SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST ENTERTAINMENT HOLDING CORP.
(Exact name of registrant as specified in its charter)
Nevada 84-0974303
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5495 Marion Street, Denver, Colorado 80216
(Address of Principal Executive Offices) (Zip Code)
FIRST ENTERTAINMENT HOLDING CORP.
COMPENSATION PLAN - 1999C
(Full titles of the plans)
Douglas R. Olson, President
First Entertainment Holding Corp.
5495 Marion Street
Denver, Colorado 80216
(Name and address of agent for service)
(303) 382-1500
(Telephone number, including area code, of agent for service)
Copy to:
Alan L. Talesnick, Esq.
Francis B. Barron, Esq.
Patton Boggs LLP
1660 Lincoln Street, Suite 1900
Denver, Colorado 80264
(303)830-1776
<TABLE>
CALCULATION OF REGISTRATION FEE
Title Of Securities Amount to Be Proposed Proposed Amount of
To Be registered Registered Maximum Maximum
Registration
Offering Aggregate
Price Per Offering
Unit Price
<S> <C> <C> <C> <C>
Common Stock, 1,000,000 shares $.8975 (2) $879,500 $250
$.008 par value (1)
</TABLE>
(1) Consists of 1,000,000 shares issuable pursuant to the Company's
Compensation Plan - 1999C (the "Stock Plan").
(2) The Proposed Maximum Aggregate Offering Price was calculated
pursuant to Rule 457(h) using the average of the high and low reported
sales prices of the Company's common stock on the OTC Bulletin Board on
November 5, 1999 which is within five business days of the date of
filing (November 12, 1999) of this Registration Statement because
options and shares have not yet been granted under the Stock Plan.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
This registration statement relates to two separate prospectuses.
Items 1 and 2 hereof, and the documents incorporated herein by
reference pursuant to Part II, Item 3 hereof, constitutes the first
prospectus relating to offers by us and our employees and consultants
of 1,000,000 shares of common stock to be issued pursuant to our
Compensation Plan-1999C (the "Stock Plan"). The second prospectus
relates to the re-offer or resale of any shares which are deemed to be
"control securities" or "restricted securities" under the Securities
Act of 1933, as amended. Our principal offices are located at 5495
Marion Street, Denver, Colorado 80216; telephone (303) 382-1500.
PROSPECTUS
Item 1. Plan Information
STOCK PLAN INFORMATION
We established the Stock Plan effective November 3, 1999 to
provide us with flexibility and to conserve our cash resources in
compensating certain of our technical, administrative and professional
employees and consultants and to supplement prior stock option plans.
The issuance of shares under the Stock Plan is restricted to persons
and firms who are closely-related to us and who provide services in
connection with the development, production of our products or
otherwise in connection with our business. The Stock Plan authorizes
us to issue up to 1,000,000 shares of our common stock. Shares must
be issued only for bona fide services and may not be issued under the
Stock Plan for services in connection with the offer and sale of
securities in a capital-raising or capital promoting transaction.
Shares are awarded under the Stock Plan pursuant to individually
negotiated compensation contracts as determined and/or approved by the
Stock Plan committee. The eligible participants include directors,
officers, employees and non-employee consultants and advisors.
Subject to the restriction that shares may not be awarded under the
Stock Plan to persons owning beneficially or of record ten percent
(10%) or more of our then outstanding shares or who would own such
amount of shares as a result of an award under the Stock Plan, there
is no limit as to the number of shares which may be awarded to a
single participant. We anticipate that a substantial portion of the
remaining shares to be issued under the Stock Plan will be issued as
compensation to our technical consultants, attorneys, and advisors who
provide development services in the development and testing of its
various products and services.
The Stock Plan does not require restrictions on the
transferability of shares issued thereunder. However, such shares may
be restricted as a condition to their issuance where the Board of
Directors deems such restrictions appropriate. The Stock Plan is not
subject to the Employee Retirement Income Securities Act of 1974
("ERISA"). Shares awarded under the Stock Plan are intended to be
fully taxable to the recipient as earned income.
We will provide without charge, upon written or oral request, the
documents incorporated by reference in Item 3 of Part II of this
Registration Statement. These documents are incorporated by reference
in the Section 10(a) prospectus. We will also provide without charge,
upon written or oral request, all other documents required to be
delivered to employees pursuant to Rule 428(b). Any and all such
requests shall be directed to the Company at its office at 5495 Marion
Street, Denver, CO 80216, attention: President.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED ON
THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
No person has been authorized by us to give any information or to
make any representation other than as contained in this prospectus
and, if given or made, such information or representation must not be
relied upon as having been authorized by us. Neither the delivery of
this prospectus nor any distribution of the shares of the common stock
issuable under the terms of the Stock Plan shall, under any
circumstances, create any implication that there has been no change in
our affairs since the date hereof.
Our principal offices are located at 5495 Marion Street, Denver,
CO 80216; telephone (303) 382-1500.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES
IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
IN SUCH STATE.
REOFFER PROSPECTUS
FIRST ENTERTAINMENT HOLDING CORP.
1,000,000 Shares Of Common Stock
This prospectus relates to the transfer of up to 1,000,000 shares
of common stock of First Entertainment Holding Corp. by the selling
stockholders identified in this prospectus. The shares will be
acquired by the selling stockholders pursuant to grants of stock and
options under our Stock Plan. We will not receive any of the proceeds
from the sale of the shares by the selling stockholders. However, we
will receive proceeds from the exercise of options to purchase shares
of common stock that may be granted under the Stock Plan.
The selling stockholders have not entered into any underwriting
arrangements. The prices for our shares may be the market prices
prevailing at the time of transfer, prices related to the prevailing
market prices, or negotiated prices. Brokerage fees or commissions may
be paid by the selling stockholders in connection with sales of our
shares. We will not receive any of the proceeds from the sale of
these shares.
Our common stock is quoted on the OTC Bulletin Board under the
symbol "FTET". On November 5, 1999, the closing price of the common
stock was $.875 per share.
Investing in our shares involves certain risks. See the "RISK
FACTORS" section beginning on page 4.
Neither the Securities And Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus is November 12, 1999
TABLE OF CONTENTS
PROSPECTUS SUMMARY
RISK FACTORS
THE COMPANY
PROSPECTIVE SELLING STOCKHOLDERS
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
INDEMNIFICATION
AVAILABLE INFORMATION
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
PROSPECTUS SUMMARY
The following summary highlights information contained in this
prospectus. It may not be complete and may not contain all the
information that you should consider before investing in the Common
Stock. You should read this entire prospectus carefully, including the
"RISK FACTORS" section.
The Company
We engage in, or hold controlling interests in entities that engage
in, radio, live entertainment and internet related businesses.
Through our Quality Communications, Inc. subsidiary, we operate an FM
radio station in Gillette, Wyoming that plays contemporary country
music. Through our Comedy Works, Inc. subsidiary, we operate a comedy
club in downtown Denver, Colorado. We also are pursuing internet
related businesses.
The Offering
The selling stockholders may sell a total of up to 1,000,000 shares of
common stock. The shares will be acquired by the selling stockholders
pursuant to our Stock Plan.
The shares may be sold at market prices or other negotiated prices.
The selling stockholders have not entered into any underwriting
arrangements for the sale of the shares.
We will not receive any proceeds from the sale of common stock by the
selling stockholders. If the options are issued to the selling
stockholders and subsequently exercised, we will use the proceeds from
those exercises for general and administrative expenses and working
capital.
Proposed Name Change
In November 1999, we determined to recommend to the shareholders for
their approval that the name of our Company be changed to "F2 Network
Group Inc.". We anticipate that the proposed name change will be
voted upon by the shareholders at a meeting to be held in December
1999 or January 2000.
Company Offices
Our offices are located at 5495 Marion Street, Denver, Colorado 80216,
telephone number (303) 382-1500.
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER, TOGETHER WITH THE
OTHER INFORMATION HEREIN, THE FOLLOWING FACTORS THAT AFFECT US.
We have a history of losses and a going concern issue.
During the period from inception (January 17, 1985) to December
31, 1998, we incurred operating losses in each fiscal year.
Cumulative net losses for that period amount to approximately
$16,500,000. As of December 31, 1998, we had a stockholders' deficit
of approximately $483,000 and had an excess of current liabilities
over current assets of approximately $1,500,000. In addition, in some
cases, we have been unable to meet our obligations as they become due.
The independent certified public accountants' report on our financial
statement's contains an explanatory paragraph, which, in general,
indicates that we have suffered recurring losses from operations, have
a working capital deficiency and have defaulted on a substantial
portion of our debt. These conditions raise substantial doubt about
its ability to continue as a going concern. Management's plans
include obtaining additional financing, and/or extending its existing
debt obligations, and/or obtaining additional equity capital and
ultimately achieving profitable operations, although there is no
assurance that the Company will be able to do so. In April 1999, we
were successful in obtaining financing from the First National Bank of
Gillette to pay debt to a creditor totaling $125,000, which came due
on March 31, 1999. The financial statements do not include any
adjustments that might result from the going concern uncertainties.
We have a limited public market.
Historically, there has been a limited public market for our
shares. We cannot assure that a larger, liquid market will ever
develop or that if developed it will be sustained. Individuals may
not be able to liquidate their investment on favorable terms at the
time they desire to do so.
Shareholders would be adversely impacted by potential future sales
pursuant to Rule 144.
At September 30, 1999, there were 11,966,646 shares issued and
outstanding. Approximately 2,922,764 shares are "restricted
securities", the transfer of which is limited under the Securities Act
of 1933, as amended (the "Act"). Under certain circumstances, these
restricted securities may become available for resale to the public
pursuant to Rule 144 promulgated under the Act. Approximately 95% of
these restricted shares have passed the date upon which they may be
sold in reliance upon Rule 144. Generally, under Rule 144, a person
(or persons whose shares are aggregated) who has satisfied a one-year
holding period may, under certain circumstances, sell within any three
month period a number of shares which does not exceed one percent (1%)
of the then outstanding common stock. Rule 144(k) also permits, under
certain circumstances, the sale of shares without any quantity
limitation by a person who has not been one of our affiliates for at
least 90 days and who has satisfied a two year holding period. The
possibility of the sales under Rule 144 may adversely affect the
market price of our securities.
We may not succeed in the negotiation of rights to proprietary rights
and may suffer increased costs.
The negotiation of acquisition, financing, licensing and sub-
licensing, production, distribution and sub-distribution agreements
can be a critical factor in our business. We cannot be certain of the
success of any such negotiations. Any or all of our packaged projects
could fail to receive any commitment for financing, production or
distribution.
Even when funds are obtained to pursue a particular project, the
project may be delayed because of various events beyond our control
such as labor problems, delays in development, lack of qualified
personnel, equipment breakdowns, and other circumstances. We intend
to seek insurance in order to reduce our exposure to such risks, but
our success in obtaining insurance against all such contingencies is
unlikely and additional financing may be required under such
circumstances. In the absence of a completion bond, and in the event
that such financing is not available, or qualified substitute
personnel cannot be engaged, the project may have to be abandoned.
If, on the other hand, a delayed project can be produced, it might be
completed only at a substantially higher cost to us.
The Multimedia entertainment business is speculative in nature.
Profits, if any, from the businesses in which we engage are
dependent on widespread public acceptance of, and interest in, each
creative project undertaken by our various segments. Audience appeal
depends upon factors which cannot be ascertained reliably in advance
and over which we may have no control, including, among other things,
unpredictable critical review, positioning in the market and
changeable public tastes. Due to factors such as the unpredictability
of audience appeal, many of our completed projects may fail to
generate sufficient revenues to recover our costs of acquisition,
development, production and distribution. We may not recoup all or
any portion of our investment in a particular project, and cannot
guarantee that any project will yield us profits.
We depend on key employees.
We are highly dependent. Success of the Company depends on the
continued active participation of Douglas Olson, our President and
Chief Operating Officer, and Howard Stern, our Chief Executive
Officer, even though neither of them devotes 100% of his time to the
Company. Our internet business depends on the continued active
participation of Michael Marsowicz. There is no employment agreement
with any of Mr. Olson, Mr. Stern or Mr. Marsowicz, and we do not carry
any "key-man" life insurance on any of them.
We may be unable to identify, acquire or commercialize additional
technologies.
From time to time, if our resources allow, we intend to explore
the acquisition and subsequent development and commercialization of
additional technologies in the entertainment and internet fields. We
cannot predict whether we will be able to identify any additional
technologies and, even if suitable technologies are identified, that
we will have sufficient funds to commercialize any such technologies
or that any such technologies will ultimately be viable.
We cannot predict the status of our property rights.
Although we have developed, and continue to develop, our own
internet content and products, we have entered into license agreements
with respect to other internet products. We cannot guarantee that
such license rights will provide us with significant protection from
competitors. Property rights protection generally is uncertain, and
involves complex legal and factual questions. To date, there has
emerged no consistent policy regarding the breadth of claims allowed
in connection with such property rights protection. Therefore, we
cannot assure that any rights licensed to us will afford protection
against competitors with similar technologies and that we will have
the financial resources necessary to enforce its property rights.
Even though we have licenses, under the terms of our license
agreements, we generally are responsible for protecting the
intellectual property rights subject to these agreements. Challenges
may be instituted by third parties as to the validity, enforceability
and infringement of the rights. Further, the cost of the litigation
to defend any challenge to uphold the validity and enforceability and
prevent infringement of our licensed rights can be substantial. Any
or all of the above could result in our business being materially and
adversely affected. We may also be required to obtain additional
licenses from others to continue to refine, develop, and market new
products. We may not be able to obtain any such licenses on
commercially reasonable terms or at all or that the rights granted
pursuant to any licenses will be valid and enforceable.
We need additional funding to sustain our operations.
In order to continue our business plans fully, we anticipate that
we will need additional funding. We do not have a steady source of
revenue to provide funding to sustain operations. The availability of
a reliable source of revenue to sustain our operations is beyond our
control.
We could be adversely impacted by intense competition.
We compete in the areas of radio broadcasting, comedy club
operation and internet related businesses with other companies. Many
of these competitors have substantially larger financial and other
resources than us. In the internet area, companies with greater
financial resources than us have not been able to generate positive
cash flow or profits from operating internet related businesses. From
time to time, there may be competition for, and shortage of,
broadcasting talent and comedians, and internet content and qualified
computer technicians. We may therefore not be able to attract the
best available talent required to develop our businesses. This
competition and these shortages could lead to an increase in costs
that could adversely effect us. We also compete with other companies
for advertising on our radio station and internet portal. Our
internet revenues are based on our ability to attract advertisers. In
addition, the low cost of entering internet related businesses may
result in additional competition in the future.
Technology changes.
The internet related businesses in which we operate and intend to
operate are characterized by rapid and significant technological
advancements and introductions of new products and services using new
technologies. As new technologies develop, we may be placed at a
competitive disadvantage, and competitive pressures may force us to
implement those new technologies at a substantial cost. If other
companies implement new technologies before us, those companies may be
able to provide enhanced capabilities and superior quality compared
with what we are able to provide. We cannot ascertain that we will be
able to respond to these competitive pressures and implement new
technologies on a timely basis or at an acceptable cost. One or more
of the technologies that we may implement in the future may become
obsolete. If this occurs, our business, financial condition and
results of operations could be materially adversely affected. If we
are unable to utilize the most advanced commercially available
technology, our business, financial condition and results of
operations could be materially and adversely affected.
New government regulations could increase our costs.
Our current and planned businesses are subject to a variety of
federal, state and local government regulations, including regulations
concerning the licensing and operation of our radio station, concerning
sales of alcohol as they relate to our comedy club business, and
concerning internet gaming as they relate to our internet business.
Although we intend to be in compliance with applicable government laws
and regulations, we cannot predict that significant costs for compliance
will not be incurred in the future.
Our comedy club operations are subject to various regulations
concerning health and safety and the dispensing of alcohol. The failure
to comply with these regulations could lead to the closing of the club
and have a material negative impact on us. In addition, we could be
subject to lawsuits resulting from actions of patrons of the comedy club
business who become intoxicated. Although we currently believe that we
have obtained adequate insurance to protect against these potential
liabilities, we cannot predict that this will be the case.
Our radio business is subject to regulation by the Federal
Communications Commission. Although we do not believe that compliance
with FCC regulations will be burdensome, the failure to comply with
applicable regulations could result in the loss of the radio station
license and a resulting adverse affect on us.
We may be unable to obtain foreign government approvals.
Because of the global reach of the internet, certain of our
proposed internet products may be subject to extensive regulation in
countries other than the United States. We may not be able to obtain
the approvals necessary to market our internet products outside of the
United States.
We could be adversely impacted by risks associated with management of
growth.
Because of our small size, we desire to grow rapidly in order to
achieve certain economies of scale. Although we cannot predict that
this rapid financial growth will occur, to the extent that it does
occur it will place a significant strain on our financial, technical,
operational and administrative resources. As we increase services and
enlarge the number of projects we are evaluating or in which we are
participating, there will be additional demands on our financial,
technical and administrative resources. If we fail to continue to
upgrade our technical, administrative, operating and financial control
systems or the occurrence of unexpected expansion difficulties,
including the recruitment and retention of qualified personnel, we
could be adversely effected.
Lack of diverse business operations may lead to a concentration of
risks.
We currently are involved in the radio broadcast business
through the ownership of one station in Gillette, Wyoming, in the
comedy club business through the ownership of one comedy club in
Denver, Colorado, and in the start-up operation of an internet portal
and web page development. Although we are pursuing other business
opportunities, our revenues currently derive primarily from the one
radio station and one comedy club. This lack of diverse business
operations subjects us to a certain degree of concentration of risks.
Our future success may be dependent upon our success in operating the
radio station and comedy club, the development of the internet
business, and development of other lines of business that are
profitable.
There is limited liquidity in our common shares.
There may be no ready market for our common shares and an
investor cannot expect to liquidate his investment regardless of the
necessity of doing so. Historically, there has been an extremely
limited public market for our shares. We cannot predict that the
market will be sustained or will expand. The prices of our shares are
highly volatile. Due to the low price of the securities, many
brokerage firms may not process transactions and may not deal with low
priced securities as it may not be economical for them to do so. This
could have an adverse affect on developing and sustaining the market
for our shares. In addition, there is no assurance that an investor
will be in a position to borrow funds using our shares as collateral.
Penny stock regulation.
The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in "penny stocks". Generally, penny
stocks are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or
quoted on the Nasdaq system). If our shares are traded for less than
$5 per share, as they currently are, the shares will be subject to
the SEC's penny stock rules unless (1) our net tangible assets exceed
$5,000,000 during our first three years of continuous operations or
$2,000,000 after our first three years of continuous operations; or
(2) we have had average revenue of at least $6,000,000 for the last
three years. We do not meet these requirements. As a result, market
transactions in our shares are subject to the penny stock rules. The
penny stock rules require a broker-dealer, prior to a transaction in a
penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document prescribed by the SEC that
provides information about penny stocks and the nature and level of
risks in the penny stock market. The broker-dealer also must provide
the customer with current bid and offer quotations for the penny
stock, the compensation of the broker-dealer and its salesperson in
the transaction and monthly account statements showing the market
value of each penny stock held in the customer's account. In addition,
the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must
make a special written determination that the penny stock is a
suitable investment for the purchaser and receive the purchaser's
written agreement to the transaction. These requirements may have the
effect of reducing the level of trading activity in the secondary
market for a stock that becomes subject to the penny stock rules. As
long as our shares are subject to the penny stock rules, the holders
of our shares may find it difficult to sell our shares.
No dividends with respect to our shares.
We have not paid any cash dividends with respect to our shares,
and it is unlikely that we will pay any dividends on our shares in the
foreseeable future. Earnings, if any, that we may realize will be
retained in the business for further business development and
expansion.
THE COMPANY
On December 15, 1997, First Entertainment, Inc. changed its state
of incorporation from Colorado to Nevada and changed its name to First
Entertainment Holding Corp. We were originally incorporated under the
laws of Colorado on January 17, 1985. In November 1999, we determined
to change our name to "F2 Network Group Inc.", subject to shareholder
approval, which has not yet been obtained. We anticipate that the
proposed name change will be voted upon by the shareholders at a
shareholders meeting planned for December 1999 or January 2000.
Currently, we operate or hold controlling interests in three
active and two non-operating business segments. The three active
segments are known as "Radio", "Live Entertainment" and "Internet".
The non-operating segments are known as "Film" and "Retail".
Initially, our business consisted of the production of pre-recorded
travel guides and special interest videos. In 1987, we entered the
radio broadcasting business by acquiring Quality Communications, Inc.,
a Wyoming corporation pursuant to which we operate the radio segment
of our business. In 1992, we acquired a controlling interest in First
Films, Inc. ("FFI"), a publicly held Colorado corporation, through
which our film and live entertainment operations are conducted. In
December 1996, we commenced, the business of selling infomercial
products in freestanding unmanned kiosks in major retail malls
including U.S. Military bases. This business segment was known as the
"retail" segment. In January 1998, we determined to discontinue the
operations of the "retail" segment as a result of lower than expected
sales. In December 1997, we acquired a 50.8% interest in Global
Internet Corp. Global Internet is a development stage company whose
planned business activity was to operate an internet gaming site. The
investment in Global Internet was written off as of December 31, 1997
and as of December 31, 1998 Global Internet had not yet commenced its
planned principal operations. Since early 1999, we have been
developing relationships with internet content providers, advertisers
and gaming companies in an attempt to create an internet site with
links to entertainment and gaming content and to provide internet site
development to other parties. In addition, we have been developing
our own website content in order to establish an internet portal
emphasizing entertainment with links to other web sites. The site is
located at www.First Entertainment.com.
This prospectus relates to the resale of shares which have been or
may be acquired by certain persons upon exercise of options that were
granted under our stock option plans.
PROSPECTIVE SELLING STOCKHOLDERS
There are an aggregate of 1,000,000 shares of common stock reserved
for issuance under the Stock Plan. The shares are covered by the
registration statement on Form S-8 which was filed with the SEC and of
which this prospectus is a part.
The 1,000,000 shares of common stock, the resales of which are
covered by this prospectus, consist of shares that may be acquired by
our directors and officers through grants under the Stock Plan and upon
the exercise of options granted under the Stock Plan.
The following table sets forth the name and position of each
prospective selling stockholder:
<TABLE>
Name Position
<S> <C>
A. B. Goldberg Director
Doug Olson President, Chief Operating Officer and
Director
Howard Stern Chief Executive Officer and Director
William Rubin Director
Wende Curtis Secretary
Michael Marsowicz Director
Philip C. Puccio Director
As of the date of this prospectus, no shares or options have been granted
pursuant to the Stock Plan to the
above officers and directors.
PLAN OF DISTRIBUTION
The 1,000,000 shares covered by this prospectus will be offered, if
at all, by certain of our stockholders, and not by us. If any of these
shares are sold by a prospective selling stockholder, they will be sold
on behalf of that person and we anticipate that the shares may be
offered pursuant to direct sales to private persons and in open market
transactions. The prospective selling stockholders may offer the shares
to or through registered broker-dealers who will be paid standard
commissions or discounts by the prospective selling stockholders. The
prospective selling stockholders have not informed us of any agreements
with brokers to sell any or all of the shares which may be offered
hereby.
LEGAL MATTERS
Patton Boggs LLP, Denver, Colorado, has acted as our counsel in
connection with this offering and has rendered an opinion concerning the
validity of our shares offered by this prospectus.
EXPERTS
The audited financial statements of First Entertainment Holding
Corp. appearing in our Annual Report on Form 10-KSB/A for the year ended
December 31, 1998 have been examined by Gordon, Hughes & Banks, LLP,
independent public certified accountants. These financial statements
are incorporated into this prospectus by reference in reliance upon the
report of the accountants included with the financial statements and
upon the authority of the accountants as experts in auditing and
accounting.
INDEMNIFICATION
Section 78.7502(3) of the Nevada General Corporation Law (the
"Nevada Code") provides for mandatory indemnification by a corporation
of expenses, including attorneys' fees, incurred by a director or
officer in connection with any proceeding brought by reason of his
position as a director or officer, so long as he was successful, on the
merits or otherwise, in defense of a proceeding.
In addition, Section 78.7502(1) of the Nevada Code permits a
corporation to indemnify a person who is party to a proceeding or
threatened proceeding, other than an action by or in the right of the
corporation (a "Derivative Action"), because of his status as a
director, officer, employee or agent of a corporation if "he acted in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful."
In a Derivative Action or threatened Derivative Action, Section
78.7502(2) of the Nevada Code permits indemnification if the person
acted in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the corporation. However, no
indemnification is allowed if the person is ultimately adjudged to be
liable to the corporation unless a court of competent jurisdiction rules
that, in view of the facts and circumstances of the case, the person is
fairly and reasonably entitled to indemnification.
The Company's articles of incorporation provide that directors and
officers shall be indemnified to the full extent permitted by the Nevada
Code. The Company's bylaws provide that no director or officer shall be
liable to the Company for his acts or omissions resulting in a loss to
the Company, except in cases where the act or omission resulted from his
willful misconduct, willful neglect or gross negligence. The bylaws
also provide that the Company may purchase and maintain liability
insurance on behalf of any director, officer, employee or agent
regardless of whether he may be indemnified pursuant to other provisions
of the bylaws.
AVAILABLE INFORMATION
This prospectus constitutes a part of a registration statement on
Form S-8 we filed with the SEC under the Securities Act. This
prospectus does not contain all the information set forth in the
registration statement and exhibits thereto, and statements included in
this prospectus as to the content of any contract or other document
referred to are not necessarily complete. For further information,
please review the registration statement and the exhibits and schedules
filed with the registration statement.
In each instance where a statement contained in this prospectus
regards the contents of any contract or other document filed as an
exhibit to the registration statement, you should review the copy of
that contract or other document filed as an exhibit to the registration
statement for complete information. Those statements are furnished in
all respects by this reference.
The Company is subject to the informational requirements of the
Exchange Act; and files reports, proxy statements and other information
with the SEC in accordance with the Exchange Act. These reports, proxy
statements and other information can be inspected and copied at the
public reference facilities maintained by the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549, Room 1024 and at the following Regional
Offices of the SEC: 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, and 7 World Trade Center, New York, New York 10048.
Copies of such material also can be obtained at prescribed rates by
writing to the SEC, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, this material may also be
inspected and copied at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005. In addition, these
materials filed electronically by the Company with the SEC are available
at the SEC's World Wide Web site at http://www.sec.gov. The SEC's World
Wide Web site contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the
SEC. Information about the operation of the SEC's public reference
facilities may be obtained by calling the SEC at 1-800-SEC-0330.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents that previously were, or are required in
the future to be, filed with the SEC (File No. 0-15435) pursuant to the
Exchange Act are incorporated herein by reference:
(i)the Company's Annual Report on Form 10-KSB/A for the year ended
December 31, 1998;
(ii)the Company's Quarterly Reports on Form 10-QSB/A for the
quarter
ended March 31, 1999 and June 30, 1999;
(iii)the description of the Company's common stock contained in the
Company's registration statement on Form 8-A as filed with the SEC
on February 26, 1987; and
(iv) all documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this prospectus and prior to the termination of the offering made
hereby.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that such statement is modified or replaced by
a statement contained in this Prospectus or in any other subsequently
filed document that also is or is deemed to be incorporated by reference
into this Prospectus. Any such statement so modified or superseded
shall not be deemed, except as so modified or replaced, to constitute a
part of this Prospectus. The Company will provide without charge to
each person to whom a copy of this Prospectus has been delivered, upon
the written or oral request of any such person, a copy of any or all of
the documents referred to above that have been or may be incorporated in
this Prospectus by reference, other than exhibits to such documents.
Written or oral requests for such copies should be directed to Douglas
R. Olson, President, First Entertainment Holding Corp., 5495 Marion
Street, Denver, Colorado 80216, (303) 382-1500.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation Of Documents By Reference.
The documents listed in (i) through (iv) below are incorporated by
reference in the registration statement. All documents subsequently
filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in the registration statement and to be part
thereof from the date of the filing of such documents.
(i) the Company's Annual Report on Form 10-KSB/A for the year
ended December 31, 1998;
(ii) the Company's Quarterly Reports on Form 10-QSB/A for the
quarter ended March 31, 1999 and June 30, 1999;
(iii) the description of the Company's common stock contained in
the Company's registration statement on Form 8-A as filed
with the SEC on February 26, 1987; and
(iv) all documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of this prospectus and prior to the termination
of the offering made hereby.
Item 4. Description Of Securities.
Not Applicable.
Item 5. Interest Of Named Experts And Counsel.
Not Applicable.
Item 6. Indemnification Of Officers And Directors.
Section 78.7502(3) of the Nevada General Corporation Law provides
for mandatory indemnification by a corporation of expenses, including
attorneys' fees, incurred by a director or officer in connection with
any proceeding brought by reason of his position as a director or
officer, so long as he was successful, on the merits or otherwise, in
defense of a proceeding.
In addition, Section 78.7502(1) of the Nevada Code permits a
corporation to indemnify a person who is party to a proceeding or
threatened proceeding, other than an action by or in the right of the
corporation, because of his status as a director, officer, employee or
agent of a corporation if "he acted in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful."
In a derivative action or threatened derivative action, Section
78.7502(2) of the Nevada Code permits indemnification if the person
acted in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the corporation. However, no
indemnification is allowed if the person is ultimately adjudged to be
liable to the corporation unless a court of competent jurisdiction rules
that, in view of the facts and circumstances of the case, the person is
fairly and reasonably entitled to indemnification.
The Company's articles of incorporation provide that directors and
officers shall be indemnified to the full extent permitted by the Nevada
Code. The Company's bylaws provide that no director or officer shall be
liable to the Company for his acts or omissions resulting in a loss to
the Company, except in cases where the act or omission resulted from his
willful misconduct, willful neglect or gross negligence. The bylaws
also provide that the Company may purchase and maintain liability
insurance on behalf of any director, officer, employee or agent
regardless of whether he may be indemnified pursuant to other provisions
of the bylaws.
Item 7. Exemption From Registration Claimed.
Not Applicable.
Item 8. Exhibits.
4.1 First Entertainment Holding Corp. Stock Plan, dated November 3,
1999.
5.1 Opinion of Patton Boggs LLP concerning the legality of the
securities being registered.
23.1 Consent of Patton Boggs LLP (included in Opinion in Exhibit
5.1).
23.2 Consent of Gordon, Hughes, Banks, LLP
24.1 Power of Attorney (included in Part II of this Registration
Statement under the caption "Signature").
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) 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;
(iii) 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 (a)(1)(i) and (a)(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 and are
incorporate by reference to the registration statement.
2. 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.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) For purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising out of 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
SEC 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 liability (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 securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of 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.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, State of Colorado, on
the 9th day of November 1999.
FIRST ENTERTAINMENT HOLDING CORP.
By: /s/ Douglas R. Olson
Douglas R. Olson, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and
directors of the Registrant, by virtue of their signatures to this to
the registration statement appearing below, hereby constitute and
appoint Douglas R. Olson or Howard Stern and each or either of them,
with full power of substitution, as attorneys-in-fact in their names,
place and stead to execute any and all amendments to this Registration
Statement in the capacities set forth opposite their name and hereby
ratify all that said attorneys-in-fact and each of them or his
substitutes may do by virtue hereof.
Pursuant to the requirements of the Securities Act, as amended,
this registration statement has been signed by the following persons in
the capacities and on the date indicated.
Signature Date
__________, 1999
A.B. Goldberg
Director
/s/ Michael Marsowicz November 9, 1999
Michael Marsowicz
Director
/s/ Douglas R. Olson November 9, 1999
Douglas R. Olson
Principal Financial Officer,
and Director
/s/ Philip C. Puccio November 9, 1999
Philip C. Puccio
Director
/s/ William Rubin November 9, 1999
William Rubin
Director
/s/ Howard Stern November 9, 1999
Howard Stern
Principal Executive Officer,
and Director
Exhibit Index
4.1 First Entertainment Holding Corp. Compensation Plan-1999C,
dated November 3, 1999.
5.1 Opinion of Patton Boggs LLP concerning the legality of the
securities being registered.
23.1 Consent of Patton Boggs LLP (included in Opinion in Exhibit
5.1).
23.2 Consent of Gordon, Hughes & Banks, LLP
24.1 Power of Attorney (included in Part II of this
Registration Statement under the caption "Signature").
Exhibit 4.1
FIRST ENTERTAINMENT HOLDING CORP.
COMPENSATION PLAN-1999C
THIS COMPENSATION PLAN-1999C is adopted this third day of
November, 1999,by FIRST ENTERTAINMENT HOLDING CORP., a Nevada
corporation with its principal place of business being located at 5495
Marion Street, Denver, Colorado 80216.
WITNESSETH:
WHEREAS, the Board of Directors of FIRST ENTERTAINMENT HOLDING
CORP., (the "Company") has determined that it would be to its
advantage, and in its best interests, to grant certain consultants and
advisors, as well as certain employees, the opportunity to purchase
stock in the Company as a result of compensation for their service;
and
WHEREAS, the Board of Directors (the "Board") believes that the
Company can best obtain advantageous benefits by issuing stock and/or
granting stock options to designated such designated individuals from
time to time, although these options are not to be granted pursuant to
Section 422A and related sections of the Internal Revenue Code as
amended;
NOW THEREFORE, the Board adopts this as the First Entertainment
Compensation Plan-1999C (the "Plan").
1.00 EFFECTIVE DATE AND TERMINATION OF PLAN
The effective date of the Plan is November 3, 1999, which is
the day the Plan was adopted by the Board. The Plan will terminate on
the earlier of the date of the grant of the final option for last
common stock allocated under the Plan or ten years from the date
thereof, whichever is earlier, and no options will be granted
thereafter pursuant to this Plan.
2.00 ADMINISTRATION OF PLAN
The Plan shall be administered by the Board, which may adopt
such rules and regulations for its administration as it may deem
necessary or appropriate, or may be administered by a Compensation
Committee to be appointed by the Board, to have such composition and
duties as the Board may from time to time determine.
3.00 ELIGIBILITY TO PARTICIPATE IN THE PLAN
3.01 Subject to the provisions of the Plan, the Board, or its
designee, shall determine and designate, from time to time those
consultants, advisors, and employees of the Company, or consultants,
advisors, and employees of a parent or subsidiary corporation of the
Company, to whom shares are to be issued and/ or options are to be
granted hereunder and the number of shares to be optioned from time to
time to any individual or entity. In determining the eligibility of an
individual or entity to receive shares or an option, as well as in
determining the number of shares to be issued and/or optioned to any
individual or entity, the Board, or its designee, shall consider the
nature and value to the Company for the services which have been
rendered to the Company and such other factors as the Board, or its
designee, may deem relevant.
3.02 To be eligible to be selected to receive an option, an
individual must be a consultant, advisor or an employee of the Company
or a consultant, advisor, or an employee of a parent or subsidiary
Corporation of the Company. The grant of each option shall be
confirmed by a Stock Option Agreement which shall be executed by the
Company and the optionee as promptly as practicable after such grant.
More than one option may be granted to an individual or entity.
Shares shall be issued directly to such entities.
3.03 An option may be granted to any individual or entity
eligible hereunder, regardless of his previous stockholdings.
3.04 The option price (determined as of the time the option
is granted) of the stock for which any person may be granted options
under this Plan (and all other plans of the Company) may be increased
or reduced by the Board, or its designee, from time to time.
4.00 NUMBER OF SHARES SUBJECT TO THE PLAN
4.01 The Board, prior to the time shall reserve for the
purposes of the Plan a total of One Million(1.000,000) of the
authorized but unissued shares of common shares of the Company,
provided that any shares as to which an option granted under the Plan
remains unexercised at the expiration thereof may be the subject of
the grant of further options under the Plan within the limits and
under the terms set forth in Article 3.00
hereof.
5.00 PRICE OF COMMON SHARES
5.01 The initial and standard price per share of common stock
to be issued directly or by option shall be $.50 per share but may be
changed in each case by the Board, or its designee, from time to time.
If the share price is changed, the Board, or its designee, shall
determine the share price no later than the date of the issuance of
the shares and/ or the grant of the option and at such other times as
the Board, or its designee, deems necessary. The Board shall have
absolute final discretion to determine the price of the common stock
under the Plan. In the absence of such specific determination, the
share price will be $0.30 per share.
6.00 SUCCESSIVE OPTIONS
Any option granted under this Plan to an person may be
exercisable at such person's discretion while there is outstanding any
other stock option previously granted to such person, whether under
this Plan or any other stock option plan of the Company.
7.00 PERIOD AND EXERCISE OF OPTION
7.01 Options granted under this Plan shall expire on the
first to occur of the following dates whether or not exercisable on
such dates: (i) five (5) years from the date the option is initially
granted; (ii) six (6) months from the date the person ceases
employment due to permanent and total disability; (iii) the date of
termination of employment for reasons other than retirement,
permanent and total disability or death, unless the Board determines,
in its sole discretion, that it would be in the best interest of the
Company to extend the options for a period not to exceed three (3)
years; or (iv) three (3) months from the date the employee retires
with permission of the Board.
7.02 Notwithstanding Section 7.01, any portion of any option
which has not become exercisable pursuant to Section 7.03 prior to the
death of the employee or termination of employment shall expire on the
employee's date of death or termination date, if termination is for
reasons other than retirement or total and permanent disability.
7.03 Any option granted under this Plan may be immediately
exercised by the holder thereof. Such an option may be exercised in
whole or in part at the time it becomes exercisable or from time to
time thereafter, until the expiration of the option.
8.00 PAYMENT FOR OPTIONED SHARES
When a person holding an option granted under this Plan
exercises any portion of the option he shall pay the full option price
for the shares covered by the exercise of that portion of his option
within one (1) month after such exercise. As soon as practicable,
after the person notifies the Company of the exercise of his option
and makes payment of the required option price, the Company shall
issue such shares to the person.
9.00 RESTRICTIONS ON TRANSFER
9.01 No right or privilege of any person under the Plan shall
be transferable or assignable, except to the person's personal
representative in the event of the person's death, and except as
provided in Section 9.02, options granted hereunder are exercisable
only by the person during his life.
9.02 If an person dies holding outstanding options issued
pursuant to this Plan, his personal representative shall have the
right to exercise such options only within one year of the death of
the person.
10.00 RECLASSIFICATION, CONSOLIDATION OR MERGER
If and to the extent that the number of issued shares of common
stock of the Company shall be increased or reduced by change in par
value, split-up reclassification, distribution of a dividend payable
in stock, or the like, the number of shares subject to direct issuance
or an option held by a person and the option price per share shall be
proportionately adjusted. If the Company is reorganized or
consolidated or merged with another corporation, the person shall be
entitled to receive direct issuance or options covering shares of such
reorganized, consolidated, or merged company in the same proportion,
at an equivalent price, and subject to the same conditions.
11.00 DISSOLUTION OR LIQUIDATION
Upon the dissolution or liquidation of the Company, the options
granted hereunder shall terminate and become null and void, but the
person shall have the right immediately prior to such dissolution or
liquidation to exercise any options granted and exercisable hereunder
to the full extent not before exercised.
12.00 BINDING EFFECT
This Plan shall inure to the benefit of and be binding upon the
Company and its employees, and their respective heirs, executors,
administrators, successors and assigns.
13.00 ADOPTION OF PLAN
This Plan has been duly adopted by the Board of Directors of the
Company on March 1, 1999.
14.00 NOTICES
Any notice to be given to the Company under the terms of this
plan shall be addressed to such address as is set forth on the first
page hereof.
IN WITNESS WHEREOF, the Company has caused this Plan to be
executed on its behalf by its President, to be sealed by its corporate
seal, and attested by its Secretary effective the day and year first
above written.
FIRST ENTERTAINMENT HOLDING CORP.
By /s/ Douglas R. Olson
Douglas R. Olson, President and
Chief Operating Officer
ATTEST:
/s/Wende Curtis
Wende Curtis, Secretary (SEAL)
Exhibit 5.1
Patton Boggs LLP
1660 Lincoln Street
Suite 1900
Denver, Colorado 80264
(303) 830-1776
November 9, 1999
First Entertainment Holding Corp.
5495 Marion Street
Denver, CO 80216
Gentlemen and Ladies:
We have acted as counsel for First Entertainment Holding Corp., a
Nevada corporation (the "Company"), in connection with preparation of
the Company's Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, concerning
registration of the issuance and /or transfer of up to 1,000,000
shares of the Company's $.008 par value common stock (the "Common
Stock") by certain stockholders of the Company (the "Selling
Stockholders"). These shares will be acquired by the selling
stockholders pursuant to grants of stock and options under the
Company's Compensation Plan - 1999C (the "Stock Plan").
We have examined the Stock Plan of the Company concerning the
registration described above. In addition, we have examined such
other certificates, agreements, documents and papers, and we have made
such other inquiries and investigations of law as we have deemed
appropriate and necessary in order to express the opinion set forth in
this letter. In our examinations, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as
originals, photostatic, or conformed copies and the authenticity of
the originals of all such latter documents. In addition, as to
certain matters we have relied upon certificates and advice from
various state authorities and public officials, and we have assumed
the accuracy of the material and the factual matters contained herein.
Subject to the foregoing and on the basis of the aforementioned
examinations and investigations, it is our opinion that the shares of
Common Stock being transferred by the Selling Stockholders as
described in the Registration Statement have been legally issued and
are fully paid and non-assessable.
We hereby consent (a) to be named in the Registration Statement
and in the prospectus that constitutes a part of the Registration
Statement as acting as counsel in connection with the transfer of
stock options, including with respect to the validity of the Common
Stock offered; and (b) to the filing of this opinion as an exhibit to
the Registration Statement.
This opinion is to be used solely for the purpose of the
registration of the Common Stock and may not be used for any other
purpose.
Very truly yours,
/s/ PATTON BOGGS LLP
PATTON BOGGS LLP
PB: ALT/FBB
Exhibit 23.2
CONSENT OF GORDON, HUGHES AND BANKS, LLP
INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" in the Registration Statement on Form S-8 and to the
incorporation by reference therein of our report dated March 17, 1999
except for the Note C as to which the date is June 11,1999 with respect
to the consolidated financial statements of First Entertainment Holding
Corp. for the year ended December 31, 1999 included in its Annual Report
on Form 10-KSB for the year ended December 31, 1999, filed with the
Securities and Exchange Commission.
Denver, Colorado
November 12, 1999
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