<PAGE>
As filed with the Securities and Exchange Commission on September 20, 1999
Registration No. _
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
e4L, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
13-2658741
(I.R.S. Employer Identification Number)
15821 VENTURA BOULEVARD
5TH FLOOR
LOS ANGELES, CALIFORNIA 91436
(Address of principal executive offices)
DANIEL M. YUKELSON
EXECUTIVE VICE PRESIDENT/FINANCE AND CHIEF FINANCIAL OFFICER, AND SECRETARY
15821 VENTURA BOULEVARD
5TH FLOOR
LOS ANGELES, CALIFORNIA 91436
(Name and address of agent for service)
(818) 461-6400
(Telephone number, including area code, of agent for service)
------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, 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
investment plans. Check the following box. |X|
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Proposed Proposed Amount of
Title of Securities Amount to be Maximum Offering Maximum Aggregate Registration
to be Registered Registered Price Per Share Offering Price Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share 1,114,009 (1) $3.875/share (2) $4,316,785 (2) $1,200.07 (2)
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Consists of 1,114,009 shares of Registrant's Common Stock issuable upon
conversion of preferred stock and exercise of warrants.
(2) Based on the average of the high and low trading price of the
Registrant's Common Stock as reported by the New York Stock Exchange on
September 17, 1999, as estimated solely for the purpose of calculating
the registration fee in accordance with Rule 457(c) under the Securities
Act of 1933.
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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION ("SEC"), ACTING PURSUANT TO
SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
"The Information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
SUBJECT TO COMPLETION, DATED _______________, 1999
PROSPECTUS
- ----------
e4L, INC.
15821 VENTURA BOULEVARD
5TH FLOOR
LOS ANGELES, CALIFORNIA 91436
(818) 461-6400
------------------------------------
1,114,009 SHARES OF COMMON STOCK
------------------------------------
Selling Stockholders are offering and selling up to 1,114,009 shares of
common stock. Such Selling Stockholders may acquire the shares of common stock
offered pursuant to this Prospectus upon conversion of preferred stock and
exercise of warrants.
The Selling Stockholders may offer the shares of common stock through
public or private transactions, on the New York Stock Exchange, at prevailing
market prices, or at privately negotiated prices.
e4L's common stock is listed on the New York Stock Exchange under the
symbol "ETV." On September 17, 1999, the closing sale price for the common
stock, as quoted on the New York Stock Exchange, was $4.125 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR
CERTAIN INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.
------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SHARES OF COMMON
STOCK OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is September __, 1999.
-1-
<PAGE>
<TABLE>
TABLE OF CONTENTS
<S> <C>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.................................................................3
RISK FACTORS......................................................................................................3
THE COMPANY.......................................................................................................6
USE OF PROCEEDS...................................................................................................7
SELLING STOCKHOLDERS..............................................................................................8
PLAN OF DISTRIBUTION..............................................................................................9
LEGAL MATTERS.....................................................................................................9
EXPERTS .........................................................................................................9
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..................................................................10
WHERE YOU CAN GET MORE INFORMATION...............................................................................10
</TABLE>
-2-
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this Prospectus discuss future
expectations, contain projections of results of operations or financial
condition or state other "forward-looking" information regarding e4L and its
subsidiaries. Those statements are subject to known and unknown risks,
uncertainties and other factors that could cause the actual results to differ
materially from those contemplated by the statements. The forward-looking
information is based on various factors and has been derived using numerous
assumptions.
Important factors that may cause e4L's actual results to differ from
projections include, for example,
o the success or failure of e4L's efforts to implement
its business strategies;
o competition for products and media time;
o the ability to raise sufficient capital to expand
e4L's business;
o the ability to develop or obtain rights to successful
new products and ability to exploit alternative
distribution channels such as wholesale/retail and
electronic commerce;
o the ability to attract and retain quality employees
and talented performers for e4L's direct response
television programming; and
o other risks which may be described in e4L's future
filings with the SEC.
e4L does not promise, nor is it obligated, to update forward-looking
information to reflect actual results or changes in assumptions or other factors
that could affect those statements.
RISK FACTORS
You should carefully consider each of the following factors and other
information in this prospectus before deciding to invest in shares of e4L's
Common Stock.
RECENT LOSSES; CASH FLOW
e4L incurred significant losses in four of its last five fiscal years.
e4L also reported a net loss of approximately $43.6 million for fiscal year 1999
and a loss of $5.9 million during the three months ended June 30, 1999. Because
of e4L's historical financial condition as well as other unfavorable conditions,
e4L developed a business plan and has begun implementing new strategies designed
to increase net revenue, reduce costs and return it to profitability. If the
business plan does not adequately address the circumstances and situations which
resulted in e4L's historic poor performance, e4L would be required to seek
alternative forms of financing, the availability of which is uncertain, or be
forced to go out of business.
NATURE OF THE DIRECT RESPONSE MARKETING AND ELECTRONIC COMMERCE INDUSTRIES
e4L experiences extreme competition for products, customers and media
access in the direct response marketing and electronic commerce industries.
Accordingly, to be successful, e4L must:
Accurately predict consumer needs, market conditions, including
consumers' acceptance of the Internet as a medium for commerce and
competition;
Introduce successful products;
Produce compelling direct response television programs and Internet
sales initiatives;
Acquire appropriate amounts of media time;
Manage its media time effectively;
Fulfill customer orders timely and efficiently;
Provide courteous and informative customer service;
Maintain adequate vendor relationships and terms;
Enhance successful products to generate additional sales;
Expand the methods used to sell products, including greater use of the
Internet as a sales medium;
Expand in existing geographic markets; and
Integrate acquired companies and businesses efficiently.
e4L's recent operating results were primarily caused by delays in
product introductions, lack of successful products, failure to adequately
leverage its global spending and deteriorating economic conditions in the Asian
(including the South
-3-
<PAGE>
Pacific Rim) market. e4L actively seeks out new products, new sources of
products and alternative distribution channels, including wholesale/retail and
the Internet. e4L cannot be certain that inventors and product manufacturers
will select it to market their products. Significant delays in product
introductions or a lack of successful products could prevent e4L from selling
adequate amounts of its products and otherwise have a negative effect on e4L's
business.
DEPENDENCE UPON FOREIGN SALES
e4L markets products to consumers in over 70 countries. In recent
years, e4L has derived approximately forty percent of its net revenue from sales
to customers outside the United States and Canada. e4L's largest international
markets are Europe and Asia, primarily Japan, Australia and New Zealand. The
economic downturn in the Asian region has had and, for the foreseeable future,
may continue to have, an adverse effect on e4L. e4L's international expansion
has caused an increase in its working capital requirements due to the additional
time required to deliver products abroad and receive payment from foreign
countries.
While e4L's foreign operations have the advantage of airing direct
response television programs that have already proven successful in the United
States, as well as successful direct response television programs produced by
other direct marketing companies with limited media access and distribution
capabilities, there can be no assurance that e4L's foreign operations will
continue to generate similar revenue or operate profitability. Competition in
the international marketplace is intense. In addition, e4L is subject to many
risks associated with doing business abroad including: (i.) adverse fluctuations
in currency exchange rates; (ii.) transportation delays and interruptions;
(iii.) political and economic disruptions; (iv.) the imposition of tariffs and
import and export controls; and (v.) increased customs or local regulations.
The occurrence of any of these risks could have an adverse effect on
e4L's business.
ENTRANCE INTO NEW MARKETS
As e4L enters new markets, it is faced with the uncertainty of never
having done business in that country's particular commercial, political and
social environment. Accordingly, despite e4L's best efforts, the likelihood of
success is unpredictable for reasons particular to each new market. For example,
e4L's success in any new market is based primarily on strong product acceptance
by consumers in the new market. It is also possible that, despite e4L's
apparently successful entrance into a new market, some unforeseen circumstance
could arise which would limit e4L's ability to continue to do business, operate
profitability or to expand in that new market.
DEPENDENCE ON SUCCESSFUL PRODUCTS; UNPREDICTABLE MARKET LIFE; INVENTORY
MANAGEMENT AND PRODUCT RETURNS
e4L is dependent on its continuing ability to introduce successful new
products to supplement or replace existing products as they mature through their
product life cycles. e4L's five most successful products each year typically
account for a substantial amount of e4L's annual net revenue. Generally, e4L's
successful products change from year to year. Accordingly, e4L's future results
of operations depend on its ability to introduce successful products
consistently and to capture the full revenue potential of each product at all
stages of consumer marketing and distribution channels during the product's life
cycle.
In addition to a supply of successful new products, e4L's revenue and
results of operations depend on a positive customer response to its direct
response television programming, the effective management of product inventory
and other factors. Customer response to e4L's programming depends on many
variables, including the appeal of the products being marketed, the
effectiveness of the direct response program, the availability of competing
products and the timing and frequency of program airings. There can be no
assurance that e4L's programming will receive market acceptance.
e4L must have an adequate supply of inventory to meet consumer demand.
Most of e4L's products have a limited market life, so it is extremely important
that e4L generate maximum sales during this time period. If production delays or
shortages, poor inventory management or inadequate cash flow prevent e4L from
maintaining sufficient inventory, e4L could lose potential product sales, which
may never be recouped. In addition, unanticipated obsolescence of a product may
occur or problems may arise regarding regulatory, intellectual property, product
liability or other issues which adversely affect future sales of a product even
though e4L may still hold a large quantity of the product in inventory.
Accordingly, e4L's ability to maintain systems and procedures to effectively
manage its inventory is of critical importance to e4L's cash flow and results of
operations.
The average United States and international product life cycle is less
than two years. Generally, products generate their most significant revenue in
their first year of sales. In addition, e4L must adapt to market conditions and
competition as well as other factors which may cut short a product's life cycle
and adversely affect e4L's results of operations.
e4L offers a limited money-back guarantee on all of its products if the
customer is not fully satisfied. Accordingly, e4L's results of operations may be
adversely affected by product returns under e4L's guarantee, its product
warranty or
-4-
<PAGE>
otherwise. Although e4L establishes reserves against product returns which it
believes are adequate based on product mix and returns history, there can be no
assurance that e4L will not experience unexpectedly high levels of product
returns which exceed the reserves for that product. If product returns do exceed
reserves, e4L's results of operations would be adversely affected.
DEPENDENCE ON THIRD PARTY MANUFACTURERS AND SERVICE PROVIDERS
Substantially all of e4L's products are manufactured by other United
States and foreign companies. In addition, e4L utilizes other companies to
fulfill orders placed for e4L's products and to provide telemarketing services.
If e4L's suppliers are unable, either temporarily or permanently, to deliver
products to e4L in time to fulfill sales orders, it could have a material
adverse effect on e4L's results of operations. Moreover, because the time from
the initial approval of a product by e4L's product development department until
the first sale of a product must be short, e4L must be able to cause its product
manufacturers to quickly produce high-quality, reasonably priced products for
e4L to sell. However, because e4L's primary product manufacturers are foreign
companies which require longer lead times for products, any delay in production
or delivery would adversely affect sales of the product and e4L's results of
operations. In addition, utilization of foreign manufacturers further exposes
e4L to the general risks of doing business abroad.
DEPENDENCE OF MEDIA ACCESS; EFFECTIVE MANAGEMENT OF MEDIA TIME
e4L must have access to media time to televise its direct response
television programming on cable and broadcast networks, network affiliates and
local stations. e4L purchases a significant amount of media time from cable
television and satellite networks, which assemble programming for transmission
to cable system operators. If demand for airtime increases, cable system
operators and broadcasters may limit the amount of time available for these
broadcasts. Larger multiple cable system operators have begun selling 'dark'
time, (i.e., the hours during which a network does not broadcast its own
programming) to third parties which may cause prices for such media to rise.
Significant increases in the cost of media time or significant decreases in
e4L's access to media could adversely impact e4L. In addition, periodic world
events may limit e4L's access to air time and reduce the number of persons
viewing e4L's direct response programming in one or more markets, which would
adversely impact e4L for these periods.
Recently, international media suppliers have begun to negotiate for
fixed media rates and minimum revenue guarantees, each of which increase e4L's
cost of media and risk. In addition to acquiring adequate amounts of media time,
e4L's business depends on its ability to manage efficiently its acquisitions of
media time, by analyzing the need for, and making purchases of, long term media
and spot media. e4L must also properly allocate its available airtime among its
current library of direct response television programs. Whenever e4L makes
advance purchases and commitments to purchase media time, it must manage the
media time effectively, because the failure to do so could negatively affect
e4L's business. If e4L cannot use all of the media time it has acquired, it
attempts to sell its excess media time to others. However, there can be no
assurance that e4L will be able to use or sell its excess media time.
In April 1998, e4L began leasing a twenty-four hour transponder on the
Eutelstat Satellite, which broadcasts across Europe. e4L has incurred
significant start-up costs in connection with the transponder lease. If e4L is
unable to use effectively or sell the remaining transponder media time, e4L's
future operations could be adversely affected. During the year ended March 31,
1999, e4L classified a portion of this contract as unfavorable and recorded a
$5.3 million unusual charge.
LITIGATION AND REGULATORY ACTIONS
There have been many lawsuits against companies in the direct marketing
industry. In recent years, e4L has been involved in significant legal
proceedings and regulatory actions by the FTC and CPSC, which have resulted in
significant costs and charges to e4L. In addition, e4L, its wholly owned
subsidiary, Positive Response Television, Inc. and Positive Response's chief
executive officer are subject to FTC consent orders which require them to submit
periodic compliance reports to the FTC. Any additional FTC or CPSC violations or
significant new litigation could have an adverse effect on e4L's business.
PRODUCT LIABILITY CLAIMS
Products sold by e4L may expose it to potential liability from damages
claims by users of the products. In certain instances, e4L is able to obtain
contractual indemnification rights against these liabilities from the
manufacturers of the products. In addition, e4L generally requires its
manufacturers to carry product liability insurance. However, e4L cannot be
certain that manufacturers will maintain this insurance or that their coverage
will be adequate to cover all claims. In addition, e4L cannot be certain that it
will be able to maintain its insurance coverage or obtain additional coverage on
acceptable terms, or that its insurance will provide adequate coverage against
all claims.
-5-
<PAGE>
COMPETITION
e4L competes directly with companies which generate sales from direct
response television programs and other direct marketing and electronic commerce
companies. e4L also competes with a large number of consumer product retailers,
many of which have substantially greater financial, marketing and other
resources than e4L. Some of these retailers have recently begun, or indicated
that they intend to begin, selling products through direct response marketing
methods, including sales in various e-commerce channels, such as the Internet.
e4L also competes with companies that make imitations of e4L's products at
substantially lower prices, which may be sold in department stores, pharmacies,
general merchandise stores and through magazines, newspapers, direct mail
advertising, catalogs and the Internet.
DEPENDENCE UPON KEY PERSONNEL
e4L's executive officers have substantial experience and expertise in
direct response sales and marketing, electronic commerce and media. In
particular, e4L is highly dependent on certain of its employees responsible for
product development and production of direct response television programs. If
any of these individuals leave e4L, e4L's business could be negatively affected.
YEAR 2000 ISSUES
The operation of e4L's business is dependent on its management
information systems, computer hardware, software programs and operating systems.
Computer technology is used in several key areas of e4L's business, including
merchandise purchasing, inventory management, pricing, sales, shipping and
financial reporting, as well as in various administrative functions. e4L has
been evaluating its computer technology to identify potential Year 2000
compliance problems and has an implementation process with respect thereto. It
is anticipated that modification or replacement of some of e4L's computer
technology will be necessary to enable e4L's computer to recognize the Year
2000. e4L does not expect that the costs associated with achieving Year 2000
compliance will have a significant effect on its business. In addition, e4L is
also dependent on third-party suppliers and vendors and will be vulnerable to
such party's failures to address and resolve their Year 2000 issues. While e4L
is not aware of any known third party problems that will not be corrected, e4L
has limited information concerning the Year 2000 readiness of third parties. If
management is incorrect, Year 2000 problems could have a negative effect on e4L
and its business.
SEASONALITY
e4L's revenue vary throughout the year. e4L's revenue have historically
been highest in its third and fourth fiscal quarters and lower in its first and
second fiscal quarters due to fluctuations in the number of television viewers.
These seasonal trends have been and may continue to be affected by the timing
and success of new product offerings and the potential growth in e4L's
electronic commerce businesses.
CONVERTIBLE SECURITIES; SHARES FOR FUTURE SALE
Sales of a substantial number of shares of e4L's common stock in the
public market could adversely affect the market price of e4L's common stock
outstanding. There are currently approximately 32.7 million shares of e4L Common
Stock outstanding, nearly all of which are freely tradable. In addition,
approximately 48.1 million shares of e4L Common Stock are currently reserved for
issuance upon the exercise of outstanding options and warrants and the
conversion of convertible preferred stock. For example, approximately 17.0
million shares of Common Stock may be issued to holders of e4L's Series D
Convertible Preferred Stock (based on a conversion price of $1.073125 per share)
and approximately 13.3 million shares of Common Stock may be issued to holders
of e4L's Series E Convertible Preferred Stock (based on a conversion price of
$1.50 per share).
THE COMPANY
e4L is principally engaged in the use of direct response transactional
television programming, also known as infomercials, wholesale/retail
distribution and electronic commerce, to sell consumer products worldwide. e4L
manages all phases of direct marketing for the majority of its consumer products
in both the United States and international markets, including product selection
and development, manufacturing by third parties, production and broadcast of
direct response programs, order processing and fulfillment and customer service.
e4L is engaged in direct marketing of consumer products in the United
States through its wholly-owned subsidiary, Quantum North America, Inc.
(formerly Media Arts International, Ltd. and d/b/a e4L North America), which e4L
acquired in 1986, and internationally through its wholly-owned subsidiaries:
Quantum International Limited, which e4L acquired in 1991; Quantum Prestige
Limited, through which e4L operates in New Zealand and in all Asian countries
other than Japan; Quantum International (Japan) Company Limited, which e4L
formed in June 1995; and Suzanne Paul Holdings Pty Limited
-6-
<PAGE>
and its operating subsidiaries which e4L acquired in July 1996. e4L produces
television programming through e4L Television (formerly d/b/a DirectAmerica
Corporation), which e4L acquired in October 1995.
e4L is a Delaware corporation, with its principal executive offices
located at 15821 Ventura Boulevard, 5th Floor, Los Angeles, California 91436,
and its telephone number is (818) 461-6400.
USE OF PROCEEDS
e4L will not receive any proceeds from the sale of the shares of Common
Stock offered by the Selling Stockholders pursuant to this Prospectus. The
Selling Stockholders will remit to e4L the exercise price of the warrants in
connection with an exercise of such securities. e4L will use the proceeds from
such warrant exercises for working capital purposes.
-7-
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the name of the Selling Stockholders,
the number of shares of Common Stock beneficially owned by each Selling
Stockholder as of September 17, 1999, and the number of shares of Common Stock
which may be offered for sale pursuant to this Prospectus by each Selling
Stockholder. The Offered Shares may be offered from time to time by each Selling
Stockholder named below. See "Plan of Distribution." However, the Selling
Stockholders are under no obligation to sell all or any portion of the shares of
Common Stock offered hereby, nor is any Selling Stockholder obligated to sell
such shares of Common Stock immediately under this Prospectus. Because the
Selling Stockholders may sell all or part of the shares of Common Stock offered
hereby, no estimate can be given as to the number of shares of Common Stock that
will be held by each Selling Stockholder upon termination of any offering made
hereby.
Pursuant to Rule 416(a) under the Securities Act, the shares of Common
Stock issuable in respect of the preferred stock and warrants are subject to
adjustment by reason of stock splits, stock dividends and other similar
transactions in the Common Stock.
<TABLE>
<CAPTION>
Common Shares Beneficially
Owned After Offering (1)
Number of Common -----------------------------
Shares Beneficially Common Shares Percent of
Name of Selling Stockholder Owned Prior to Offering Offered Hereby Number Outstanding
- ----------------------------------------- ------------------------- ------------------ --------------- -------------
<S> <C> <C> <C> <C>
RS Pacific Partners 513,776(2) 513,776 0 0
RS Emerging Growth Partners LP 264,140(3) 264,140 0 0
RS Premium Partners LP 333,093(4) 333,093 0 0
First Security Van Kasper 3,000(5) 3,000 0 0
</TABLE>
- ---------------
(1) Assumes the sale of all shares of Common Stock offered hereby. e4L is
not aware of any plans of the Selling Stockholders to dispose of their
Common Stock.
(2) Consists of 490,656 shares of Common Stock issuable upon conversion of
Series F Convertible Preferred Stock and 23,120 shares of Common Stock
issuable upon exercise of warrants.
(3) Consists of 252,250 shares of Common Stock issuable upon conversion of
Series F Convertible Preferred Stock and 11,890 shares of Common Stock
issuable upon exercise of warrants.
(4) Consists of 318,103 shares of Common Stock issuable upon conversion of
Series F Convertible Preferred Stock and 14,990 shares of Common Stock
issuable upon exercise of warrants.
(5) Consists of 3,000 shares of Common Stock issuable upon exercise of
warrants.
-8-
<PAGE>
PLAN OF DISTRIBUTION
The shares of Common Stock are being offered on behalf of each of the
Selling Stockholders and e4L will not receive any proceeds from the Offering.
The shares of Common Stock may be sold or distributed from time to time by each
Selling Stockholder, or by pledgees, donees or transferees of, or other
successors in interest to, each Selling Stockholder, directly to one or more
purchasers (including pledgees) or through brokers, dealers, agents or
underwriters who may act solely as agent or may acquire such shares as
principals, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, at negotiated prices, or at fixed prices,
which may be subject to change. The sale of the shares of Common Stock may be
effected in one or more of the following methods: (i) ordinary brokers'
transactions, which may include long or short sales; (ii) transactions involving
cross or block trades or otherwise on the New York Stock Exchange; (iii)
purchases by brokers, dealers or underwriters as principal and resale by such
purchasers for their own accounts pursuant to this Prospectus; (iv) "at the
market" to or through market makers or into established trading markets,
including direct sales to purchasers or sales effected through agents; (v) or
any other exchange on which the Common Stock is listed (including any
over-the-counter listing service); (vi) any combination of the foregoing, or by
any other legally available means. In addition, each Selling Stockholder or its
successor in interest may enter into hedging transactions with broker-dealers
who may engage in short sales of shares of Common Stock in the course of hedging
the position they assume with such Selling Stockholder. Each Selling Stockholder
or its successor in interest may also enter into option or other transactions
with broker-dealers that require the delivery by such broker-dealers of the
shares of Common Stock, which shares of Common Stock may be resold thereafter
pursuant to this Prospectus. There can be no assurance that all or any of the
shares of Common Stock will be issued to, or sold by, each Selling Stockholder.
Brokers, dealers, underwriters or agents participating in the sale of
the shares of Common Stock as agents may receive compensation in the form of
commissions, discounts or concessions from each Selling Stockholder and/or
purchasers of the Common Stock for whom such broker-dealers may act as agent, or
to whom they may sell as principal, or both (which compensation to a particular
broker-dealer may be less than or in excess of customary commissions). Each
Selling Stockholder and any broker-dealers or other persons who act in
connection with the sale of the Common Stock hereunder may be deemed to be
"Underwriters" within the meaning of the Securities Act, and any commission they
receive and proceeds of any sale of such shares may be deemed to be underwriting
discounts and commissions under the Securities Act. Neither e4L nor any of the
Selling Stockholders can presently estimate the amount of such compensation. e4L
knows of no existing arrangements between any Selling Stockholders and any other
stockholders, broker, dealer, underwriter or agent relating to the sale or
distribution of the shares of Common Stock.
A Selling Stockholder may decide not to sell any shares. e4L cannot
assure you that any Selling Stockholder will use this prospectus to sell any or
all of the shares of Common Stock. Any shares covered by this prospectus which
qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be
sold under Rule 144 or Rule 144A rather than pursuant to this prospectus. In
addition, a Selling Stockholder may transfer, devise or gift the shares by other
means not described in this prospectus.
Each Selling Stockholder and any other persons participating in the
sale or distribution of the Common Stock will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder, which
provisions may limit the timing of purchases and sales of any of the Common
Stock by any Selling Stockholder or any other such persons. The foregoing may
affect the marketability of the Common Stock.
e4L will pay substantially all of the expenses incident to the
registration, offering and sale of the Common Stock to the public other than
commissions or discounts of underwriters, broker-dealers or agents. e4L has also
agreed to indemnify each Selling Stockholder and certain related persons against
certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby has been
passed upon for e4L by e4L's outside legal counsel, Klehr, Harrison, Harvey,
Branzburg & Ellers LLP, Philadelphia, Pennsylvania.
EXPERTS
The consolidated financial statements and schedule of e4L, Inc.
appearing in e4L's Annual Report (Form 10-K) for the year ended March 31, 1999
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 and schedule are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
-9-
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows companies to "incorporate by reference" the information
filed with them, which means that e4L can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this Prospectus and information e4L files later with
the SEC will automatically update and supersede this information. e4L
incorporates by reference the documents listed below and any future filings it
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
(a) e4L's Annual Report on Form 10-K for the fiscal year ended
March 31, 1999;
(b) e4L's Quarterly Report on Form 10-Q for the quarter ended June
30, 1999;
(c) e4L's Current Reports on Form 8-K dated June 8, 1999 and
August 30, 1999;
(d) e4L's Proxy Statement on Schedule 14A, dated August 23, 1999;
and
(e) The description of e4L's Common Stock contained in e4L's
Registration Statement on Form 8-A, dated August 28, 1990,
including all amendments and reports filed for the purpose of
updating such description.
This Prospectus is part of a registration statement e4L filed with the
SEC. You should rely only on the information or representations provided in this
Prospectus. e4L has authorized no one to provide you with different information.
e4L is not offering or selling these securities in any state where the offer or
sale is not permitted. You should not assume that the information in this
Prospectus is accurate as of any date other than the date stated on the front
cover page of this Prospectus.
e4L will provide without charge to each person to whom this Prospectus
is delivered, upon written or oral request, a copy of any or all of such
documents which are incorporated herein by reference. You should direct your
requests for copies to e4L, Inc., 15821 Ventura Boulevard, 5th Floor, Los
Angeles, California 91436; Attention: Investor Relations, telephone number (818)
461-6400, facsimile number (818) 461-6525.
WHERE YOU CAN GET MORE INFORMATION
At your request, e4L will provide you, without charge, a copy of any
exhibits to e4L's Registration Statement. If you would like more information,
write or call e4L at:
e4L, Inc.
Attention: Investor Relations
15821 Ventura Boulevard, 5th Floor
Los Angeles, California 91436
Telephone: (818) 461-6400
Facsimile: (818) 461-6530
e4L's fiscal year ends on March 31. e4L intends to provide to its
stockholders annual reports containing audited financial statements and other
appropriate reports. In addition, e4L files annual, quarterly and current
reports, proxy statements and other information with the SEC. You may read and
copy any reports, statements or other information e4L files at the SEC's public
reference room in Washington, D.C. You can request copies of these documents,
upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
rooms. e4L's SEC filings are also available to the public on the SEC's Internet
site at http\\www.sec.gov.
-10-
<PAGE>
No dealer, salesman or any other person has been authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offering described herein and, if given or made, such
information or representation must not be relied upon as having been authorized
by e4L or the Selling Stockholders. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy a security other than the shares of
Common Stock offered hereby, nor does it constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that the information contained herein is correct as of any date subsequent to
the date hereof.
1,114,009 SHARES OF COMMON STOCK
e4L, INC.
------
PROSPECTUS
------
SEPTEMBER __, 1999
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is an itemized statement of the estimated amounts of all
expenses payable by e4L in connection with the registration of the shares of
Common Stock offered hereby, other than underwriting discounts and commissions:
<TABLE>
<S> <C>
Registration Fee--Securities and Exchange Commission................... $ 1,200.07
*Blue Sky fees and expenses............................................. $ 1,000.00
*Accountants' fees and expenses ........................................ $ 5,000.00
*Legal fees and expenses ............................................... $ 5,000.00
*Printing and EDGAR expenses ........................................... $ 1,000.00
*Miscellaneous ......................................................... $ 1,000.00
------------
Total ......................................................... $14,200.07
-------------
-------------
</TABLE>
- ------------------
* Estimate
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
e4L has adopted in its Certificate of Incorporation and Bylaws the
provisions of Section 102(b)(7) of the Delaware General Corporation Law which
eliminate or limit the personal liability of a director of e4L or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except that this provision shall not eliminate or limit the liability of a
director for any breach of the director's duty of loyalty to e4L or its
stockholders, for acts or omissions not in good faith or which involve
intentional misconduct or a known violation of the law, under Section 174 of the
Delaware General Corporation Law, or for any transaction from which the director
derived an improper personal benefit.
Further, e4L's Certificate of Incorporation and Bylaws provide that e4L
shall indemnify all persons whom it may indemnify pursuant to Section 145 of the
Delaware Corporation Law to the full extent permitted therein. Section 145
provides, subject to various exceptions and limitations, that e4L may indemnify
its directors or officers if such director or officer is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer of e4L, or is or was
serving at the request of e4L as a director or officer of another corporation,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of e4L, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The determination of whether indemnification
is proper under the circumstances, unless made by a court, shall be made by a
majority of a quorum of disinterested members of the Board of Directors,
independent legal counsel or the stockholders of e4L. In addition, e4L shall
indemnify its directors or officers to the extent that they have been successful
on the merits or otherwise in defense of any such action, suit or proceeding, or
in the defense of any claim, issue or matter therein, against expenses
(including attorneys' fees) actually and reasonably incurred by them in
connection therewith.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Schedule of Exhibits.
Exhibit
NUMBER EXHIBIT
------ -------
4.1 (1) Certificate of Designations, Preferences and Rights of
Series F Convertible Preferred Stock.
4.2 (1) Form of e4L Warrant issued in connection with the Series F
Convertible Preferred Stock.
5 (2) Opinion and Consent of Klehr, Harrison, Harvey, Branzburg
& Ellers, LLP.
10.1 (1) Securities Purchase Agreement, dated August 27, 1999,
among e4L and the Series F Investors.
10.2 (1) Registration Rights Agreement, dated August 27, 1999, among
e4L and the Series F Investors.
23 (2) Consent of Ernst & Young LLP, independent auditors.
- ----------------
(1) Incorporated by reference to Current Report on Form 8-K dated
August 30, 1999.
(2) Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(i) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(A) to include any prospectus required by section
10(a)(3) of the Securities Act;
(B) to reflect in the Prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement.
(C) to include any material information with respect to
the plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
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 Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(ii) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(iii) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(iv) For purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to Section 13(a) or 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 herein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
(b) 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 foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the 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 with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent,
II-2
<PAGE>
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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 17th day of
September, 1999.
e4L, INC.
BY: /s/ STEPHEN C. LEHMAN
---------------------------------------------------------
Stephen C. Lehman, Chairman of the Board of Directors and
Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned officers and directors of e4L, Inc. whose signature
appears below hereby appoints Stephen C. Lehman and Daniel M. Yukelson as true
and lawful attorney-in-fact for the undersigned with full power of substitution,
to execute in his name and on his behalf in each capacity stated below, any and
all amendments (including post-effective amendments) to this Registration
Statement as the attorney-in-fact shall deem appropriate, and to cause to be
filed any such amendment (including exhibits thereto and other documents in
connection therewith) to this Registration Statement with the Securities and
Exchange Commission, as fully and to all intents and purposes as such person
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact, or any of them, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated on this 17th day of September, 1999.
SIGNATURE TITLE(S)
--------- --------
/s/ STEPHEN C. LEHMAN Chairman of the Board of Directors and Chief
- ---------------------------- Executive Officer
Stephen C. Lehman
/s/ DANIEL M. YUKELSON Executive Vice President/Finance and Chief
- ---------------------------- Financial Officer, and Secretary
Daniel M. Yukelson
/s/ STUART D. BUCHALTER Director
- ----------------------------
Stuart D. Buchalter
/s/ ROBERT W. CRAWFORD Director
- ----------------------------
Robert W. Crawford
/s/ JOHN W. KIRBY President and Director
- ----------------------------
John W. Kirby
/s/ DAVID E. SALZMAN Director
- ----------------------------
David E. Salzman
/s/ ANDREW M. SCHUON Director
- ----------------------------
Andrew M. Schuon
/s/ ERIC R. WEISS Vice Chairman of the Board of Directors and
- ---------------------------- Chief Operating Officer
Eric R. Weiss
<PAGE>
EXHIBIT INDEX
EXHIBIT NO.
- -----------
5 Opinion and Consent of Klehr, Harrison, Harvey, Branzburg &
Ellers, LLP.
23 Consent of Ernst & Young LLP, independent auditors.
<PAGE>
EXHIBIT 5
[LETTERHEAD OF KLEHR, HARRISON, HARVEY, BRANZBURG & ELLERS LLP]
September 17, 1999
Board of Directors
e4L, Inc.
15821 Ventura Boulevard, 5th Floor
Los Angeles, California 91436
RE: REGISTRATION STATEMENT ON FORM S-3
Gentlemen:
We have acted as counsel to e4L, Inc., a Delaware corporation (the
"Company"), in connection with the preparation of the Company's Registration
Statement on Form S-3 (the "Registration Statement") being filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"). The Registration Statement relates to the
resale of up to 1,114,009 shares of the Company's common stock, par value $.01
per share (the "Shares") issuable upon conversion of preferred stock (the
"Preferred Stock") and exercise of warrants (the "Warrants").
In connection with this opinion, we have examined and relied upon the
original or copies of (i) the Certificate of Incorporation and the By-laws of
the Company, (ii) minutes and records of the corporate proceedings with respect
to the issuance of the Shares, and (iii) such other documents as we have deemed
necessary as a basis for the opinion hereinafter set forth.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinions expressed herein that were not independently established or
verified, we have relied upon oral or written statements and representations of
officers and other representatives of the Company and others.
This opinion is limited to the laws of the State of Delaware and we
express no opinion as to the laws of any other jurisdiction.
Based upon and subject to the foregoing, we are of the opinion that the
Shares issuable upon conversion of the Preferred Stock and exercise of the
Warrants, when issued upon conversion of the Preferred Stock or exercise of the
Warrants in accordance with the terms of the Certificate of Designations,
Preference and Rights of the Preferred Stock or the Warrants, as the case may
be, will be validly issued, fully paid and non-assessable.
This opinion is being furnished to you solely for your benefit in
connection with the Registration Statement and is not to be used, circulated,
quoted or referred to or relied upon for any other purpose without our express
written permission.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Act, or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Klehr, Harrison, Harvey, Branzburg & Ellers LLP
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of e4L, Inc. for the
registration of 1,114,009 shares of its common stock and to the incorporation by
reference therein of our report dated June 25, 1999 with respect to the
consolidated financial statements and schedule of e4L, Inc. included in its
Annual Report (Form 10-K) for the year ended March 31, 1999, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Los Angeles, California
September 16, 1999
