entitled to vote in the
election of directors generally may nominate one or more persons for
election as directors at a meeting only if written notice of such
stockholder's intent to make such nomination or nominations has been
given, either by personal delivery or by United States mail, postage
prepaid, to the secretary of the Corporation not later than (i) with
respect to an election to be held at an annual meeting of
stockholders, the close of business on the last day of the eighth
month after the immediately preceding annual meeting of
stockholders, and (ii) with respect to an election to be held at a
special meeting of stockholders for the election of directors, the
close of business on the fifth day following the date on which
notice of such meeting is first given to stockholders. Each such
notice shall set forth: (a) the name and address of the stockholder
who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the stockholder is a holder
of record of stock of the Corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice; (c) a
description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder as
would be required to be included in a proxy statement filed pursuant
to the proxy rules of the Securities and Exchange Commission, had
the nominee been nominated, or intended to be nominated, by the
Board of Directors, and; (e) the consent of each nominee to serve as
a director of the Corporation if so elected. The presiding officer
at the meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure.
ARTICLE III
Committees
SECTION 3.1. COMMITTEES. The Board of Directors, by
resolution adopted by a majority of the number of directors then
fixed by these By-Laws or resolution thereto, may establish such
standing or special committees of the Board as it may deem
advisable, and the members, terms, and authority of such committees
shall be set forth in the resolutions establishing such committee.
SECTION 3.2. EXECUTIVE COMMITTEE NUMBER AND TERM OF OFFICE.
The Board of Directors may, at any meeting, by majority vote of the
Board of Directors, elect from the directors an executive committee.
The executive committee shall consist of such number of members as
may be fixed from time to time by resolution of the Board of
Directors. The Board of Directors may designate a chairman of the
committee who shall preside at all meetings thereof, and the
committee shall designate a member thereof to preside in the absence
of the chairman.
SECTION 3.3. EXECUTIVE COMMITTEE POWERS. The executive
committee may, while the Board of Directors is not in session,
exercise all or any of the powers of the Board of Directors in all
cases in which specific directions shall not have been given by the
Board of Directors; except that the executive committee shall not
have the power or authority of the Board of Directors to (i) amend
the Certificate of Incorporation or the By-Laws of the Corporation,
(ii) fill vacancies on the Board of Directors, (iii) adopt an
agreement or certification of ownership, merger or consolidation,
(iv) recommend to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets,
or a dissolution of the Corporation or a revocation of a
dissolution, (v) declare a dividend, or (vi) authorize the issuance
of stock.
SECTION 3.4. EXECUTIVE COMMITTEE MEETINGS. Regular and
special meetings of the executive committee may be called and held
subject to the same requirements with respect to time, place and
notice as are specified in these By-Laws for regular and special
meetings of the Board of Directors. Special meetings of the
executive committee may be called by any member thereof. Unless
otherwise indicated in the notice thereof, any and all business may
be transacted at a special or regular meeting of the executive
meeting if a quorum is present. At any meeting at which every
member of the executive committee shall be present, in person or by
telephone, even though without any notice, any business may be
transacted. All action by the executive committee shall be reported
to the Board of Directors at its meeting next succeeding such
action.
The executive committee shall fix its own rules of procedure,
and shall meet where and as provided by such rules or by resolution
of the Board of Directors, but in every case the presence of a
majority of the total number of members of the executive committee
shall be necessary to constitute a quorum. In every case, the
affirmative vote of a quorum shall be necessary for the adoption of
any resolution.
SECTION 3.5. EXECUTIVE COMMITTEE VACANCIES. The Board of
Directors, by majority vote of the Board of Directors then in
office, shall fill vacancies in the executive committee by election
from the directors.
ARTICLE IV
The Officers
SECTION 4.1. NUMBER AND TERM OF OFFICE. The officers of the
Corporation shall consist of, as the Board of Directors may
determine and appoint from time to time, a chief executive officer,
a president, one or more executive vice-presidents, a secretary, a
treasurer, a controller, and/or such other officers as may from time
to time be elected or appointed by the Board of Directors, including
such additional vice-presidents with such designations, if any, as
may be determined by the Board of Directors and such assistant
secretaries and assistant treasurers. In addition, the Board of
Directors may elect a chairman of the Board and may also elect a
vice-chairman as officers of the Corporation. Any two or more
offices may be held by the same person. In its discretion, the
Board of Directors may leave unfilled any office except as may be
required by law.
The officers of the Corporation shall be elected or appointed
from time to time by the Board of Directors. Each officer shall
hold office until his successor shall have been duly elected or
appointed or until his death or until he shall resign or shall have
been removed by the Board of Directors.
Each of the salaried officers of the Corporation shall devote
his entire time, skill and energy to the business of the
Corporation, unless the contrary is expressly consented to by the
Board of Directors or the executive committee.
SECTION 4.2. REMOVAL. Any officer may be removed by the
Board of Directors whenever, in its judgment, the best interests of
the Corporation would be served thereby.
SECTION 4.3. THE CHAIRMAN OF THE BOARD. The chairman of the
Board, if any, shall preside at all meetings of stockholders and of
the Board of Directors and shall have such other authority and
perform such other duties as are prescribed by law, by these By-Laws
and by the Board of Directors. The Board of Directors may designate
the chairman of the Board as chief executive officer, in which case
he shall have such authority and perform such duties as are
prescribed by these By-Laws and the Board of Directors for the chief
executive officer.
SECTION 4.4. THE VICE-CHAIRMAN. The vice-chairman, if any,
shall have such authority and perform such other duties as are
prescribed by these By-Laws and by the Board of Directors. In the
absence or inability to act of the chairman of the Board and the
president, he shall preside at the meetings of the stockholders and
of the Board of Directors and shall have and exercise all of the
powers and duties of the chairman of the Board. The Board of
Directors may designate the vice-chairman as chief executive
officer, in which case he shall have such authority and perform such
duties as are prescribed by these By-Laws and the Board of Directors
for the chief executive officer.
SECTION 4.5. THE PRESIDENT. The president shall have such
authority and perform such duties as are prescribed by law, by these
By-Laws, by the Board of Directors and by the chief executive
officer (if the president is not the chief executive officer). The
president, if there is no chairman of the Board, or in the absence
or the inability to act of the chairman of the Board, shall preside
at all meetings of stockholders and of the Board of Directors.
Unless the Board of Directors designates the chairman of the Board
or the vice-chairman as chief executive officer, the president shall
be the chief executive officer, in which case he shall have such
authority and perform such duties as are prescribed by these By-Laws
and the Board of Directors for the chief executive officer.
SECTION 4.6. THE CHIEF EXECUTIVE OFFICER. Unless the Board
of Directors designates the chairman of the Board or the
vice-chairman as chief executive officer, the president shall be the
chief executive officer. The chief executive officer of the
Corporation shall have, subject to the supervision and direction of
the Board of Directors, general supervision of the business,
property and affairs of the Corporation, including the power to
appoint and discharge agents and employees, and the powers vested in
him by the Board of Directors, by law or by these By-Laws or which
usually attach or pertain to such office.
SECTION 4.7. THE EXECUTIVE VICE-PRESIDENTS. In the absence
of the chairman of the Board, if any, the president and the
vice-chairman, if any, or in the event of their inability or refusal
to act, the executive vice-president (or in the event there is more
than one executive vice-president, the executive vice-presidents in
the order designated, or in the absence of any designation, then in
the order of their election) shall perform the duties of the
chairman of the Board, of the president and of the vice-chairman,
and when so acting, shall have all the powers of and be subject to
all the restrictions upon the chairman of the Board, the president
and the vice-chairman. Any executive vice-president may sign, with
the secretary or an authorized assistant secretary, certificates for
stock of the Corporation and shall perform such other duties as from
time to time may be assigned to him by the chairman of the Board,
the president, the vice-chairman, the Board of Directors or these
By-Laws.
SECTION 4.8. THE VICE-PRESIDENTS. The vice-presidents, if
any, shall perform such duties as may be assigned to them from time
to time by the chairman of the Board, the president, the
vice-chairman, the Board of Directors, or these By-Laws.
SECTION 4.9. THE TREASURER. Subject to the direction of
chief executive officer and the Board of Directors, the treasurer
shall have charge and custody of all the funds and securities of the
Corporation; when necessary or proper he shall endorse for
collection, or cause to be endorsed, on behalf of the Corporation,
checks, notes and other obligations, and shall cause the deposit of
the same to the credit of the Corporation in such bank or banks or
depositary as the Board of Directors may designate or as the Board
of Directors by resolution may authorize; he shall sign all receipts
and vouchers for payments made to the Corporation other than routine
receipts and vouchers, the signing of which he may delegate; he
shall sign all checks made by the Corporation (provided, however,
that the Board of Directors may authorize and prescribe by
resolution the manner in which checks drawn on banks or depositories
shall be signed, including the use of facsimile signatures, and the
manner in which officers, agents or employees shall be authorized to
sign); unless otherwise provided by resolution of the Board of
Directors, he shall sign with an officer-director all bills of
exchange and promissory notes of the Corporation; whenever required
by the Board of Directors, he shall render a statement of his cash
account; he shall enter regularly full and accurate account of the
Corporation in books of the Corporation to be kept by him for that
purpose; he shall, at all reasonable times, exhibit his books and
accounts to any director of the Corporation upon application at his
office during business hours; and he shall perform all acts incident
to the position of treasurer. If required by the Board of
Directors, the treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such sure ties as the
Board of Directors may require.
SECTION 4.10. THE SECRETARY. The secretary shall keep the
minutes of all meetings of the Board of Directors, the minutes of
all meetings of the stockholders and (unless otherwise directed by
the Board of Directors) the minutes of all committees, in books
provided for that purpose; he shall attend to the giving and serving
of all notices of the Corporation; he may sign with an
officer-director or any other duly authorized person, in the name of
the Corporation, all contracts authorized by the Board of Directors
or by the executive committee, and, when so ordered by the Board of
Directors or the executive committee, he shall affix the seal of the
Corporation thereto; he may sign with the president or an executive
vice-president all certificates of shares of the capital stock; he
shall have charge of the certificate books, transfer books and stock
ledgers, and such other books and papers as the Board of Directors
or the executive committee may direct, all of which shall, at all
reasonable times, be open to the examination of any director, upon
application at the secretary's office during business hours; and he
shall in general perform all the duties incident to the office of
the secretary, subject to the control of the chief executive officer
and the Board of Directors.
SECTION 4.11. THE CONTROLLER. The controller shall be the
chief accounting officer of the Corporation. Subject to the
supervision of the Board of Directors, the chief executive officer
and the treasurer, the controller shall provide for and maintain
adequate records of all assets, liabilities and transactions of the
Corporation, shall see that accurate audits of the Corporation's
affairs are currently and adequately made and shall perform such
other duties as from time to time may be assigned to him.
SECTION 4.12. THE ASSISTANT TREASURERS AND ASSISTANT
SECRETARIES. The assistant treasurers shall respectively, if
required by the Board of Directors, give bonds for the faithful
discharge of their duties in such sums and with such sureties as the
Board of Directors may determine. The assistant secretaries as
thereunto authorized by the Board of Directors may sign with the
chairman of the Board, the president, the vice-chairman or an
executive vice-president, certificates for stock of the Corporation,
the issue of which shall have been authorized by a resolution of the
Board of Directors. The assistant treasurers and assistant
secretaries, in general, shall perform such duties as shall be
assigned to them by the treasurer or the secretary, respectively, or
chief executive officer, the Board of Directors, or these By-Laws.
SECTION 4.13. SALARIES. The salaries of the officers shall
be fixed from time to time by the Board of Directors, and no officer
shall be prevented from receiving such salary by reason of the fact
that he is also a director of the Corporation.
SECTION 4.14. VOTING UPON STOCKS. Unless otherwise ordered
by the Board of Directors or by the executive committee, any
officer, director or any person or persons appointed in writing by
any of them, shall have full power and authority in behalf of the
Corporation to attend and to act and to vote at any meetings of
stockholders of any corporation in which the Corporation may hold
stock, and at any such meeting shall possess and may exercise any
and all the rights and powers incident to the ownership of such
stock, and which, as the owner thereof, the Corporation might have
possessed and exercised if present. The Board of Directors may
confer like powers upon any other person or persons.
ARTICLE V
Contracts and Loans
SECTION 5.1. CONTRACTS. The Board of Directors may
authorize any officer or officers, agent or agents, to enter into
any contract or execute and deliver any instrument in the name of
and on behalf of the Corporation, and such authority may be general
or confined to specific instances.
SECTION 5.2. LOANS. No loans shall be contracted on behalf
of the Corporation and no evidences of indebtedness shall be issued
in its name unless authorized by a resolution of the Board of
Directors. Such authority may be general or confined to specific
instances.
ARTICLE VI
Certificates for Stock and Their Transfer
SECTION 6.1. CERTIFICATES FOR STOCK. Certificates
representing stock of the Corporation shall be in such form as may
be determined by the Board of Directors. Such certificates shall be
signed by the chairman of the Board, the president, the
vice-chairman or an executive vice-president and/or by the secretary
or an authorized assistant secretary and shall be sealed with the
seal of the Corporation. The seal may be a facsimile. If a stock
certificate is countersigned (i) by a transfer agent other than the
Corporation or its employee, or (ii) by a registrar other than the
Corporation or its employee, any other signature on the certificate
may be a facsimile. In the event that any officer, transfer agent
or registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer,
transfer agent, or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue. All
certificates for stock shall be consecutively numbered or otherwise
identified. The name of the person to whom the shares of stock
represented thereby are issued, with the number of shares of stock
and date of issue, shall be entered on the books of the Corporation.
All certificates surrendered to the Corporation for transfer shall
be canceled and no new certificates shall be issued until the former
certificate for a like number of shares of stock shall have been
surrendered and canceled, except that, in the event of a lost,
destroyed or mutilated certificate, a new one may be issued therefor
upon such terms and indemnity to the Corporation as the Board of
Directors may prescribe.
SECTION 6.2. TRANSFERS OF STOCK. Transfers of stock of the
Corporation shall be made only on the books of the Corporation by
the holder of record thereof or by his legal representative, who
shall furnish proper evidence of authority to transfer, or by his
attorney thereunto authorized by power of attorney duly executed and
filed with the secretary of the Corporation, and on surrender for
cancellation of the certificate for such stock. The person in whose
name stock stands on the books of the Corporation shall be deemed
the owner thereof for all purposes as regards the Corporation.
ARTICLE VII
Fiscal Year
SECTION 7.1. FISCAL YEAR. The fiscal year of the
Corporation shall begin on the first day of January in each year and
end on the last day of December in each year.
ARTICLE VIII
Seal
SECTION 8.1. SEAL. The Board of Directors shall approve a
corporate seal which shall be in the form of a circle and shall have
inscribed thereon the name of the Corporation.
ARTICLE IX
Waiver of Notice
SECTION 9.1. WAIVER OF NOTICE. Whenever any notice is
required to be given under the provisions of these By-Laws or under
the provisions of the Certificate of Incorporation or under the
provisions of the corporation law of the state of incorporation,
waiver thereof in writing, signed by the person or persons entitled
to such notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of such notice. Attendance
of any person at a meeting for which any notice is required to be
given under the provisions of these By-Laws, the Certificate of
Incorporation or the corporation law of the state of incorporation
shall constitute a waiver of notice of such meeting except when the
person attends for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because
the meeting is not lawfully called or convened.
ARTICLE X
Amendments
SECTION 10.1. AMENDMENTS. These By-Laws may be
altered, amended or repealed and new By-Laws may be adopted
at any meeting of the Board of Directors of the Corporation
by the affirmative vote of a majority of the members of the
Board, or by the affirmative vote of a majority of the
outstanding capital stock of the Corporation (assessed upon
the basis of votes and not on the basis of number of
shares) entitled to vote generally in the election of
directors, voting together as a single class.
ARTICLE XI
Indemnification
SECTION 11.1. INDEMNIFICATION. The Corporation
shall indemnify its officers, directors, employees and
agents to the fullest extent permitted by the General
Corporation Law of Delaware, as amended from time to time.
[END]
WEINBERG & COMPANY, PA
Town Executive Center
6100 Glades Road, Suite 314
Boca Raton, Florida 33434
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the use in the Form SB-2 Registration Statement
of Alpine Entertainment, Inc., our report as of December 31, 1997
and 1996, dated December 7, 1998 (except for Note 10B as to which
the date is February 10, 1999) relating to the combined financial
statements of Alpine Pictures International, Inc. and Affiliate
which appear in such Form SB-2.
WEINBERG & COMPANY PA
Certified Public Accountants
Boca Raton, Florida
February 12, 1999
