<PAGE>
Prospectus filed pursuant to Rule 424(b)(3)
Registration Statement on Form S-3
(Reg. No. 33-63841)
PROSPECTUS
NATIONAL MEDIA CORPORATION
1700 Walnut Street
Philadelphia, Pennsylvania 19103
(215) 772-5000
------------------------------------
9,537,217 Shares of Common Stock
------------------------------------
This Prospectus concerns the offer and sale by certain Selling
Shareholders (as described herein), from time to time, of up to 554,456 shares
of the common stock, par value $.01 per share (the "Common Stock"), of National
Media Corporation, a Delaware corporation ("NMC" and, together with its
subsidiaries, the "Company"), issued by the Company to such Selling Shareholders
on October 25, 1995 in connection with the merger (the "Merger") of
DirectAmerica Corporation and California Production Group, Inc. (collectively,
"DirectAmerica") with and into a wholly-owned subsidiary of NMC. See "SELLING
SHAREHOLDERS AND RELATED INFORMATION." All shares of Common Stock issued by the
Company in connection with the Merger are hereinafter referred to as the "Merger
Shares."
This Prospectus also concerns the offer and sale by certain Selling
Shareholders, from time to time, of up to 2,557,960 shares of Common Stock
issuable upon the conversion of 255,796 shares of Series B Convertible Preferred
Stock, par value $.01 per share (the "Series B Preferred Stock"). The Series B
Preferred Stock was issued by the Company to such Selling Shareholders during
the period of October 1994 through December 1994. See "SELLING SHAREHOLDERS AND
RELATED INFORMATION." The Series B Preferred Stock is convertible into an
aggregate of 2,557,960 shares of Common Stock. The shares of Common Stock
issuable upon conversion of the Series B Preferred Stock are hereinafter
referred to as the "Series B Shares."
This Prospectus also concerns the offer and sale by certain Selling
Shareholders, from time to time, of up to 6,424,801 shares of Common Stock
issuable upon the exercise of Warrants (as hereinafter defined) issued by the
Company. The Warrants consist of (i) 3,069,552 Common Stock purchase warrants
(3,027,000 of which have an exercise price of $4.80 per share of Common Stock
and 42,552 of which have an exercise price of $5.74 per share of Common Stock)
(the "Acquisition Warrants") issued by the Company to certain of the Selling
Shareholders in connection with their purchase of the Series B Preferred Stock
during the period of October 1994 through December 1994; (ii) 2,250,000 Common
Stock purchase warrants with an exercise price of $4.80 per share of Common
Stock (the "Loan Warrants") issued by the Company to certain of the Selling
Shareholders in connection with a $5.0 million term loan made by such Selling
Shareholders to the Company in October 1994 (the "Term Loan"); (iii) 500,000
Common Stock purchase warrants with an exercise price of $8.865 per share of
Common Stock (the "ValueVision Warrants") issued by the Company to ValueVision
International, Inc. ("ValueVision") on November 24, 1995 pursuant to the terms
of certain agreements between the Company and ValueVision entered into by such
parties in April 1995 (the "ValueVision Agreements") in connection with the
settlement of certain disputes described more fully in the Company's Current
Report on Form 8-K, dated April 13, 1995; (iv) 500,000 Common Stock purchase
warrants with an exercise price of $10.00 per share of Common Stock (the
"Holders' Warrants") issued by the Company on November 24, 1995 to the holders
of certain promissory notes issued by the Company in connection with the Term
Loan whose consent was required for the Company to issue the ValueVision
<PAGE>
Warrants; (v) 66,264 Common Stock purchase warrants with varying exercise prices
(the "First Settlement Warrants") issued by the Company in February 1995 in
connection with the settlement of certain disputes between the Company and The
Wall Street Group, Inc.; and (vi) 38,985 Common Stock purchase warrants with an
exercise price of $5.50 per share of Common Stock (the "Second Settlement
Warrants") issued by the Company in November 1995 in connection with the
settlement of certain disputes between the Company and William H. Campbell, a
former officer of the Company. Each of the Acquisition Warrants and Loan
Warrants may be exercised, from time to time, at any time during the period
beginning approximately one year from the date of issuance by the Company and
ending on the ten-year anniversary thereof. The ValueVision Warrants will become
exercisable with respect to 166,667 shares of Common Stock on each of the
thirteen month and two-year anniversaries of the issuance thereof and 166,666
shares of Common Stock on the three-year anniversary of the issuance thereof,
provided ValueVision has satisfied certain conditions set forth in the
ValueVision Warrants. Once vested, the ValueVision Warrants may be exercised,
from time to time, at any time until the ten-year anniversary of the issuance
thereof. The Holders' Warrants may be exercised, from time to time, at any time
during the period beginning on the date of issuance by the Company and ending on
December 1, 1996. The First Settlement Warrants may be exercised, from time to
time, at any time during the period beginning on the date of issuance by the
Company and ending on the three-year anniversary thereof. The Second Settlement
Warrants may be exercised, from time to time, at any time during the period
beginning on the date of issuance by the Company and ending on December 6, 1997.
The Acquisition Warrants, Loan Warrants, ValueVision Warrants, Holders'
Warrants, First Settlement Warrants and Second Settlement Warrants are sometimes
hereinafter collectively referred to as the "Warrants." The 6,424,801 shares of
Common Stock issuable upon exercise of the Warrants are hereinafter referred to
as the "Warrant Shares." See "SELLING SHAREHOLDERS AND RELATED INFORMATION." The
Merger Shares, Series B Shares and Warrant Shares are sometimes hereinafter
collectively referred to as the "Shares."
The Company's Common Stock is listed on the New York Stock Exchange
("NYSE") and Philadelphia Stock Exchange ("PHLX") under the symbol "NM." On
December 1, 1995, the closing sale price for the Company's Common Stock, as
quoted on the NYSE, was $18.375 per share.
It is presently anticipated that sales of Shares by the Selling
Shareholders hereunder will be effected, from time to time, (i) in ordinary
transactions on the NYSE and PHLX; (ii) through dealers or in ordinary broker
transactions on the NYSE, PHLX or otherwise; (iii) "at the market" to or through
market makers or into an existing market for the Shares; (iv) in other ways not
involving market makers or established trading markets, including direct sales
to purchasers or sales effected through agents; (v) through transactions in
options (whether exchange-listed or otherwise); or (vi) in combinations of any
such methods of sale. The Shares held by the Selling Shareholders may also be
sold hereunder by brokers, dealers, banks or other persons or entities who
receive such Shares and as a pledgee of the Selling Shareholders. The Selling
Shareholders and brokers and dealers through whom sales of Shares may be
effected may be deemed to be "underwriters," as defined under the Securities Act
of 1933, as amended (the "Securities Act"), and any profits realized by them in
connection with the sale of the Shares may be considered to be underwriting
compensation.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5 HEREOF.
-------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATIONS TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-2-
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================================
Price Underwriting Discounts Proceeds to Proceeds to the
to Public and Commissions the Company Selling Shareholders
========================================================================================================================
<S> <C> <C> <C> <C>
Per Share..... $(1) $(2) $0(3) $(1)(4)
- ------------------------------------------------------------------------------------------------------------------------
Total......... $(1) $(2) $0(3) $(1)(4)
========================================================================================================================
</TABLE>
(1) It is anticipated that the Shares registered for resale hereunder will
be sold by the Selling Shareholders in market or private
transactions at prevailing prices, from time to time.
(2) No underwriting discounts or commissions were or are payable by the
Company in connection with the issuance of the Shares to the Selling
Shareholders. In connection with the sale of the Shares by the Selling
Shareholders pursuant to this Prospectus, the Selling Shareholders may
pay underwriting or broker-dealer discounts or commissions. The amount
of such discounts and commissions, if any, cannot be determined by the
Company at this time.
(3) The Company will not receive any proceeds from the resale of the
Shares by the Selling Shareholders.
(4) The Company will pay all expenses of the offering of the Shares to
which this Prospectus relates, other than, in connection with the
resales of the Shares by the Selling Shareholders, any underwriting or
broker-dealer discounts or commissions agreed to be paid by the Selling
Shareholders.
--------------------------------------
The Date of this Prospectus is December 6, 1995
-3-
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at prescribed rates at the Public Reference Section of the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
Commission's regional offices located at 7 World Trade Center, New York, New
York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. The Common Stock of the Company is listed on both the NYSE
and PHLX, and such reports, proxy statements and other information concerning
the Company may be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005 and the Philadelphia Stock
Exchange, Inc., 1900 Market Street, Philadelphia, Pennsylvania 19103.
The Company has filed with the Commission a registration statement on
Form S-3 under the Securities Act with respect to the securities offered hereby
(such registration statement, together with all exhibits thereto, is hereinafter
referred to as the "Registration Statement"). This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the
securities offered hereby, reference is hereby made to the Registration
Statement. Statements contained in this Prospectus as to the contents of any
document filed with, or incorporated by reference in, the Registration Statement
are not necessarily complete, and in each instance are qualified in all respects
by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1995 (the "1995 Annual Report");
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended June 30, 1995 (the "June 30, 1995 10-Q") and September
30, 1995;
(c) The Company's Current Reports on Form 8-K, dated April 13,
1995, September 11, 1995, September 21, 1995 and October 19,
1995; and
(d) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, dated August 28,
1990, including all amendments and reports filed for the
purpose of updating such description.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the filing of a post-effective amendment to the
Registration Statement which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such reports and documents. Any statement contained in a
document incorporated by reference herein shall be modified or superseded for
all purposes to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company hereby undertakes to provide, without charge, to each
person to whom a copy of this Prospectus has been delivered, upon the written or
oral request of such person, a copy of all documents incorporated by
-4-
<PAGE>
reference in this Prospectus, other than exhibits to such documents unless
such exhibits are specifically incorporated by reference herein. Written or oral
requests for copies should be directed to Marshall A. Fleisher, Vice
President/Legal and Corporate Secretary, National Media Corporation, 1700 Walnut
Street, Philadelphia, Pennsylvania 19103, (215) 772-5000.
The Company will furnish its shareholders with annual reports
containing audited financial statements and reports by independent accountants.
In addition, the Company will distribute unaudited quarterly reports to its
shareholders for the first three quarters of each fiscal year.
THE COMPANY
The Company's business involves the use of direct response
transactional television programming, known as infomercials, to sell consumer
products. The Company is engaged in this form of direct marketing of consumer
products in the United States and Canada through its wholly-owned subsidiary,
Media Arts International, Ltd. ("Media Arts"), which the Company acquired in
1986, and internationally through its wholly-owned subsidiaries, Quantum
International Limited ("Quantum"), which the Company acquired in 1991, and
Quantum International Japan Company Limited ("Quantum Japan"), which was formed
in June 1995. In addition, the Company markets products of independent third
parties who provide programs to the Company. On October 25, 1995, the Company
consummated its acquisition of DirectAmerica. DirectAmerica produces
infomercials on behalf of the Company and various third parties. To capitalize
on the consumer awareness and familiarity that the Company's infomercials create
for its products, the Company, along with its strategic partners, also markets
and sells its products through non-infomercial distribution channels, including
retail stores and television home shopping programs.
The Company is a Delaware corporation, with its principal executive
offices located at 1700 Walnut Street, Philadelphia, Pennsylvania 19103
(telephone number (215) 772-5000).
RISK FACTORS
The Shares offered hereby are speculative in nature and involve a high
degree of risk. In addition to the other information set forth in this
Prospectus (including the information set forth in the documents incorporated
herein by reference), the following factors should be considered carefully by
prospective investors in evaluating an investment in the Shares offered by this
Prospectus.
Recent Losses. The Company has suffered net losses in three of its last
four fiscal years, including a net loss of $8,699,000 incurred during the fiscal
year ended March 31, 1994 and a net loss of $672,000 incurred during the fiscal
year ended March 31, 1995. These losses resulted in a substantial decrease in
working capital from $7,995,000 at March 31, 1993 to $1,377,000 at March 31,
1994. Based upon this deterioration in the Company's financial condition and the
presence of certain other conditions, as of July 13, 1994, as noted in the
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1994
(the "1994 Annual Report"), the Company's independent auditors opined that
substantial doubt existed as to the Company's ability to continue as a going
concern. However, as a result of a series of capital raising transactions in the
Company's 1995 fiscal year and the Company's recent profitability, at September
30, 1995, the Company's working capital had increased to approximately $29.5
million. The Company's 1995 fiscal year end audited financial statements set
forth in the 1995 Annual Report contain an unqualified opinion of its
independent auditors. No assurance can be given that the Company's operations
will continue to be profitable and/or that its financial position will continue
to improve. See "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources," in each
of the 1995 and 1994 Annual Reports.
Litigation and Regulatory Actions Involving the Company. The Company in
recent years has been and, to a much lesser extent, continues to be involved in
significant legal proceedings. In addition, the Company has been, and continues
to be, the subject of regulatory investigations by the Federal Trade Commission
(the "FTC") and the Consumer Product Safety Commission ("CPSC").
-5-
<PAGE>
Material abbreviated information regarding the current status of
material pending litigation and regulatory actions involving the Company is set
forth below. However, as it pertains to previously reported matters, such
information does not purport to be complete and is qualified in its entirety by
the detailed description of the legal and regulatory proceedings set forth in
the Company's 1995 and 1994 Annual Reports under "Item 3, Legal Proceedings";
the Company's June 30, 1995 10-Q under "Item 1, Legal Proceedings"; and the
Company's Current Report on Form 8-K, dated April 13, 1995, under "Item 5, Other
Events." Such descriptions variously include information relating to the status
of the proceedings, the Company's evaluation of the claims made against it and
the like. Certain of such previously reported matters have been resolved
substantially in accordance with the terms set forth in such prior disclosure.
In addition, as set forth on the cover page hereof, the Company consummated the
Merger on October 25, 1995. As of such date, DirectAmerica was a party to
several litigation proceedings. As a result of the Merger, any liability which
DirectAmerica may have in connection with such litigation becomes the
responsibility of the subsidiary of the Company into which DirectAmerica was
merged. Although certain of the former shareholders of DirectAmerica have agreed
to indemnify the Company against certain of such liabilities, it is not possible
to predict with any accuracy what, if any, liability the Company may have in
connection with such matters.
1. Shareholders' Delaware Class Actions. In January 1994, four class
action complaints were filed against the Company and certain of its present and
former officers and directors in the Court of Chancery of the State of Delaware
in connection with a proposed merger transaction with ValueVision. See the
discussion of the litigation set forth under "Item 3. Legal Proceedings--
Shareholders' Delaware Class Actions" in the Company's 1995 Annual Report. The
Company and the other parties to the litigation have reached agreement in
principle to settle these actions as well as the Lachance and Efron and Cohen
class action litigation described below, providing for cash payments by the
Company's insurer of $1.125 million and cash payments by the Company of
$375,000, as to which the Company recorded a charge in the fourth quarter of its
1995 fiscal year. Consummation of these settlements is subject, among other
things, to the approval of the Court.
2. Lachance and Efron and Cohen Class Actions. In July and December,
1994, stockholders filed purported class action lawsuits in federal court
against the Company and certain of its former officers and directors in
connection with the aborted ValueVision tender offer. The parties have reached
an agreement in principle to settle the matters as discussed under paragraph 1
above.
3. Consumer Product Safety Commission Investigation. On February 24,
1994, the staff of the CPSC notified the Company that it had made a preliminary
determination that a particular model of the Company's Juice Tiger(R) product
presents a "substantial product hazard" under the Consumer Product Safety Act.
The CPSC staff requested the Company to take voluntary corrective action to
ameliorate such alleged product hazard. While the Company has disputed that the
model in question presents a substantial product hazard, the Company and the
CPSC staff are presently discussing the form and nature of voluntary action
proposed by the Company to assuage the CPSC staff's concerns. The CPSC staff has
also indicated that, upon agreement on and implementation of a corrective action
plan, it may investigate and assess whether the Company failed to comply with
reporting requirements under the Consumer Product Safety Act such as to warrant
imposition of a civil penalty. Management believes that it is not yet possible
to determine whether the cost of implementing any such corrective action plan
and the amount of any such civil penalty, alone or together, will have a
material adverse effect on the Company, its results of operations or financial
condition.
-6-
<PAGE>
Regulatory Matters. The infomercial industry is regulated by the FTC,
the United States Post Office, the CPSC, the Federal Communications Commission,
the Food and Drug Administration, various States' Attorneys General, and other
state and local consumer protection and health agencies. The FTC directly
regulates marketers of products, such as the Company, credit card companies
which process customer orders and others involved in the infomercial and direct
marketing industries.
The Company's marketing activities and/or products have been
and will continue to be subject to the scrutiny of each of the aforementioned
regulatory agencies. An adverse determination or extended investigation by any
of these agencies could have a material adverse effect on the Company. Moreover,
the domestic and international regulatory environments in which the Company
operates are subject to change from time to time. It is possible that changes in
the regulations to which the Company is subject might have a material adverse
effect on the Company's business, operation and financial condition. As a result
of prior settlements with the FTC, the Company has agreed to two consent orders
which among other things require the Company to submit compliance reports to the
FTC staff. The Company has submitted the compliance reports as well as
additional information requested by the FTC staff. In connection with one of
these orders, the Company recently received a request from the FTC for certain
information regarding the Company's infomercials in order to determine whether
the Company is in compliance with such order. The Company is cooperating with
such request and as of the current date believes itself to be in compliance with
the consent orders and other FTC requirements.
The Company's international business is subject to the laws
and regulations of England, the European Union, Japan and other countries in
which the Company sells its products, including, but not limited to, the various
consumer and health protection laws and regulations in the countries in which
the programming is broadcast, where applicable. If any significant actions were
brought against the Company or any of its subsidiaries in connection with a
breach of such laws or regulations, including the imposition of fines or other
penalties, or against one of the entities through which the Company obtains a
significant portion of its media access, the Company's results of operations
could be materially adversely affected. There can be no assurance that changes
in the laws and regulations of any territory which forms a significant portion
of the Company's market will not adversely affect the Company's business.
Dependence on Key Personnel. The Company is dependent upon its ability
to attract, and retain recognizable and effective spokespersons for its
infomercial programming. The Company currently utilizes a limited number of
spokespersons. The inability of the Company to attract, retain or replace
effective spokespersons in the future could have a material adverse effect on
the Company.
Product Liability Claims. Products sold by the Company may expose it to
potential liability from claims by users of such products. The Company generally
requires the manufacturers of its products to carry product liability insurance,
although in certain instances where a limited amount of products are purchased
from non-U.S. vendors, the Company may not formally require the vendor to carry
product liability insurance. (Certain of such vendors, however, may in fact
maintain such insurance.) There can be no assurance that such parties will
maintain this insurance or that this coverage will be adequate to cover all
potential claims. The Company currently maintains product liability insurance
coverage in amounts deemed prudent. There can be no assurance that the Company
will be able to maintain such coverage or obtain additional coverage on
acceptable terms, or that such insurance will provide adequate coverage against
all potential claims.
Media Access; Related Matters. The Company is dependent on having
access to media time to televise its infomercials on cable networks, network
affiliates and local stations. There can be no assurance that the Company will
be able to purchase or renew media time on a long-term basis or at favorable
price levels. The Company purchases a significant amount of its media time from
cable television and satellite networks. These cable television and satellite
networks assemble programming for transmission to multiple and local cable
-7-
<PAGE>
system operators. These operators may not be required to carry all of the
network's programming. The Company currently does not pay and is not paid for
the "privilege" of being broadcast by these operators. It is possible that, if
demand for air time grows, and because of recently enacted cable legislation,
these operators will begin to charge the Company to continue broadcasting the
Company's infomercials or limit the amount of time available to the Company.
Recently, larger multiple system operators have elected to change their
operations by selling dark time (i.e. the hours during which a station does not
broadcast its own programming). Significant increases in the cost of media time
or significant decreases in the Company's access to media time could have a
material adverse effect on its results of operations.
Approximately one-third of the Company's media time is
purchased under long-term contracts, which are generally from one to five years
in length. Long-term contracts require the Company to make advance purchases and
commitments to purchase media time which, to the extent the Company does not use
it effectively, will have a material adverse effect on the Company's results of
operations. However, in the past the Company has generally been able to maintain
a flow of infomercials to fill the media time on channels where it has advance
commitments. In addition, as part of its media strategy, the Company arranges to
sell a portion of its media time to others, if necessary. There can be no
assurance, however, that the Company will be able to use all of its media time
or sell it to others or that, upon expiration of such long-term contracts, the
Company will be able to successfully negotiate extensions of such contracts. The
inability of the Company to extend one or more of such contracts as they expire
could have a material adverse effect on the Company's business and results of
operations.
Strategic Partnerships. The Company has entered into relationships with
manufacturers of consumer products in several product categories, including
Regal Ware, Inc., CSA, Inc. and Blue Coral, Inc. These manufacturers have come
to realize that the showcasing of a product through an infomercial on television
is a powerful means to create and build brand awareness and generate follow-up
product sales. A clear advantage of these relationships to the Company is that
the manufacturing partner provides research and development support and assumes
the inventory risk, thereby reducing the Company's financial risk as well as its
working capital requirements. Additionally, in January 1995, the Company entered
into a two year agreement with Mitsui & Co., Ltd. to provide media time and
fulfillment service in support of the Company's Japanese operations. A loss of
any of these relationships could have a material adverse effect on the Company's
business and results of operations.
Competition. The Company competes directly with several companies which
generate sales from infomercials. The Company also competes with a large number
of consumer product companies and retailers which have substantially greater
financial, marketing and other resources than the Company, some of which have
recently commenced, or indicated their intent to conduct, direct response
marketing. The Company also competes with companies that make imitations of the
Company's products at substantially lower prices. Products similar to the
Company's products may be sold in department stores, pharmacies, general
merchandise stores and through magazines, newspapers, direct mail advertising
and catalogs.
Dependence on Key Products by the Company and Unpredictable Market
Life. The Company has been dependent on its ability to develop a relatively
small number of successful new products in each year. The Company's five most
successful products in each of the fiscal years ended March 31, 1995, 1994,
1993, and 1992, accounted for 54%, 67%, 47%, and 59% respectively, of the
Company's net revenues for such periods. Product sales for a given period
reflect, among other things, customer response to the infomercials on the air
during the period. Customer response to infomercials depends on many variables,
including the appeal of the products being marketed, the effectiveness of the
infomercials and the availability of competing products, and the timing and
frequency of air-time. There can be no assurance that the Company's new products
will receive market acceptance. In addition, in the event the Company does not
have an adequate supply of inventory, as a result of production delays or
shortages or inadequate inventory management, it may lose potential product
sales. The ability of the Company to manage its inventory is of critical
importance due to the Company's practice of minimizing its inventory of a given
product. This issue is made even more difficult by the international nature of
the Company's business.
Even when market acceptance for the Company's new products
occurs, the Company's results of operations may be adversely impacted by returns
of such products. The Company establishes reserves against such returns.
-8-
<PAGE>
Although the Company believes that such reserves are adequate based upon
historic levels and product mix, there can be no assurance that the Company
will not experience unexpectedly high levels of returns (in excess of its
reserves) for certain products. In the event that returns exceed reserves, the
Company's results of operations could be adversely affected.
Most of the Company's products have a limited market life for
sales through infomercials. Historically, the majority of products generate
their most significant domestic revenue in their introductory year, while
foreign revenues have tended to have been generated more evenly over a longer
period. In the event the Company increases the number of times an infomercial is
broadcast within a market, the market life of such product in such market may
decrease. There can be no assurances that a product which has produced
significant sales will continue to produce significant or any sales in the
future. As a result, the Company is dependent on its ability to continue to
identify and successfully market new products. The failure of newly introduced
products or significant delays in the introduction of, or failure to introduce,
new products would adversely impact the Company's results of operations in terms
of both lost opportunity cost and actual loss of dollars invested.
Dependence on Foreign Sales by the Company. The Company had no sales
outside the United States and Canada prior to June 1991. In the fiscal years
ended March 31, 1995, 1994, 1993 and 1992, approximately 45.7%, 26.7%, 26.4% and
13.8%, respectively, of the Company's net revenues were derived from sales to
customers outside the United States and Canada, and such sales represented a
74.8% increase in the fiscal year ended March 31, 1995 from the fiscal year
ended March 31, 1994, a 22.6% increase in the fiscal year ended March 31, 1994
from the fiscal year ended March 31, 1993 and a 165.5% increase in the fiscal
year ended March 31, 1993 from the fiscal year ended March 31, 1992. In the
fiscal years ended March 31, 1994 and 1995, sales in Germany accounted for
approximately 12-13% of the Company's net revenues, respectively. In late July
1994, the Company began airing its infomercials in Japan. Sales of the Company's
products in Japan accounted for approximately 30.0% of the Company's net
revenues for the six months ended September 30, 1995. The Company anticipates
that sales in Japan and elsewhere in the Pacific Rim will continue to increase
as a proportion of the Company's overall sales. This increase in international
sales activity has resulted in increased working capital requirements as a
result of additional lead time for delivery and payment of product prior to
receipt of sale proceeds. However, while the Company's foreign operations have
the advantage of airing its infomercials that have been successful in the United
States, as well as successful infomercials produced by companies with limited
media access and distribution capabilities, there can be no assurance that the
Company's foreign operations will continue to generate significant increases in
net revenues. In addition, the Company is subject to the risks of doing business
abroad, including adverse fluctuations in currency exchange rates,
transportation delays and interruptions, political and economic disruptions, the
imposition of tariffs and import and export controls, and increased customs or
local regulations. The occurrence of any one or more of the foregoing could
adversely affect the Company's results of operations.
Risks Associated with Entering into New Markets. The Company's
dependence on revenues from sales of products outside the United States and
Canada is described above, under "- Dependence on Foreign Sales by the Company."
In particular, the Company's entrance into the Japanese market should be noted.
As the Company enters into markets such as Japan it is faced with the
uncertainty of never having done business in that commercial, political and
social setting. Accordingly, despite the Company's best efforts, its likelihood
of success in each new market which it enters is unpredictable for reasons
particular to each such market. It is also possible that, despite the Company's
apparently successful entrance into a new market, that some unforeseen
circumstance will arise which limits the Company's ability to continue to do
business or to expand in that new market.
Dependence on Third Party Manufacturers. The Company is dependent on
its strategic partners and other third party sources, both foreign and domestic,
to manufacture all of its products, but does not depend on any one particular
supplier for a majority of its products. It is inherent in the nature of the
Company's business for a strategic partner or a limited number of manufacturers
to manufacture certain of its products at any given time. The inability of the
Company, either temporarily or permanently, to obtain a timely supply of product
to fulfill sales orders for a specific product could have a material adverse
impact on the Company. Moreover, because the time from the initial approval of a
product by the product development department to the first sale of such product
is relatively short, the Company's ability to identify sources that can meet its
production deadlines at a reasonable cost and produce a high quality product is
important to its business, and there can be no assurance that the Company will
successfully locate such sources. Because the Company often relies on foreign
-9-
<PAGE>
manufacturers, it must allow longer lead times to order products to fulfill
customer orders and utilizing such foreign manufacturers exposes the Company to
the general risks of doing business abroad.
Shares Eligible for Sale under Registration Rights. In February 1995,
the Company completed a registration process with respect to 500,000 shares of
Common Stock which were issued in connection with the settlement of certain
litigation which allows the holder of such shares to sell them publicly. In
October 1995, the Company completed a registration process with respect to
200,000 shares of Common Stock issuable pursuant to certain employee benefit
plans of the Company. The sale of all such shares would have been subject to
substantial limitations in the absence of such registrations. A substantial
number of such shares may still be held by the registered holders thereof and
available for resale pursuant to currently effective registration statements.
Sales of substantial amounts of the shares discussed above, or of
Shares offered pursuant hereto, could adversely affect the maket value of Common
Stock depending upon the timing of such sales and, in the case of convertible
securities, may effect a dilution of the book value per share of Common Stock.
In addition, a substantial number of such shares of Common Stock (including the
Shares offered pursuant hereto) are issuable pursuant to the exercise of
outstanding vested and non-vested options, warrants and similar rights and the
conversion of outstanding preferred stock. Subject to certain limitations, the
persons holding such options, warrants and convertible securities may obtain the
shares of Common Stock underlying such options, warrants and convertible
securities at any time. The issuance of a large number of shares of Common Stock
would dilute the percentage interest of other existing stockholders of the
Company.
Dividends on Common Stock Not Likely. The Company has not declared or
paid a cash dividend on the Common Stock since the quarter ended December 31,
1991 and the Board of Directors does not anticipate that dividends will be paid
in the near future. In addition, the Company's ability to declare or pay any
dividends or make any other distribution (whether in cash or property) on any
shares of its capital stock is restricted pursuant to the terms of certain debt
financing agreements to which the Company is a party.
-10-
<PAGE>
SELLING SHAREHOLDERS
AND RELATED INFORMATION
The Selling Shareholders are listed below. Included below concerning
each Selling Shareholder is a table showing the total amount and percentage of
the Common Stock beneficially owned by such person, the amount subject to sale
hereunder and the resulting amount and percentage if all Shares offered hereby
which are owned by such person are sold. Except as otherwise provided in the
notes to the table, none of the Selling Shareholders has held any position or
office, or had any other material relationship with the Company during the past
three years.
<TABLE>
<CAPTION>
Pre-Offering(1) Post-Offering(2)
--------------- ----------------
Total Total
Number Number
of Shares of Shares
Beneficially Percentage Shares Beneficially Percentage
Selling Shareholders Owned of Class(3) Offered Owned of Class(3)
- -------------------- ----- ----------- ------- ----- -----------
<S> <C> <C> <C> <C> <C>
Anapol, Schwartz, Weiss
and Cohen, P.C.(4) 16,566 * 16,566 0 0
Gary J. Anderson(5)(6) 27,500 * 27,500 0 0
Charles L. Andes(5)(6)(7) 32,500 * 27,500 5,000 *
Jeanne Apostol(8) 7,917 * 7,917 0 0
David Bacharach(9)(10) 129,800 * 55,000 74,800 *
David E. Baxter and
Nancy L. Baxter(5)(11) 68,335 * 27,500 40,835 *
Vincent G. Bell, Jr.(12) 44,000 * 44,000 0 0
Michael Boyd(5) 27,500 * 27,500 0 0
Paul R. Brazina(13) 22,145 * 22,145 0 0
Peter Brice(9) 55,000 * 55,000 0 0
William H. Campbell(14) 44,163 * 38,985 5,178 *
CIP Capital L.P.(15) 550,000 3.41% 550,000 0 0
David John Carman and
Eline Emilie Carman(9)(16) 268,200 1.69% 55,000 213,200 1.35%
Jeff Clifford(17) 1,000 * 1,000 0 0
Craig Drake(9)(18) 146,200 * 55,000 91,200 *
Gary Erlbaum(19) 123,750 * 123,750 0 0
Michael Erlbaum(19) 27,500 * 27,500 0 0
Steven Erlbaum(19) 68,750 * 68,750 0 0
Anthony J. Filiti(20) 82,500 * 82,500 0 0
Nedra Fischer(21) 330,000 2.08% 330,000 0 0
Robert A. Fox(9)(22) 55,000 * 55,000 0 0
Morris R. Garfinkle(23)(24) 220,000 1.39% 220,000 0 0
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION>
Pre-Offering(1) Post-Offering(2)
--------------- ----------------
Total Total
Number Number
of Shares of Shares
Beneficially Percentage Shares Beneficially Percentage
Selling Shareholders Owned of Class(3) Offered Owned of Class(3)
- -------------------- ----- ----------- ------- ----- -----------
<S> <C> <C> <C> <C> <C>
Marc R. Ginsberg(25) 8,250 * 8,250 0 0
William M. Goldstein(5) 27,500 * 27,500 0 0
Bruce D. Goodman(26) 147,630 * 147,630 0 0
Micaela Hallman(27) 11,000 * 11,000 0 0
Frederick S. Hammer(9)(28) 85,000 * 55,000 30,000 *
Robert Henry(17) 792 * 792 0 0
Patrick R. Himmler(17) 500 * 500 0 0
Martin Jacobs(20) 82,500 * 82,500 0 0
Robert E. Keith, Jr.(6)(9) 55,000 * 55,000 0 0
Tan Ching Khoon(29) 110,000 * 110,000 0 0
Sharon King(17) 792 * 792 0 0
John W. Kirby(30) 372,180 2.39% 372,180 0 0
Legg Mason Wood Walker
Custodian FBO Steven
Rosner IRA Rollover(23)(31) 328,600 2.08% 220,000 108,600 *
Yolande Levene(9) 55,000 * 55,000 0 0
Howard E. Lubert, as
Trustee for the Jonathan
Lubert Trust(32) 153,750 * 153,750 0 0
Howard E. Lubert, as
Trustee for the Kristine
Lubert Trust(32) 153,750 * 153,750 0 0
Ira Lubert(5)(6)(33) 82,500 * 77,500 5,000 *
MLPF as Custodian FBO
The Mark P. Hershhorn
IRA FBO Mark P.
Hershhorn(29)(34) 560,000 3.50% 110,000 450,000 2.82%
Richard C. Maida(9) 55,000 * 55,000 0 0
Jack L. Messman(35) 33,000 * 33,000 0 0
Morris Saffer Holdings(19) 55,000 * 55,000 0 0
Robert M. Morse(20) 82,500 * 82,500 0 0
Warren V. Musser(6)(29) 110,000 * 110,000 0 0
David Naftaly(5) 27,500 * 27,500 0 0
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
Pre-Offering(1) Post-Offering(2)
--------------- ----------------
Total Total
Number Number
of Shares of Shares
Beneficially Percentage Shares Beneficially Percentage
Selling Shareholders Owned of Class(3) Offered Owned of Class(3)
- -------------------- ----- ----------- ------- ----- -----------
<S> <C> <C> <C> <C> <C>
Steven H. Oram, Chartered
Cash or Deferred
Arrangement Profit
Sharing Trust(5) 27,500 * 27,500 0 0
PNC Bank, Custodian
UGMA PA for Kyle
Messman(27) 11,000 * 11,000 0 0
PNC Bank, Custodian UGMA PA for
Valerie L. Messman(27) 11,000 * 11,000 0 0
James W. Poduska,Sr.(29)(36) 110,000 * 110,000 0 0
Gary Quint(37) 1,000 * 1,000 0 0
Peter Richner(9) 55,000 * 55,000 0 0
Theodore D. Rosner(9)(38) 81,600 * 55,000 26,600 *
Safeguard Scientifics
(Delaware), Inc.(6)(39) 2,750,000 15.01% 2,750,000 0 0
Stanley Schneider(9)(40) 142,300 * 55,000 87,300 *
Wolfgang Simon(41) 137,500 * 137,500 0 0
Arthur R. Spector(20) 82,500 * 82,500 0 0
Sylvester Stallone(42) 751,600 4.74% 275,000 476,600 3.01%
Joan Stefanik(9) 55,000 * 55,000 0 0
David Stein and
Barbara Stein(9)(43) 75,000 * 55,000 20,000 *
Craig A. Streem(44) 42,983 * 13,750 29,233 *
John J. Sullivan(45) 149,849 * 41,250 108,599 *
Patrick Sullivan(46) 41,250 * 41,250 0 0
Technology Leaders II
L.P.(6)(47) 612,986 3.79% 612,986 0 0
Technology Leaders II
Offshore C.V.(6)(48) 487,014 3.03% 487,014 0 0
Jean C. Tempel(6)(9) 55,000 * 55,000 0 0
Robert Thatcher(17) 500 * 500 0 0
ValueVision International,
Inc.(49) 500,000 3.11% 500,000 0 0
The Wall Street Group,
Inc.(50) 44,728 * 44,728 0 0
</TABLE>
-13-
<PAGE>
<TABLE>
<CAPTION>
Pre-Offering(1) Post-Offering(2)
--------------- ----------------
Total Total
Number Number
of Shares of Shares
Beneficially Percentage Shares Beneficially Percentage
Selling Shareholders Owned of Class(3) Offered Owned of Class(3)
- -------------------- ----- ----------- ------- ----- -----------
<S> <C> <C> <C> <C> <C>
Carl Wayneburn(4) 4,970 * 4,970 0 0
H. Dewey Yesner(9) 55,000 * 55,000 0 0
Jon W. Yoskin, II(51) 114,012 * 78,012 36,000 *
</TABLE>
- --------------
* Less than 1%.
(1) Beneficial ownership figures include all Common Stock represented by
(i) shares of issued and outstanding Common Stock; (ii) shares of
Common Stock issuable upon exercise or conversion of the Series B
Preferred Stock and the Warrants; and (iii) shares of Common Stock
issuable upon exercise or conversion of other outstanding warrants,
options or convertible securities which are exercisable or
convertible, as applicable, within sixty days of the date hereof. Based
on information available to the Company, except as otherwise indicated
herein, to the Company's knowledge, none of the Selling Shareholders
beneficially owns any Common Stock other than the Merger Shares, the
Series B Shares and the Warrant Shares.
(2) Assumes the sale of all Shares offered by this Prospectus by each
Selling Shareholder to third parties unaffiliated with the Selling
Shareholders.
(3) These percentages are calculated in accordance with Section 13(d) of
the Exchange Act and the rules promulgated thereunder.
(4) Represents Warrant Shares issuable upon the exercise of First
Settlement Warrants.
(5) Includes 12,500 Series B Shares and 15,000 Warrant Shares issuable
upon the exercise of Acquisition Warrants.
(6) Statements on Schedule 13D, dated December 19, 1994, were filed by the
following persons affirming their membership in a group with respect
to their respective holdings of Common Stock: Safeguard Scientifics,
Inc. ("SSI") and its wholly-owned subsidiary, Safeguard Scientifics
(Delaware), Inc. ("SSD"), Technology Leaders II Management L.P.
("TLM"), a limited partnership organized for the sole purpose of acting
as a general partner of Technology Leaders II L.P. ("TL") and
Technology Leaders II Offshore C.V. ("TLO"), Gary J. Anderson, Charles
L. Andes, Robert E. Keith, Jr., Ira Lubert, Warren V. Musser and
Jean C. Tempel (collectively, the "Group"). Mr. Anderson is Executive
Vice President - Fund Management of SSI and is a Managing Director of
Technology Leaders Management, Inc. ("TLM Inc."), a general partner of
TLM. Mr. Andes controls Technology Leaders Advisers III, Inc., a
general partner of TLM. Mr. Keith is President - Fund Management of
SSI and is a Managing Director of TLM Inc. Mr. Lubert is a Managing
Director of TLM Inc. Mr. Musser is Chairman of the Board, Chief
Executive Officer, President and Chief Operating Officer of SSI. Ms.
Tempel is Executive Vice President of SSI and a Managing Director of
TLM Inc.
(7) Includes 5,000 shares of Common Stock issued as compensation for
serving as a director of the Company. Mr. Andes has served as a
director of the Company since October 1994.
(8) Represents Merger Shares issued by the Company in connection with the
Merger. Ms. Apostol serves as Vice President - Production and
Development of DirectAmerica.
-14-
<PAGE>
(9) Includes 25,000 Series B Shares and 30,000 Warrant Shares issuable upon
the exercise of Acquisition Warrants.
(10) Mr. Bacharach is also the beneficial owner of 74,800 shares of Common
Stock.
(11) Includes 40,835 shares of Common Stock held by Mr. Baxter,
individually. Mr. Baxter served as a consultant to the Company from
October 1992 through February 1993. Mr. Baxter also served as acting
President of Media Arts from October 1992 through January 1993.
(12) Includes 20,000 Series B Shares and 24,000 Warrant Shares issuable upon
the exercise of Acquisition Warrants. Mr. Bell is a director of SSI
and, as such, may be deemed to beneficially own those shares of Common
Stock controlled by SSI and its affiliates. Mr. Bell expressly
disclaims beneficial ownership of any shares of Common Stock controlled
by SSI and its affiliates.
(13) Represents Merger Shares issued by the Company in connection with the
Merger. Mr. Brazina serves as Vice-President, Chief Financial Officer
and Treasurer of DirectAmerica.
(14) Includes 5,178 shares of Common Stock and 38,985 Warrant Shares
issuable upon the exercise of Second Settlement Warrants.
(15) Includes 250,000 Series B Shares and 300,000 Warrant Shares issuable
upon the exercise of Acquisition Warrants.
(16) Includes 13,200 shares of Common Stock and options to purchase an
additional 200,000 shares of Common Stock held by Mr. Carman,
individually. Mr. Carman is Executive Vice President of the Company and
President and Chief Executive Officer of Quantum. He has served as a
director of the Company since April 1993.
(17) Represents Merger Shares issued by the Company in connection with the
Merger.
(18) Mr. Drake is also the beneficial owner of 91,200 shares of Common
Stock.
(19) In the case of Gary Erlbaum, includes 101,250 Warrant Shares issuable
upon the exercise of Loan Warrants and 22,500 Warrant Shares issuable
upon the exercise of Holders' Warrants; in the case of Michael Erlbaum,
includes 22,500 Warrant Shares issuable upon the exercise of Loan
Warrants and 5,000 Warrant Shares issuable upon the exercise of
Holders' Warrants; in the case of Steven Erlbaum, includes 56,250
Warrant Shares issuable upon the exercise of Loan Warrants and 12,500
Warrant Shares issuable upon the exercise of Holders' Warrants; and, in
the case of Morris Saffer Holdings, includes 45,000 Warrant Shares
issuable upon the exercise of Loan Warrants and 10,000 Warrant Shares
issuable upon the exercise of Holders' Warrants.
(20) Includes 37,500 Series B Shares and 45,000 Warrant Shares issuable upon
the exercise of Acquisition Warrants.
(21) Includes 150,000 Series B Shares and 180,000 Warrant Shares issuable
upon the exercise of Acquisition Warrants.
(22) Mr. Fox is a director of SSI and, as such, may be deemed to
beneficially own those shares of Common Stock controlled by SSI and its
affiliates. Mr. Fox expressly disclaims beneficial ownership of any
shares of Common Stock controlled by SSI and its affiliates.
(23) Includes 100,000 Series B Shares and 120,000 Warrant Shares issuable
upon the exercise of Acquisition Warrants.
(24) Mr. Garfinkle is Vice President - Global Strategy of the Company.
(25) Includes 3,750 Series B Shares and 4,500 Warrant Shares issuable upon
the exercise of Acquisition Warrants.
(26) Represents Merger Shares issued by the Company in connection with the
Merger. Mr. Goodman serves as President and Chief Operating Officer of
DirectAmerica.
(27) Includes 5,000 Series B Shares and 6,000 Warrant Shares issuable upon
the exercise of Acquisition Warrants.
-15-
<PAGE>
(28) Includes 5,000 shares of Common Stock issued as compensation for
serving as a director of the Company and options to purchase an
additional 25,000 shares of Common Stock. Mr. Hammer has served as a
director of the Company since October 1994.
(29) Includes 50,000 Series B Shares and 60,000 Warrant Shares issuable upon
the exercise of Acquisition Warrants.
(30) Represents Merger Shares issued by the Company in connection with the
Merger. Mr. Kirby serves as Chairman of the Board and Chief Executive
Officer of DirectAmerica and Executive Vice President of the Company.
(31) Mr. Rosner is also the beneficial owner of 108,600 shares of Common
Stock.
(32) Includes 18,750 Series B Shares, 22,500 Warrant Shares issuable upon
the exercise of Acquisition Warrants and 112,500 Warrant Shares
issuable upon the exercise of Loan Warrants.
(33) Includes 50,000 Warrant Shares issuable upon the exercise of Holders'
Warrants and 5,000 shares of Common Stock issued as compensation for
serving as a director of the Company. Mr. Lubert has served as a
director of the Company since December 1994.
(34) Includes 150,000 shares of Common Stock and options to purchase an
additional 300,000 shares of Common Stock. Mr. Hershhorn is President
and Chief Executive Officer of the Company and Chairman of the Board of
Quantum. He has served as a director of the Company since September
1994.
(35) Includes 15,000 Series B Shares and 18,000 Warrant Shares issuable upon
the exercise of Acquisition Warrants. Mr. Messman is a director of SSI
and, as such, may be deemed to beneficially own those shares of Common
Stock controlled by SSI and its affiliates. Mr. Messman expressly
disclaims beneficial ownership of any shares of Common Stock controlled
by SSI and its affiliates.
(36) Mr. Poduska is a director of SSI and, as such, may be deemed to
beneficially own those shares of Common Stock controlled by SSI and its
affiliates. Mr. Poduska expressly disclaims beneficial ownership of any
shares of Common Stock controlled by SSI and its affiliates.
(37) Represents Merger Shares issued by the Company in connection with the
Merger. Mr. Quint serves as Vice President - Finance of DirectAmerica.
(38) Mr. Rosner is also the beneficial owner of 26,600 shares of Common
Stock.
(39) Includes 500,000 Series B Shares, 600,000 Warrant Shares issuable upon
the exercise of Acquisition Warrants, 1,350,000 Warrant Shares
issuable upon the exercise of Loan Warrants and 300,000 Warrant Shares
issuable upon the exercise of Holders' Warrants.
(40) Mr. Schneider is also the beneficial owner of 87,300 shares of Common
Stock.
(41) Includes 62,500 Series B Shares and 75,000 Warrant Shares issuable upon
the exercise of Acquisition Warrants.
(42) Includes 125,000 Series B Shares and 150,000 Warrant Shares issuable
upon the exercise of Acquisition Warrants. Also includes an additional
476,600 shares of Common Stock. Mr. Stallone filed a Statement on
Schedule 13D, dated September 7, 1995, with respect to his holdings of
Common Stock.
(43) Mr. Stein is also the beneficial owner of 20,000 shares of Common
Stock.
(44) Includes 6,250 Series B Shares and 7,500 Warrant Shares issuable upon
the exercise of Acquisition Warrants. Also includes 5,900 shares of
Common Stock and options to purchase an additional 23,333 shares of
Common Stock. Mr. Streem served as Vice President and Secretary of the
Company from May 1992 until March 1994 and from April 1994 until
December 1994.
-16-
<PAGE>
(45) Includes 18,750 Series B Shares and 22,500 Warrant Shares issuable upon
the exercise of Acquisition Warrants. Also includes 75,265 shares of
Common Stock and options to purchase an additional 33,334 shares of
Common Stock. Mr. Sullivan is Senior Vice President - Administration,
Planning and Investor Relations of the Company.
(46) Includes 18,750 Series B Shares and 22,500 Warrant Shares issuable upon
the exercise of Acquisition Warrants.
(47) Includes 139,315 Series B Shares, 167,178 Warrant Shares issuable upon
the exercise of Acquisition Warrants, 250,767 Warrant Shares
issuable upon the exercise of Loan Warrants and 55,726 Warrant Shares
issuable upon the exercise of Holders' Warrants.
(48) Includes 110,685 Series B Shares, 132,822 Warrant Shares issuable upon
the exercise of Acquisition Warrants, 199,233 Warrant Shares
issuable upon the exercise of Loan Warrants and 44,274 Warrant Shares
issuable upon the exercise of Holders' Warrants.
(49) Represents Warrant Shares issuable upon the exercise of ValueVision
Warrants. In April 1995, the Company and ValueVision entered into a
Telemarketing, Production and Post-Production Agreement and a Joint
Venture Agreement. The terms of such agreements are described in the
Company's Current Report on Form 8-K, dated April 13, 1995.
(50) Represents Warrant Shares issuable upon the exercise of First
Settlement Warrants. The Wall Street Group, Inc. provided investor
relations services to the Company from March 1990 until August 1992. In
connection with the termination of The Wall Street Group, Inc.'s
services by the Company, certain disputes arose between the parties,
which disputes were settled by the Company in February 1995 through the
issuance of the First Settlement Warrants.
(51) Includes 35,460 Series B Shares and 42,552 Warrant Shares issuable upon
the exercise of Acquisition Warrants. Also includes 11,000 shares of
Common Stock and options to purchase an additional 25,000 shares of
Common Stock. Mr. Yoskin has served as a director of the Company since
June 1994.
LEGAL MATTERS
The legality of the shares of Common Stock offered hereby has been
passed upon for the Company by Marshall A. Fleisher, Esquire, Vice President
(Legal) and Corporate Secretary of the Company. Mr. Fleisher is the beneficial
owner of 16,000 shares of Common Stock.
EXPERTS
The consolidated financial statements of National Media Corporation
appearing in the Company's Annual Report on Form 10-K for the year ended
March 31, 1995 have been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
-17-
<PAGE>
===================================== ===================================
No person is authorized to give
any information or to make any
representation not contained or NATIONAL MEDIA CORPORATION
incorporated by reference in this
Prospectus, and if given or made,
such information or representation
must not be relied upon as having 9,537,217 SHARES OF COMMON STOCK
been authorized by the Company.
Neither the delivery of this
Prospectus nor any sale made
hereunder shall, under any
circumstances, create any ---------------------
implication that there has been no
change in the facts set forth in
this Prospectus or in the affairs PROSPECTUS
of the Company since the date hereof.
This Prospectus does not constitute
an offer to sell or a solicitation
of an offer to buy any securities December 6, 1995
other than those to which it relates
or an offer to sell or a solicitation
of an offer to buy any securities in ---------------------
any jurisdiction in which such offer
or solicitation is not authorized, or
in which the person making such offer
or solicitation is not qualified to
do so, or to any person to whom it is
unlawful to make such an offer or
solicitation in such jurisdiction.
TABLE OF CONTENTS
Page
----
Available Information.......... 4
Incorporation of Certain
Information by Reference..... 4
The Company.................... 5
Risk Factors................... 5
Selling Shareholders and
Related Information.......... 11
Legal Matters.................. 17
Experts........................ 17
===================================== ===================================
