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As filed with the Securities and Exchange Commission on November 2, 2000
Registration Statement No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VENTURE CATALYST INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
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<S> <C>
Utah 33-0618806
(State Of Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
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16868 Via Del Campo Court, Suite 200
San Diego, California 92127
(858) 385-1000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
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Kevin McIntosh
Vice President, Chief Financial Officer and Treasurer
Venture Catalyst Incorporated
16868 Via Del Campo Court, Suite 200
San Diego, California 92127
(858) 385-1000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
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Copy to:
Glenn D. Smith, Esq.
Venture Catalyst Incorporated
16868 Via Del Campo Court, Suite 200
San Diego, California 92127
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
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. [_]
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CALCULATION OF REGISTRATION FEE
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<CAPTION>
Title of Each Class of Amount to Proposed Maximum Proposed Maximum Amount of
Securities to be Registered be Registered Offering Price Per Unit(1) Aggregate Offering Price(1) Registration Fee(1)
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<S> <C> <C> <C> <C>
Common Stock, $0.001 par value
per share........................ 579,105 $2.30 $1,331,941.50 $351.63
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(1) Estimated solely for purposes of calculating the registration fee based
upon the average of the high and low prices of the common stock reported
on the Nasdaq National Market on October 31, 2000 and calculated in
accordance with Rule 457(c) promulgated under the Securities Act of 1933,
as amended.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED NOVEMBER 1, 2000
VENTURE CATALYST INCORPORATED
579,105 Shares of Common Stock
This prospectus relates to the offer and sale of up to 579,105 shares of
common stock of Venture Catalyst Incorporated from time to time by the selling
shareholders listed on page 11 of this prospectus.
Venture Catalyst will not receive any part of the proceeds from the sale of
the shares of common stock covered by this prospectus. We have agreed to bear
the expenses of registration of the shares. The selling shareholders may offer
the shares through brokers, dealers or agents or directly to purchasers. These
transactions may be effected in the over-the-counter market or otherwise, at
market prices prevailing at the time of sale or at privately negotiated prices.
Our common stock is listed on the Nasdaq National Market under the symbol
VCAT. On November 1, 2000, the closing price of our common stock as quoted on
Nasdaq was $2.5625 per share.
We urge you to read the "Risk Factors" section beginning on page 6 of this
prospectus for a specific description of risks associated with purchasing our
common stock that you should consider before making your investment decision.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
You should rely only on the information contained in this document or that
we have referred you to. We have not authorized anyone to provide you with
different information.
The information in this prospectus is not complete and may be changed. The
selling shareholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
The date of this Prospectus is , 2000.
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TABLE OF CONTENTS
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PAGE
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<S> <C>
WHERE YOU CAN FIND MORE INFORMATION........................................ 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................ 3
PROSPECTUS SUMMARY......................................................... 4
RISK FACTORS............................................................... 6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.......................... 12
USE OF PROCEEDS............................................................ 12
SELLING STOCKHOLDERS....................................................... 12
PLAN OF DISTRIBUTION....................................................... 13
LEGAL MATTERS.............................................................. 14
EXPERTS.................................................................... 14
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NOTE TO READERS OF THIS PROSPECTUS
We were incorporated in 1980 in Utah. When we refer to "us," "we," "our,"
"the Company" and "Venture Catalyst" in this prospectus, we mean Venture
Catalyst Incorporated and its consolidated subsidiaries. Our address is 16868
Via Del Campo Court, Suite 200, San Diego, California 92127. Information
contained on our web-site does not constitute part of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission (the "SEC") a
registration statement on Form S-3 (the "Registration Statement") under the
Securities Act, with respect to the shares offered by this prospectus. This
prospectus does not contain all the information set forth in the Registration
Statement and its exhibits. Certain portions of the Registration Statement have
been omitted as permitted by the rules and regulations of the SEC. Copies of
the Registration Statement (including the omitted portions) are available from
the SEC upon payment of a fee. For further information, reference is made to
the Registration Statement and the exhibits filed therewith. Statements
contained in this prospectus or the Registration Statement relating to the
contents of any contract or other document filed as an exhibit to the
Registration Statement are not necessarily complete, and in each instance are
qualified in all respects by the full text of such contract or document.
You should rely only on the information or representations provided in this
prospectus or incorporated by reference. We have not authorized anyone else to
provide you with different information. The selling shareholders have agreed
not to make an offer of the shares of our common stock (the "Common Stock") in
any state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date
on the cover page.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any documents we file at the
SEC's public reference room in Washington, D.C. at 450 Fifth Street, N.W.,
Washington, D.C. 20549, or in the public reference rooms located in New York,
New York and Chicago, Illinois. Please call the SEC at (1-800) SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public at the SEC's web-site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with
it, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and information we later file with the SEC will
automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we will make with
the SEC under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act:
. Annual Report on Form 10-KSB for the fiscal year ended June 30, 2000;
. Proxy Statement on Schedule 14A dated October 27, 2000.
We will provide without charge to any person to whom this prospectus is
delivered, upon written or oral request of such person, a copy of any or all of
the documents which have been incorporated by reference in this prospectus.
Requests for copies should be directed to Kevin McIntosh, Chief Financial
Officer, 16868 Via Del Campo Court, Suite 200, San Diego, California 92127,
telephone (858) 385-1000.
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PROSPECTUS SUMMARY
Many of the matters set forth in this prospectus contain forward-looking
statements that are subject to risks and uncertainties that could cause actual
results to differ materially from those set forth in this prospectus. We refer
you to cautionary information contained elsewhere in this prospectus and in
other documents we file with the SEC from time to time.
The Company
Venture Catalyst Incorporated, or VCAT, provides professional services to
support and facilitate the development of our clients' businesses. We act as
the clients' ally in organizing, developing and growing businesses at a faster
rate. We offer comprehensive gaming and hospitality consulting services, web
development services, public and governmental relations, Internet marketing,
strategic planning, technology solutions, and professional and technical
expertise. Our objective is to make our clients money by working with them
during every stage of their development and financial growth. In connection
with the implementation of our strategy, we have, in the past, made
investments, or taken all or a portion of our fees, in securities of our
clients. However, we do not expect this to be a significant part of our
strategy going forward.
We have provided many of these services to several Native American Indian
tribes, including the Barona Group of Capitan Grande Band of Mission Indians
(the "Barona Tribe"), since 1991. We currently provide services to the Barona
Tribe in connection with their operation of the Barona Casino and development
of the Barona Valley Ranch, a $225 million development project which when
complete, will expand its gaming and resort facilities to include a new casino
with approximately 80,000 square feet of gaming space, a 400 room resort hotel
and an 18-hole championship golf course. Our services are provided under the
terms of the Amended and Restated Consulting Agreement, as amended by
Modification #1 (the "Consulting Agreement"), which expires in March 2004.
In August 1998, we acquired Cyberworks, Inc. ("Cyberworks"), a web-site
development and Internet marketing company to expand our Internet services,
including those of Worldwide Media Holdings, N.V. ("WMH"). Cyberworks was
merged into VCAT following the sale of the Cyberworks domain name to Pacific
Century CyberWorks in August 2000, as part of our strategy to consolidate and
use a single service brand. Our Internet services include full service web-site
development, Internet marketing, strategic consulting for interactive and
online business development and custom Internet applications. Our clients have
included more than 350 local, national and international clients, in a wide
array of industries, including gaming, entertainment, technology and consumer
goods.
In July 1999, we expanded our services to include broader consulting
services to emerging and established businesses, to further grow our client
base. We provide our spectrum of services to public and private companies. In
connection with this expansion, we acquired the assets of Typhoon Capital
Consultants, LLC ("Typhoon"), an investor relations and business consulting
firm. In September 2000, we decided to discontinue offering investor relations
services.
In January 2000, we acquired all of the outstanding shares of capital stock
of webinc. Inc. ("webinc"), a recently-organized corporation whose business
plan focused on consulting, incubation and venture capital-related services to
start-up and early stage companies focusing on Internet infrastructure and
technology. The operations of webinc have been merged into Venture Catalyst.
While we are not a venture capitalist, we provide strategic consulting to our
clients at all stages of their development.
In March 2000 we acquired CTInteractive, Incorporated ("CTI"), a full-
service technology management firm, whose operations have been merged into
VCAT. Our technology solution services include business
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application development, network management, web site development and hosting,
and hardware sales and service. We provide these services to a broad spectrum
of clients, from large corporations to emerging businesses.
In July 1999, as an adjunct to our Internet gaming consulting business, we
launched the "Vegas At Home" portal web-site to provide both the gaming
industry and its patrons with an online central location containing a variety
of gaming related products, merchandise, information and links to most
significant traditional casinos. We are in the process of seeking a partner for
an updated Vegas At Home portal site and have shut down the existing site.
In July 2000, we acquired DayPlan.com, Inc. ("DayPlan"), a software company
offering a complete web-based scheduling platform. DayPlan contains features,
such as a group calendar function, which allows users to coordinate activities
with an affinity group or organization by allowing multiple users to post to
the same calendar. This group calendar can be made available only to a specific
affinity group, or can be made public to reach the entire web audience. We
intend to offer DayPlan as a service to our clients and to build the user base.
We also are exploring enhancements and features for broader application, which
may include a strategic partner to develop or market DayPlan.
In March 1998, we established WMH to leverage our gaming business expertise.
WMH offered marketing, advertising, technical and distribution services for
Internet related gaming businesses. In February 2000, our Board of Directors
adopted a plan to discontinue the Internet gaming consulting business and we
are in the process of liquidating WMH. Internet gaming consulting has not
produced a material portion of our revenues and was not profitable. We believe
the resources committed to such business will be more effectively used in our
other businesses.
Our principal offices are located at 16868 Via Del Campo Court, Suite 200,
San Diego, California 92127. Our telephone number is (858) 385-1000. Our web-
site address is www.vcat.com.
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RISK FACTORS
Any investment in our Common Stock is very risky. You should carefully
consider the risks and uncertainties described below, as well as the other
information contained herein and the other information we have referred you to,
in deciding whether to invest in our Common Stock. If any of the following
events actually occurs, our business, financial condition and results of
operations may suffer materially. As a result, the market price of our Common
Stock could decline, and you could lose all or part of your investment in our
Common Stock.
Our Revenue Depends in Large Part on a Single Customer and Loss of that
Customer Could Significantly Damage Our Business
We derive a majority of our revenue from services provided to the Barona
Tribe, including the Barona Casino, under the Consulting Agreement. The fees
paid to us are based upon a net profit formula that includes the Barona
Casino's income and expenses. Accordingly, although gross revenues of the
Barona Casino may increase, the Company's consulting revenue may not
correspondingly increase because expenses at the Barona Casino also may have
increased. For the fiscal year ended June 30, 2000 revenues from services to
the Barona Tribe declined as a percentage of sales. While we are continuing to
take steps to diversify and expand our service offerings for additional
clients, those activities are not yet producing revenues as significant as
those being earned from the Barona Tribe. In connection with the Barona
Casino's $225 million expansion project, the Barona Casino has incurred, and
expects to incur, significantly higher expenses. As a result, the consulting
fees paid to us during the expansion project may decrease. Any material
reduction in fees payable to us in connection with the Consulting Agreement
could have a material adverse affect on the operating results and financial
condition of the company.
Legal Uncertainties Relating to Native American Gaming; Limited Recourse
Against Tribes and Tribal Assets
Federal, state and tribal governments extensively regulate gaming on Native
American land. Certain vendors such as the Company must apply for a license
from the tribe, such as the Barona Tribe and are subject to a determination of
suitability by the California gaming agency. Findings of suitability are
granted for two years.
Consulting Agreement
The Consulting Agreement has not yet been approved by the regulatory
authorities. The National Indian Gaming Commission (the "NIGC") conducted an
investigation of the past relationship between the Barona Tribe and the Company
as manager of the Barona Casino that resulted in a January 1997 settlement
agreement.
In April 1997, the Company received a letter from the NIGC questioning
whether the Consulting Agreement was in fact a management contract. In March
1999, the NIGC started a preliminary review of the relationship between the
Barona Tribe and the Company, which has included a review of the Consulting
Agreement. This review is currently pending. There is no assurance that the
NIGC will determine that the Consulting Agreement is not a management contract.
If the NIGC concludes that the Consulting Agreement is not a management
agreement, the NIGC will forward such Agreement to the Bureau of Indian Affairs
("BIA") for its review. If the BIA determines that its approval is required,
there can be no assurance that the BIA will approve the Consulting Agreement.
Management contracts for Native American gaming facilities are subject to
approval by the NIGC and generally provide for a maximum management fee and a
maximum term. The NIGC has the power to require contract modifications under
certain circumstances or to void a contract if the management company fails to
comply with applicable laws and regulations. In addition, the Company, our
directors, persons with management responsibility, certain of our stockholders
and certain persons with a financial interest in the
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management agreement must be investigated and approved by the NIGC and the
tribal gaming commission in order for a management contract to be approved by
the NIGC and receive a license to operate a gaming facility by the tribal
gaming commission. Persons who acquire beneficial ownership of our stock may be
subject to certain reporting and qualification procedures established by the
NIGC and the tribal gaming commission. Such limitations could adversely affect
the marketability of the Common Stock or could affect or prevent certain
corporate transactions, including mergers or other business combinations.
If the Consulting Agreement is not approved, results in fines or penalties
or is significantly modified to reduce consulting fees to us, it would have a
material adverse effect on the business and financial condition of the Company.
Limited Recourse Against Tribes and Tribal Assets
Native American tribes are sovereign nations with their own governmental
systems. Tribal officials are subject to replacement by appointment or
election. Our relationship with a tribe could improve or deteriorate under new
administrations. Good relationships with Native American tribes and their
officials, in particular the Barona Tribe, are critical to our ability to
obtain, retain and renew contracts with the tribe. Although we believe our
agreements with Native American tribes contain appropriate legal protections, a
deterioration in the relationship with a tribe could have a material adverse
effect on the Company, including possible termination of any contract.
We have made, and may make, advances or loans (including guarantees of
indebtedness) to tribes for the construction, development, equipment and
operation of casinos for which we may act as a consultant or manager. These
amounts are not conventional indebtedness loans subject to customary mortgages
or security. If these casinos do not generate sufficient cash flow to repay
such indebtedness, our loans may not be repaid. Our principal recourse for
collection of indebtedness from a tribe or money damages for breach or wrongful
termination of a contract is from revenues, if any, from casino operations. We
have agreed to, and in the future may agree to, subordinate the repayment of a
tribe's indebtedness and payment of other fees due to us from a tribe to other
obligations of the tribe, such as indebtedness to a commercial lender.
Accordingly, in the event of a default by a tribe, a tribe's indebtedness to us
may not be repaid, if at all, until any senior creditors have been repaid in
full.
As of June 30, 2000 we have advanced approximately $9.7 million to the
Barona Casino in connection with the ongoing expansion project, of which $2
million was repaid in October 2000 by Barona in connection with a $30 million
bridge financing. We have committed to advance up to $10 million to the Barona
Casino, if needed, until all outside financing is obtained. These advances are
scheduled to be repaid when the remaining $175 million financing is completed.
We have agreed to subordinate the consulting fees earned by us, and the fees
are now subject to a Subordination Agreement relating to an approximately $19
million federally tax-exempt bond financing and $30 million bridge loan
financing of the Barona Tribe. We also have approximately $1.9 million in the
form of cash pledged as a guarantee for and bonds issued by the Klamath Tribes,
of which the approximately $1.5 million in cash pledged has been released in
connection with a refinancing by the Klamath Tribes. The approximately $400,000
in bonds have been defeased as part of the refinancing by the Klamath Tribes.
We have agreed to hold the bonds for a period of five years. If a default
occurs, it would have a material adverse effect on the business and financial
condition of the Company.
Risks of Being Deemed an Investment Company
We may incur significant costs to avoid investment company status and may
suffer other adverse consequences if we are deemed to be an investment company
under the United States Investment Company Act of 1940, as amended (the "1940
Act"). A company may be deemed to be an investment company if it owns
investment securities with a value exceeding 40% of its total assets, subject
to certain exclusions. Investment companies are subject to registration under,
and compliance with, the 1940 Act unless a particular exclusion or SEC safe
harbor applies. If we were deemed to be an investment company, we would become
subject to the
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requirements of the 1940 Act. As a consequence, we would be prohibited from
engaging in business or issuing our securities as we have in the past and might
be subject to civil and criminal penalties for non-compliance. In addition,
certain of our contracts might be voidable. Such repercussions from being
deemed an investment company could have a material adverse affect on the
Company's operating results and financial condition.
Specifically, if we are deemed to be, and are required to register as, an
investment company, we will be forced to comply with substantive requirements
under the 1940 Act, including:
. limitations on our ability to borrow;
. limitations on our capital structure;
. restrictions on acquisitions of interests in portfolio and/or affiliated
companies;
. prohibitions on transactions with affiliates;
. restrictions on specific investments; and
. compliance with reporting, record keeping, voting, proxy disclosure and
other rules and regulations.
If we were forced to comply with the rules and regulations of the 1940 Act,
our operations would significantly change, and we would be prevented from
successfully executing our business strategy.
In addition, to avoid regulation under the 1940 Act and related SEC rules,
we may need to sell assets which we would otherwise want to retain and may be
unable to sell assets which we would otherwise want to sell. In addition, we
may be forced to acquire additional, or retain existing, income-generating or
loss-generating assets which we would not otherwise have acquired or retained
and may need to forego opportunities to acquire interests in attractive
companies that would benefit our business. If we were forced to sell, buy or
retain assets in this manner, we would be prevented from successfully executing
our business strategy.
Although investment securities currently comprise less than 40% of our
assets, fluctuations in the value of these securities or of our other assets
may cause this limit to be exceeded. This would require us to attempt to reduce
our investment securities as a percentage of our total assets. This can be
attempted in a number of ways, including the disposition of investment
securities and the acquisition of non-investment security assets. If we sell
investment securities, we may sell them sooner than we otherwise would. These
sales may be at depressed prices and we may never realize anticipated benefits
from, or may incur losses on, these investments. Some investments may not be
sold due to contractual or legal restrictions or the inability to locate a
suitable buyer. Moreover, we may incur tax liabilities when we sell assets. We
may also be unable to purchase additional investment securities that may be
important to our operating strategy. If we decide to acquire non-investment
security assets, we may not be able to identify and acquire suitable assets and
businesses.
Difficulty and Risks of Planned Expansion; Management of Growth
Our success depends, in part, on our ability to identify opportunities to
acquire or invest in companies that will strategically augment our service
offerings. Our management will have sole and absolute discretion in identifying
and selecting such companies. You will not be able to evaluate the merits of an
acquisition or investment before we proceed with the transaction.
We may expand through the acquisition of businesses, technologies, products
or services from other businesses. These activities involve a number of special
problems, including:
. difficulty in integrating technologies, operations and personnel with
the existing business;
. diversion of management attention in connection with both negotiating
the acquisitions and integrating the assets and businesses;
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. strain on managerial and operational resources as management tries to
oversee larger operations;
. exposure to unforeseen liabilities of acquired companies;
. the dilution of our shareholders as the result of the issuance of our
stock in connection with the acquisitions of other businesses;
. the need to incur debt; and
. the requirement to record operating costs for the amortization of
goodwill and other intangible assets, which amounts could be
significant.
We may not be able to successfully address these problems. Moreover, our
future operating results will depend to a significant degree on our ability to
successfully manage growth and integrate acquisitions. We may not be able to
successfully integrate or generate meaningful revenues from these acquisitions.
Even if we identify a company for acquisition or investment, we may not be
able to complete the transaction for many reasons including:
. our inability to interest companies in aligning with us;
. our inability to agree on the terms of an acquisition or investment; and
. incompatibility between us and the management of the company.
In addition, our planned expansion of operations may exceed our present
management, technical, financial and other resources. To manage our growth
effectively, we must continue to increase and improve our operational,
financial and management information systems and must attract, train and
motivate qualified managers and employees. There can be no assurance, however,
that we will successfully be able to achieve these goals. If we are unable to
manage growth effectively, there could be a material adverse affect on our
operating results and financial condition.
Some of Our Services Activities Have a Limited Operating History
Certain of our services for our clients have been offered for less than a
year. Because of our short operating history in these activities, we are unable
to provide you with significant data upon which you can evaluate our prospects.
We cannot be certain that our expanded business strategy or the business
strategies of our clients will be successful. Because we provide services to
and have interests in early stage companies and emerging businesses, we are
exposed to not only the business risks of our clients but also to the risks of
our own business activities.
Fluctuation in the Value of Our Assets
The Company's assets are, and will be, partially comprised of equity
securities of other publicly and non-publicly traded companies, and include
positions in equity securities that have experienced significant volatility in
their stock prices. We expect the number of, and our investment in, these
assets may increase in the immediate future. The market price and valuations of
the securities that we hold in other companies may fluctuate due to market
conditions and other conditions over which we have no control. We do not
directly attempt to reduce or eliminate our market exposure on these
securities. Certain of these companies have encountered financial difficulties
which could likely result in a write down of some or all of the carrying value
of such asset. Any write down could have a material adverse affect on our
operating results and financial condition.
Fluctuation of Our Quarterly Results
Our operating results have fluctuated on a quarterly basis during the last
several years, and we expect that quarterly operating results are likely to
continue to fluctuate from quarter to quarter. Many factors, some of
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which are beyond our control, have contributed to these quarterly fluctuations
in the past and may continue to do so. Such factors include:
. demand for our services;
. demand for the products and services of our clients in which we own
securities;
. specific economic conditions in the industries in which we or our
clients engage; and
. general economic conditions in the United States.
The emerging nature of many of our clients makes predictions concerning our
future assets and revenues difficult. We believe that period-to-period
comparisons of our results of operations will not necessarily be meaningful and
should not be relied upon as indicative of our future performance. It is also
possible that in some fiscal quarters our operating results will be below the
expectations of securities analysts and investors. In such circumstances, the
price of our Common Stock may decline.
Concentration of Our Ownership
L. Donald Speer, II, our Chairman of the Board and Chief Executive Officer,
beneficially owned approximately 27.4% of our outstanding common stock as of
September 25, 2000. Additionally, the members of our Board of Directors and our
executive officers collectively own approximately 37.3% of our outstanding
common stock as of September 25, 2000. The concentration of our share ownership
may:
. delay or prevent a change in control of the Company;
. impede a merger, consolidation, takeover, or other transaction involving
the Company;
. discourage a potential acquirer from making a tender offer or otherwise
attempting to obtain control of the Company; or
. control election of directors of the Company.
In addition, the Company currently possesses a right and option until
December 25, 2001, to purchase all or part of Richard Harrison's, a former
officer and director, 750,000 shares of Common Stock at $2.50 per share.
Dependence on Certain Key Personnel; Difficulty in Attracting and Retaining
Qualified Employees
Our performance is substantially dependent on the performance of its
executive officers and other key employees, in particular, Mr. Speer.
In addition, our operations depend to a great extent on the management
efforts of its other officers and other key personnel and on the ability to
attract new key personnel and retain existing key personnel. Competition is
intense for highly skilled web site development and gaming employees in
particular. The loss of the services of any member of our senior management may
significantly delay or prevent the achievement of business development and
other business objectives. Our ability to attract and retain qualified
personnel, consultants and advisors is critical to our success. In order to
pursue our business strategy, we will need to hire additional qualified
technical and management personnel. Since we face competition from numerous web
development companies and other related businesses, we may not be able to avoid
increased costs in order to do so. We may be unable to attract and retain these
individuals and other key employees, and our failure to do so would have a
material adverse effect on the Company's operating results and financial
condition.
Our officers and key employees are not bound by non-competition agreements
that extend beyond their employment at the Company, and there can be no
assurance that employees will not leave the Company or compete against us.
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Volatility of Our Common Stock Price
The trading price of the Company's common stock has been, and will likely
continue to be, subject to wide fluctuations because of regulatory
developments, performance of our public clients in which we own equity
securities, quarterly variations in the Company's operating results,
announcements of new services or business activities by the Company or its
competitors, general market fluctuations, and other events and factors. These
factors, coupled with the small public float, have in the past, and could in
the future, result in wide fluctuations in the market trading price.
11
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, and the other reports we have filed from time to time with
the SEC, contain forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act. Forward-looking
statements deal with our current plans, intentions, beliefs and expectations
and statements of future economic performance. Statements containing terms
like "believes," "does not believe," "plans," "expects," "intends,"
"estimates," "anticipates" and other phrases of similar meaning are considered
to imply uncertainty and are forward-looking statements.
Forward-looking statements involve known and unknown risks and
uncertainties that may cause our actual results in future periods to differ
materially from what is currently anticipated. We make cautionary statements
throughout this prospectus, including under "Risk Factors." You should read
these cautionary statements as being applicable to all related forward-looking
statements wherever they appear in this prospectus, the materials referred to
in this prospectus, the materials incorporated by reference into this
prospectus and our press releases.
We cannot guarantee our future results, levels of activity, performance or
achievements. Neither we nor any other person assumes responsibility for the
accuracy and completeness of these statements.
We are under no duty to update any of the forward-looking statements after
the date of this prospectus.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares of
Common Stock being sold by the selling stockholders pursuant to this
prospectus.
SELLING STOCKHOLDERS
We are registering all 579,105 shares of Common Stock covered by this
prospectus on behalf of the selling stockholders named in the table below. In
exchange for the retirement of $3,069,256 of corporate debt, we issued all of
the shares to the selling stockholders at a share price of approximately
$5.30.
The following table sets forth as of November 1, 2000, the name of each of
the selling stockholders, the number of shares owned by each of the selling
stockholders, the number of shares of our Common Stock owned by each of the
selling stockholders as of the number of shares that may be offered under this
prospectus and the number of shares of our Common Stock owned by each of the
selling stockholders after this offering is completed. Except as described
below, each selling stockholder has sole voting and investment power with
respect to the shares of Common Stock set forth in the table. The table has
been prepared on the basis of the information furnished to us by or on behalf
of each of the selling stockholders. As of November 1, 2000, there were
approximately 7,422,000 shares of our Common Stock outstanding.
<TABLE>
<CAPTION>
Number of Shares Number of Shares
of Common Stock Number of Shares of Common Stock
Beneficially of Common Stock Beneficially
Owned Before the Being Offered by Owned After the
Selling Stockholders Offering this Prospectus(1) Offering(2)
-------------------- ---------------- ------------------ ----------------
<S> <C> <C> <C>
Jonathan Ungar............. 630,262(3) 358,587 271,675(3)
Alan Woods................. 220,518 220,518 0
</TABLE>
During the past three years, Messrs. Ungar's and Woods' relationship with
us included the ownership of common stock and the holding of promissory notes,
certain of which were exchanged for the shares being registered. We do not
know how long the selling stockholders will hold the shares before selling
them and we currently have no agreements, arrangements or understandings with
any of the selling stockholders regarding
12
<PAGE>
the sale of any of the shares. The selling stockholders named above may have
sold, transferred or otherwise disposed of all or a portion of such shares of
Common Stock since November 1, 2000, in transactions exempt from registration
under the Securities Act. Generally, only selling stockholders identified in
the foregoing table who beneficially own the shares of Common Stock set forth
opposite their respective names may sell such offered shares pursuant to this
Registration Statement of which this prospectus forms a part. We may from time
to time include additional selling stockholders in supplements to this
prospectus. The shares offered by this prospectus may be offered from time to
time by the selling stockholders named above.
(1) This registration statement shall also cover any additional shares of
Common Stock which become issuable in connection with the shares registered
for sale hereby as a result of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt of
consideration which results in an increase in the number of our outstanding
shares of Common Stock.
(2) Assumes the sale of all shares offered hereby and no other purchases or
sales of our common stock.
(3) Includes the right to acquire up to 144,775 shares of our Common Stock
at a price of $5.894 pursuant to warrants issued in connection with the
promissory note exchange.
PLAN OF DISTRIBUTION
The shares of Common Stock offered hereby may be sold from time to time by
the selling stockholders or by their pledgees, donees, distributees,
transferees or other successors in interest. The selling stockholders will act
independently of us in making decisions regarding the timing, manner and size
of each sale. The sales may be made on the Nasdaq National Market or such
other market on which our Common Stock may from time to time be trading, at
prices and at terms then prevailing or at prices related to the then current
market price, or in negotiated transactions. The selling stockholders may
effect such transactions by selling the shares to or through broker-dealers.
The shares may be sold by one or more of, or a combination of, a block trade
in which the broker-dealer will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction, purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus, an exchange
distribution in accordance with the rules of such exchange, ordinary brokerage
transactions and transactions in which the broker solicits purchasers and in
privately negotiated transactions.
In effecting sales, broker-dealers engaged by the selling stockholders may
arrange for other broker-dealers to participate in the resales.
The selling stockholders may enter into hedging transactions with broker-
dealers in connection with distributions of the shares or otherwise. In these
transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with selling stockholders. The
selling stockholders also may sell shares short and redeliver the shares to
close out such short positions. The selling stockholders may enter into option
or other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer such shares pursuant to this prospectus. The selling stockholders
also may loan or pledge the shares to a broker-dealer. The broker-dealer may
sell the shares so loaned, or upon a default the broker-dealer may sell the
pledged shares pursuant to this prospectus.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe material arrangements regarding the plan of
distribution.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling stockholders. Broker-
dealers or agents may also receive compensation from the purchasers of the
shares for whom they act as agents or to whom they sell as principals, or
both. Compensation as to a particular broker-dealer might be in excess of
customary commissions and will be in amounts to be negotiated in
13
<PAGE>
connection with the sale. Broker-dealers or agents and any other participating
broker-dealers or the selling stockholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act in connection with
sales of the shares. Accordingly, any such commission, discount or concession
received by them and any profit on the resale of the shares purchased by them
may be deemed to be underwriting discounts or commissions under the Securities
Act. Because selling stockholders may be deemed to be "underwriters" within the
meaning of Section 2(l1) of the Securities Act, the selling stockholders will
be subject to the prospectus delivery requirements of the Securities Act. In
addition, any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 promulgated under the Securities Act may be sold under
Rule 144 rather than pursuant to this prospectus. The selling stockholders have
advised us that they have not entered into any agreements, understandings or
arrangements with any underwriters or broker-dealers regarding the sale of
their securities. There is no underwriter or coordinating broker acting in
connection with the proposed sale of shares by the selling stockholders.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. 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 an 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 our Common Stock for a period of two
business days prior to the commencement of such distribution. In addition, each
selling stockholder will be subject to applicable provisions of the Exchange
Act and the associated rules and regulations under the Exchange Act, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our Common Stock by the selling stockholders. We will make copies of
this prospectus available to the selling stockholders and have informed them of
the need to deliver copies of this prospectus to purchasers at or prior to the
time of any sale of the shares.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The selling
stockholders may agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act. The
selling stockholders have agreed to indemnify certain persons, including
broker-dealers and agents, against certain liabilities in connection with the
offering of the shares, including liabilities arising under the Securities Act.
LEGAL MATTERS
For purposes of this prospectus, Fabian & Clendenin, A Professional
Corporation, is giving its opinion as to the validity of the issuance of the
shares of Common Stock. Members of such firm do not own any shares of our
Common Stock.
EXPERTS
Grant Thorton LLP, independent auditors, have audited our consolidated
financial statements included in our annual report on Form 10-K for the year
ended June 30, 2000, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial reports are incorporated by reference in reliance on Grant Thorton
LLP's report, given on their authority as experts in accounting and auditing.
14
<PAGE>
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No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus in
connection with the offer made by this Prospectus and, if given or made, such
information or representation must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any Securities other than the Common
Stock to which it relates, or an offer in any jurisdiction to any person to
whom it is unlawful to make such an offer in such jurisdiction. Neither the
delivery of this Prospectus nor any sale hereunder shall, under any
circumstances, create an implication that the information contained herein is
correct at any time after the date hereof.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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579,105 Shares
VENTURE CATALYST INCORPORATED
Common Stock
-----------------
PROSPECTUS
-----------------
, 2000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses Of Issuance and Distribution.
The following table sets forth all expenses, other than underwriting
documents and commissions, payable by the Registrant in connection with the
sale of the Common Stock being registered. All the amounts shown are estimates,
except for the registration fee.
<TABLE>
<S> <C>
SEC Registration Fee.............................................. $ 351.63
Blue Sky Fees and expenses........................................ 100.00
Printing and engraving expenses................................... 5,000.00
Legal fees and expenses........................................... 1,000.00
Accounting fees and expenses...................................... 1,000.00
Transfer Agent and Registrar Fees................................. 1,000.00
Miscellaneous expenses............................................ 1,400.00
---------
TOTAL........................................................... $9,851.63
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 16-10a-902 of the Utah Revised Business Corporation Act ("URBCA")
provides that a corporation may indemnify an individual, who was made a party
to a proceeding because such individual was a director of the corporation,
against liability incurred in such proceeding if the director acted in good
faith, reasonably believed his or her conduct was in, or not opposed to, the
corporation's best interests and in the case of any criminal proceeding, had no
reasonable cause to believe his or her conduct was unlawful; provided that, the
corporation may not indemnify a director in connection with any other
proceeding where the director was found liable or where the director was
charged with deriving an improper personal benefit and was found liable on such
basis. Section 16-10a-903 of URBCA provides for mandatory indemnification for
directors in certain limited circumstances, unless otherwise prohibited by a
corporation's articles of incorporation. Section 16-10a-904 of URBCA authorizes
a corporation to pay for or reimburse directors for certain expenses relating
to a proceeding in limited circumstances. Section 16-10a-905 of URBCA allows a
director to apply for a court-ordered indemnification regarding a proceeding in
limited circumstances. Section 16-10a-906 of URBCA specifies the instances and
procedures when a director can be indemnified by a corporation or when a
corporation may advance fees to a director relating to a proceeding. Section
16-10a-907 of URBCA provides that, unless a corporation's articles of
incorporation states otherwise, an officer of the corporation is entitled to
mandatory indemnification under Section 16-10a-903 and court-ordered
indemnification under Section 16-10a-905 to the same extent as a director; in
addition, a corporation may indemnify and advance expenses for an officer,
employee, fiduciary or agent of the corporation to the same extent as a
director; also, unless against public policy or inconsistent with the
corporation's articles of incorporation, bylaws, general or specific action of
the board of directors of the corporation or contract, a corporation may
indemnify and advance expenses for an officer, employee, fiduciary or agent of
the corporation to a greater extent than for a director. Section 16-10a-908 of
URBCA authorizes a corporation to purchase and maintain liability insurance for
a director, officer, employee, fiduciary or agent of a corporation.
Article X of the Amended and Restated Bylaws of the Company (the "Bylaws")
permits indemnification of directors, officers, employees, fiduciaries and
agents of the Company to the maximum extent permitted by Utah law. In addition,
in the event that a court of competent jurisdictions invalidates Article X of
the Bylaws or any portion thereof, the Company shall indemnify each officer or
director of the Company for expenses relating to the settlement of any action,
suit or proceeding to the full extent permitted by any portion of Article X
that has not been invalidated by such court or by another applicable law.
II-1
<PAGE>
Item 16. Exhibits And Financial Statement Schedules.
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
5 Opinion of Fabian & Clendenin, A Professional Corporation.
23.1 Consent of Grant Thornton LLP, Independent Public Accountants.
23.2 Consent of Fabian & Clendenin (included in Exhibit 5).
23.3 Power of Attorney. (See page II-5).
</TABLE>
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 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.
(b) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) 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.
(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
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(d) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
To include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material change
to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
II-2
<PAGE>
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-3
<PAGE>
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California on the 1st day of
November, 2000.
VENTURE CATALYST INCORPORATED
(Registrant)
/s/ L. Donald Speer, II
By: _________________________________
L. Donald Speer, II
Chairman of the Board and
Chief Executive Officer
II-4
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints, jointly and severally, Kevin McIntosh
and Glenn D. Smith, and each of them acting individually, as his attorney-in-
fact, each with full power of substitution and resubstitution, for him or her
in any and all capacities, to sign any and all amendments to this Registration
Statement (including post-effective amendments), and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ L. Donald Speer Chairman of the Board and November 1, 2000
____________________________________ Chief Executive Officer
L. Donald Speer (Principal Executive
Officer)
/s/ Kevin McIntosh Vice President, Chief November 1, 2000
____________________________________ Financial Officer and
Kevin McIntosh Treasurer (Principal
Accounting Officer)
/s/ Stephen M. Dirks Vice President, Corporate November 1, 2000
____________________________________ Development, and Director
Stephen M. Dirks
/s/ Andrew B. Laub Executive Vice President, November 1, 2000
____________________________________ Corporate Development, and
Andrew B. Laub Director
Vice President, Governmental November , 2000
____________________________________ Relations and Director
Jana McKeag
/s/ Glenn D. Smith Executive Vice President, November 1, 2000
____________________________________ General Counsel, Secretary
Glenn D. Smith and Director
/s/ Charles T. Owen Director November 1, 2000
____________________________________
Charles T. Owen
Director November , 2000
____________________________________
Charles Reibel
/s/ Cornelius E. ("Neil") Smyth Director November 1, 2000
____________________________________
Cornelius E. ("Neil") Smyth
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
5 Opinion of Fabian & Clendenin, A Professional Corporation.
23.1 Consent of Grant Thorton LLP, Independent Public Accountants.
Consent of Fabian & Clendenin, A Professional Corporation
23.2 (included in Exhibit 5).
</TABLE>
