As filed with the Securities and Exchange Commission on
February 10, 1997
Registration No. 333-10535
SECURITIES AND EXCHANGE COMMISSION
___________________
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________
FLORIDA GAMING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 59-1670533
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1750 South Kings Highway W. Bennett Collett
Fort Pierce, Florida 34945-3099 Florida Gaming Corporation
(407) 469-2500 1750 South Kings Highway
(Address of principal Fort Pierce, Florida 34945-3099
executive offices) (407) 464-7500
(Name, address, including zip
code, and telephone number
including area code, of agent of
service)
Copies to:
James A. Giesel
Alan K. MacDonald
Brown, Todd & Heyburn PLLC
3200 Providian Center
Louisville, Kentucky 40202
(502)589-5400
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier,
effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
Calculation of Registration Fee
<TABLE>
<CAPTION> Proposed
Title of each class Proposed maximum
of securities to Amount Being maximum price aggregate offering Amount of
be registered Registered (1) per unit (2) price (2) Registration Fee
__________________ ______________ ______________ __________________ ________________
<S> <C> <C> <C> <C>
Common Stock, 703,297 $ 6.75 $4,747,255 $1,545.87
$.10 par value shares
</TABLE>
(1) Includes such additional shares of Common Stock as may be
issued to the Selling Stockholder because of future stock
dividends, stock distributions, stock splits or similar
capital readjustments.
(2) Represents the average of the closing bid and asked prices of
the Common stock of the Registrant on February 6,
1997. Estimated solely for the purpose of calculating the
registration fee.
(3) Represents the $1,366.05 paid with the initial filing of
the Registration Statement and $179.82 paid in connection
with the additional 87,912 shares requested for
registration by this Amendment No. 1.
The registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a),
may determine.
PROSPECTUS
703,297 </> Shares
of
FLORIDA GAMING CORPORATION
Common Stock
This Prospectus relates to a possible offering of shares of
common stock, $.10 par value (the "Common Stock") of Florida Gaming
Corporation (the "Company") by and for the account of BOK DPC Asset
Holding Corporation (the "Selling Stockholder"). See "Selling
Stockholder and Plan of Distribution." The Company will not
receive any of the proceeds from any sale of the shares that may be
offered hereby. The Common Stock of the Company is traded on the
NASDAQ SmallCap Market under the symbol "BETS".
The Selling Stockholder has advised the Company that sales of
the Common Stock may be sold from time to time to purchasers
directly by the Selling Stockholder in negotiated transactions and
in the over-the-counter market on NASDAQ. The shares may be sold
by one or more of the following: (a) a block trade in which the
broker or dealer so engaged will attempt to sell the shares as
agent but may position and resell a portion of the block as princi-
pal to facilitate the transaction; (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; and (c) ordinary brokerage
transactions in which the broker solicits purchasers. Alternative-
ly, the Selling Stockholder may from time to time offer the shares
offered hereby through underwriters, dealers or agents, who may
receive compensation in the form of underwriting discounts, conces-
sions or commissions from the Selling Stockholder and/or the
purchasers of securities for whom they may act as agents. The
shares offered hereby may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or at
varying prices determined at the time of sale or at negotiated
prices.
The terms of any offering of the shares of Common Stock by the
Selling Stockholder, including the names of the underwriters, if
any, and the public offering price, underwriting discounts and
proceeds to the Selling Stockholder, will be set forth in an
accompanying Prospectus Supplement, to the extent required. The
Selling Stockholder and any agents or broker-dealers that
participate in the distribution of the shares of Common Stock may
be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"), and any commissions
received by them and any profit on the resale of the shares may be
deemed to be underwriting commissions or discounts under the
Securities Act.
The Company will pay all expenses of the Offering, but not
including the Selling Stockholder's legal fees, underwriting
discounts and commissions and fees. In addition, the Company has
agreed to indemnify the Selling Stockholder against certain
liabilities, including certain liabilities under the Securities
Act. See "Selling Stockholder and Plan of Distribution."
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN CONSIDERATIONS
RELEVANT TO AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus also relates to such additional securities as
may be issued to the Selling Stockholder because of future stock
dividends, stock distributions, stock splits or similar capital
readjustments.
The date of this Prospectus is ___________, 199_.
IN CONNECTION WITH THIS OFFERING, AN UNDERWRITER MAY EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SHARES OF COMMON STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY
BE EFFECTED ON THE NASDAQ OVER-THE-COUNTER MARKET OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company has filed with the U.S. Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act
</> with
respect to the Common Stock offered hereby. This Prospectus does
not include all the information set forth in the Registration
Statement and the exhibits thereto, to which reference is made for
further information with respect to the Company.
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations thereunder and in accordance
therewith files periodic reports, proxy and information statements,
and other information with the Commission (File No. 0-9099). The
Registration Statement and the exhibits thereto and all reports,
proxy and information statements, and other information filed by
the Company with the Commission may be inspected at the public
reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 or at the Commission's Web
site (http://www.sec.gov), and may also be inspected and copied at
the regional offices of the Commission located at 7 World Trade
Center, 13th Floor, New York, New York 10048, and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission pursuant to the Securities Act and the Exchange Act are
hereby incorporated by reference herein:
(1) The Company's Annual Report on Form 10-KSB for its fiscal
year ended December 31, 1995;
(2) The Company's Quarterly Reports on Form 10-QSB for the
quarterly periods ended March 31, 1996, June 30, 1996 and
September 30, 1996 ;
(3) The Company's Current Reports on Form 8-K dated February 13,
1996, September 12, 1996, October 9, 1996, November 25,
1996, December 13, 1996, December 31, 1996, as amended, and
January 16, 1997 ;
(4) The description of the shares of Common Stock contained
in the Company's Registration Statement on Form 10.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of
the offering of the shares of Common Stock hereunder shall be
deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated
herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document that also is incorporated
or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to
each person to whom this Prospectus is delivered, on the written or
oral request of such person, a copy of any and all of the documents
incorporated by reference in this Prospectus (other than exhibits
to such documents unless such exhibits are specifically
incorporated by reference into the documents that this Prospectus
incorporates). Written or oral requests for such copies should be
directed to Timothy L. Hensley of Florida Gaming Corporation,
3500 N.W. 37th Avenue, Miami, Florida 33142 .
Telephone requests may be directed to Mr. Hensley at
(305) 633-6400 .
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and
should be read in conjunction with, the more detailed information
and financial statements appearing elsewhere in or incorporated by
reference into this Prospectus. Unless the context indicates
otherwise, all references in this Prospectus to the Company include
the Company and its subsidiaries and all references to the number
of shares of Common Stock (i) relate to the Company's Common Stock,
par value $.10 per share (the "Common Stock"), and (ii) assume that
outstanding stock options and conversion rights are not exercised.
The Offering
Common Stock offered by the
Selling Stockholder. . . . . . . . . 703,297 Shares
Total Outstanding Common
Stock(1) . . . . . . . . . . . . . . . 4,435,960 Shares
Dividend Policy. . . . . . . . . . . . The Company has not paid any
dividends on its Common Stock in
the past and does not expect to pay
any dividends on the Common Stock
in the foreseeable future.
NASDAQ Symbol. . . . . . . . . . . . . BETS
Limitation on Total Ownership . . . . The laws of the State of Florida
require that before any person
acquires more than five percent of
the equity securities of a pari-mutuel
operator such as the Company
(representing more than 221,798
shares of the Company's
presently issued Common Stock),
such person must receive the
approval of the Florida Department
of Business Regulation.
(1) As of February 1, 1997. Excludes 2,183,250
Common Stock issuable upon exercise of outstanding
stock options, 7,748 shares of Common Stock
issuable upon the conversion of Class A
Preferred Stock, and shares of Common Stock
issuable upon the conversion of Preferred Stock
based on the market price of the Common Stock
immediately prior to conversion. See
"Description of Capital Stock -- Series Preferred
Stock."
THE COMPANY
The Company's principal executive offices are located at Fort
Pierce Jai-alai, 1750 South Kings Highway, Fort Pierce, Florida
34945. The Company's telephone number is (407) 464-7500. The
Company changed its name from Lexicon Corporation to Florida Gaming
Corporation on March 17, 1994. The Company was incorporated in
Delaware in 1976.
The Company currently owns and operates four jai-alai fronton
and inter-track pari-mutuel wagering facilities (each, a "Fronton,"
and collectively, the "Frontons") located in South and Central
Florida. See "Recent Developments." The Company's business at
this time consists primarily of its operations at the Frontons,
which include, among other things, live jai-alai, inter-track pari-mutuel
wagering on jai-alai, thoroughbred racing, harness racing,
and dog racing, and the sale of food and alcoholic beverages. The
Company's Fort Pierce, Tampa, and Ocala locations provide audio,
video, and wagering on inter-track and interstate simulcasting of
jai-alai, horse racing, and dog racing from around the State of
Florida as well as the rest of the country. The Miami location
offers more limited ITW simulcasting, but simulcasts its jai-alai
performances to other gaming facilities in Florida, Newport, Rhode
Island, and Mexico. ITW provides significant additional revenue as
well as a variety of entertainment for customers.
Since its inception and before its acquisition of the Fronton
located in Fort Pierce, the Company engaged in several other lines
of business, none of which are currently now in operation. On
March 31, 1993, the Company sold 603,000 shares of Common Stock to
Freedom Financial Corporation ("Freedom") and present management
assumed control of the Company. After considering various business
alternatives, the Company entered into an agreement to acquire the
Fort Pierce Fronton in October 1993. On February 1, 1994, the
Company received approval from the Florida Department of Business
and Professional Regulation, Division of Pari-Mutuel Wagering (the
"DPMW") to transfer the pari-mutuel permit for the Fort Pierce
Fronton to the Company and completed the acquisition of the Fort
Pierce Fronton on February 2, 1994.
RISK FACTORS
Certain statements and information under the captions "The
Company," "Recent Developments," and elsewhere in this Prospectus
(including documents incorporated herein by reference, see
"Incorporation of Certain Documents by Reference"), constitute
forward-looking statements as that term is defined in the
Securities Act. Such forward-looking statements involve known and
unknown risks and other factors that may cause the actual results
or performance of the Company to be materially different from any
future results or performance expressed or implied by such
forward-looking statements. Such risks and factors include, but
are not limited to, those described below and elsewhere in this
Prospectus.
In addition to reviewing the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1995, the other
documents incorporated herein by reference and the other
information in this prospectus, the following factors should be
considered carefully in evaluating the Company and its business
before purchasing the Common Stock offered hereby:
Recent Operating Results
The Company had net loss of $397,732 for the nine month period
ended September 30, 1996, compared to an operating loss of $103,141
for the comparable 1995 period. The Company's operations generally
are subject to financial, economic, legal and other factors, many
of which are beyond its control.
Gaming Competition
The gaming industry is highly competitive. Other gaming
companies have substantially greater financial resources and larger
management staffs than the Company. Because of the growing
popularity and profitability of gaming activities, competition is
significantly increasing. The Company competes for customers with
other forms of legal wagering, including video poker gaming in non-casino
facilities, charitable gaming, pari-mutuel wagering and state lotteries.
Further expansion of gaming opportunities could also
significantly and adversely affect the Company's business. In
particular, the expansion of casino gaming in or near the
geographic areas from which the Company attracts or expects to
attract a significant number of its customers could have a material
adverse effect on the Company's business. The Company expects that
it will experience significant competition as the emerging casino
industry matures.
Potential Dilution and Market Impact From Outstanding Capital Stock
and Options
As of February 1, 1997, the Company had 4,435,960 shares of
Common Stock issued and outstanding. In addition, as of that date,
2,183,250 shares of Common Stock were issuable upon the exercise of
outstanding options, 7,748 shares of Common Stock were issuable
upon the conversion of outstanding shares of Class A preferred
stock, and additional shares of Common Stock were issuable upon the
conversion of outstanding shares of preferred stock at a conversion
price based on the market price of the Common Stock at conversion.
See "Description of Capital Stock Series Preferred Stock." The
voting power of each holder of Common Stock would be diluted by the
issuance of additional shares of Common Stock. Moreover, the
prevailing market price for the Common Stock may be materially and
adversely affected by the addition of a substantial number of
shares of Common Stock, including the shares offered hereby, into
the market or by the registration under the Securities Act for the
sale of the shares offered thereby.
Upon consummation of this offering, assuming that no stock
options and conversion rights are exercised, the Company will have
4,435,960 shares of Common Stock issued and outstanding. Of those
shares, the 703,297 shares sold in this offering will be freely
transferable without restriction or registration under the Act,
unless held by persons deemed to be "affiliates" of the Company (as
that term is defined under the Securities Act). Of the approxi-
mately 3,820,575 remaining shares of Common Stock to be outstanding
immediately following the offering, persons who may be deemed
"affiliates" of the Company or who acquired the shares in a trans-
action exempt from registration under the Securities Act will hold
approximately 1,915,316 shares ("Restricted Shares"), which may
only be sold in the public market if such shares are registered
under the Securities Act or sold in accordance with Rule 144
promulgated under the Securities Act. Freedom, the holder of
1,349,480 Restricted Shares, has demand registration rights for its
shares and WJA Realty has certain piggyback registration rights
with respect to its 200,000 Restricted Shares.
Potentially Volatile Stock Price
The price of the Common Stock on the NASDAQ SmallCap Market in
the past years has shown significant volatility. During 1994 the
price of the Common Stock ranged between $2.00 and $17.25; during
1995 the price of the Common Stock ranged between $2.50 and $17.25;
and during 1996 the price of the Common Stock ranged between $2.50
and $10.00. Factors such as the Company's operating results or
other announcements by the Company or its competitors may have a
significant impact on the market price of the Company's securities.
The price of the Common Stock may be highly volatile and may
decline at an equal or greater rate than the rate at which it has
risen over the last three years.
Uncertainties in Integrating Operations and Achieving Cost
Savings
The Company recently purchased three frontons. The success of
any business combination, including the acquisition of WJA's
frontons described in "Recent Developments," is in part dependent
on the ability following such transactions to consolidate
operations, integrate departments, systems and procedures and
thereby obtain business efficiencies, economies of scale and
related cost savings. The consolidation of operations, the
integration of departments, systems and procedures and the
relocation of staff present significant management challenges.
There can be no assurance that future consolidated results will
improve as a result of the acquisition of WJA's frontons, or as to
the timing or extent to which cost savings and efficiencies will be
achieved.
Risks Associated with Acquisitions
There may be liabilities which the Company fails or is unable
to discover in the course of performing due diligence
investigations on any company or business it seeks to acquire or
has acquired, including liabilities arising from non-compliance
with certain federal, state or local laws by prior owners, and for
which the Company, as a successor owner, may be responsible. The
Company has sought to minimize its exposure to such liabilities by
obtaining indemnification from former owners, which may be
supported by deferring payment of a portion of the purchase price.
However, there is no assurance that such indemnifications, even if
obtainable, enforceable and collectible (as to which there also is
no assurance), will be sufficient in amount, scope or duration to
fully offset the possible liabilities arising from the
acquisitions. The success of the Company's aggressive development
plans in the gaming industry is dependent on a number of factors
including, but not limited to, economic conditions, competitive
environment, adequate capital, accurate site selection,
construction schedules, and supply of trained personnel. There can
be no assurance that the Company will be successful in the pari-mutuel
gaming industry or in any related industries which it enters.
Cost of Planned Expansion; Management of Growth
Since the change in management of the Company in March, 1993,
the Company has expanded its operations rapidly, and it plans to
continue to further expand its operations through participation in
other gaming ventures as opportunities arise. The Company's
operating results may be adversely affected if net revenues
do not increase sufficiently to compensate for the increase in
operating expenses caused by such an expansion. In addition, the
Company's planned expansion of operations may exceed the Company's
present management, technical, financial and other resources. To
manage its growth effectively, the Company must continue to
increase its management information systems and must attract, train
and motivate qualified managers and employees. There can be no
assurance, however, that the Company will successfully be able to
achieve these goals. If the Company is unable to manage growth
effectively, its operating results may be adversely affected.
Dependence on Key Personnel
The success of the Company is dependent, in part, on its key
management personnel. In particular, the Company is highly
dependent upon W. Bennett Collett, W. Bennett Collett, Jr., and
Timothy L. Hensley. The loss of their services could have a
material adverse effect on the Company. There is no assurance that
the Company will be able to hire qualified individuals to replace
any of these persons if necessary. The Company does not have any
employment contracts with its executives, nor does the Company have
any key man life insurance policies on their lives.
Control of the Company
As of February 1, 1997, W. Bennett Collett, Chairman and chief
executive officer of the Company, beneficially owned an aggregate
of 3,004,480 shares of the Company's Common Stock (including shares
beneficially owned by Freedom, with respect to which Mr. Collett
disclaims beneficial ownership), or an aggregate of approximately
49.33% of the issued and outstanding shares of the Company's Common
Stock (assuming the exercise of all options held by Freedom and Mr.
Collett). Mr. Collett is and will be able to exert considerable
influence over the election of the Company's directors and the
outcome of corporate actions requiring stockholder approval.
Possible Depressing Effect of Future Sales of the Company's Common
Stock
Future sales of shares of Common Stock, or the perception that
such sales could occur, could adversely affect the market price of
the Company's Common Stock. There can be no assurance as to when,
and how many of, shares of Common Stock will be sold and the effect
such sales may have on the market price of the Company's Common
Stock. Such securities may be subject to resale restrictions in
accordance with the Securities Act and the regulations promulgated
thereunder. As such restrictions lapse or if such shares are
registered for sale to the public, such securities may be sold to
the public. In the event of the issuance and subsequent resale of
a substantial number of shares of the Company's Common Stock, or a
perception that such sales could occur, there could be a material
adverse effect on the prevailing market price of the Company's
Common Stock.
Absence of Dividends on Common Stock
The Company has not paid any dividends on its Common Stock in
the past and does not anticipate paying dividends on its Common
Stock in the foreseeable future. In the event the Company is
not contractually prohibited from paying dividends, the holders of
Common Stock would be entitled to receive dividends only when and
as declared by the Board of Directors of the Company, subject to
the prior rights and preferences, if any, of holders of preferred
stock.
Antitakeover Effects of Certain Instruments, Agreements of the
Company, and Laws
The Company's certificate of incorporation and bylaws, certain
contracts to which the Company is a party, the Delaware General
Corporation Law and Florida gaming laws contain provisions that
could delay or prevent a transaction that results in a change of
control of the Company or discourage a tender offer or other plan
to restructure the Company favored by a significant portion of the
Company's stockholders. For example, the Florida laws require that
before any person or entity acquires a 5% or greater equity
interest in the Company, such person or entity must receive the
approval of Florida gaming authorities.
Potential Conflicts of Interest and Related Party Transactions
Certain relationships among the Company, its management and
affiliates create various potential and actual conflicts of
interest. As of February 1, 1997, pursuant to a $2 million
line of credit, Freedom has borrowed approximately $1.8 million
form the Corporation. It is the Company's policy that all
material affiliated transactions and loans will be made or entered
into on terms that are no less favorable to the Company than those
that can be obtained from unaffiliated third parties. All future
material affiliated transactions and loans must be approved by a
majority of the independent directors who do not have an interest
in the transactions.
New Projects
Each of the Company's projects to finance, develop, and
operate gaming facilities will be subject to the many risks
inherent in the establishment of a new business enterprise,
including unanticipated design, construction, regulatory and
operating problems, and the significant risks commonly associated
with implementing a marketing strategy in new markets. There can
be no assurance that any of these projects will become operational
within the estimated time frames and projected budgets at the time
the Company enters into a particular agreement, or at all. The
Company plans to reduce the financial significance of individual
projects by focusing on small- to medium-sized projects that can be
accomplished with a smaller capital investment and will allow a
significant portion of any financing of any subsequent expansions
to be paid from operating funds whenever possible. In addition,
the Company intends to develop projects as joint ventures when
possible, to reduce its financial commitment to individual
projects. There can be no assurance that the significant
expenditures required to develop a gaming project will ultimately
result in the establishment of profitable operations.
To the extent the Company's future gaming projects become
operational, the Company will be required to add and train
personnel, expand its management information systems and control
expenses. If the Company does not successfully address the
Company's increased management needs or the Company otherwise is
unable to manage its growth effectively, the Company's operating
results could be materially adversely affected.
Governmental Regulation
The Company will need to secure regulatory approvals from
state and local authorities for each of its prospective gaming
ventures. No assurance can be given that any of these approvals
will be secured in a timely fashion or at all. The denial of
regulatory approvals would prohibit the opening of the new
facilities and any delay in securing such approvals could result in
postponement of their scheduled openings.
In addition to a variety of generally applicable state and
federal laws governing business operations, the Company's gaming
ventures are regulated by federal and state laws and regulations
applicable to the gaming industry generally and to the distribution
of gaming equipment. Because the regulatory environment is dynamic
and evolving, it is impossible to predict how certain provisions
will be ultimately interpreted or how they may affect the Company.
Changes in such laws or regulations could have a material adverse
impact on the Company's ability to finance, develop and operate
gaming ventures.
Construction Risks
The Company anticipates that its prospective gaming ventures
may often include the construction of additional facilities. The
Company's cost estimates and projected completion dates for
construction of facilities may change significantly as the projects
progress. In addition, the Company's development projects will
entail significant construction risks, including shortages of
materials or skilled labor, unforeseen environmental or engineering
problems, work stoppages, weather interferences and unanticipated
cost increases, any of which could have a material adverse effect
on the projects and could delay their scheduled openings.
RECENT DEVELOPMENTS
Acquisition of Frontons/Development of Cardrooms
Terms of the Acquisition Agreement
On September 12, 1996, the Company acquired notes (the "WJA
Notes") of WJA Realty Limited Partnership ("WJA"), with balances
aggregating about $20,000,000 from the Bank of Oklahoma, N.A.,
Tulsa, Oklahoma. The WJA Notes were secured by, among other
collateral, real estate and improvements consisting of three jai-alai
and ITW facilities located in Miami, Tampa and Ocala, Florida (the "WJA
Frontons"). Consideration for the WJA Notes was a combination of
$2,000,000 in cash, a $6,000,000 promissory note bearing interest at
the prime rate, 703,297 shares of the Company's Common Stock and a
$1,000,000 non-interest bearing note.
On November 25, 1996, the Company entered into an agreement
with WJA and Florida Gaming Centers, Inc., a wholly-owned
subsidiary of the Company (the "Subsidiary"), pursuant to which the
Subsidiary agreed to acquire the WJA Frontons. The acquisition was
consummated as of January 1, 1997. The WJA Frontons acquired have
been combined with the Fort Pierce Fronton into the Subsidiary.
The consideration for the acquisition included (i) the
cancellation of WJA Notes and related obligations acquired by the
Company from the Bank of Oklahoma, NA, (ii) the retention by WJA of
200,000 shares of the Company's common stock owned by WJA, and
(iii) a profit sharing arrangement described in more detail below.
The Company assumed all liabilities of WJA arising in the ordinary
course of the business, subject to certain limitations and
exceptions. The Company also assumed the principal amount
outstanding under a $500,000 promissory note owed to
Wheeler-Phoenix, Inc., with the terms amended to provide for
repayment of principal over a ten year period following the closing
in equal annual installments and an annual interest rate of 6%.
The profit sharing arrangement is based on the Subsidiary's
net profits, as defined, before income taxes. The Company will pay
WJA 20% of the cumulative net profits of the Subsidiary for each of
the ten full calendar years 1997 through 2006, subject to a
cumulative $1,000,000 per year cap described below. The cumulative
$1,000,000 cap is equal to the product of $1,000,000 multiplied by
the number of years in the ten-year period completed, minus the sum
of all amounts previously paid under the 20% profit sharing
arrangement. In addition, if the Subsidiary has net profits in any
calendar year during the ten-year period in excess of $5,000,000,
but does not receive a 20% payment on the entire amount because of
the cumulative $1,000,000 per year cap, the Subsidiary shall pay
WJA 5% of the portion of the net profits on which the 20% payment
is not made. No net profit payments will be due for any year after
the ten year period. If during the ten year period, the Subsidiary
disposes of any of its significant assets or operations, then WJA
would be entitled to receive an amount equal to ten percent of the
Subsidiary's gain, if any, on the disposition.
Two principals of WJA, Roger M. Wheeler, Jr. and Richard P.
Donovan, have entered into consulting arrangements with the
Subsidiary. Mr. Wheeler has entered into a ten-year consulting
agreement with the Subsidiary, with annual compensation of $100,000
during the first five years of the agreement and annual
compensation of $50,000 during the second five years of the
agreement. Mr. Donovan has entered into a five-year consulting
agreement with the Subsidiary, with annual compensation of
$240,000, plus certain benefits.
Jai-Alai Operations
Pursuant to the permit granted to it under Florida law, each
Fronton, in order to conduct ITW, must offer a "full schedule" of
jai-alai performances of at least 100 live evening and/or matinee
performances per year. In addition, the Fronton may offer ITW
year-round so long as a pari-mutuel facility in Florida is
providing live pari-mutuel activities at the same time. Each
Fronton has received a permit from the DPMW to conduct live jai-alai
performances during 1997. The Miami and Tampa Frontons conduct live
jai-alai year round. Fort Pierce and Ocala operate four-month seasons.
All of the Frontons, with the exception of Miami, typically remain open
for ITW when live jai-alai performances are not being conducted.
In 1980, WJA and three other parimutuel permit holders formed
Summer Jai-Alai ("SJA"), a Florida general partnership, to conduct
parimutuel jai-alai operations at the Miami Fronton during the
summer months ("Summer Operations"). Following the acquisition of
the WJA Frontons, the Company is currently a party to the
partnership. Under the terms of the partnership agreement, certain
of the Company's costs and expenses will be allocated to Summer
Operations based upon specific formulas set forth in the agreement.
In addition, pursuant to a lease agreement which expires in 2004,
SJA rents the Miami Fronton for the time in which the summer jai-alai
season is conducted. The rental is based upon 1% of handle, plus applicable
Florida sales tax. The Company has a 21% interest in SJA which is accounted
for under the equity method.
Cardroom Development
Florida House Bill No. 337 (now known as section 849.086 of
the Florida Statutes) became effective June 1, 1996. This
legislation authorized card rooms at licensed pari-mutuel
facilities starting January 1, 1997. The card rooms will be
administered and regulated by the DPMW. Games will be limited to
non-banked poker games. Card room operation is also subject to
approval by the county commission in which the pari-mutuel facility
is located. This same bill also authorized full-card simulcasting
of races from out of state tracks such as Belmont, Meadowlands,
Philadelphia Park and Monmouth. The Frontons in Fort Pierce,
Tampa, and Ocala are currently carrying several of these signals.
This legislation also reduced the pari-mutuel tax on handle from 5%
to 4.25% at the Tampa, Fort Pierce and Ocala frontons. The pari-mutuel
tax on the handle at Miami was also reduced from 5% to 3.85%.
In late 1996 the county governments of Dade County and
Hillsborough County, Florida, passed legislation permitting poker
rooms to be operated by all pari-mutuel facilities located in Miami
and Tampa. As a result, the Company now plans to open poker rooms
in Miami (with 40 tables initially) and Tampa (with 30 tables
initially) during the first quarter of 1997. License applications
have been filed, and the Company is in the initial phases of
construction and employee training. As authorized by House Bill
No. 337, the Miami and Tampa facilities will conduct low stakes
($10 per hand) poker at these facilities two hours prior to, during
and two hours following live jai-alai performances. A rake of $0.25
per player per hand is expected to be received by the pari-mutuel
for each hand dealt. State taxes amount to 10% of the rake, and 4%
of the rake must be paid to the jai-alai players.
Fronton Facilities
Set forth below is a brief description of the Frontons,
including the WJA Frontons now owned by the Company:
Size of Number
Number Building of Gaming
Location of Acres Sq. Ft. Seats*
Fort Pierce 137.00 80,000 2,150
Miami 25.50 165,000 4,389
Tampa 34.21 114,000 3,500
Ocala 47.98 63,000 1,774
______ _______ ______
Totals 244.69 422,000 11,813*
*These figures do not include up to approximately 1,200 future
gaming positions anticipated from the addition of up to 200 poker
tables in connection with the establishment of cardrooms.
The Company's Miami Fronton, near the Miami International
Airport, was built in 1925 and remodeled in 1982. In addition to
its jai-alai auditorium, the fronton has a restaurant overlooking
the court, a banquet room, one large television lounge and four
smaller television lounges. Parking facilities at the Miami
Fronton (including on-street parking) are large enough to park
about 4,000 vehicles.
The Company's Tampa Fronton was built in 1953 and remodeled in
1985. In addition to its jai-alai auditorium, the Fronton has a
restaurant overlooking the court and parking for approximately
3,300 vehicles.
The Company's Ocala Fronton, completed in 1973, is situated
on a 47-acre site midway between Ocala and Gainesville in north-central
Florida. It has seating for 1,774 people, a total capacity for spectators
of approximately 3,800, and parking for approximately 1,100 vehicles.
Fort Pierce is a coastal community in St. Lucie County, about
110 miles north of Miami. The Fort Pierce Fronton, completed in
1974, is located approximately one-mile from the Florida Turnpike
exit and about 2 miles from an I-95 exit. The Turnpike is the
primary route between South Florida and Orlando. I-95 is the main
north-south highway that travels the entire Atlantic coast. The
Fort Pierce Fronton, sits on a 35-acre site and has parking for
approximately 2,000 vehicles.
In addition to the facilities and restaurants described, all
of the Frontons have mutuel windows, liquor bars and food stands.
In late 1994 and early 1995 the Company acquired four parcels
of land encompassing approximately 100 acres contiguous to the Fort
Pierce Fronton. This acquisition gave the Company approximately
134 acres with increase exposure to major thoroughfares and
improved access to I-95. The Company's uses for the additional
property are still being planned. The Company also owns
approximately 11 acres adjacent to the Ocala Fronton and a total of
18 acres in parcels near the Miami Fronton; some of these holdings
are available as extra parking space.
After the acquisition of the WJA Frontons, the Company began
converting the television lounge and standing areas at the Miami
and Tampa Frontons into low-stakes cardrooms. The Company expects
both cardrooms to be open by March 1997. The 12,000 square foot
cardroom in Miami is expected to open with 40 tables; the 10,000
square foot cardroom in Tampa is expected to open with 30 tables,
and each will have the capacity to hold almost twice as many
tables.
Competition
The gaming industry is highly competitive. The Company
competes for customers with other forms of legal wagering,
including charitable gaming, pari-mutuel wagering and state
lotteries. The Company competes with other entertainment providers
for its customers. With the exception of only one fronton operated
in Dania, Florida (described further below), the Company does not
consider itself to be in direct competition with any other fronton
facility. Florida's pari-mutuel legislation does not permit the
construction of any jai-alai facility within a geographic radius of
50 miles or to any other jai-alai facility.
There are currently 41 permits issued by the State of Florida
to operate pari-mutuel facilities in the state; 33 of those permits
are now active. Of the 33 active permit holders, only ten are held
by jai-alai operators; others engage in horse racing, harness
racing and dog racing. Aside from the Company's Frontons, the only
other operating jai-alai frontons in Florida are in Dania and
Orlando.
The Miami area offers a wide range of pari-mutuel and other
entertainment activities that compete with the Company for
spectators' leisure-time and wagering patronage. Within a 35-mile
radius of the Company's Miami fronton, there is another jai-alai
fronton whose season competes with the Miami Fronton, three horse
racing tracks that operate during part of the Miami fronton's
season (although not at the same time and not at night), and three
dog racing tracks, one of which operates during substantial
portions of the Miami Fronton's season. The Summer jai-alai
operation competes directly with two dog racing tracks (owned and
operated by two of the Company's partners in the summer jai-alai
operation) and another jai-alai fronton which operates during the
summer season. In addition to these pari-mutuel activities, the
Company's Miami fronton competes with numerous other sporting and
entertainment activities, including professional sports teams,
especially numerous Miami Beach night clubs, Indian Gaming
facilities, cruise and cruise/gaming ships, and gaming activities
in the Bahamas, which are readily accessible from the Miami area.
The primary market for the Miami Fronton includes approximately 3.5
million adults within 50 miles of the fronton.
The Tampa Fronton competes with dog racing (there are three
tracks located within a 55-mile radius that operate during the
Tampa Fronton's season, but only one at a time) and with a horse
racing track situated approximately 20 miles northwest of the Tampa
Fronton which operates for 74 days (but no evenings) during the
winter season. The Tampa Fronton also competes with other
alternative entertainment activities similar to those in Miami.
The primary market for the Tampa Fronton includes approximately
1.75 million adults within 50 miles of the fronton.
The pari-mutuel operation closest to the Ocala Fronton is 75
miles away. The Ocala Fronton does, however, compete with the
Ocala Breeders Sales Company, which offers ITW wagering. There are
not substantial competing evening entertainment activities in
Ocala. The primary market for the Ocala Fronton includes
approximately 350,000 adults within 30 miles of the facility.
The primary market area for the Fort Pierce Fronton includes
approximately 500,000 adults within 35 miles of the facility. The
major population centers in the vicinity of this fronton include
Fort Pierce, Port St. Lucie, and Vero Beach, Florida. The Company
does not consider itself to be in direct competition with any other
fronton or other pari-mutuel facility permitted to operate in
Florida in its market area at this time. The closest pari-mutuel
facilities are dog racing facilities in West Palm Beach,
approximately 50 miles south of the fronton, and in Melbourne,
approximately 53 miles north of the fronton. The Fort Pierce
fronton competes to a certain extent with the St. Lucie Civic
Center which features sporting events and entertainment activities.
Capital Raising Transactions
In December 1996 the Company issued and sold 550 shares of
Series C 8% Cumulative Convertible Preferred Stock in an offshore
transaction for $1,000 per share resulting in net proceeds to the
Company of $506,000. The shares of Series C Preferred Stock are
convertible into shares of the Company's Common Stock. See
"Description of Capital Stock Series Preferred Stock" and "Risk
Factors Potential Dilution and Market Impact From Outstanding
Capital Stock and Options."
In December 1996 and January 1997 the Company issued and sold
1,175 shares of Series D Preferred Stock in a private placement
transaction for $1,000 per share resulting in net proceeds to the
Company of $1,081,000. The shares of Series D Preferred Stock are
convertible into shares of the Company's Common Stock. See
"Description of Capital Stock Series Preferred Stock" and "Risk
Factors Potential Dilution and Market Impact From Outstanding
Capital Stock and Options."
USE OF PROCEEDS
This Prospectus related to shares being offered and sold for
the accounts of the Selling Stockholder. The Company will not
receive any of the proceeds of any sale by the Selling Stockholder
of the shares of Common Stock.
SELLING STOCKHOLDER AND PLAN OF DISTRIBUTION
The Selling Stockholder acquired the 703,297 shares of Common
Stock offered by this Prospectus in connection with the
consummation of the purchase of the WJA Notes. BOK DPC Asset
Holding Corporation, the Selling Stockholder, is a subsidiary of
Bank of Oklahoma, National Association. See "Recent Developments."
As of February 1, 1997, the Selling Stockholder owned 703,297
shares of Common Stock, constituting 15.9% of the 4,435,960 issued
and outstanding shares of Common Stock.
The securities offered hereby may, upon compliance with
applicable "Blue Sky" law, be sold from time to time to purchasers
directly by the Selling Stockholder in negotiated transactions and
in the over-the-counter market on NASDAQ. The shares may be sold
by one or more of the following: (a) a block trade in which the
broker or dealer so engaged will attempt to sell the shares as
agent; and (b) ordinary brokerage transactions in which the broker
solicits purchasers. In addition, any securities covered by the
Prospectus which qualify for sale pursuant to Rule 144 may be sold
under Rule 144 rather than pursuant to this Prospectus.
Alternatively, the Selling Stockholder may from time to time
offer the securities offered hereby through underwriters, dealers
or agents, who may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Stockholder
and/or the purchasers of securities for whom they may act as
agents.
In order to comply with the securities laws of certain states,
if required, the Shares will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in
certain states the Shares may not be sold unless they have been
registered or qualified for sale in the applicable state or any
exemption from the registration or qualification requirement is
available and is complied with.
Under applicable rules and regulations under the Exchange Act,
any person engaged in the distribution of the shares may not
simultaneously engage in market making activities with respect to
the Common Stock for a period of nine business days prior to the
commencement of such distribution. In addition and without
limiting the foregoing, the Selling Stockholder will be subject to
applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Rules 10b-6
and 10b-7, which provisions may limit the timing of purchases and
sales of shares of the Common Stock by the Selling Stockholder.
The Selling Stockholder and any underwriters, dealers or
agents that participate in the distribution of securities offered
hereby may be deemed to be underwriters, and any profit on the sale
of such securities by them and any discounts, commissions or
concessions received by any such underwriters, dealers or agents
might be deemed to be underwriting discounts and commissions under
the Securities Act. At the time a particular underwritten offer of
securities is made, to the extent required, a supplement to this
Prospectus will be distributed which will set forth the aggregate
amount of securities being offered and the terms of the offering,
including the name or names of any underwriters, dealers or agents,
and discounts, commissions and other items constituting compensa-
tion from the Selling Stockholder and any discounts, commissions or
concessions allowed or reallowed or paid to dealers.
The securities offered hereby may be sold from time to time in
one or more transactions at a fixed offering price, which may be
changed or at varying prices determined at the time of sale or at
negotiated prices.
The Selling Stockholder will pay its legal fees and the
commissions and discounts of underwriters, dealers or agents, and
transfer taxes, if any, incurred in connection with the sale of the
shares.
The Company has agreed to indemnify the Selling Stockholder
against certain liabilities in connection with the Registration
Statement, of which this Prospectus is a part, including certain
liabilities under the Securities Act.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of (i)
15,000,000 shares of Common Stock, par value $.10 per share; (ii)
500,000 shares of Convertible Preferred Stock, having a par value
of $.10 per share, no shares of which are currently outstanding;
(iii) 1,200,000 shares of Class A Convertible Preferred Stock,
having a par value of $.10 per share; and (iv) 500,000 shares of
Preferred Stock, having a par value of $.10 per share, issuable in
one or more series.
The following brief description of the Company's capital stock
does not purport to be complete and is subject in all respects to
(i) applicable Delaware law, and (ii) the provisions of the Com-
pany's Restated Certificate of Incorporation (the "Certificate")
and Bylaws, copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus is a part. See
"Additional Information."
Common Stock
The Company is authorized to issue 15,000,000 shares of Common
Stock. Each share is entitled to one vote on all matters submitted
to shareholders for a vote (including the election of directors).
The Common Stock does not provide for cumulative voting rights,
preemptive rights to purchase any additional shares, is not redeem-
able by the Company and, when issued, will be fully paid and
nonassessable. Holders of the Common Stock are entitled to receive
such dividends as may be declared by the Board of Directors out of
earnings or surplus and are entitled to share ratably in any
distribution of the Company's assets, after payment of all debts
and other liabilities and subject to the preferential rights of the
holders of the Company's preferred stock to a payment upon
liquidation and dissolution of the Company. As of February 1,1
997, the Company had issued and outstanding 4,435,960 shares of
Common Stock.
Class A Convertible Preferred Stock
The Company is authorized to issue 1,200,000 shares of Class
A Convertible Preferred Stock. The Class A Convertible Preferred
Stock bears annual dividends at the rate of $.90 per share payable
in cash, property or Common Stock, which are cumulative and have
priority over dividends on the Common Stock. As of February 1,
1997, the Company had issued and outstanding 34,435 shares of the
Class A Convertible Preferred Stock.
Series Preferred Stock
The Company is also authorized to issue 500,000 shares of
Convertible Preferred Stock, having a par value of $.10 per share,
and 500,000 shares of Preferred Stock, having a par value of $.10
per share, in one or more series. With regard to the issuance of
the Preferred Stock in one or more series, the Board of Directors
of the Company is authorized to establish, by resolution, the
number of shares to be included in each such series, and to fix the
designations, powers, preferences, and rights of the shares of each
such series, and any qualifications, limitations or restrictions
thereof, provided that no such shares of Preferred Stock shall have
powers, preferences or special rights that adversely affect the
holders of the Class A Convertible Preferred Stock. As of the date
of this Prospectus, the Board has authorized such shares in three
series.
Series B Convertible Preferred Stock. The Company's Series B
Convertible Preferred Stock (the "Series B Preferred Stock")
provides annual cumulative dividends at the rate of 8% of the
consideration paid for the stock. Such dividends are payable in
shares of the Company's Common Stock. The consideration to be
received by the Company upon initial issuance of each share of the
Series B Preferred Stock is $1,000. Holders of Series B shares may
generally convert all or any of such Series B shares to the
Company's Common Stock using a ratio based on the consideration
paid for the stock and 75% to 80% of the market value of the Common
Stock. Upon liquidation, the holders of Series B preferred shares
shall be entitled to be paid $1,000 per share plus 8% accrued
dividends before any distribution to holders of Common Stock. As of
February 1, 1997, the Company had issued and outstanding 1,465
shares of Series B Preferred Stock.
Series C 8% Cumulative Convertible Preferred Stock. The
Company is authorized to issue 5,000 shares of Series C 8%
Cumulative Convertible Preferred Stock, $.10 par value (the "Series
C Preferred Stock"), which provides annual dividends at the rate of
8% of the share's Stated Value. The Stated Value per share equals
$1,000 (as adjusted for any stock dividends, combination or split).
At the discretion of the Company's Board of Directors, such
dividends may be paid in shares of the Series C Preferred Stock.
As of February 1, 1997, the Company had issued and outstanding 550
shares of Series C Preferred Stock.
Holders of Series C Preferred Stock may convert all or any of
such shares to the Company's Common Stock (the "Series C Conversion
Shares") beginning 90 days after the issuance of the Series C
Preferred Stock. If not converted earlier by the holder, the
Series C Preferred Stock shall be converted automatically on
December 31, 1998. In general, the number of Series C Conversion
Shares issuable on conversion of each share of Series C Preferred
Stock shall equal the consideration paid for such share together
with accrued and unpaid dividends on such share, if any, divided by
the lesser of (i) $7.50 or (ii) 80% of the closing bid price of the
Common Stock on the five trading days before conversion. A holder
of Series C Conversion Shares may not sell more than 33% of such
shares between 90 and 120 days of his purchase of Series C
Preferred Stock converted into such shares and 67% of such shares
between 121 and 150 days of his purchase; a holder may generally
sell all of his Series C Conversion Shares 151 days after his
purchase.
All shares of Series C Preferred Stock have been sold pursuant
to offshore transactions exempt from registration pursuant to
Regulation S promulgated under the Securities Act. The Series C
Conversion Shares must be resold in transactions exempt under
Regulation S or another applicable exemption under the Securities
Act, or (if the exemption under Regulation S becomes unavailable at
any time before the third anniversary of the purchase of the Series
D Preferred Stock) pursuant to the registration of the Series C
Conversion Shares by the Company.
Upon liquidation, the holders of Series C Preferred Shares
shall be entitled to be paid $1,000 per share plus 8% accrued
dividends before any distribution to holders of Common Stock. The
Company has the right to redeem the shares of Series C Preferred
Stock if a holder of such shares exercise his right of conversion
at a time when the conversion price is below $5.00. The
redemption price to be paid by the Company is 125% of the Stated
Value of such shares together with all accrued and unpaid dividends
thereon.
Series D 8% Cumulative Convertible Preferred Stock. The
Company is authorized to issue up to 5,000 shares of Series D 8%
Cumulative Convertible Preferred Stock (the "Series D Preferred
Stock"), which provides annual dividends at the rate of 8% of the
share's Stated Value. The Stated Value per share equals $1,000
(as adjusted for any stock dividends, combination or split). At
the discretion of the Company's Board of Directors, such dividends
may be paid in shares of the Series D Preferred Stock. As of
February 1, 1997, the Company had issued and outstanding 1,175
shares of Series D Preferred Stock.
Holders of Series D Preferred Stock may convert all or any of
such shares to the Company's Common Stock beginning 90 days after
the issuance of the Series D Preferred Stock. If not converted
earlier by the holder, the Series D Preferred Stock shall be
converted automatically on December 31, 1998. The Company is
obligated to file a registration statement (the "Series D
Registration Statement") covering the shares of Common Stock
issuable on conversion of the Series D Preferred Stock (the "Series
D Conversion Shares") and to use its best efforts to cause the
Series D Registration Statement to become effective. In general,
the number of Series D Conversion Shares issuable on conversion of
each share of Series D Preferred Stock shall equal the Stated Value
together with accrued and unpaid dividends on such share, if any,
divided by the Conversion Price, which is defined as the lesser of
(i) $7.50 or (ii) 80% of the closing bid price of the Common Stock
on the five trading days before conversion. If the Series D
Registration Statement has not been declared effective within 120
days from December 31, 1996 (the "Initial Issuance Date"), the
Conversion Price shall be reduced by an amount between 3% and 20%
(resulting in the issuance of a larger number of Series D
Conversion Shares) based on the extent of such delay. No Series
D Conversion Shares may be sold before the earlier of March 13,
1997 or the date on which the Series D Registration Statement
becomes effective. Notwithstanding the effectiveness of the
Series D Registration Statement, generally a holder of Series D
Conversion Shares may not sell more than 33% of such shares between
March 13, 1997 and April 12, 1997, and 67% of such shares between
April 13, 1997 and May 22, 1997; a holder may generally sell all of
the Series D Conversion Shares after May 13, 1997.
If the Series D Registration Statement has not been declared
effective within 365 days of the Initial Issuance Date, a holder of
Series D Preferred Stock shall receive a preferential dividend
equal to 10% of the Stated Value on the 366th day after the Initial
Issuance Date and preferential dividends of either 3% or 10% of the
Stated Value every 30 days thereafter until the 726th day after the
Initial Issuance Date.
Upon liquidation, the holders of Series D Preferred Shares
shall be entitled to be paid $1,000 per share plus 8% accrued
dividends before any distribution to holders of Common Stock. The
Company has the right to redeem the shares of Series D Preferred
Stock if a holder of such shares exercise his right of conversion
at a time when the Conversion Price is below $5.00 or if the Series
D Registration Statement has not become effective within 120 days
of the Initial Issuance Date. The redemption price to be paid by
the Company is determined using a ratio based on the trading price
of the Company's Common Stock and the Stated Value.
The Class A Convertible Preferred Stock, the Series B Preferred Stock,
the Series C Preferred Stock and the Series D Preferred Stock are all equal
in rank with respect to the payment of dividends and the distribution of
assets upon liquidation of the Company.
Special Provisions of Delaware Law and the Company's Restated
Certificate of Incorporation
The Company is a Delaware corporation and is subject to
Section 203 of the Delaware General Corporation Law ("DGCL"). In
general, Section 203 prevents an "interested stockholder" (defined
generally as a person owning 15% or more of a corporation's out-
standing voting stock) from engaging in a "business combination"
(as defined) with a Delaware corporation for three years following
the date such person became an interested stockholder unless: (i)
before such person became an interested stockholder, the board of
directors of the corporation approved the transaction in which the
interested stockholder became an interested stockholder or approved
the business combination, (ii) upon consummation of the transaction
that resulted in the interested stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the trans-
action commenced (excluding stock held by directors who are also
officers of the corporation and by employee stock plans that do not
provide employees with the rights to determine confidentially
whether shares held subject to the plan will be tendered in a
tender or exchange offer), or (iii) on or following the transaction
in which such person became an interested stockholder, the business
combination is approved by the board of directors of the corpora-
tion and approved at a meeting of stockholders by the affirmative
vote of the holders of at least two-thirds of the outstanding
voting stock of the corporation not owned by the interested stock-
holder. Under Section 203, the restrictions described above also
do not apply to certain business combinations proposed by an
interested stockholder prior to the consummation or abandonment of
and subsequent to the earlier of the public announcement or notifi-
cation of one of certain extraordinary transactions involving the
corporation and a person who had not been an interested stockholder
during the previous three years or who became an interested stock-
holder with the approval of a majority of the corporation's direc-
tors, if such extraordinary transaction is approved or not opposed
by a majority of the directors who were directors prior to any
person becoming an interested stockholder during the previous three
years or who were recommended for election or elected to succeed
such directors by a majority of such directors.
The foregoing provisions could delay or frustrate a change in
control of the Company. The provisions could also discourage or
make more difficult a merger, tender offer or proxy contest, even
if such event would be favorable to the interests of stockholders.
Section 102(a)(7) of the DGCL authorizes corporations to limit
or eliminate the personal liability of directors to corporations
and their stockholders for monetary damages for breach of the
directors' fiduciary duty of care. The duty of care requires that,
when acting on behalf of the corporation, directors must exercise
an informed business judgment based on all material information
reasonably available to them. Absent the limitations now autho-
rized by such legislation, directors are accountable to corpora-
tions and their stockholders for monetary damages for conduct
constituting gross negligence in the exercise of their duty of
care. Although Section 102(a) does not change directors' duty of
care, it enables corporations to limit available relief to equita-
ble remedies such as injunction or rescission. The Certificate
limits the liability of the directors to the Company or its stock-
holders (in their capacity as directors but not in their capacity
as officers) to the fullest extent permitted by Section 102(a).
Specifically, directors of the Company will not be personally
liable for monetary damages for breach of a director's fiduciary
duty as a director, except for liability: (i) for any breach of the
director's duty of loyalty to the Company or its stockholders; (ii)
for acts or omissions not in good faith or which involve intention-
al misconduct or a knowing violation of law; (iii) for unlawful
payments of dividends or unlawful stock repurchase or redemptions
as provided in Section 174 of the DGCL; or (iv) for any transaction
from which the director derived an improper personal benefit.
LEGAL MATTERS
Certain legal matters with respect to the Common Stock offered
hereby will be passed upon for the Company and the Selling
Stockholder by Brown, Todd & Heyburn PLLC, Louisville, Kentucky.
EXPERTS
The audited financial statements of the Company at December
31, 1995 and 1994 and for each of the two years in the period ended
December 31, 1995 incorporated by reference into this Prospectus
and elsewhere in the Registration Statement, to the extent and for
the periods indicated in its report, have been audited by King &
Company, PSC, independent public accountants, and are incorporated
herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
<PAGE>
No dealer, salesperson or other individual has been authorized to
give any information or to make any representations not contained
in, or incorporated by reference in, this Prospectus, in connection
with the offering covered by this Prospectus. If given or made,
such information or representations must not be relied upon as
having been authorized by the Company, the Selling Stockholder or
any selling agent. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, the Common Stock in any
jurisdiction where, or to any person to whom, it is unlawful to
make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any
circumstances, create an implication that there has not been any
change in the facts set forth in this Prospectus or incorporated by
reference herein or in the affairs of the Company since the date
hereof.
TABLE OF CONTENTS
Page
Available Information . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . . . . . . . . 2
Prospectus Summary . . . . . . . . . . . . . . . . . . . 3
The Company. . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . 4
Recent Developments. . . . . . . . . . . . . . . . . . . 7
Use of Proceeds. . . . . . . . . . . . . . . . . . . . 10
Selling Stockholder and Plan
of Distribution . . . . . . . . . . . . . . . . . . . . 10
Description of Capital Stock . . . . . . . . . . . . . . . 11
Legal Matters . . . . . . . . . . . . . . . . . . . . . 14
Experts . . . . . . . . . . . . . . . . . . . . . . . . 14<PAGE>
703,297 Shares
of
Common Stock
FLORIDA GAMING
CORPORATION
PROSPECTUS
, 199
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Expense Amount
SEC registration fe. . . . . . . . . . . . . . . . $ 1,546
"Blue Sky" filing fees and
expenses (including legal expenses)(1). . . . . 15,000
Legal fees and expenses(1) . . . . . . . . . . . . 15,000
Accounting fees and expenses(1) . . . . . . . . . 1,000
Printing(1) . . . . . . . . . . . . . . . . . . . 100
Transfer agent fees(1) . . . . . . . . . . . . . . 100
(1) Estimated $32,746
All itemized fees and expenses of the offering are expected to
be paid by the Registrant.
Item 15. Indemnification of Directors and Officers.
Section 102(a)(7) of the Delaware General Corporation Law
authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their stockholders for
monetary damages for breach of the directors' fiduciary duty of
care. The duty of care requires that, when acting on behalf of the
corporation, directors must exercise an informed business judgment
based on all material information reasonably available to them.
Absent the limitations now authorized by such legislation,
directors are accountable to corporations and their stockholders
for monetary damages for conduct constituting gross negligence in
the exercise of their duty of care. Although Section 102(a) does
not change directors' duty of care, it enables corporations to
limit available relief to equitable remedies such as an injunction
or rescission. The Registrant's Restated Certificate of
Incorporation limits the liability of the directors to the
Registrant or its stockholders (in their capacity as directors but
not in their capacity as officers) to the fullest extent permitted
by Section 102(a). Specifically, a director of the Registrant will
not be personally liable for monetary damages for breach of a
director's fiduciary duty as a director, except for liability: (i)
for any breach of the director's duty of loyalty to the Registrant
or its stockholders; (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of
law; (iii) for unlawful payments of dividends or unlawful stock
repurchases or redemptions as provided in Section 174 of the
Delaware General Corporation Law; or (iv) for any transaction from
which the director derived an improper personal benefit.
Under Section 145 of the Delaware General Corporation Law, the
Registrant has the power to indemnify directors and officers under
certain prescribed circumstances and subject to certain limitations
against certain costs and expenses, including attorney's fees,
actually and reasonably incurred in connection with any action,
suit or proceeding, whether civil, criminal, administrative, or
investigative, to which any of them is a party by reason of his
being a director or officer of the Registrant if it is determined
that he acted in accordance with the applicable standard of conduct
set forth in such statutory provisions. The Registrant's by-laws
provide that the Registrant shall indemnify each person who may be
indemnified pursuant to Section 145, as amended from time to time
(or any successor provision thereto), to the fullest extent
permitted by Section 145.
On March 10, 1993, the Board of Directors of the Registrant
authorized the Registrant to enter into indemnification agreements
with each of its directors and executive officer to evidence the
Registrant's agreement to indemnify them to the fullest extent
permitted by law.
The Company does not presently carry any officer/director
liability insurance policy.
See Item 17 below regarding indemnification.
Item 16. Exhibits.
3.1 Restated Certificate of Incorporation is hereby
incorporated by reference to Exhibit 3.1 of Form SB-2
Registration Statement No. 33-79882.
3.2 Certificate of Designations for Series B Preferred Stock
is hereby incorporated by reference to Exhibit 3.3 of
Form S-3 Registration Statement No. 33-99380.
3.3. Certificate of Amendment to Certificates of Designations
of Series B Preferred Stock and Series 9% AA Preferred
Stock. (previously filed).
3.4 Bylaws are hereby incorporated by reference to Exhibit
3.2 of Form SB-2 Registration Statement No. 33-79882.
4.1 Restated Certificate of Incorporation is hereby
incorporated by reference to Exhibit 3.1 of Form SB-2
Registration Statement No. 33-79882.
4.2 Certificate of Amendment to Certificates of Designations
of Series C 8% Cumulative Convertible Preferred Stock is
hereby incorporated by reference to Exhibits 3.1 and 4.1
Current Report on Form 8-K dated December 13, 1996.
4.3 Form of Regulation S Subscription Agreement is hereby
incorporated by reference to Exhibit 4.2 Current Report
on Form 8-K dated December 13, 1996.
4.4 Certificate of Amendment to Certificates of Designations
of Series D 8% Cumulative and Convertible Preferred Stock
is hereby incorporated by reference to Exhibits 3.1 and
4.1 Current Report on Form 8-K dated January 16, 1997.
4.5 Form of Regulation D Subscription Agreement is hereby
incorporated by reference to Exhibit 4.2 Current Report
on Form 8-K dated January 16, 1997.
5 Opinion of Brown, Todd & Heyburn PLLC.
23.1 Consent of Brown, Todd & Heyburn PLLC is included in its
opinion filed herewith.
23.2 Consent of King & Company, PSC.
24 Power of attorney included on signature page hereof.
(previously filed).
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(i) To include any material information with
respect to any plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
(ii) That, for the purpose of determining any
liability under the Securities Act of 1933, each post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(iii) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act of 1933, each filing of the Company's annual report
pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) 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 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.
(d) The Registrant will:
(1) For determining any liability under the
Securities Act, treat the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the Registrant under Rule 424(b)(1), or (4), or
497(h) under the Securities Act as part of this registration
statement as of the time the Commission declared it effective.
(2) For determining any liability under the
Securities Act, treat each post-effective amendment that
contains a form of prospectus as a new registration statement
for the securities offered in the registration statement, and
that offering of the securities at that time as the initial
bona fide offering of those securities.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this Amendment No. 1 to the registration statement
to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Miami, State of Florida.
FLORIDA GAMING CORPORATION
Date: February 10, 1997 By /s/ W. Bennett Collett
W. Bennett Collett
Chairman of the Board and Chief
Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933,
this Amendment No. 1 to the registration statement has been signed
by the following persons in the capacities and on the dates
indicated.
/s/ W. Bennett Collett Chairman of the Board February 10, 1997
W. Bennett Collett of Directors and Chief
Executive Officer
(Principal Executive Officer)
/s/ Timothy L. Hensley Executive Vice February 10, 1997
Timothy L. Hensley President, Treasurer
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
* Director February 10, 1997
Gary E. Bowman
* President and Director February 10, 1997
Robert L. Hurd
* Director February 10, 1997
Roland M. Howell
* Director, Executive February 10, 1997
W. Bennett Collett, Jr. Vice President and
Secretary
* Director February 10, 1997
George W. Galloway, Jr.
*By /s/W. Bennett Collett February 10, 1997
W. Bennett Collett
Pursuant to the Power Attorney
previously filed as Exhibit 24
to the Registration Statement
Exhibit 5
Brown, Todd & Heyburn PLLC
3200 Providian Center
Louisville, Kentucky 40202-3363
February 10, 1997
Florida Gaming Corporation
1750 South Kings Highway
Fort Pierce, Florida 34945-3099
Re: Registration Statement (No. 333-10535)
on Form S-3
Gentlemen:
We refer to the registration by Florida Gaming Corporation
(the "Company") of 703,297 shares of the Company's common
stock, par value $0.10 per share (the "Common Stock"), that may be
offered for sale for the account of BOK DPC Asset Holding
Corporation, (the "Selling Stockholder"), in connection with the
Selling Stockholder's acquisition of the Common Stock pursuant to
the Loan Sale Agreement dated July 3, 1996 (the "Agreement"), and
as more fully described in Amendment No. 1 to the Registration Statement
(No. 333-10535) on Form S-3 (the "Registration Statement") filed by the
Company pursuant to the Securities Act of 1993, as amended, (the "Act"),
to which this opinion is an exhibit, and in the Prospectus constituting a
part thereof (the "Prospectus").
We have acted as counsel to the Company in connection with the
preparation of the Registration Statement. As such counsel, we
have examined originals, or copies certified to our satisfaction,
of the Company's Restated Certificate of Incorporation and Bylaws,
such agreements, documents, certificates and other statements of
government officials and corporate officers and representatives,
and other papers as we have deemed relevant and necessary as a
basis for our opinion. In such examination we have assumed the
genuineness of all documents submitted to us as originals and the
conformity with the original document of documents submitted to us
as copies. In addition, as to matters of fact only, we have relied
to the extent we deemed such reliance proper, upon certificates and
other written statements of public officials and corporate officers
of the Company.
Based upon the foregoing, we are of the opinion that the
shares of Common Stock offered for sale for the account of the
Selling Stockholder, when issued and delivered as described in the
Registration Statement, will be duly authorized, validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit
to the above-mentioned Registration Statement and to the use of our
name under the caption "Legal Matters" in the Prospectus.
Very truly yours,
BROWN, TODD & HEYBURN PLLC
By /s/ James A. Giesel
James A. Giesel, Member
ACCOUNTANTS' CONSENT
We consent to the use in this Form S-3 Registration Statement
relating to the sale of 703,297 shares of common stock, $.10 par value,
of Florida Gaming Corporation of our report dated March 21, 1996,
accompanying the December 31, 1995 financial statements of Florida
Gaming Corporation incorporated by reference in such Registration
Statement, and to the use of our name, and the statements with
respect to us, as appearing under the heading "Experts" in the
Prospectus.
KING & COMPANY, PSC
/s/ King & Company, PSC
Louisville, Kentucky
February 10, 1997
