<PAGE> 1
As filed with the Securities and Exchange Commission on November 6, 1997
REGISTRATION NO. 333-________
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
UNITED LEISURE CORPORATION
(Name of Small Business Issuer in its Charter)
----------
DELAWARE 13-2652243
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
----------
18081 MAGNOLIA
FOUNTAIN VALLEY, CA 92708
(714) 837-1200
(Address, Including Zip Code and Telephone Number of
Principal Executive Offices)
HARRY SHUSTER
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
18081 MAGNOLIA
FOUNTAIN VALLEY, CA 92708
(714) 837-1200
(Name, Address and Telephone Number
of Agent for Service)
COPIES TO:
GERALD M. CHIZEVER, ESQ.
MADGE S. BELETSKY, ESQ.
RICHMAN, LAWRENCE, MANN, GREENE,
CHIZEVER & PHILLIPS
9601 WILSHIRE BOULEVARD
PENTHOUSE
BEVERLY HILLS, CALIFORNIA 90210
(310) 274-8300
(310) 274-2831(FAX)
<PAGE> 2
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of a prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
- --------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum Amount of
Title of Each Class of Amount to Offering Price Aggregate Registration
Securities to be Registered be Registered Per Share(1) Offering Price Fee
<S> <C> <C> <C> <C>
Common Stock, par value 500,000(2) $.625 $312,500 $97.66
$.01 per share
</TABLE>
- --------------------------------------------------------------------------------
(1) Estimated in accordance with Rule 457 solely for the purpose of determining
the registration fee and based on the last sale price as reported by the
National Association of Securities Dealers Inc. on November 3, 1997.
(2) Includes 350,000 shares of Common Stock underlying Common Stock purchase
warrants, which warrants include one warrant to purchase 150,000 shares of
Common Stock exercisable at the lesser of $.40 per share or 75% of the
average of the last trade prices for the 10 trading days immediately
preceding the exercise of the warrant, and two warrants to purchase 100,000
shares of Common Stock each, each exercisable at $.75 per share
(collectively, the "Warrants"). Pursuant to Rule 416, there are also being
registered such additional shares of Common Stock as may become issuable as
a result of the anti-dilution provisions of the Warrants.
--------------------
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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
ii
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
Subject to Completion, dated November 6, 1997
UNITED LEISURE CORPORATION
500,000 SHARES OF COMMON STOCK
This Prospectus has been prepared for use in connection with the
proposed resale by the selling stockholders described herein (the "Selling
Stockholders"), of an aggregate of up to 500,000 shares of the Company's common
stock, $.01 par value per share (the "Common Stock") consisting of (i) 150,000
shares of Common Stock (the "Shares") and (ii) 350,000 shares of Common Stock
underlying Common Stock purchase warrants, which warrants include one warrant to
purchase 150,000 shares of Common Stock exercisable at the lesser of $.40 per
share or 75% of the average of the last trade prices for the 10 trading days
immediately preceding the exercise of the warrant and two warrants to purchase
100,000 shares of Common Stock each, exercisable at a price of $.75 per share
(collectively, the "Warrants"). The Shares and the shares of Common Stock
underlying the Warrants (collectively, the "Securities"), may be offered and
sold by the Selling Stockholders from time to time directly or through agents or
to or through broker-dealers. See "Plan of Distribution." Unless the context
indicates or otherwise requires, references in this Prospectus to the "Company"
are to United Leisure Corporation and its consolidated subsidiaries.
The Company's Common Stock is traded on the Nasdaq SmallCap Market under
the trading symbol UTDL. On November 3, 1997, the closing price for the Common
Stock as reported by Nasdaq was $.625 per share.
The Company will receive no portion of the proceeds of the sale of the
Securities by the Selling Stockholders; however, the Company will receive
proceeds upon the exercise of the Warrants if and when it is exercised. The
Company will bear the expenses in connection with the registration of the
Securities. See "Plan of Distribution," "Use of Proceeds" and "Selling
Stockholders."
SEE "RISK FACTORS," COMMENCING ON PAGE 7 OF THIS PROSPECTUS, FOR A DISCUSSION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
SECURITIES OFFERED HEREBY.
THE SECURITIES HAVE NOT BEEN REGISTERED FOR SALE UNDER THE SECURITIES
LAWS OF ANY STATE OR JURISDICTION AS OF THE DATE OF THIS PROSPECTUS. BROKERS OR
DEALERS EFFECTING TRANSACTIONS IN THE SECURITIES SHOULD CONFIRM THE EXISTENCE OF
AN EXEMPTION FROM REGISTRATION OR THE REGISTRATION THEREOF UNDER THE SECURITIES
LAWS OF THE STATES IN WHICH SUCH TRANSACTIONS OCCUR.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS _________, 1997.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance therewith files
reports, proxy materials and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy materials and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the Commission:
Seven World Trade Center, 13th Floor, New York, N.Y. 10048 and 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material can also be obtained
from the Public Reference Section of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,
such material can be inspected at the offices of the National Association of
Securities Dealers, Inc., at 1735 K Street, N.W., Washington, D.C. 20006. The
Commission maintains a website that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. The Common Stock is listed on the Nasdaq SmallCap Market,
and the reports, proxy statements and certain other information filed by the
Company may be obtained by calling the Nasdaq Public Reference Room Disclosure
Information Group at (800) 638-8241 or (202) 728-8298.
This Prospectus constitutes a part of the Registration Statement on Form
S-3 (together with all exhibits and amendments thereto, the "Registration
Statement") filed by the Company under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus, which constitutes a part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement, certain items of which are contained in schedules and
exhibits to the Registration Statement as permitted by the rules and regulations
of the Commission. Statements contained in this Prospectus as to the contents of
any agreement, instrument or other document referred to are not necessarily
complete. With respect to each such agreement, instrument or other document
filed as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such reference.
2
<PAGE> 5
DOCUMENTS INCORPORATED BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1996, filed pursuant to Section 13(a) of the Securities
Exchange Act of 1934, containing audited financial statements for the fiscal
year ended December 31, 1996.
(b) The Company's quarterly reports on Form 10-QSB for the fiscal
quarters ended March 31, 1997 and June 30, 1997, and all other reports, if any,
filed by the Company pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 since the quarter ended June 30, 1997, including the
Company's Form 8K filed with the Commission on August 13, 1997 and the Company's
Form 8K/A filed with the Commission on October 14, 1997, containing audited
financial statements for the Las Vegas Property for the year ended December 31,
1996.
(c) The description of the Company's Common Stock contained in
Amendment No. 5 to its Registration Statement on Form SB-2 (Commission File No.
33-81074), as filed with the Commission on November 10, 1994, including any
amendment or report filed for the purpose of updating such description.
All documents filed by the Registrant pursuant to Section 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date hereof and prior to the filing
of a post-effective amendment to this registration statement which indicates
that all securities offered hereunder have been sold, or which deregisters all
securities then remaining unsold under this registration statement, shall be
deemed to be incorporated by reference in this registration statement and to be
a part hereof from the date of filing of such documents. Any statement contained
in a report or document shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in a subsequently filed document which also is or is deemed to be incorporated
by reference in this Prospectus 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 undertakes to provide without charge to each person to whom
a copy of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents referred to above which have been
or may be incorporated by reference herein (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference in
such documents). Requests for such copies should be directed to the Company at
18081 Magnolia, Fountain Valley, CA 92708, Attn: Corporate Secretary (telephone
(714) 837-1200).
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE SELLING STOCKHOLDERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
3
<PAGE> 6
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT.
4
<PAGE> 7
THE COMPANY
Until recently, the primary business of United Leisure Corporation, a
Delaware corporation (the "Company"), had been to act as a developer and manager
(rather than an operator) under a ground lease with The Irvine Company, which
ground lease covered approximately 300 acres of real estate in Irvine,
California (the "Ground Lease"). The Ground Lease terminated on February 28,
1997, and although litigation remains pending with respect to various aspects of
the Ground Lease, the Company does not anticipate that it will have any future
income from its Ground Lease operations. The Company has been planning for the
termination of its Ground Lease for the past several years, and its income from
its Ground Lease operations has been reduced as a percentage of its total income
from operations in the last several years.
The Company currently operates three Camp Frasier day camp locations,
three Planet Kids play/learning centers and one Frasier's Frontier, an amusement
park. The Company intends to continue to operate each of these locations;
however, the Company does not currently anticipate that it will continue to
expand its children's educational and recreational activities in the future.
On July 29, 1997, United Hotel & Casino, L.L.C., a Delaware limited
liability company ("UHC"), of which the Company currently owns a 50% membership
interest, acquired, in fee simple, approximately 8.5 acres of partially
developed land on the Las Vegas Strip in Las Vegas, Nevada (the "Las Vegas
Property"). The Las Vegas Property is located at 3025 Las Vegas Boulevard and
currently contains a shopping center consisting of approximately 20 retailers
and The Silver City Casino. Upon the acquisition of the Las Vegas Property, UHC
became the lessor of the shopping center and the Silver City Casino. The Silver
City Casino is owned and operated by Circus Circus and it is anticipated that
Circus Circus will continue to operate this casino on the Las Vegas Property.
UHC currently intends to continue to lease the existing shopping center on the
Las Vegas Property, but in the future UHC may determine to further develop the
Las Vegas Property. The Company has the right to appoint one member of the three
member management committee of UHC.
Since 1986 the Company has been engaged in protracted and expensive
litigation involving the Ground Lease with its landlord, The Irvine Company, in
Orange County Superior Court (Case No. 49-12-02). The case is styled The Splash
v. The Irvine Company, et al. (the "Irvine Company Litigation"). The Irvine
Company Litigation, as well as several other actions between the Company and The
Irvine Company, and actions between the Company and its subtenants under the
Ground Lease, are still pending. In the Irvine Company Litigation the Company
was awarded a jury verdict in the total approximate amount of $42 million in
November 1993, and the Irvine Company was denied any recovery against the
Company on its claims. In April 1994, the Court granted a new trial on post-
verdict motions brought by the Irvine Company. The Company has appealed this
order. The appeal has been fully briefed and is currently scheduled for oral
argument in mid- November 1997. If a new trial is ordered in connection with the
Irvine Company Litigation, the Company anticipates that it may have to incur
substantial additional legal fees. In view of the inherent uncertainties of
litigation, the ultimate outcome of the Irvine Company Litigation cannot be
predicted.
5
<PAGE> 8
The Company was incorporated under the laws of the State of Delaware in
May 1969 under the name "Lion Country Safari, Inc." The Company has operated and
plans to continue to operate primarily as a holding company for its operating
subsidiaries. The Company's executive offices are located at, and its mailing
address is, 18081 Magnolia, Fountain Valley, CA 92708. Its telephone number is
(714) 837-1200.
6
<PAGE> 9
RISK FACTORS
An investment in the securities offered hereby is highly speculative and
involves a high degree of risk. Prospective investors should carefully consider
all of the information contained in this Prospectus and, in particular, the
following factors which could materially and adversely affect the operations and
prospects of the Company or an investment therein, before making a decision to
purchase any Securities offered hereby:
The Irvine Company Litigation; New Trial Ordered. The Company has been
engaged in protracted and expensive litigation with its landlord under the
Ground Lease, The Irvine Company, since 1986. The Irvine Company Litigation has
been characterized by years of legal maneuvering by both parties. In November
1993, after a six-week trial, the Company obtained a judgment in the approximate
amount of $42,000,000; however, on post-trial motions, a new trial was ordered.
The Company has appealed this Order and the appeal has been fully briefed and is
currently scheduled for oral argument in mid-November 1997. There are
substantial claims against the Company involved in The Irvine Company Litigation
and there can be no assurance that a second trial, if held, would not result in
a judgment adverse to the Company. There can be no assurance as to the ultimate
outcome of the Irvine Company Litigation and purchasers of Securities should not
rely on the verdict in the first trial as having any bearing on the results
which may obtain from a new trial, if any.
Operating Losses; Accumulated Deficit; Uncertainly of Future Results.
The Company has experienced net losses from its operations for an extended
period of time. In 1995 and 1996 and for the six months ended June 30, 1997, the
Company experienced losses of $604,183, $403,275 and $1,675,644, respectively.
These losses, incurred over a number of years, have resulted in an accumulated
deficit of $14,285,906 at June 30, 1997. The Company can make no assurances that
the future operations of the Company will result in profitable operations.
Although the Company believes a significant portion of its negative operating
results in recent years is due to the legal fees and costs associated with the
Irvine Litigation and related actions and due to development costs incurred in
connection with the Company's expansion into a new field of operations
(childrens' recreational and educational activities), there can be no assurance
that the Company will be able to be operated profitably in the future. The
Company anticipates that it will continue to experience net operating losses as
it continues working on its ongoing development plans, including the future
development of The Las Vegas Property. Even after the Company's development
plans are completed, and the Irvine Company Litigation is concluded, there can
be no assurance that the Company's operations will be operated profitably.
Dependence on Management. The Company's success will depend largely upon
the Company's management, in particular, Harry Shuster, the Company's Chairman
of the Board, President and Chief Executive Officer. The Company has entered
into a Consulting Agreement with Mr. Shuster the initial term of which expires
on May 31, 1999 and which is thereafter renewable for additional terms of one
year each unless terminated by either party. The loss of the services of Mr.
Shuster, or other key management personnel, would have a material adverse effect
on the Company's business and prospects.
7
<PAGE> 10
Time to be Devoted by Management. The Company relies on the services of
the Company's Chairman, Harry Shuster. However, Mr. Shuster is also the Chairman
of the Board and Chief Executive Officer of one other public company, Grand
Havana Enterprises, Inc. ("Grand Havana"), and the Chairman of the Board of a
company that currently has a registration statement on file with the Securities
and Exchange Commission, United Film Distributors, Inc. ("United Film"). Mr.
Shuster devotes substantial time to the business and affairs of these two other
entities. Mr. Shuster is also involved with several private companies that take
up a portion of his time. Although Mr. Shuster intends to devote such time to
the business of the Company as he deems necessary for its operations, there can
be no assurance that Mr. Shuster will be available to handle any crisis
situation that may arise, and if Mr. Shuster is unavailable, it is possible that
the resolutions of such crises may be less favorable than the resolutions that
could have been reached had Mr. Shuster been available. In addition, as a result
of competing demands for Mr. Shuster's time, he may grant priority to other
positions he holds at times when the Company would benefit from his services.
Conflicts of Interest/Potential for Compromise of Management's Fiduciary
Duties. The Company is subject to actual and potential conflicts of interest
arising out of the relationships between and among the Company and its officers
and directors and their affiliates. Due to these actual and potential conflicts
of interest there is significant potential for the fiduciary duties of the
officers and directors of the Company to be compromised. The officers and
directors of the Company are aware of their fiduciary obligations to act in good
faith and in a manner the officers and directors reasonably believe to be in or
not opposed to the best interest of the Company, and the officers and directors
of the Company intend to comply with their fiduciary obligations, however,
should the officers and directors breach their fiduciary obligations to the
Company, the remedies available to stockholders in such circumstances under
state law, including the stockholders bringing a derivative action on behalf of
the Company against an officer or director, would likely be prohibitively
expensive and time consuming for the stockholders to pursue.
As of September 30, 1997, the Company had loaned Grand Havana the
principal amount of $775,000 which, pursuant to the terms of a financing
agreement, as amended, is due March 31, 1998. In addition, the Company has
pledged $875,000 as collateral to support a letter of credit for the benefit of
Grand Havana, which collateral Grand Havana has agreed to replace in full by
March 1998. Although the Company believes that Grand Havana will meet its
repayment obligations to the Company when they become due, there can be no
assurance that this will be the case. In addition, the Company has entered into
a consulting agreement with Harvey Bibicoff, who is a director of Grand Havana,
pursuant to which in consideration for consulting services rendered, Mr.
Bibicoff received 150,000 shares of the Common Stock of the Company and the
right to receive 2-1/2% of the membership interest in UHC held by the Company on
or before August 1, 1999. Further, Mr. Bibicoff made a short term loan to the
Company of $900,000 in connection with the acquisition of the Las Vegas
Property, $875,000 of which the Company has since repaid. The terms of the loans
made by the Company to Grand Havana, the terms of the loan made by Mr. Bibicoff
to the Company, and the consulting agreement between the Company and Harvey
Bibicoff were not arrived at by arms' length negotiations, and therefore may be
on terms less favorable to the Company than if the Company had entered into
these agreements with unaffiliated third parties.
8
<PAGE> 11
Delaware law provides that a contract that a corporation enters into in
which its officers and directors or affiliates of its officers and directors
have a financial interest (a "Related Party Contract") is not void or voidable
if the material facts as to the relationship or interest and as to the contract
are disclosed or are known to the Board of Directors, and the Board in good
faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested directors
be less than a quorum. Delaware law further provides that a Related Party
Contract is not void or voidable if the contract or transaction is fair to the
corporation at the time it is authorized, approved or ratified by the Board of
Directors. Management's current policy is to permit the Company to enter into
Related Party Contracts so long as such contracts would not be void or voidable
under Delaware law. Accordingly, with respect to each of the Related Party
Contracts described above, the Company's Board of Directors is fully aware of
the relevant relationships and financial interests involved, and the
disinterested Board members have adopted resolutions, in good faith, approving
each of such Related Party Contracts. Management may enter into additional
Related Party Contracts in the future so long as the Board of Directors is aware
of the relationship and financial interest of an officer and director in the
contract and the contract is approved by the disinterested directors in good
faith. None of the Related Party Contracts described above has been submitted to
the stockholders for their approval and the Company does not intend to submit
such Related Party Contracts to the stockholders for their approval in the
future unless such approval is required by law or by the rules of any regulatory
authority, e.g., NASDAQ.
Limitation on Director Liability. As permitted by Delaware corporation
law, the Company's Certificate of Incorporation limits the liability of
Directors to the Company and its stockholders for monetary damages for breach of
a Director's fiduciary duty except for liability in certain instances.
General Economic Conditions. The marketability and profitability of the
Las Vegas Property may be adversely affected by changes in the general and local
economic conditions in the area in which the property is located, as well as
changes in national economic conditions. A local economy may be adversely
affected by unemployment, inflation, recession, competition, adverse weather,
acts of God, unavailability of materials or skilled labor, poor economic
conditions and other factors, none of which can be predicted with certainty. If
the local economy of the Las Vegas, Nevada area is adversely affected, it could
have a material adverse impact on the Company.
Defaults by Tenants/Vacancies. Defaults by tenants of the Las Vegas
Property on their rental obligations, or failure to obtain replacement tenants
should present or future tenants leave, could result in substantially less cash
available for UHC and therefore for the Company. Less cash available for UHC
could cause UHC to default on the payment of its mortgage obligations with
respect to the Las Vegas Property, which default could result in foreclosure of
the Las Vegas Property which in turn would result in a material adverse effect
to the Company's business, financial condition and results of operations. Of the
approximately 22 tenants on the Las Vegas Property, the Silver City Casino
accounted for approximately one-half of all rental received from the Las Vegas
Property as of July 31, 1997. The lease for the Silver City Casino expires on
October 31, 1999. If the Las Vegas Property should lose the Silver City Casino
as a tenant and were not able to fill the vacancy,
9
<PAGE> 12
or could not receive the same rental from a new tenant, this could have a
material adverse effect on the business, financial condition and results of
operation of the Company.
Control of Las Vegas Property. The Operating Agreement pursuant to which
UHC is operated provides that the Company has the right to appoint only one
member of the current three member management committee of UHC. Accordingly, the
Company will not be able to control any operational decisions with respect to
the Las Vegas Property.
Third Party Financing/Possible Future Dilution of Ownership in UHC. In
connection with the purchase of the Las Vegas Property by UHC, the Company was
required to make a capital contribution to UHC of approximately $3,800,000. In
order to enable the Company to meet its capital contribution obligation,
Westminster Capital, Inc., an unrelated third party, made a loan of $1,900,000
to the Company. The Westminster Loan bears interest at 15% per annum, is
evidenced by a secured promissory note (the "Note") and is due on the earlier to
occur of (i) the demand of the holder (which demand may not be made prior to
July 29, 1998 unless there is a sooner event of default) or (ii) July 29, 1999
(the "Maturity Date"). The holder of the Note has the right, at any time prior
to the Maturity Date, to convert the entire outstanding principal balance of the
Note into a 25% membership interest in UHC which would leave the Company with
only a 25% membership interest in UHC after such conversion. Accordingly, if UHC
operates with a positive cash flow, the holder of the Note could convert the
Note into a membership interest in UHC leaving the Company with only a 25%
indirect interest in the Las Vegas Property. In addition, the Note is secured,
by among other things, the 50% membership interest that the Company owns in UHC
as well as 408,333 of the 941,666 shares of common stock which the Company owns
in Grand Havana. If the Company should default on the Note, the default could
result in the foreclosure on a significant amount of the Company's assets, which
foreclosure would have a material adverse effect on the Company's business,
financial condition and results of operations.
Balloon Payment. The promissory note assumed by UHC in connection with
the acquisition of the Las Vegas Property, which currently has an outstanding
principal balance in excess of $16 million, does not provide for full
amortization, requiring instead, a "balloon" payment of the unpaid principal
balance plus accrued interest on December 31, 2002. Although the Company
believes UHC will be able to refinance the Las Vegas Property prior to the date
set for the balloon payment upon terms acceptable to UHC, there can be no
assurance that it will be able to do so. If UHC is unable to refinance this loan
prior to December 31, 2002 on terms acceptable to UHC, it would not be able to
meet the balloon payment due in December 31, 2002 from the net cash flow from
the Las Vegas Property, and it would have to find other sources with which to
make such payment. There can be no assurance that UHC or the Company would be
able to obtain funding in order to make such balloon payment.
Uninsured Losses. Although UHC will maintain comprehensive insurance for
the Las Vegas Property, including liability, fire and extended coverage, of a
type and in an amount which is customarily obtained on similar properties, there
are certain types of losses (generally of a catastrophic nature, such as
earthquakes and floods) which are either uninsurable or not economically
insurable. Should such a disaster occur to or cause the
10
<PAGE> 13
destruction of any of the Las Vegas Property, the Company could lose both its
invested capital and anticipated cash flow with respect to any such properties.
Environmental Risks. Real estate in general is subject to certain
environmental risks, arising from the location or site on which a project is
built or from materials used in construction or stored or used on the property.
Although the Company is unaware of any environmental problems associated with
the Las Vegas Property, the occurrence of hazardous environmental conditions on
the Las Vegas Property may only become apparent after a lengthy period of time.
Thus, there can be no assurance that there are no environmental risks with
respect to the Las Vegas Property. If hazardous substances are discovered on the
Las Vegas Property, or discovered to be emanating from any of such properties,
UHC, as the owner or operator of the property may be held strictly liable for
all costs and liabilities relating to such hazardous substances. The Company is
not subject to or aware of any environmental problems relating to the Las Vegas
Property at this time which may have a financial or other adverse impact on the
Company or UHC.
Competition. The Company will face competition with respect to
attracting and retaining tenants for the Las Vegas Property. The Las Vegas,
Nevada commercial rental market is a generally competitive one. If UHC should
not be able to fill vacancies as they arise in the Las Vegas Property due to
competition for tenants in the Las Vegas, Nevada area, it may be forced to lower
its current rental rates or it may be faced with substantial time lags before it
is able to fill vacancies.
The Company's children's day camps and play learning centers compete
with numerous competitors, many of which have substantially greater financial,
marketing, personnel and other resources than the Company. It is also likely
that other competitors will emerge in the future. The Company will compete with
companies that have greater market recognition, greater resources and broader
capabilities than the Company. As a consequence, there is no assurance that the
Company will be able to successfully compete in the marketplace.
Uncertain Success of New Business Areas. The Company opened its first
Planet Kids play learning center in July 1995 with its other two Planet Kids
locations opening in December 1995 and September 1996. In addition, the 3
childrens' day camps operated by the Company (not including the day camp located
on the Irvine Property which ceased to be operational upon termination of the
Ground Lease), had their first full summer of operations in 1996. Accordingly,
the Company has only relatively recently been operating its three existing day
camps, three plant kids location and one Frasier's Frontier amusement Park. This
new business area for the Company will take additional time to develop and there
can be no assurance that this new business area will be a success.
In addition, UHC acquired the Las Vegas Property in July 1997. Although
the Company had pervious experience in managing real property when it served as
sublessor under the Ground Lease, the Company has never owned or managed a
commercial shopping center in Las Vegas, Nevada and there can be no assurance
that the Company, through its representative on the management committee, will
be able to do so successfully.
11
<PAGE> 14
Possible Need for Additional Financing. The Company's future capital
requirements will depend on numerous factors. If the $42 million judgment in the
Irvine Company Litigation is not upheld and a new trial is ordered, the Company
anticipates that it will continue to expend significant funds on legal expenses.
Further, in the Irvine Company Litigation The Irvine Company had also asserted
claims against the Company under the Ground Lease and it is possible that if
there is a new trial that the Company could be held liable to The Irvine
Company. There are numerous uncertainties associated with the various aspects of
the Irvine Company Litigation and the outcome of these matters could have a
material impact on the Company's liquidity in ways in which the Company's
management is currently unable to predict. Although management believes that its
current cash from operations, distributions received by the Company as a result
of its investments, and repayment to the Company of amounts previously advanced
by the Company to Grand Havana will provide the Company with sufficient funds to
meet the Company's anticipated need for working capital and capital expenditures
for at least the next 12 months, there can be no assurance that this will be the
case, in particular with respect to various uncertainties surrounding the Irvine
Company Litigation and related actions. In addition, if UHC should determine to
further develop the Las Vegas Property, the Company may be required to make
additional capital contributions to UHC in order to fund these development
costs. If the Company is in need of additional financing, there can be no
assurance that additional financing will be available to the Company on
acceptable terms, or at all.
New NASDAQ SmallCap Market Criteria. The Common Stock is traded on The
NASDAQ SmallCap Market under the symbol "UTDL." Continued qualification to trade
on the NASDAQ SmallCap Market is subject to certain quantitative and qualitative
criteria. Changes to these criteria were effected on August 22, 1997 and
companies have until February 22, 1998 to comply with these new criteria. Among
the quantitative criteria is a new requirement of a minimum bid price for the
Common Stock of at least $1.00 per share. The minimum bid price of the Common
Stock of the Company has often been under $1.00 per share in the past two years.
Although management believes that as a result of its new business activities in
connection with the acquisition and management of the Las Vegas Property by UHC,
that the Common Stock will be able to maintain a minimum bid price of at least
$1.00 in the future, there can be no assurance that this will be the case. Among
the new qualitative criteria are several which the Company does not currently
meet, including (i) distribution of annual and interim reports, (ii) an audit
committee, a majority of which are independent directors; (iii) an annual
stockholders meeting and (iv) review of conflicts of interest. Although the
Company intends to comply with all of these criteria by the date set by NASDAQ
for compliance, failure to comply would result in de-listing from the NASDAQ
SmallCap Market.
Control by Management. Following completion of this offering, Harry
Shuster, the Chairman of the Board, President and Chief Executive Officer of the
Company, will beneficially own, in the aggregate, approximately 35% of the
outstanding shares of Common Stock of the Company (assuming options to purchase
an aggregate of 506,950 shares were exercised by Mr. Shuster). Accordingly, Mr.
Shuster will have significant influence over the outcome of all matters
submitted to the stockholders for approval, including the election of Directors
of the Company.
12
<PAGE> 15
No Dividends on Common Stock. Should the operations of the Company be
profitable, it is likely that the Company would retain much or all of its
earnings in order to finance future growth and expansion. Therefore, the Company
does not presently intend to pay dividends, and it is not likely that any
dividends will be paid in the foreseeable future. The Company has paid no
dividends in the past.
Additional Authorized Shares Available for Issuance. The Company is
authorized to issue 30,000,000 shares of Common Stock. A total of 12,518,849
shares of Common Stock are currently issued and outstanding and an additional
6,391,950 shares of Common Stock have been reserved for future issuance in
connection with the exercise of options and warrants that are currently
outstanding. Accordingly, an aggregate of 11,089,201 shares of authorized but
unissued shares of Common Stock are available for issuance without further
stockholder approval. As a result, any issuance of additional shares of Common
Stock may cause current stockholders of the Company to suffer significant
dilution which may adversely affect the market.
Rule 144 Sales; Future Sales of Common Stock. As of October 15, 1997 the
Company had outstanding 12,518,849 shares of Common Stock of which a total of
approximately 4,724,792 shares are "restricted securities" as that term is
defined under Rule 144 of the Securities Act and may be sold in compliance with
Rule 144 of the Securities Act. Ordinarily, under Rule 144, a person who is an
affiliate of the Company (as that term is defined in Rule 144) and has
beneficially owned restricted securities for a period of one year may, every
three months, sell in brokerage transactions an amount that does not exceed the
greater of (i) 1% of the outstanding class of such securities or (ii) the
average weekly trading volume of trading in such securities on all national
exchanges and/or reported through the automated quotation system of a registered
securities association during the four weeks prior to the filing of a notice of
sale by a securities holder. A person who is not an affiliate of the Company who
beneficially owns restricted securities is also subject to the foregoing volume
limitations but may, after the expiration of two years, sell unlimited amounts
of such securities under certain circumstances. All but 150,000 of the
"restricted securities" have been held in excess of two years and the 150,000
shares which have been less than two years are being registered in this
offering. Possible or actual sales of the Company's outstanding Common Stock by
certain of the present stockholders under Rule 144, as well as the sale of the
shares by the Selling Stockholders in this offering, may have a depressive
effect on the price of the Company's Common Stock and could impair the Company's
ability to raise capital through the sale of its equity securities.
In addition, the Company currently has outstanding options to purchase
an aggregate of 866,950 shares exercisable at prices ranging from $.30 to $1.38
per share, Class A Warrants issued in the Company's 1994 public offering to
purchase an aggregate of 4,945,000 shares of Common Stock at an exercise price
of $4.00 per share, warrants to purchase 430,000 shares of Common Stock issued
to the underwriter in connection with the Company's 1994 public offering at an
exercise price of $6.60 per share and the Warrant which is exercisable to
purchase 150,000 shares of Common Stock at the lesser of $.40 per share or 75%
of the average of the last trade prices for the 10 trading days immediately
preceding exercise of the warrant, and warrants to purchase an aggregate of
200,000 shares of Common Stock where are exercisable at $.75 per share. The sale
of the shares of Common Stock underlying such convertible securities could have
a further depressive effect
13
<PAGE> 16
on the price of the Common Stock and could further impair the Company's ability
to raise capital through the sale of its equity securities.
Volatility of Market Price for the Common Stock. The market price for
the Common Stock prior to the date hereof has been highly volatile. Factors such
as the Company's operating results and announcements by the Company or its
competitors may have a significant impact on the market price for the Common
Stock. Additionally, in recent years, the stock market has experienced a high
level of price and volume volatility and market prices for the stock of many
companies have experienced wide price fluctuations not necessarily related to
the operating performance of such companies.
"Penny Stock" Regulations. The Commission has adopted regulations which
generally define a "penny stock" to be any equity security that has a market
price (as defined) of less than $5.00 per share or an exercise price of less
than $5.00 per share, subject to certain exceptions, including an exception with
respect to securities quoted by NASDAQ. If the Company's Common Stock ceases to
be quoted by NASDAQ, the Company's securities would likely be considered "penny
stock" and thereby become subject to rules that impose additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those with assets in
excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together
with their spouse). For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchase of such
securities and must have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior to the
transaction, of a disclosure schedule prepared by the Commission relating to the
penny stock market. The broker-dealer also must disclose the commission payable
to both the broker-dealer and the registered representative, current quotations
for the securities and, if the broker-dealer is the sole market-maker, the
broker-dealer must disclose this fact and the broker-dealer's presumed control
over the market. Finally, monthly statements must be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks. Consequently, the "penny stock" rules may
restrict the ability of broker-dealers to sell the Company's securities and may
affect the ability of purchasers in this offering to sell their Common Stock.
Possible Adverse Effects of Authorization of Preferred Stock. The
Company's Certificate of Incorporation authorizes the issuance of a maximum of
100,000 shares of Preferred Stock on terms that may be fixed by the Company's
Board of Directors without further stockholder action. The terms of any series
of Preferred Stock, which may include priority claims to assets and dividends,
and special voting rights, could adversely affect the rights of holders of the
Common Stock. No Preferred Stock is currently outstanding and the Company has no
current plans to issue such Preferred Stock. The issuance of such Preferred
Stock could make the possible takeover of the Company or the removal of
management of the Company more difficult, discourage hostile bids for control of
the Company in which stockholders may receive premiums for their shares of
Common Stock, or otherwise dilute the rights of holders of Common Stock and the
market price of the Common Stock.
14
<PAGE> 17
USE OF PROCEEDS
All of the Securities offered hereby are being offered by the Selling
Stockholders for their own accounts. The Company will not receive any proceeds
from the sale of the Securities by the Selling Stockholders. Assuming exercise
of the Warrants in full, the Company would receive gross proceeds from the
exercise of the Warrants of approximately $210,000. The Company believes that
the exercise of the Warrants will depend on the market price of a share of
Common Stock at the time of exercise and its relation to the exercise prices of
the Warrants.
The Company intends to use the net proceeds from the exercise of the
Warrants, if any, for working capital and general corporate purposes. Pending
application of the proceeds, the Company intends to place the funds in
interest-bearing investments such as bank accounts, certificates of deposit and
United States Government obligations.
PLAN OF DISTRIBUTION
The Securities being sold by the Selling Stockholders are being sold for
their own accounts. The Company will not receive any of the proceeds from such
sales, except proceeds received by the Company upon the exercise of the
Warrants. See "Use of Proceeds."
The Selling Stockholders may sell the Securities from time to time
through dealers or brokers in transactions on the Nasdaq Stock Market at prices
then prevailing, or directly to one or more purchasers in negotiated
transactions at negotiated prices, or in a combination thereof. The Selling
Stockholders and any dealers or brokers that participate in such distribution
may be deemed "underwriters" within the meaning of the Securities Act and any
commissions or discounts received by any such dealer or broker may be deemed
"underwriting compensation."
The Common Stock of the Company is traded on the Nasdaq SmallCap Market
under the symbol "UTDL."
The costs of registering the Securities will be paid by the Company.
There can be no assurances that the Selling Stockholders will sell any
or all of the Securities offered hereunder.
15
<PAGE> 18
SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders,
the number of shares of the Company's Common Stock beneficially owned by the
Selling Stockholders, the number of shares that may be sold by the Selling
Stockholders in this Offering, and the number of shares of Common Stock to be
owned by the Selling Stockholders, and the percentage of Common Stock to be
owned by the Selling Stockholders, assuming all of the shares of Common Stock
are sold in this Offering.
<TABLE>
<CAPTION>
Before Offering After Offering
---------------------------------- ----------------------------
Number of Shares Number of Shares Number of Shares Percent of
Beneficially to Be Sold in Beneficially Outstanding
Owned(1) Offering Owned Shares
-------- -------- ----- ------
<S> <C> <C> <C> <C>
Westminster Capital, Inc.(2) 150,000(3) 150,000 0 *
Harvey Bibicoff(4) 310,000 150,000 160,000 1.3%
Whale Securities Co., L.P.(5) 100,000(6) 100,000 0 *
Mary Jane Shapiro(5) 100,000(6) 100,000 0 *
</TABLE>
- --------------------------
* Less than 1%
(1) As of October 15, 1997 there were 12,518,849 shares of Common Stock
outstanding.
(2) Westminster Capital, Inc. received its warrant to purchase 150,000 shares
of Common Stock as consideration for a loan made by Westminster Capital,
Inc. to the Company. See "Risk Factors-- Third Party Financing/Possible
Future Dilution of Ownership in UHC."
(3) Includes 150,000 shares of Common Stock issuable upon exercise of a
warrant.
(4) Harvey Bibicoff received 150,000 shares of the Common Stock being sold in
this offering in consideration for consulting services rendered to the
Company. Mr. Bibicoff is a director of Grand Havana Enterprises, Inc., an
affiliate of the Company.
(5) Whale Securities Co., L.P. received warrants to purchase 200,000 shares of
the Company's Common Stock in consideration for entering into a financial
consulting agreement with the Company. Warrants to purchase 100,000 of the
200,000 shares were designated by Whale Securities Co., L.P. to go to Mary
Jane Shapiro, the spouse of a principal of that firm.
(6) Includes 100,000 shares of Common Stock issuable upon exercise of a
warrant.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
OF SECURITIES ACT LIABILITIES
The Company's Certificate of Incorporation and By-laws provide for
indemnification of its directors and officers to the fullest extent permitted by
Delaware law. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
16
<PAGE> 19
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-KSB of the Company for the year ended December 31,
1996, and the financial statements incorporated in this Prospectus by reference
to the Form 8K/A filed by the Company with the Commission on October 14, 1997,
have been incorporated in reliance on the report of Hollander, Gilbert & Co.,
independent certified public accountants, given upon the authority of said firm
as experts in auditing and accounting.
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for
the Company by Richman, Lawrence, Mann, Greene, Chizever, Friedman & Phillips,
Beverly Hills, California.
17
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a schedule of the estimated expenses (all of which will
be borne by the Company) incurred in connection with the offering of the
securities registered hereby, other than underwriting discounts and commissions,
if any. All of the amounts shown are estimates, except the SEC Registration Fee.
<TABLE>
<S> <C>
SEC registration fee............................... $ 97.66
Blue Sky fees and expenses......................... 2,000.00*
Accounting fees and expenses....................... 2,500.00*
Legal fees and expenses............................ 10,000.00*
Miscellaneous...................................... 1,500.00*
----------
Total.............................................. $16,097.66*
==========
</TABLE>
-----------------
* estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102(b)(7) of the General Corporation Law of the State of
Delaware grants corporations the right to limit or eliminate the personal
liability of their directors in certain circumstances in accordance with
provisions therein set forth. The Company's Certificate of Incorporation, as
restated, provides for the elimination of personal liability of a Director to
the corporation or its stockholders for monetary damages for the breach of the
Director's fiduciary duty to the full extent allowable under Section 102(b)(7).
Section 145 of the General Corporation Law of the State of Delaware
grants corporations the right to indemnify their directors, officers, employees
and agents in accordance with the provisions therein set forth. The Company's
Bylaws provide for indemnification of such persons to the full extent allowable
under applicable law. In addition, the Company has entered into indemnity
agreements with each of its Directors, which generally provide contractual
indemnity protection which is coextensive with the indemnity provisions of the
General Corporation Law of the State of Delaware and the Company's Bylaws.
ITEM 16. EXHIBITS.
See the Exhibit Index which is incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
II-1
<PAGE> 21
(i) To include any Prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) To reflect in the Prospectus any facts or events
which, individually or together, represent a fundamental change
in the information set forth in the Registration Statement;
(iii) To include any additional or changed material
information on the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement.
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
section 13 or 15(d) of the Exchange Act that are incorporated by reference in
this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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 the 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) 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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Registrant's Articles of Incorporation, By-Laws 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 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 which 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 and will be governed by the final adjudication of such issue.
II-2
<PAGE> 22
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 Los Angeles, State of California, on this 3rd day of
November 1997.
UNITED LEISURE CORPORATION
By /s/ HARRY SHUSTER
-------------------------------------
Harry Shuster
Chairman of the Board,
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Harry Shuster and Brian Shuster, and each of
them, his attorney-in-fact with power of substitution for him in any and all
capacities, to sign any amendments, supplements, subsequent registration
statements relating to the offering to which this Registration Statement
relates, or other instructions he deems necessary or appropriate, and to file
the same, with exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that said attorney-in-fact or his substitute may 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 this 3rd day of November 1997.
SIGNATURE TITLE
--------- -----
/s/ Harry Shuster Chairman of the Board,
- ------------------------------ President and Chief Executive
Harry Shuster Officer (Principal Executive Officer
and Principal Financial Officer)
and a Director
/s/ Alvin Cassel Director
- ------------------------------
Alvin Cassel
/s/ Brian Shuster Vice President and
- ------------------------------ Director
Brian Shuster
/s/ Alvin Alexander Director
- ------------------------------
Alvin Alexander
Director
- ------------------------------
J. Brooke Johnston, Jr.
II-3
<PAGE> 23
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
No. Description No.
<S> <C> <C>
(5) Opinion of Richman, Lawrence, Mann, Greene, Chizever, Friedman &
Phillips.
(23)-1 Consent of Richman, Lawrence, Mann, Greene, Chizever, Friedman &
Phillips (included in Exhibit 5).
(23)-2 Consent of Hollander, Gilbert & Co., independent public accountants.
(24) Powers of Attorney (included on the signature page in Part II of this
Registration Statement).
</TABLE>
<PAGE> 1
[LETTERHEAD OF RICHMAN, LAWRENCE, MANN, GREENE,
CHIZEVER & PHILLIPS]
Exhibit 5
November 5, 1997
United Leisure Corporation
18081 Magnolia
Fountain Valley, CA 92708
Ladies and Gentlemen:
We have been requested by United Leisure Corporation, a Delaware
corporation (the "Company"), to render our opinion in connection with the
registration under the Securities Act of 1933, as amended, and the public
offering by each of the Selling Stockholders named in the Registration Statement
(as defined below), of up to 500,000 shares of common stock of the Company
("Common Stock") consisting of (i) 150,000 shares of Common Stock (the "Shares")
and (ii) 350,000 shares of Common Stock (the "Warrant Shares") underlying
certain Common Stock purchase warrants (the "Warrants").
We have examined the Company's Registration Statement on Form S-3 in the
form to be filed with the Securities and Exchange Commission on or about
November 5, 1997 (the "Registration Statement"). We have examined such further
documents as we have deemed necessary as a basis for the opinion hereafter
expressed.
Based on the foregoing, we are of the opinion that, the Shares and the
Warrant Shares have been duly authorized, and, upon exercise of the Warrants as
provided for in the instruments evidencing the same, and payment of the exercise
price for the Warrant Shares, both the Shares and the Warrant Shares will be
validly issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
RICHMAN, LAWRENCE, MANN, GREENE,
CHIZEVER, FRIEDMAN & PHILLIPS
By: /s/ Gerald M. Chizever
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-3, to be filed with the Securities and Exchange Commission
on or about November 5, 1997, of our report, dated March 20, 1997, on our audits
of the consolidated financial statements of United Leisure Corporation and
subsidiaries and to our report, dated October 1, 1997, on our audit of the
historical summary of revenues and direct operating expenses of the Las Vegas
Plaza Shopping Center for the year ended December 31, 1996. We also consent to
the reference of our firm under the caption "Experts" in the registration
statement.
/s/ Hollander, Gilbert & Co.
Los Angeles, California
November 5, 1997
