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
incorporation or jurisdiction) identification No.)
7887 E. BELLEVIEW AVE. SUITE 1114 80111
DENVER, COLORADO (Zip Code)
(Address of principal executive office)
FIRST ENTERTAINMENT COMPENSATION PLAN-1999B
(Full title of plan)
(Name, address, including zip code, and telephone number, including area code,
of agent for service of process)
A.B. GOLDBERG
7887 E. BELLEVIEW AVE. SUITE 1114
DENVER, COLORADO 80111
(303) 228-1650
The Commission is requested to send copies of all communications and notes to:
David J. Wagner, Esq.
David Wagner & Associates, P.C.
8400 East Prentice Avenue
Penthouse Suite
Englewood, Colorado 80111
(303) 793-0304
<PAGE>
CALCULATION OF REGISTRATION FEE
Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities To To Be Offering Price Aggregate Registration
Be Registered Registered Per Share (1) Offering Price(1) Fee
COMMON SHARES 1,000,000 $0.80 $800,000 $100.00
$0.008 par value SHARES
OPTIONS TO PURCHASE 1,000,000 -0- -0- -0-
COMMON SHARES
TOTAL $100.00
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933 and based upon the
average of the high and low sale prices of the shares on the OTCBB on April 21,
1999.
<PAGE>
PART I
PART I. INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
This registration statement relates to two separate prospecti.
Items 1 and 2 hereof, and the documents incorporated herein by
reference pursuant to Part II, item 3 hereof, constitutes the first
prospectus relating to offers by the Company to its employees and
consultants of 1,000,000 shares (the "Shares") of common stock,$.008 par
value, $.80 per share (the "Common Stock"), to be issued pursuant the
Company's First Entertainment Compensation Plan 1999B (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. The Company's principal
offices are located at 7887 E. Bellview, Suite 1114, Englewood, CO 80111;
telephone 303/228-1650.
PROSPECTUS
----------
Item 1. Plan Information
STOCK PLAN INFORMATION
The Stock Plan was established by the Company effective on March 1,
1999 to provide the Company flexibility and to conserve the Company's cash
resources in compensating certain of its technical, administrative and
professional employees and consultants. The issuance of shares under
the Stock Plan is restricted to persons and firms who are
closely-related to the Company and who provide services in connection
with the development, production of the Company's products or otherwise
in connection with its business. The Stock Plan authorizes the
Company to issue up to 1,000,000 shares of the Company's 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 "Committee"). The eligible participants include
directors, employees and non-employee consultants and advisors. The
Company intends to award options for up to 400,000 shares of common stock
(included as part of the 1,000,000 subscribed above) under the Stock Plan
to its directors to compensate them for their past service on the
Company's Board of Directors. 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 the Company's then outstanding
Common Stock 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. The Company anticipates that a
substantial portion of the remaining shares to be issued under the Stock
Plan will be issued as compensation to technical consultants, attorneys,
and advisors to the Company who provide development services to the
Company 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.
Item 2. Registrant Information and Employee Plan Annual Information
The Registrant shall provide without charge, upon written or oral
request, the documents incorporated by reference in Item 3 of Part
II of this Registration Statement. Such documents are incorporated
by reference in the Section 10(a) prospectus. The Registrant shall 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 Registrant at
its office at 7887 E. Bellview, Suite 1114, Englewood, CO 80111, 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 the Company 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 the Company. Neither the delivery
of this Prospectus nor any
distribution of the shares of the common stock issuable under the terms of
the Plan shall, under any circumstances, create any implication that there
has been no change in the affairs of the Company since the date hereof.
The Company's principal offices are located at 7887 E. Bellview,
Suite 1114,Englewood, CO 80111; telephone 303-228-1650.
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.
The date of this Prospectus is April 21, 1999
PROSPECTUS
----------
FIRST ENTERTAINMENT HOLDING CORP.
1,000,000 shares of Common Stock,
$.008 par value per share
This Prospectus relates to up to 1,000,000 shares of common stock,
$.008 par value (the "Common Stock"), of First Entertainment Holding
Corp., a Nevada corporation (the "Company"), to be issued to various
individuals and affiliates of the Company pursuant to the Company's
First Entertainment Compensation Plan 1999B which are deemed control
securities and may be re-offered and resold from time to time by such
affiliates. All of the shares of Common Stock registered hereunder,
are sometimes hereinafter referred to as the "Securities." The holders of
the shares of Common Stock are sometimes hereinafter collectively referred
to as the "Selling Stockholders." All costs in connection with the
registration of the Securities are being borne by the Company. The Company
will not receive any of the proceeds from the sale of the Securities
pursuant to this Prospectus.
The Common Stock is quoted on the OTC Bulletin Board operated by the
NASD under the symbol "FTET." The last reported closing bid and asked
prices of the Common Stock on April 21, 1999 were $.91 and $.93 per share,
respectively.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE PURCHASED
ONLY BY THOSE PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. THE
COMPANY HAS INCURRED SUBSTANTIAL OPERATING LOSSES. SEE "RISK FACTORS"
HEREIN.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION.
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities has
been filed with the Securities and Exchange Commission. These
securities may not be sold nor may offers to buy be accepted prior to the
time the registration statement becomes effective. This Prospectus
shall not constitue an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any Sate in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such State.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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.
The Selling Stockholders directly or through agents, dealers
or underwriters to be designated from time to time may sell the Securities
on terms to be determined at the time of sale. To the extent required,
the number of Securities to be sold, the respective purchase price and
public offering price, the name of any agent, dealer or underwriter and
any applicable commissions or discounts with respect to a particular
offer will be set forth in and accompanied by a Prospectus Supplement.
See "Plan of Distribution."
The Selling Stockholders and any agents, dealers or underwriters
that participate with the Selling Stockholders in the distribution of
their shares may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), and any
commissions received by them and any profits on the resale of the Selling
Stockholders' shares, may be deemed to be underwriting commissions or
discounts under the Securities Act. Under applicable rules and
regulations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), any person engaged in a distribution of
securities may not simultaneously bid for or purchase securities of the
same class for a period of two (2) business days prior to the
commencement of such distribution. In addition, and without limiting
the foregoing, the Selling Stockholders will be subject to the
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Rules 10b-2, 10b-5, 10b-6 and
10b-7, in connection with transactions in the Securities during the
effectiveness of the Registration Statement of which this Prospectus forms
a part. All of the foregoing may affect the marketability of the
Securities.
The date of this Prospectus is April 21, 1999.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and in accordance therewith files reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements
and other information filed by the Company in accordance with the
Exchange Act can be inspected and copies made at the public reference
facilities maintained by the Commission at Room 1204, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, DC 20549; Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, IL 60661
and 7 World Trade Center, New York, NY 10048. Copies of such material can
be obtained at prescribed rates from the public reference section of the
Commission at 450 Fifth Street, N.W., Washington, DC 20549. The
Commission maintains a web-site that contains reports, proxy and
information statements and other information regarding the Company that are
on file with the Commission. The address of the Commission's web-site is
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-8 (including all amendments thereto, the "Registration
Statement"), with respect to the Common Stock offered hereby. As
permitted by the rules and regulations of the Commission, this
Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits
and schedules thereto. For further information about the Company and the
Securities offered hereby, reference is made to the Registration Statement
and the exhibits thereto, which may be examined without charge at the
public reference facilities maintained by the Commission at Room 1204,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549, and
copies of which may be obtained from the Commission upon payment of the
prescribed fees.
No person has been authorized by the Company 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 the Company. Neither the delivery
of this Prospectus nor any
distribution of the shares of the Common Stock issuable under the terms of
this Prospectus, under any circumstances, create any implication that
there has been no change in the affairs of the Company since the date
hereof.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference the following
document heretofore filed with the Commission: the Annual Report of the
Company on Form 10-KSB for the fiscal year ended December 31, 1998;
and, Forms 8-K filed subsequent the fiscal year end and prior to the date
of this Prospectus.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained in a
document incorporated herein by reference shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a
statement contained herein (or in any other subsequently filed document
which also is incorporated herein by reference)modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed to
constitute a part hereof except as so modified or superseded.
The Company will provide, without charge to each person to
whom a Prospectus is delivered, on the written or oral request of any
such person, a copy of any or all of the documents incorporated herein by
reference, other than exhibits to such documents unless such exhibits are
specifically incorporated by reference into the information that is
incorporated into the Prospectus. Such written requests should be
directed to the Secretary of the Company at 7887 E. Bellview, Suite 1114,
Englewood, CO 80111, telephone (303)228-1650.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed descriptions and financial information and statements appearing
elsewhere in this Prospectus and the documents incorporated herein by
reference.
The Company
- ------------
The Company is in a multi-media entertainment company, holding
controlling interests in five distinct segments, two active and three non
operating. The two active segments, which are overviewed by the parent
company, FEHC, are known as "Radio," and "Live Entertainment. The non
operating segments are known as "Film", "Retail" and "Internet". See "The
Company" and "Risk Factors" below.
The Company's principal offices are located at 7887 E. Bellview, Suite
1114, Englewood, CO 80111, telephone (303) 228-1650.
The Offering
- -------------
Up to 1,000,000 shares of Common Stock are being offered pursuant to
this Prospectus which may be offered from time to time by the Selling
Stockholders for their own account.
Plan of Distribution
- ---------------------
The Selling Stockholders, directly or through agents or underwriters,
may offer and sell from time to time all or any part of the Securities
held by them in amounts and on terms to be determined or at quoted prices
then prevailing on the NASD Bulletin Board. See "Plan of Distribution."
RISK FACTORS
Investment in the Company's securities involves a high degree of risk.
Investors should carefully consider the following factors, among others,
relating to the Company.
HISTORY OF LOSSES AND GOING CONCERN ISSUE.
During the period from inception (January 17, 1985) to December 31,
1998, the Company incurred operating losses in each fiscal year.
Cumulative net losses for that period amount to approximately $16,200,000.
As of December 31, 1998, the Company had a stockholders' deficit of
approximately $483,000 had an excess of current liabilities over current
assets of approximately $1,500,000, and, in some cases, has been unable to
meet its obligations as they become due. The independent certified public
accountants' report on the financial statements of the Company contain an
explanatory paragraph, which, in general, indicates that the Company has
suffered recurring losses from operations, has a working capital deficiency
and has defaulted on a substantial portion of its 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. In April of 1999 the
Company was successful in obtaining financing from the First National Bank
of Gillette to pay debt to a creditor totalling $125,000 which came due on
March 31, 1999. The financial statements do not include any adjustments
that might result from these uncertainties.
LIMITED PUBLIC MARKET
Historically, there has been a limited public market for the Common
Shares of the Company. There can be no assurance 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.
POTENTIAL FUTURE SALES PURSUANT TO RULE 144 BY EXISTING SHAREHOLDERS
At February 28, 1999, there were 10,046,795 shares issued and
outstanding. Most of these shares of Common Stock held by the Company's
present shareholders have not been registered under the Securities Act of
1933, as amended (the "Act") but are, under certain circumstances,
available for public sale pursuant to Rule 144, promulgated under the Act.
Approximately 95% of these restricted shares have passed the date upon
which such restricted shares 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 the greater of one percent (1%) of the then outstanding
Common Stock or the average weekly trading volume during the four calendar
weeks prior to such sale. Rule 144(k) also permits, under certain
circumstances, the sale of shares without any quantity limitation by a
person who has not been an affiliate of the Company for at least 90 days
and who has satisfied a two year holding period. The possibility of sales
under Rule 144 may adversely affect the market price of the Company's
securities. However, there can be no guarantee what the precise effect, if
any, will be as a result of the registration of these Common Shares.
INTENSE COMPETITION.
Competition is intense in each segment of the entertainment industry
in which the Company engages. Many of the organizations with which the
Company will be in competition have far greater financial and creative
resources and larger staffs than the Company. In addition, many of such
organizations have proven, successful operating histories, which the
Company lacks.
NEGOTIATION OF RIGHTS TO LITERARY PROPERTIES AND OTHER RISKS.
The negotiation of acquisition, production financing, production,
distribution and sub-distribution agreements can be a critical factor in
the Company's business. There can be no assurance of the success of any
such negotiations. It is possible that any or all of the projects packaged
by the Company could fail to receive any commitment for production
financing, production or distribution.
Even when funds are obtained for the production of a particular
project, its actual production may be delayed because of various events
beyond the control of the company such as labor problems, delays in
supplies, props or costumes, equipment breakdowns, weather delay and other
circumstances. The Company intends to seek insurance in order to reduce
its exposure to such risks, but the company's 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
substitute artists, screenwriters or producers 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 the Company.
SPECULATIVE NATURE OF THE COMPANY'S BUSINESS.
Profits, if any, from the businesses in which the Company engages are
dependent on widespread public acceptance of, and interest in, each
creative project undertaken by the Company's various segments. Audience
appeal depends upon factors which cannot be ascertained reliably in advance
and over which the Company may have no control, including, among other
things, unpredictable critical reviews, positioning in the market and
changeable public taste. Due to factors such as the unpredictability of
audience appeal, many of the Company's completed projects may fail to
generate sufficient revenues to recover their costs of acquisition,
development, production and distribution. The Company may not recoup all
or any portion of its investment in a particular project, and there can be
no assurance that any project will yield profits to the Company.
SUCCESS DEPENDENT ON MANAGEMENT.
Success of the Company depends on the continued active participation
of A.B. Goldberg, the Company's President, even though he does not devote
100% of his time to the Company. There is no employment agreement with him,
and the Company has not obtained any "key-man" insurance from which it
would benefit in the event of his death. However, the Company intends in
the future to negotiate an employment agreement with him. The loss of the
services of Mr. Goldberg would adversely affect the continued development
of the Company's business.
NO ASSURANCE OF IDENTIFICATION, ACQUISITION OR COMMERCIALIZATION OF
ADDITIONAL TECHNOLOGIES.
From time to time, if the Company's resources allow, the Company
intends to explore the acquisition and subsequent development and
commercialization of additional technologies in the entertainment and
internet field. There can be no assurance, however, that the Company
will be able to identify any additional technologies and, even if
suitable technologies are identified, there can be no assurance that the
Company will have sufficient funds to commercialize any such technologies
or that any such technologies will ultimately be viable.
GOVERNMENT REGULATION
The Company's internet products may be subject to extensive regulation
in countries other than the United States. There can be no assurance that
the Company will be able to obtain the approvals necessary to market its
internet products outside of the United States.
PROPERTY RIGHTS.
The Company has entered into exclusive license agreements with
respect to its internet products. There can be no assurance, however, that
such license rights will provide the Company with significant protection
from competitors. Property rights protection is generally 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. Accordingly, there can be no
assurance that any rights licensed by the Company will afford protection
against competitors with similar technologies. Finally, there can be no
assurance that the Company will have the financial resources necessary to
enforce its property rights.
Even though the Company has licenses, under the terms of the
Company's license agreements the Company is generally responsible for
protecting such rights. 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 the Company's licensed rights
can be substantial. Any or all of the above could result in the Company's
business being materially and adversely affected. The Company may be
required to obtain additional licenses from others to continue to
refine, develop, and market new products. There can be no assurance that
the Company will 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. There can be no assurance that
others will not independently develop similar technologies.
No assurance can be given that others will not independently develop
or obtain access to such materials or processes, or that the Company's
competitive position will not be adversely affected thereby.
NO DIVIDENDS WITH RESPECT TO COMMON STOCK
The Company has not paid any cash dividends with respect to its
Common Stock, and it is unlikely that the Company will pay any dividends
on its Common Stock in the foreseeable future. Earnings, if any, that the
Company may realize will be retained in the business for further
development and expansion.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK.
This Prospectus contains forward-looking statements within the meaning
of section 27A of the Securities Act of 1933, as amended, and section 21E
of the Securities Exchange Act of 1934, as amended, including statements
regarding, among other items (i) the Company's growth strategies, (ii)
the Company's products, (iii) the need for additional financing, and in
general, (iv) the need for and uncertainty with respect to necessary
regulatory clearances, (v) commercial acceptance of certain of the
Company's products, and (vi) the Company's ability to successfully
commercialize its products and to achieve profitability in general. These
forward-looking statements are based largely on the Company's
expectations and are subject to a number of risks and
uncertainties, certain of which are beyond the Company's control. Actual
results could differ materially from these forward-looking statements as a
result of the factors described in "Risk Factors," including, among
others, regulatory, financial, market or general economic influences. In
light of these risks and uncertainties, there can be no assurance that the
forward-looking statements contained in this Prospectus will in fact
transpire or prove to be accurate.
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. (the Company or FEHC). The Company was
originally incorporated under the laws of Colorado on January 17, 1985.
Currently, the Company is a multi-media entertainment company, holding
controlling interests in five distinct segments, two active and three non
operating. The two active segments, which are overviewed by the parent
company, FEHC, are known as "Radio," and "Live Entertainment. The non
operating segments are known as "Film", "Retail" and "Internet".
Initially, the Company's business consisted of the production of
pre-recorded travel guides and special interest videos. In 1987, the
Company entered the radio broadcasting business by acquiring Quality
Communications, Inc., a Wyoming corporation pursuant to which the Company
operates the radio segment of its business. In 1992, the Company acquired
a controlling interest in First Films, Inc. ("FFI"), a publicly held
Colorado corporation, under which its film and live entertainment
operations are undertaken. In December 1996, the Company commenced
operations of selling infomercial products in freestanding unmanned kiosks
in major retail malls including U.S. Military bases. This segment was
known as the "retail" segment. In January, 1998 the Company determined to
discontinue the operations of the "retail" segment as a result of lower
than expected sales. In December 1997, the Company acquired an interest in
Global Internet Corp. (Global Internet). Global Internet is a development
stage company whose planned business activity was to commence operations of
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.
Radio
In October 1987, the Company entered the radio broadcasting business
through the acquisition of Quality Communications, Inc. ("Quality
Communications"), a Wyoming corporation. The Company, through Quality
Communications, operates a radio station, 100.7, "The Fox",located in
Gillette, Wyoming.
In November 1993, the Company changed the music format of the radio
station formerly known as KGWY, or Y-100, from a top-40 station to a format
known as the "Heart of Rock." In February, 1995 the format was changed
again to contemporary country. The changes have had a positive effect on
its market share and gross revenues. Independent market surveys show the
radio station has approximately 44% of the market in Gillette, Wyoming. In
1996, the radio station started promoting concerts using up and coming
country and western singers. The radio station was a venue to promote the
concerts and add an additional source of revenue for the radio station.
Live Entertainment
FFI acquired 100 percent of the outstanding stock of Comedy Works,
Inc., a Colorado corporation, on September 13, 1990 in an exchange for
200,000,000 shares of common stock. Comedy Works was incorporated in 1982
and has operated one comedy club from its Larimer Square, Denver, Colorado
location since that time. Comedy Works Larimer Square typically has ten
shows per week and has averaged over 2,000 customers per week for the past
fifteen years.
The goal of Comedy Works is to produce first-rate shows in the theater
environment. Revenues are generated through both ticket sales at the door
and beverage and food sales at tables. The club is open to the public only
for shows, which last from 1 to 2 hours each, and number as many as three
per night. Non-show times are devoted to preparing and producing a show
that changes completely each week, and to promoting and marketing the
nightclub.
Video
Initially, the Company entered the pre-recorded videocassette product
market through the design, production and distribution of pre-recorded
videocassette travel guides and later expanded into production and
distribution of special interest videocassette productions. The Company is
no longer active in the video market.
Retail
In December 1996, the Company commenced operations of its retail
segment through its subsidiary, "The Best of As Seen On TV, Inc." (ASOTV).
The segment consisted of selling the most common and most popular
infomercial products in free standing un-manned kiosks in retail outlets
throughout the United States. The Company opened its first four unmanned
locations in December, 1996, in Pearl Harbor, Andrews Air Force Base and
Bolling Air Force Base in Washington, D.C. and Lechmere's in Cambridge,
Massachusetts. In March 1997, the Company terminated its unmanned kiosk
operations when the leases to its first four locations were not renewed.
Sales volumes at the unmanned kiosk locations were not sufficient to
maintain profitable operations. The Company turned its efforts to
operating manned kiosks in major retail malls. Each manned kiosk was
approximately 250 square feet and sold the top 50 selling infomercial
products. Commencing August, 1997, the Company opened six manned kiosk
locations in six retail malls located in the Denver metropolitan area. The
sales volumes for the manned kiosks were less than projected and in January
1998, the Company determined to discontinue the operations of ASOTV due to
operating
losses and lack of working capital to further develop the concept.
The result of operations of ASOTV for the years ended December 31,
1998 and 1997 are disclosed as discontinued operations.The assets of ASOTV
were written down to their estimated net realizable
value resulting in a write down of $490,000 which is included in the
accompanying statement of operations for the year ended December 31, 1997
as part of the loss from discontinued operations.
Internet Activities
On May 1, 1997, the Company entered into an agreement with Global
Casino, Inc. (Global Casino) to acquire 1,500,000 shares of common stock of
Global Internet Corp. owned by Global Casino and a $375,000 note receivable
from Global Internet owed to Global Casino in exchange for 30,000 shares of
FEHC Class B Convertible Stock (Class B Stock). Each share of Class B
stock is convertible into 12.5 shares of FEHC restricted common stock.
The acquisition of Global Internet required the approval of the
shareholders of FEHC. On December 5, 1997 the shareholders of FEHC
approved (i) the increase in the authorized shares of FEHC common stock and
(ii) the acquisition of Global Internet Corp. For accounting purposes
control of Global Internet did not change until December 5, 1997 and, as
such, December 5, 1997 is considered the acquisition date.
In June 1997, FEHC issued 14,080 shares of Class B convertible
preferred stock to two officers of Global Internet, in exchange for
$176,000 of accrued but unpaid compensation. Global Internet owed the two
officers compensation under the terms of long term employment agreements.
For accounting purposes the Class B convertible preferred shares issued
were recorded on December 5, 1997, the date the shareholders of FEHC
approved an increase in the authorized shares of common stock.
Global Internet was in the process of developing a virtual internet
casino and had a Web Site Development and Maintenance Agreement
(Development Agreement) with Electronic Data Systems (EDS) and DDB Needham
to develop the web site for approximately $1,200,000, of which $300,000 had
been expended on the web site development prior to the Company's
acquisition of Global Internet. FEHC was unable to obtain the financing
needed to complete the web site development and the Development Agreement
was terminated.
In December, 1997 Global Transaction Services, Ltd, a wholly owned
subsidiary of FEHC, was issued an internet gaming license from the
Commonwealth of Dominica to establish and operate a computer based gaming
business operating exclusively as an off-shore business. The license is
for a period of five years. In order to maintain the license, operations
must commence within one year and continue without significant interruption
throughout its term.
In accordance with the terms of an agreement dated December 15, 1997,
if funding of at least $1 million was not received by Global Internet by
February 28, 1998, FEHC agreed to sell to Anthony Kay, president of Global
Internet, all of the shares of Global Transaction Services, Ltd. for
$17,000. Anthony Kay resigned as an officer and director of Global Internet
in March, 1998.
On March 2, 1998, Global Internet was notified of its default under
the December 15, 1997 agreement and the shares of Global Transaction
Services, Ltd which holds the gaming license, were sold to Anthony Kay.
On July 30, 1998, the Company repurchased all of the issued and
outstanding shares of Global Transaction Services Ltd. from Anthony Kay by
issuing 50,000 shares of common stock of FEHC.
The ability of the Company to obtain the necessary financing to
commence operations of a virtual internet casino is uncertain and as such
the Company's investment in Global Internet was determined by management to
be impaired. Included in the accompanying consolidated statements of
operations for the year ended December 31, 1997 is an impairment write-off
of approximately $558,000 representing the Company's investment in Global
Internet.
Other Business Developments
Balzac
In April 1996, the Company acquired certain assets from Balzac, Inc.,
a private company which manufactures and distributes toys, including a
product line of toy balls. The assets and rights acquired consisted of the
following: inventory of toy balls, the exclusive license to sell Balzac
products in Australia and various other rights.
During 1996, a dispute arose between the Company and Balzac where
Balzac asserted a violation of the Purchase Agreement.
In April 1997, Balzac and the Company entered into a Settlement
Agreement whereby Balzac repurchased the exclusive Australian License for
$800,000 and agreed to repay the Company $200,000 which was the difference
between the value of the seized inventory and the obligation under the
licensing agreement. The $1,000,000 is to be repaid over forty months at
8% per annum by liquidating a minimum of 25,000 shares of common stock of
FEHC per quarter held by Balzac, Inc. The Company would be paid any
portion of the sales price per share up to $1.00 and Balzac would retain
any portion of the sales price over $1.00 per share. Any unsold stock
after 40 months will become the property of FEHC. The ability of Balzac to
sell all 1,000,000 shares held by Balzac at a price of $1.00 to repay its
obligation was determined by management to be unlikely. The common stock
of FEHC has traded at below $1.00 since August, 1997 and on February 5,
1998, the Company was delisted from NASDAQ. As of December 31, 1997 the
note receivable from Balzac was determined to be impaired and was written
down to its net realizable value of $81,340 resulting in an impairment loss
of approximately $902,000. During 1998, the note receivable was determined
to be further impaired and was written down to its net realizable value of
$42,000 resulting in an additional impairment of $39,340. Subsequent to
year end the Company was informed by Balzac that it had filed Chapter 11
Bankruptcy proceedings. Management determined the note receivable was
unlikely to be collected and the remaining $42,000 was written off as of
December 31, 1998.
Letters of Intent
In June, 1998 FEHC signed a non-binding letter of intent with Intelek,
LLC ("Intelek") to form a joint venture with Intelek for the purpose of
developing and promoting entertainment sites on the internet. In December,
1998 the Board of Directors determined not to pursue this opportunity and
the letter of intent was terminated.
In July 1998 FEHC signed a non-binding letter of intent with
SportsNet, Inc. (SNI) to operate an internet gaming site from the sovereign
nation of the Commonwealth of Dominica pursuant to an International Gaming
License issued December 20, 1997, to a subsidiary of the Company.
On September 15, 1998, the Company entered into a definitive agreement
with SportsNet, Inc. (SNI) The effective date of the Agreement will be ten
days after the following two events have occurred; (i) SNI has completed a
financing of not less than $1,000,000 and (ii) the Company has entered into
a contract with a credit card processor for participants in the Games
satisfactory to both the Company and SNI.
The Agreement, if and when it becomes effective, would continue in
effect as long as the Company has a valid internet gaming license issued by
the Commonwealth of Dominica or would terminate upon revocation of such
license by the Commonwealth of Dominica.
The definitive agreement with SportsNet, Inc. was terminated as of
March 19, 1999 as SNI had not yet completed its financing of $1,000,000 as
required by the agreement.
Global Games
On March 17, 1999 the Company signed a letter of intent with Global
Games Corp. (Global Games) for the licensing of Global Games' sports book
software and related technology. Under the terms of the agreement Global
Games will receive a percentage of the net gaming revenue for the licensing
of its software to the Company. Consummation of this transaction is
subject to the completion of a definitive agreement and approval by the
Board of Directors of both companies. Under the letter of intent, Global
Games will provide all technical service and support. The gaming site will
be operated from the Commonwealth of Dominica and will be accessible on a
play for fun basis from North America. The Company is unable to predict if
or when the agreement will be signed and the transaction will be
consummated.
On March 20, 1999, the Company signed a letter of intent with EMNet
Corp ("EMNet") to form a joint venture and create a significant Internet
based website business for "Comedy" products based around the affiliation
and content derived from a circuit of the leading comedy clubs in America.
Revenue streams would be generated through providing Internet marketing
services to member clubs, producing regular sponsored live exclusive
programming on the Internet and develop a pay-per-view model, and through
the sale of comedy CD's and direct downloads, associated merchandise and
admissions to live performances at member clubs. The closing of this
transaction will be subject to negotiating a definitive agreement, approval
by the Board of Directors of both companies, completion of a detailed
business plan, completion of the required agreements with America On Line
("AOL") and the signing of a minimum of 5 member clubs.
Starnet Communications International Inc.
On March 23, 1999, a wholly owned and newly acquired subsidiary of the
Company, Kensington Investments Inc., entered into a definitive agreement
with Softec Systems Caribbean Inc., a wholly owned subsidiary of Starnet
Communications International, Inc., to license internet casino software
which includes virtual casino games, sports book and simulcast horse horse
and dog racing.
Softec will provide all hardware,software and appropriate connection to the
Internet with sufficient bandwith to the Company that would allow the
Company to operate an internet gaming site. The Agreement shall be
effective for a period of one year and shall be automatically renewed
indefinitely with additional one year terms unless the Company notifies
Softec of its termination of the agreement in writing. Softec shall be paid
a one time start-up fee of $100,000 payable over the next ten months and a
monthly license fee ranging from 12.5% to 25% of net monthly revenue but
not less than $25,000 a month. The $25,000 minimum monthly license fee
does not commence until 90 days after the first wager is accepted.
Kensington will operate the site in accordance with a internet gaming
license issued by the government of St. John's Antigua, West Indies.
The Company is committed to maintaining strict compliance with all existing
and pending U.S. legislation regarding internet gaming and in conjunction
with Softec, will build and operate this site in strict compliance. The
Company, in conjunction with Starnet, will build and operate a gaming-for-
fun site that will be available to U.S. players and is intended to be
supported by advertising revenue.
In April, 1999 the Company signed a letter of intent with South Florida
publisher Skarco Press for the acquisition of the exclusive internet
rights to their award winning Young Jewish Lifestyle publication,
DIMENSIONS Magazine.
The Company intends to make available through www.dimensionsonline.com the
magazine to every major advertising market in the U.S. Each major
advertising market will have their own regional Internet edition providing
greater opportunity for not only market penetration for Dimensions
advertisers, but for significantly increased publishing and distribution
revenues.
The closing of this transaction will be subject to completion of due
diligence procedures, negotiating a definitive agreement, approval of the
Board of Directors of both companies. The Company is unable to predict if
or when an agreement will be sighned and the transaction will be
consummated.
Competition
Radio
100.7, "The Fox" competes with seven other signals available in the
area. Two of these radio signals originate from Gillette, Wyoming. The
Company presently enjoys the largest share of the market, estimated to be
44 percent.
Live Entertainment
Competition is intense in the comedy and music night club
entertainment industries. On a national level, the Company competes for
entertainers with companies that are better capitalized, highly visible and
have longer operating histories and larger staffs in their respective
locations. None of the national comedy clubs have locations in Denver,
Colorado. Comedy Works Larimer Square has been in business in Denver,
Colorado for 17 years and the Company believes it to be the highest
revenue-producing comedy club in the area. The Company believes that
Comedy Works Larimer Square provides higher-quality acts than its local
competitors, reflected in the fact that it charges approximately twice the
admission price of its local competitors. The main competitors of Comedy
Works Larimer Square are both individually-owned and located in shopping
centers in the suburbs, while Comedy Works is located in the downtown
Denver area.
Licenses
The Federal Communications Commission (FCC) issues radio broadcasters
a license to operate within their assigned frequency for seven years. These
licenses, upon application, are renewable for additional seven year
periods. The FCC issued KGWY its original license on October 1, 1983, to
operate at a frequency of 100.7 MHz, 24 hours a day, at 100,000 watts of
effective radiated power. It was subsequently reissued in October of 1990
and 1997. During the renewal process the public has an opportunity to
express its opinion of how well the particular station is servicing its
broadcast area. Extreme public negativity during this period can hold up
the reissuance process. In addition, frequent violations of FCC rules and
regulations can be cause for the denial of the station's license renewal.
The FCC allots a certain number of frequencies for each broadcast
area,based upon community need, population factors and the determination of
the economic viability of another station in the designated region.
Currently there are no other licenses available in the Gillette area. It is
possible to request that the FCC reconsider opening up further frequencies
through its rule making body, but this can be a time consuming process.
All sales of stations and subsequent transfers of licenses must be approved
by the FCC.
In December, 1997 the Commonwealth of Dominica issued an internet
gaming license to Global Transaction Services, Ltd, which allows the
Company to establish and operate a computer based gaming business operating
exclusively as an offshore business. The license is for a period of five
years and operations must commence within one year and continue without
significant interruption throughout its term. Operations had not commenced
by December, 1998. The Commonwealth of Dominica has extended the date to
commence operation to March 31, 1999 before the license will expire. The
Company has received a verbal extension from the Commonwealth of Dominica
to June 30, 1999 for its internet gaming license although as of the date of
this prospectus an executed extension has not been received by the Company.
Seasonality
Radio
Although revenues are spread over the entire calendar year, the first
quarter generally reflects the lowest and the fourth quarter generally
reflects the highest revenues for each year. The increase in retail
advertising each fall in preparation for the holiday season, combined with
political advertising, tends to increase fourth quarter revenues.
Live Entertainment
The Company has found that its highest-revenue months are from July 15
to October 15 of each year. From approximately May 15 to July 15 of each
year, business is typically down 30 percent below average, primarily
because customers prefer outdoor activities at that time of year. During
the holiday season, management has found a slight increase due to
once-a-year customers, on vacation or hosting visiting friends or
relatives.
Employees
First Entertainment Holding Corp
Currently, FEHC, the Holding Company, employs one part time executive.
The Holding Company contracts the accounting, management information
systems and administrative function to a company owned by the former
president of the Company and to other independent consultants.
Radio
The Company employs approximately eight full-time employees and five
part-time employees. The full-time employees, are engaged mainly in the
administrative radio operations and sales. The part-time employees are
engaged in the on-air activities as on-air personalities.
Live Entertainment
This division has five full-time employees and approximately 26
part-time employees. Full-time employees are management staff and
part-time employees are waitresses, bartenders, and door personnel.
Retail
This division has no employees as of December 31, 1998 since the
business has been discontinued.
CERTAIN SELLING STOCKHOLDERS
The following table sets forth, as of the date hereof, the aggregate
number of the Company's shares of Common Stock to be offered by
certain Selling Stockholders who are to be issued shares of Common Stock
pursuant to the Plan which will be "control securities" (as such term is
defined in the Act) assuming all shares being offered pursuant to this
Prospectus are sold.
Number of
Shares to
Name and Address be Offered
A.B. Goldberg 100,000
7887 E.Belleview Ave.
Suite 1114
Denver, CO 80111
Howard Stern 100,000
500 Corporate Drive
Suite 200
Ft. Lauderdale, FL 33334
William Rubin 100,000
313 East Fort Ave.
Baltimore, MD 21230
Doug Olson 100,000
5495 Marion Street
Denver, CO 80216
PLAN OF DISTRIBUTION
The Company will not receive any proceeds from the sale of the
shares of Common Stock by the Selling Stockholders pursuant to this
Prospectus. The securities offered by this Prospectus may be sold from
time to time by all of the Selling Stockholders. Usual and customary
or specifically negotiated brokerage fees or commissions may be paid by
the Selling Stockholders.
The Selling Stockholder through whom such securities are sold may be
deemed "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities
offered, and any profits realized or commissions received may be deemed
underwriting compensation. The Company has agreed to indemnify certain of
the Selling Stockholders against certain liabilities, including
liabilities under the Securities Act.
At the time a particular offer of the shares is made by or on the
behalf of a Selling Stockholder, to the extent required, a Prospectus
Supplement will be distributed which will set forth the number of shares
being offered and the terms of the offering, including the name or names
of any underwriters, dealers or agents, the purchase price paid by any
underwriter for shares purchased from the Selling Stockholders, any
discounts, commissions and other items constituting compensation
from the selling Stockholders and any discounts, commissions or
concessions allowed or reallowed or paid to dealers, and the
proposed selling price to the public.
The shares of Common Stock may be sold from time to time in one or
more transactions at a fixed offering price, which may be changed, at
varying prices determined at the time of sale, or at negotiated prices.
Such prices will be determined by the Selling Stockholders or by
agreement between the Selling Stockholders and any underwriters.
In order to comply with the applicable securities laws of certain
states, if any, the shares of Common Stock will be offered or sold through
registered or licensed brokers or dealers in those states. In addition, in
certain states the shares of Common Stock may not be offered or sold
unless they have been registered or qualified for sale in such states
or an exemption from such registration or qualification requirement is
available and is complied with.
Under applicable rules and regulations promulgated under the Exchange
Act, any person engaged in a distribution of securities may not
simultaneously bid for or purchase securities of the same class for a
period of two business days prior to the commencement of such
distribution. In addition, and without limiting the foregoing, the
Selling Stockholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including
without limitation Rules 10b-2, 10b-5, 10b- 6 and 10b-7, in connection with
transactions in the shares during the effectiveness of the Registration
Statement of which this Prospectus is a part. All of the foregoing may
affect
the marketability of the shares of Common Stock.
The Company will pay all of the expenses incident to the
registration of the shares of Common Stock other than any fees or
expenses of any counsel retained by the Selling Stockholders and any out
of pocket expenses incurred by the Selling Stockholders or any person
retained by the Selling Stockholders in connection with the registration
of the shares, fees and expenses of compliance with state securities or
blue sky laws and commissions and discounts of underwriters, dealers
or agents, if any.
DESCRIPTION OF CAPITAL STOCK
The authorized stock of the Company consists of 50,000,000
authorized shares of Common Stock, par value $.008 per share, 9,610,170
shares of which were outstanding as of December 31, 1998; and 5,000,000
authorized shares of Preferred Stock, $0.001 par value, consisting of
1,500,000 shares of Class A Preferred Stock; 1,000,000 shares of Class B
Preferred Stock; and 1,000,000 shares of Class C Preferred Stock. A total
of 10,869 Class A Preferred Stock, 13,040 Class B Preferred Stock, and no
Class C Preferred Stock were issued and outstanding as of December 31,
1998.
There are no preemptive rights with respect to any of the capital
stock of the Company.
Common Stock
- -------------
Each share of Common Stock is entitled to one vote, either in person
or by proxy, on all matters that may be voted upon by the owners thereof
at a meeting of the shareholders, including the election of directors. The
holders of Common Stock (i) have equal, ratable rights to dividends from
funds legally available therefor, when, as and if declared by the Board
of Directors of the Company; (ii) are entitled to share ratably in all of
the assets of the Company available for distribution to holders of Common
Stock upon liquidation, dissolution or winding up of the affairs of
the Company; (iii) do not have preemptive or redemption provisions
applicable thereto; and (iv) are entitled to one noncumulative vote
per share on all matters on which shareholders may vote at all meetings
of shareholders.
All shares of Common Stock issued and outstanding are, and those
offered hereby, when issued, will be fully paid and nonassessable,
with no personal liability attaching to the ownership thereof.
Preferred Stock
- ----------------
A total of One Million Five Hundred Thousand (1,500,000) shares of the
Company's $0.001 per share Preferred Stock have been designated Class "A"
7% Cumulative, Non-Participating, Convertible Preferred Stock, which has a
7% dividend and is redeemable by the Company at face value and convertible
into common shares of the Company. The rights of Class A preferred stock
are superior to all other Preferred Stock.
A total of One Million (1,000,000) shares of the Company's Preferred
Stock have been designated Class "B" 6% Cumulative dividend, payable
quarterly if and when declared, and are redeemable by the Company at face
value and convertible into common shares of the Company at the option of
the Company. The rights of Class B preferred stock are subordinate to Class
A Preferred Stock.
A total of One Million (1,000,000) shares of the Company's Preferred
Stock have been designated Class "C" Convertible non-dividend Preferred
Stock. The Class C Preferred Stock is convertible into common stock of the
Company at a conversion price per share of Class C preferred stock equal to
the average previous thirty day bid price of the Common Stock on the date
of conversion. The rights of Class C preferred stock are subordinate to
Class A and Class B Preferred Stock.
Transfer Agent and Registrar
- -----------------------------
The transfer agent for the Company's Common Stock is American
Securities Transfer, Incorporated, 988 Quail Street, Suite 101, Lakewood,
Colorado 80215. The telephone number is (303) 234-5300. The Company itself
transfers its Preferred Shares.
No dealer, salesman or other person has been authorized to give
any information or to make any representations not contained in this
Prospectus and if given or made, such information or representations must
not be relied upon as having been authorized by the Company or any
Underwriter. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create any implication that
there has been no change in the affairs of the Company since the date
hereof. This Prospectus does not constitute an offer tosell or a
solicitation of an offer to buy any of the securities offered hereby in
any jurisdiction to any person or to make such offer or solicitation in
such jurisdiction.
FIRST ENTERTAINMENT HOLDING CORP.
1,000,000 Shares of Common Stock
TABLE OF CONTENTS
AVAILABLE INFORMATION............................................
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE............................................
PROSPECTUS SUMMARY...............................................
RISK FACTORS.....................................................
THE COMPANY.....................................................
SELLING STOCKHOLDERS............................................
PLAN OF DISTRIBUTION............................................
DESCRIPTION OF CAPITAL STOCK....................................
---------------------------
PROSPECTUS
---------------------------
April 21, 1999
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed by the Company with the
Securities and Exchange Commission, are hereby incorporated by reference
into this Prospectus:
a. The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1998; and
b. The Company's Reports on Form 8-K which have been filed since the
Company's Annual Report, if any.
c. The description of the Company's common stock from the Company's
Registration Statement on Form 8-A filed with the Securiites and Exchange
Commission on February 26, 1987.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the
date of this Registration Statement and prior to the filing of a post-
effective amendment to this Registration Statement which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated in this
Registration Statement by reference and to be a part hereof from the date
of filing of such documents.
Any statement contained in this Registration Statement, in a
supplement to this Registration Statement or in a document incorporated by
reference herein, shall be deemed to be modified or superseded for purposes
of this Registration Statement to the extent that a statement contained
herein or in any subsequently filed supplement to this Registration
Statement or in any document that is subsequently incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The Registrant is registering common shares and options to purchase
common shares. The common shares are registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended. The Registrant is also
registering options. For a description of the options, see Exhibit 4.1
attached hereto.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
David Wagner & Associates, P.C., Attorneys at Law, special securities
counsel to the Registrant for the purpose of this Registration Statement,
and whose opinion as to the legality of the issuance of the Shares
hereunder is attached hereto as Exhibit 5, have been allocated, for past
services and pursuant to the Plan, a total of 20,000 shares, which have
been registered in the Registration Statement of which this prospectus is a
part. An affiliate of this firm owns an additional 20,000 common shares of
the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Twelfth of the Company's Articles of Incorporation authorizes
the Corporation to indemnify to the maximum extent permitted under Nevada
law.
The Nevada Private Corporations Act allows indemnification of
directors, officers, employees and agents of the Company, including the
advancement of expenses:
Section 78.751 of the Nevada Private Corporations Act provides:
1. A corporation may indemnify any person who was or 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, except an action by or in
the right of the corporation, by reason of the fact that he is or was
a director,officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement actually and
reasonable 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 the
corporation, and, with respect to any criminal action or
proceeding,had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, does not, of itself, create a
presumption that the person did not act 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, he had reasonable cause to believe that his conduct was
unlawful.
2. A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts
paid in settlement and attorneys' fees actually and reasonably
incurred by him in connection with the defense or settlement of the
action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation. Indemnification may not be made for any claim, issue or
matter as to which such person shall have been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation,unless and only to the extent that the court in which the
action or suit was brought or other court of competent jurisdiction,
determines upon application that in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnity
for such expenses as the the court deems proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsections 1. and
2., or in defense of any claim, issue or matter therein, he must be
indemnified by the corporation against expenses, including attorneys'
fees, actually and reasonably incurred by him in connection with the
defense.
4. Any indemnification under subsections 1. and 2., unless
ordered by a court or advanced pursuant to subsection 5, must be made
by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee
or agent is proper in the circumstances. The determination must be
made:(a) By the stockholders, (b) By the board of directors by a
majority vote of a quorum consisting of directors who were not parties
to such action, suit or proceeding (c)If a majority vote of a quorum
consisting of directors who were not parties to the act, suit or
proceeding so orders, by independent legal counsel in a written
opinion;(d) If a quorum consisting of directors who were not parties
to the act, suit or proceeding cannot be obtained, by independent
legal counsel in a written opinion.
5. The articles of incorporation, the bylaws or an agreement made
by the corporation may provide that the expenses of officers and
directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in
advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined by a
court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. The provisions of this subsection do
not affect any rights to advancement of expenses to which corporate
personnel other than directors or officers may be entitled under any
contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in
or ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification aor advancement of expenses may be entitled under the
articles or incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his
official capacity or an action in another capacity while holding such
office, except that indemnification, unless ordered by a court
pursuant to subsection 2 or for the advancement of expenses made
pursuant to subsection 5, may not be made to or on behalf of any
director or officer if a final adjudication establishes that his acts
or omissions involved intentional misconduct, fraud or knowing
violation of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the heirs,
executors, and administrators of such a person.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS
Exhibit
Number Description
3.1 Articles of Incorporation of the Company *
3.2 Bylaws of the Company*
3.3 Articles of Merger Between the Company and First
Entertainment, Inc.*
4.1 First Entertainment Compensation Plan-1999B, dated March 1, 1999.
5 Opinion of Counsel, David Wagner & Associates, P.C.
24.1 Consent of David Wagner & Associates, P.C. (Included in Exhibit
5).
24.2 Consent of Gordon, Hughes & Banks, LLP, independent
Certified Public Accountants.
* Previously Filed
ITEM 9. UNDERTAKINGS
1. The Registrant hereby undertakes:
(a) 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 formation 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;
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bonafide offering thereof.
(c) 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.
2. The Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 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 herein, and the offering of such securities at that time shall be
deemed to be in the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing 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 and County of Denver, State of
Colorado, on this 21st day of April, 1999.
FIRST ENTERTAINMENT, INC.
By: /S/ A.B. GOLDBERG
A.B. Goldberg
Principal Executive
and Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
A MAJORITY OF THE BOARD OF DIRECTORS
Dated: 4/21/99 By:/S/A.B.GOLDBERG
A.B. Goldberg
Director
Dated: 4/21/99 By:/S/ WILLIAM RUBIN
William Rubin
Director
Dated: 4/21/99 By:/S/ DOUG OLSON
Doug Olson
Director
Dated: 4/21/99 By:/S/ HOWARD STERN
Howard Stern
Director
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)
E X H I B I T S
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
3.1 Articles of Incorporation of the Company *
3.2 Bylaws of the Company *
3.3 Articles of Merger Between the Company and First Entertainment,
Inc. *
4.1 First Entertainment Compensation Plan-1999B, dated March 1, 1999.
5 Opinion of Counsel, David Wagner & Associates, P.C.
24.1 Consent of David Wagner & Associates, P.C. (Included in Exhibit
5).
24.2 Consent of Gordon, Hughes & Banks, LLP, independent Certified
Public Accountants.
*Previously filed
<PAGE>
Exhibit 5.0
Opinion of Counsel, David Wagner & Associates, P.C.
<PAGE>
DAVID WAGNER & ASSOCIATES, P.C.
Attorneys and Counsellors at Law
8400 East Prentice Avenue
Penthouse Suite
Englewood, Colorado 80111
Telephone (303) 793-0304
Facsimile (303) 771-4562
April 21, 1999
Board of Directors
First Entertainment Holding Corp.
7887 E. Belleview Ave.
Suite #1114
Denver, CO 80111
Gentlemen:
We have acted as counsel to First Entertainment Holding Corp (the
"Company") in connection with the preparation and filing of a Registration
Statement on Form S-8 (the "Registration Statement") covering registration
under the Securities Act 1933, as amended, of the subject shares of the
Company's common stock, $.008 par value per share (the "Shares").
Based upon the foregoing, and assuming that Shares will be issued as
set forth in the Registration Statement, at a time when effective, and that
there will be full compliance with all applicable securities laws involved
under the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated pursuant to
said Acts, and in those states in which the Shares may be sold, we are of
the opinion that, upon issuance of the Shares according the Registration
Statement and receipt of the consideration to be paid for the Shares, the
Shares will be duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock of the Company. This opinion does not
cover any matters related to any re-offer or re-sale of the Shares by the
beneficiary thereof, once issued as described in the Registration
Statement.
This opinion is not to be used, circulated, quoted or otherwise
referred to for any other purpose without our prior written consent. This
opinion is based on our knowledge of the law and facts as of the date
hereof. We assume no duty to communicate with the Company in respect to
any matter which comes to our attention hereafter.
Very truly yours,
DAVID WAGNER & ASSOCIATES, P.C.
///Signed///
<PAGE>
Exhibit 24.1
Consent of Issuer's Counsel
<PAGE>
DAVID WAGNER & ASSOCIATES, P.C.
8400 East Prentice Avenue
Penthouse Suite
Englewood, Colorado 80111
Telephone (303) 793-0304
Facsimile (303) 771-4562
April 21, 1999
We consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to our firm in the prospectus
which is made a part of the Registration Statement.
Very truly yours,
DAVID WAGNER & ASSOCIATES, P.C.
///Signed///
<PAGE>
Exhibit No. 24.2
Consent of Independent Public Accountant
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
First Entertainment Holding Corp.
Denver, Colorado
We hereby consent to the incorporation by reference in the Registration
Statement of our report dated March 17, 1999 relating to the consolidated
financial statements of First Entertainment Holding Corp. appearing in
the Company's Annual Report on Form 10-KSB for the year ended December 31,
1998.
Gordon, Hughes & Banks, LLP
///signed///
Denver, Colorado
April 21, 1999
<PAGE>
