<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 13, 1999
REGISTRATION NO. 333-72167
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BIKERS DREAM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 33-0140149
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3810 WACKER DRIVE
MIRA LOMA, CALIFORNIA 91752
(909) 360-2500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MR. HERM ROSENMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
3810 WACKER DRIVE
MIRA LOMA, CALIFORNIA 91752
(909) 360-2500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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COPIES OF COMMUNICATIONS TO:
HOWARD J. UNTERBERGER, ESQ.
CHRISTINA LYCOYANNIS, ESQ.
MILLER & HOLGUIN
1801 CENTURY PARK EAST, SEVENTH FLOOR
LOS ANGELES, CALIFORNIA 90067
(310) 556-1990
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX. [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
<PAGE> 2
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED TO BE REGISTERED PER UNIT OFFERING PRICE FEE
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock 25,000 shares(1) $2.93755(2) $73,438.75 $20.42
==============================================================================================
</TABLE>
(1) The Registration Statement as originally filed on February 11, 1999
covered the sale of 3,330,601 shares, for which a registration fee of
$3,370.90 was paid. This Amendment No. 1 covers an additional 25,000
shares underlying outstanding options, resulting in an additional
registration fee as shown in the table. Also registered hereunder are an
indeterminate number of additional shares of common stock which may
become issuable by virtue of anti-dilution provisions of options.
(2) Estimated solely for the purpose of calculating the registration fee,
and based, pursuant to Rule 457(c), on the average of the high and low
prices of the Registrant's common stock as reported by Nasdaq for May 7,
1999, which date is within 5 business days prior to the initial filing
date of this Registration Statement.
----------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 3
PROSPECTUS
DATED MAY 13, 1999 SUBJECT TO COMPLETION
BIKERS DREAM, INC.
3,355,601 SHARES OF COMMON STOCK
Shareholders of Bikers Dream, Inc from time to time, may offer and sell
up to 3,355,601 shares of Bikers Dream common stock. The selling shareholders
may, from time to time, offer their shares through public or private
transactions at prevailing market prices or privately negotiated prices.
Bikers Dream's common stock is traded on the Nasdaq SmallCap Market
System under the symbol BIKR. On May 7, 1999, the last reported sale price of
our common stock on Nasdaq was $2.938.
--------------------------
AN INVESTMENT IN THESE SECURITIES IS RISKY. YOU SHOULD ONLY PURCHASE THESE
SHARES IF YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. PLEASE SEE
THE RISK FACTORS BEGINNING ON PAGE 2 TO READ ABOUT CERTAIN FACTORS
YOU SHOULD CONSIDER BEFORE BUYING SHARES OF COMMON STOCK.
----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF ACCURACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this prospectus is ____________, 1999
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TABLE OF CONTENTS
<TABLE>
<S> <C>
The Company............................................................. 2
Risk Factors............................................................ 2
Sales by Selling Shareholders........................................... 9
Plan of Distribution.................................................... 15
Legal Matters........................................................... 16
Experts................................................................. 16
Where You Can Find More Information..................................... 17
</TABLE>
NOTICE ABOUT FORWARD-LOOKING STATEMENTS
To the extent that the information presented in this prospectus, and in
other documents which are incorporated by reference in this prospectus under the
section of this prospectus entitled "Where You Can Find More Information,"
discusses financial projections, information or expectations about our business
plans, results of operations, products or markets, or otherwise makes statements
about future events, such statements are forward-looking. Such forward- looking
statements can be identified by the use of words such as "intends,"
"anticipates," "believes," "estimates," "projects," "forecasts," "expects,"
"plans," and "proposes." Although we believe that the expectations reflected in
these forward-looking statements are based on reasonable assumptions, there are
a number of risks and uncertainties that could cause actual results to differ
materially from such forward-looking statements. These include, among others,
the cautionary statements in the "Risk Factors" section of this prospectus
beginning on page 2. These cautionary statements identify important factors that
could cause actual results to differ materially from those described in the
forward-looking statements. When considering forward-looking statements in this
prospectus, you should keep in mind the cautionary statements in the "Risk
Factors" section and other sections of this prospectus, and other cautionary
statements in documents which are incorporated by reference in this prospectus
under the section of this prospectus entitled "Where You Can Find More
Information."
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THE COMPANY
Bikers Dream is a manufacturer, distributor and retailer of
quality-built, American heavyweight cruiser motorcycles under the "Ultra Cycles"
brand name. Our principal executive offices are located at 3810 Wacker Drive,
Mira Loma, California 91752, and our telephone number is (909) 360-2500.
RISK FACTORS
An investment in shares of Bikers Dream common stock involves a high
degree of risk. You should carefully consider the following factors as well as
the other information contained and incorporated by reference in this prospectus
before deciding to invest.
HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICITS MAY AFFECT PROFITABILITY;
IMPROVEMENTS IN PROFITABILITY DEPEND UPON BIKERS DREAM'S ABILITY TO ITS EXPAND
DEALER NETWORK AND INCREASE ITS MANUFACTURING CAPABILITY.
Bikers Dream has a history of operating losses and accumulated deficits.
Bikers Dream had operating net losses of approximately $3.8 million, $5.1
million and $4 million for the fiscal years ended December 31, 1998, 1997 and
1996, respectively. As of December 31, 1998, Bikers Dream's accumulated deficit
was approximately $15.8 million. Bikers Dream may not be able to achieve or
maintain profitability in the future. The ability of Bikers Dream to improve its
profitability in future periods will depend upon its ability to continue to
expand its dealer network and to increase its manufacturing capability on a
cost-effective basis.
UNCERTAINTIES ASSOCIATED WITH BIKERS DREAM'S MANUFACTURING OPERATIONS.
In the fiscal year ended December 31, 1998, Bikers Dream derived
approximately 57% of its total revenues from its motorcycle manufacturing
operations. Bikers Dream expects that the percentage of revenues attributable to
its manufacturing operations will rise in future periods. The following are the
risks which we believe to be most significant with respect to Bikers Dream's
manufacturing operations:
BIKERS DREAM HAS LIMITED EXPERIENCE WITH MANUFACTURING OPERATIONS.
Bikers Dream entered the motorcycle manufacturing business in 1997 through the
acquisition of the assets of its Ultra Cycles division. Previously, Bikers
Dream's operations had involved only the operation of retail stores selling new
and used motorcycles and motorcycle parts and accessories. Although we have
acquired considerable direct experience with motorcycle manufacturing since our
acquisition of the Ultra Cycles division in 1997, such experience is more
limited than that of other motorcycle manufacturers which have been in operation
for a longer period of time.
DEMAND FOR BIKERS DREAM'S MOTORCYCLES MAY NOT BE SUFFICIENT TO ENABLE BIKERS
DREAM TO PROTECT OR INCREASE MARKET SHARE. Our ability to sell the motorcycles
which we manufacture depends on sustained market demand. Bikers Dream
manufactures heavyweight cruiser motorcycles. According to industry research
reports, the overall market for heavyweight cruisers has grown by approximately
12% per year since 1996. The base retail price of one of our heavyweight
cruisers ranges from approximately $16,000 to $26,000. Motorcycles within this
price range are luxury goods and are therefore more susceptible to changes in
popular fashion and
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changes in economic conditions than lower priced motorcycles. Any reduction in
overall demand for heavyweight cruiser motorcycles may require Bikers Dream to
increase its share of the market in order to sustain or increase sales. However,
we cannot ensure that demand for our motorcycles will be sufficient to enable us
to protect or increase our market share.
IF BIKERS DREAM IS UNABLE TO EXPAND ITS DEALER NETWORK IT MAY NOT BE
ABLE TO MAINTAIN OR INCREASE SALES. Motorcycles manufactured by Bikers Dream are
sold through our six owned Bikers Dream Superstores, approximately 40
independently owned Bikers Dream Superstores and approximately 65 independent
Ultra Cycles dealers. Approximately 75% of the motorcycles sold by Bikers Dream
during the year ended December 31, 1998 were sold through the independent dealer
network. Dealers may not be able to maintain or increase this level of sales. We
believe that we will need to continue to expand our independent dealer network
in order to increase sales, but may not be able to do so successfully.
BIKERS DREAM'S COMPETITIVE POSITION WITHIN ITS MARKET NICHE COULD SUFFER
IF COMPETITORS ENTER OR EXPAND OPERATIONS WITHIN THIS MARKET. The U.S.
heavyweight cruiser motorcycle market in which Bikers Dream competes is highly
competitive. Harley-Davidson, Inc. is by far the largest seller of heavyweight
cruiser motorcycles. According to Harley-Davidson's 1998 annual report on Form
10-K, it controls approximately 49.5% of the heavyweight cruiser motorcycle
market. Bikers Dream seeks to avoid direct competition with Harley-Davidson by
operating within a specialized niche of the heavyweight market. Within this
niche, Bikers Dream competes on the basis of product performance and style,
pricing, service and warranties. This competitive strategy includes offering
certain customized features, such as polished or painted high-performance
engines, at no additional charge over base prices, as well as a four-year,
unlimited mileage warranty for all models. Our main competitors within this
market niche are Titan Motorcycles, Big Dog Motorcycles and CMC (California
Motorcycle Corp.). There can be no assurance that these competitors will not
expand their manufacturing operations or that other motorcycle manufacturers
will not enter this market.
UNCERTAINTIES ASSOCIATED WITH BIKERS DREAM'S RETAIL STORE OPERATIONS.
The following are the risks which we believe to be most significant with
respect to Bikers Dream's retail store operations:
SUPERSTORE SALES VOLUME AND PROFITABILITY DEPEND ON CONTINUED POPULARITY
OF MOTORCYCLES. Bikers Dream depends on the continued popularity of motorcycles
and motorcycle related products to maintain sales volume. Without sufficient
sales volume, our stores will lose the benefit of economies of scale associated
with the superstore concept.
BIKERS DREAM'S ABILITY TO COMPETE IN A LARGELY FRAGMENTED RETAIL MARKET
COULD DIMINISH IF RETAIL COMPETITORS BEGIN COMPETING ON A LARGER SCALE.
Superstores owned by Bikers Dream must compete with thousands of motorcycle
retail outlets throughout the United States which provide aftermarket parts,
services and accessories. Most of these competitors are small, privately owned
businesses. Competition could increase if current competitors of Bikers Dream
expand their retail facilities and operations or new competitors with
substantial capital and other resources enter the retail market.
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BIKERS DREAM NEEDS ADDITIONAL CAPITAL FINANCING TO CONTINUE EXPANSION OF
MANUFACTURING OPERATIONS; SUCH FINANCING MAY DILUTE EXISTING SHAREHOLDERS'
INTERESTS AND SUBSTANTIALLY RESTRICT BIKERS DREAM'S ABILITY TO OPERATE AND RAISE
ADDITIONAL FUNDS.
Bikers Dream utilizes its working capital primarily to finance the
manufacture of motorcycles. Typically, manufacturing costs are incurred two to
three months prior to receipt of payment for the finished product. As we expand
our operations, internally generated cash is not sufficient to meet our working
capital needs. Accordingly, Bikers Dream has needed to look to outside funding
sources to address its liquidity and working capital needs. Historically, Bikers
Dream has addressed these needs primarily through private equity placements and
secured debt-financing arrangements with lenders.
In April 1998, Bikers Dream completed a private placement of Series C
Convertible Preferred Stock, which generated approximately $3.075 million in
cash. In addition, in June 1998, Bikers Dream completed a three-year senior
secured loan with Tandem Capital of Nashville, Tennessee. The amount of the loan
is $4.5 million. The loan bears interest at 12% per annum and stipulates
quarterly payments. The Tandem loan is secured by a first lien on substantially
all of Bikers Dream's assets. In connection with this loan, Tandem also received
warrants to purchase 457,500 shares of common stock. In addition, on each
anniversary of the closing date of the loan, until the loan is paid in full,
Tandem Capital is entitled to receive a warrant to purchase an additional
200,000 shares of common stock. Bikers Dream used the proceeds of the Tandem
loan to repay $2.5 million of then-existing long-term debt and to expand Bikers
Dream's motorcycle manufacturing operations.
In order to finance its current working capital needs, Bikers Dream is
relying on a $1.5 million inventory flooring line of credit which it obtained in
May 1998 from Cana Capital Corporation, a company owned by Bruce Scott, a
director of Bikers Dream, and a $300,000 bridge loan which Bikers Dream obtained
in October 1998 from MD Strategic L.P., a partnership in which Don Duffy, a
director of Bikers Dream, is a principal. Advances under the Cana Capital line
of credit bear interest at a rate of 2% or 5% over the prime rate, depending on
the type of advance. The MD Strategic loan is evidenced by an unsecured note
bearing interest at 18% per annum and is due, together with accrued interest, on
the earlier of May 31, 1999 or upon receipt by Bikers Dream of funds from a
third-party lender.
In February 1999, Bikers Dream completed an offering of $1,500,000 in
newly issued Series D Preferred Stock. The investors in the Series D Preferred
Stock offering have committed to purchase an additional $500,000 of Series D
Preferred Stock upon approval by Bikers Dream's shareholders of the issuance of
such additional Series D Preferred Stock. The same investors have also committed
to purchase an additional $1 million in Series D Preferred Stock following the
later to occur of shareholder approval or the effectiveness of a registration
statement with respect to such shares.
Although we believe that we can, at our current level of operations,
adequately service our existing indebtedness and meet our working capital needs
by using available internal cash, we will require additional outside sources of
capital to continue to expand our manufacturing operations. We are currently
negotiating an inventory and receivables based line of credit of
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<PAGE> 8
up to $10 million which will be used to pay off all or part of our existing
indebtedness to Tandem Capital, Cana Capital Corporation and MD Strategic L.P.,
and to finance our general business operations and working capital needs. We
believe that such a credit facility, combined with the proceeds of Series D
Preferred Stock offerings, would provide Bikers Dream with sufficient working
capital for the current year. If Bikers Dream does not obtain such a credit
facility, it will be unable to meet its expansion goals unless it obtains other
debt or equity financing on acceptable terms. Bikers Dream is continually in
discussions with lenders and potential equity partners regarding funding options
to fuel its growth strategy.
Any additional equity financing that Bikers Dream obtains may be
dilutive to shareholders, and any additional debt financing may impose
substantial restrictions on the ability of Bikers Dream to operate and raise
additional funds. The Board of Directors will determine the terms of any
financing at the appropriate time based upon management's good faith evaluation
of the best interests of Bikers Dream and its shareholders. There can be no
assurance that additional capital will be available or that, if available, such
capital will be made available on satisfactory terms.
LOSS OF SERVICES OF HERM ROSENMAN MAY JEOPARDIZE THE EFFECTIVE MANAGEMENT OF
BIKERS DREAM.
Bikers Dream depends highly on the services of Herm Rosenman, its
President and Chief Executive Officer. Bikers Dream entered into an employment
agreement with Mr. Rosenman which expires in 2002, but has not obtained key man
insurance for Mr. Rosenman. The loss of Mr. Rosenman could jeopardize the
effective management of Bikers Dream, which could have a material adverse effect
on its results of operations.
ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK UNDERLYING PREFERRED STOCK,
OPTIONS AND WARRANTS MAY CAUSE SIGNIFICANT DILUTION OF EXISTING SHAREHOLDERS'
INTERESTS.
Significant dilution of existing shareholders' interests may occur if
Bikers Dream issues additional shares of common stock underlying outstanding
shares of preferred stock, warrants and options, as described below:
CONVERSION OF OUTSTANDING PREFERRED STOCK. As of May 7, 1999, Bikers
Dream had one share of Series A Preferred Stock, 702,194 shares of Series B
Preferred Stock, and 1,545 shares of Series D Preferred Stock outstanding. No
shares of Series C Preferred Stock are currently outstanding. The number of
shares of common stock issuable, collectively, upon conversion of the
outstanding Series A Preferred Stock and Series B Preferred Stock is less than
5% of the outstanding common stock of Bikers Dream as of May 7, 1999. However,
the number of shares of common stock issuable upon conversion of the Series D
Preferred Stock may constitute a significantly greater percentage of the total
outstanding shares of common stock of Bikers Dream stock as such conversion is
based on a formula which is pegged to the market price of the common stock. The
formula provides, specifically, that the number of shares of common stock
issuable upon the conversion of one share of Series D Preferred Stock is
calculated by adding $1,000 to the amount of accrued and unpaid dividends on
such share and dividing the resulting sum by the conversion price. The
conversion price is equal to the lesser of (1) 110% of the closing bid price of
the common stock on the last trading day before the date of issuance of the
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<PAGE> 9
share of Series D Preferred Stock being converted, or (2) 90% of the average of
the four lowest closing bid prices of the common stock during the last 22
trading days before the date of conversion.
The 1,545 shares of Series D Preferred Stock currently outstanding may
be converted commencing April 7, 1999. The exact number of shares of common
stock into which currently outstanding Series D Preferred Stock may ultimately
be convertible will vary over time as the result of ongoing changes in the
trading price of Bikers Dream common stock. Decreases in the trading price of
Bikers Dream common stock are likely to result in increases in the number of
shares of common stock issuable upon conversion. However, prior to the receipt
of shareholder approval, the maximum number of shares issuable upon conversion
of the Series D Preferred Stock will not exceed 1,027,996. This number
represents 19.9% of Bikers Dream's outstanding common stock as of the date the
Series D Preferred Stock was issued.
OUTSTANDING WARRANTS AND OPTIONS. As of May 7, 1999, 1,199,250
previously issued warrants were outstanding at exercise prices ranging from
$4.00 to $5.00. As of April 28, 1999, 952,374 options were outstanding at prices
ranging from $3.00 to $7.50, and 575,334 of the options were fully vested. In
addition, under the terms of the agreement governing its $4.5 million term loan
from Tandem Capital, Bikers Dream is obligated to issue to Tandem Capital on
each anniversary of the closing date of the term loan, until such loan is paid
in full, a warrant to purchase 200,000 additional shares of common stock at an
exercise price equal to the greater of (1) $4.00, or (2) 80% of the average
closing bid price of the common stock for the 20 days preceding such anniversary
date. (See discussion in Risk Factor entitled "Bikers Dream Needs Additional
Capital Financing to Continue Expansion of Manufacturing Operations; Such
Financing May Dilute Existing Shareholders' Interests and Substantially Restrict
Bikers Dream's Ability to Operate and Raise Additional Funds" on page 4.) The
exercise of the warrants and options described in this paragraph could result in
significant dilution to existing security holders of Bikers Dream.
BIKERS DREAM'S ABILITY TO CONTINUE OPERATIONS MAY BE MATERIALLY IMPAIRED IF IT
HAS INSUFFICIENT CASH TO REDEEM SERIES D PREFERRED STOCK UPON A MANDATORY
REDEMPTION.
Bikers Dream is required to redeem Series D Preferred Stock after an
event triggering mandatory redemption pursuant to the terms of the documents
governing the terms of the Series D Preferred Stock . Such triggering events
include, among other things:
- Failure of Bikers Dream to pay dividends when required;
- Material breaches of Bikers Dream's agreements with purchasers of
Series D Preferred Stock, including failure to register the common
stock issuable upon conversion of Series D Preferred Stock and
failure to maintain the effectiveness of any such registration;
- Failure to maintain a Nasdaq listing for Bikers Dream's common
stock;
- Failure to deliver common stock certificates in a timely fashion
after the conversion of Series D Preferred Stock; and
- Failure to obtain shareholder approval for the issuance of Series D
Preferred Stock and underlying common shares by September 30, 1999.
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With respect to the last item listed above, the rules of the Nasdaq
Stock Market limit the number of shares of common stock which Bikers Dream can
issue without shareholder approval. Under these rules, without shareholder
approval common shares cannot be issued upon the conversion of Series D
Preferred Stock in an amount exceeding 19.9% of the number of common shares
outstanding at the time the Series D Preferred Stock was issued. At the time the
Series D Preferred Stock was issued, Bikers Dream had 5,165,810 shares of common
stock outstanding, thereby enabling Bikers Dream to issue up to 1,027,996 shares
of common stock without prior shareholder approval.
Given the formula used for the conversion of Series D Preferred Stock,
the number of shares issuable upon the conversion of all currently outstanding
Series D Preferred Stock will not exceed 1,027,996 as long as the trading price
of Bikers Dream's common stock is $1.68 or greater. If the trading price of the
common stock falls below $1.68, then the holders of Series D Preferred Stock
will have the right to redeem any shares of Series D Preferred Stock which
cannot be converted without violating the 19.9% limitation. Consequently,
significant downward fluctuations of Bikers Dream's stock price could also
create an obligation on the part of Bikers Dream to redeem shares of outstanding
Series D Preferred Stock, which could have a material adverse effect on our
business and financial condition.
It is unlikely that Bikers Dream will have sufficient cash to be able to
redeem Series D Preferred Stock if required to do so. As a result, the
occurrence of an event triggering mandatory redemption of the Series D Preferred
Stock could materially impair our ability to continue to operate our business.
VOLATILITY OF STOCK PRICE MAY INCREASE NUMBER OF SHARES ISSUABLE UPON CONVERSION
OF PREFERRED STOCK.
The stock market from time to time experiences significant price and
volume fluctuations, some of which are unrelated to the operating performance of
particular companies. We believe that a number of factors can cause the price of
Bikers Dream common stock to fluctuate, perhaps substantially. These factors
include, among others:
- Announcements of financial results and other developments relating
to our business;
- Changes in the general state of the economy; and
- Changes in market analyst estimates and recommendations for Bikers
Dream common stock.
As an example, in late December 1998, Bikers Dream's stock price and trading
volume fluctuated significantly following announcement of our plans to engage in
Internet related commerce.
SIGNIFICANT DECREASE IN PRICE OF COMMON STOCK WOULD CORRESPONDINGLY INCREASE
NUMBER OF SHARES ISSUABLE UPON CONVERSION OF SERIES D PREFERRED STOCK AND CAUSE
DILUTION TO EXISTING SHAREHOLDERS.
Significant downward fluctuations of Bikers Dream's stock price may
substantially increase the number of shares of common stock issuable upon
conversion of outstanding Series D Preferred Stock as a result of the conversion
formula, which is tied to the market
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<PAGE> 11
price of the common stock, thereby also diluting the book value and earnings per
share of common stock held by existing shareholders of Bikers Dream.
SALES OF COMMON STOCK ISSUED UPON CONVERSION OF SERIES D PREFERRED STOCK MAY
DEPRESS MARKET PRICE OF COMMON STOCK.
The Series D Preferred Stock converts to common stock in accordance with
the formula described in the risk factor above entitled "Issuance of Additional
Shares of Common Stock Underlying Preferred Stock, Options and Warrants May
Cause Significant Dilution of Existing Shareholders' Interests." It is possible
that such conversion may take place at a discount to market. Holders of common
stock issued upon conversion of the Series D Preferred Stock therefore may have
an incentive to sell such common stock at prices below market prices prevailing
at the time of the conversion. Such sales would depress the market price of the
common stock.
SEASONAL FACTORS MAY CAUSE FLUCTUATION OF QUARTERLY RESULTS OF OPERATIONS,
THEREBY MAKING QUARTER-TO-QUARTER COMPARISONS DIFFICULT.
We generally expect our sales to be higher during the second and third
quarters and lower during the first and fourth quarters because consumers are
more likely to purchase and use Bikers Dream's products during periods of good
weather. CONSEQUENTLY, OUR RESULTS OF OPERATIONS VARY, AND MAY NOT BE
COMPARABLE, FROM QUARTER TO QUARTER.
BIKERS DREAM MUST COMPLY WITH FEDERAL, STATE AND LOCAL REGULATIONS, INCLUDING
ENVIRONMENTAL AND SAFETY REGULATIONS.
Our operations are subject to regulation, supervision and licensing
under various federal, state and local statutes, ordinances and regulations.
Federal and state authorities have various environmental control requirements
relating to air and noise pollution which affect our business and operations .
Our motorcycles are subject to certification by the U.S. Environmental
Protection Agency for compliance with applicable emissions and noise standards
and by the state of California Air Resources Board with respect to more
stringent emissions standards. Bikers Dream's motorcycle products must also
comply with the National Highway Traffic Safety Administration's standards.
Management believes that Bikers Dream holds all required licenses and permits
and is in compliance with all applicable federal, state and local laws and
regulations.
DIVIDENDS HAVE NOT BEEN PAID ON BIKERS DREAM COMMON STOCK AND ARE NOT EXPECTED
TO BE PAID IN THE FUTURE.
We have not paid any dividends on our common stock and do not expect to
pay any dividends in the foreseeable future.
POSSIBLE ISSUANCE OF ADDITIONAL PREFERRED STOCK MAY ADVERSELY AFFECT RIGHTS OF
HOLDERS OF COMMON STOCK AND MAY RENDER MORE DIFFICULT CERTAIN ANTI-TAKEOVER
STRATEGIES IN THE BEST INTEREST OF SHAREHOLDERS.
As of the date of this prospectus, Bikers Dream has 703,740 shares of
preferred stock outstanding. The Articles of Incorporation of Bikers Dream
permit the Board of Directors to
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designate the terms of, and issue, up to 9,296,260 additional shares of
preferred stock without further shareholder approval. The issuance of additional
shares of preferred stock could adversely affect the rights of holders of common
stock by, among other things, establishing preferential dividends, liquidation
rights and voting power. In addition, the issuance of preferred stock might
render more difficult, and therefore discourage, an unsolicited takeover
proposal such as a tender offer, proxy contest or removal of incumbent
management, even if such actions would be in the best interest of our
shareholders.
RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS .
See "Notice About Forward-Looking Statements" on page 2 of this
prospectus.
SALES BY SELLING SHAREHOLDERS
The selling shareholders are offering hereby a total of 3,355,601 shares
of Bikers Dream common stock. The following table sets forth as of the date of
this prospectus, the name of each of the selling shareholders, the number of
shares of common stock that each such selling shareholder beneficially owns as
of May 7, 1999 the number of shares of common stock beneficially owned by each
selling shareholder that may be offered for sale from time to time by this
prospectus and the number of shares and percentage of common stock to be held by
each such selling shareholder assuming the sale of all the common stock offered
hereby.
Except as indicated, none of the selling shareholders has held any
position or office or had a material relationship with Bikers Dream or any of
its affiliates within the past three years other than as a result of the
ownership of Bikers Dream common stock. Bikers Dream may amend or supplement
this prospectus from time to time to update the disclosure set forth herein.
<TABLE>
<CAPTION>
SECURITIES SECURITIES PERCENTAGE
NAME OF BENEFICIALLY SECURITIES BENEFICIALLY OWNERSHIP
SELLING OWNED PRIOR TO OFFERED OWNED AFTER AFTER
SHAREHOLDER OFFERING(1) FOR SALE OFFERING(2) OFFERING
- ---------------------- ---------------- ------------- --------------- -------------
<S> <C> <C> <C> <C>
Bulldog Capital 524,555 398,834(3) 125,721 2.4%
Management Limited
Partnership, Inc.
Polaris Prime 54,387 54,387(4) 0 *
Directional Hedge
MD Strategic L.P. 933,488 609,040(5) 324,448 6.3%
MDV IV L.P. 164,010 164,010(6) 0 *
Peter Tuppence 9,501 9,501(7) 0 *
Mary Whalen 62,005 62,005(8) 0 *
Tom Scarola 9,501 9,501(9) 0 *
</TABLE>
9
<PAGE> 13
<TABLE>
<CAPTION>
SECURITIES SECURITIES PERCENTAGE
NAME OF BENEFICIALLY SECURITIES BENEFICIALLY OWNERSHIP
SELLING OWNED PRIOR TO OFFERED OWNED AFTER AFTER
SHAREHOLDER OFFERING(1) FOR SALE OFFERING(2) OFFERING
- ---------------------- ---------------- ------------- --------------- -------------
<S> <C> <C> <C> <C>
David Whalen 12,001 12,001(10) 0 *
Michael Whalen 12,001 12,001(11) 0 *
Michael Petrycki 19,002 19,002(12) 0 *
Castle Rock Partners 38,004 38,004(13) 0 *
Greg Brundage 8,849 8,849(14) 0 *
William James Bell 47,505 47,505(15) 0 *
1993 Trust
Craig McNab 38,004 38,004(16) 0 *
MNDA Partners 28,503 28,503(17) 0 *
Cruttenden Family, 37,787 37,787(18) 0 *
L.P.
Robert London 113,361 113,361(19) 0 *
Jack Baker 10,000 10,000(20) 0 *
Steve Balog 5,000 5,000(21) 0 *
John Bay 5,000 5,000(22) 0 *
Dennis Cameroon 2,000 2,000(23) 0 *
Fred Fraenkel 1,000 1,000(24) 0 *
Fred Friedman 20,000 20,000(25) 0 *
Impley Investments 2,500 2,500(26) 0 *
Gavin Kleinknecht 1,500 1,500(27) 0 *
Keir Kleinknecht 1,500 1,500(28) 0 *
Peter Kleinknecht 1,000 1,000(29) 0 *
Sabrina Kleinknecht 1,500 1,500(30) 0 *
Robert Lavinia 5,000 5,000(31) 0 *
Len Lichter 10,000 10,000(32) 0 *
ADMN Associates 103,000 103,000(33) 0 *
Meyer Duffy Ventures 20,000 20,000(34) 0 *
III
Boyce Wells Meyer 7,500 7,500(35) 0 *
Trust
Ralph Rabman 1,000 1,000(36) 0 *
</TABLE>
10
<PAGE> 14
<TABLE>
<CAPTION>
SECURITIES SECURITIES PERCENTAGE
NAME OF BENEFICIALLY SECURITIES BENEFICIALLY OWNERSHIP
SELLING OWNED PRIOR TO OFFERED OWNED AFTER AFTER
SHAREHOLDER OFFERING(1) FOR SALE OFFERING(2) OFFERING
- ---------------------- ---------------- ------------- --------------- -------------
<S> <C> <C> <C> <C>
Crossan Seibolt 2,500 2,500(37) 0 *
Stanton Weissenborn 5,000 5,000(38) 0 *
Leigh Welles 500 500(39) 0 *
Keith Zobrist 2,500 2,500(40) 0 *
Alexander Garrin 833 833(41) 0 *
Kristoffer Garrin 833 833(42) 0 *
Nicholas Garrin 833 833(43) 0 *
Tandem Capital 457,500 457,500(44) 0 *
Austost Anstalt Schaan 323,050 323,050(45) 0 *
Tusk Investments, Inc. 323,050 323,050(45) 0 *
Nesher, Inc. 46,150 46,150(45) 0 *
Amro International, 184,600 184,600(45) 0 *
S.A
Guarantee & Finance, 46,150 46,150(45) 0 *
Corp.
Settondown Capital 51,640 51,640(45) 0 *
International, Ltd.
Collinsville Holdings 25,667 25,667 0 *
Ltd.
M.J. Segal & Company 25,000 25,000(46) 0 *
------- ------- ------- -------
</TABLE>
- ----------
* Less than 1%.
(1) Based upon 5,157,590 shares of common stock outstanding as of May 7,
1999. Except as otherwise noted herein, the number and percentage of
shares beneficially owned is determined in accordance with Rule 13d-3 of
the Exchange Act, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rule, beneficial
ownership includes any shares as to which the individual has sole or
shared voting power or investment power and also any shares which the
individual has the right to acquire within 60 days of the date of this
prospectus through the exercise of any stock option or other right.
Unless otherwise indicated in the footnotes, each person has sole voting
and investment power, or shares such powers with his or her spouse, with
respect to the shares shown as beneficially owned.
11
<PAGE> 15
(2) Assumes the sale of all shares of common stock offered hereby.
(3) Includes 343,834 shares of common stock issued upon conversion of Series
C Preferred Stock and 55,000 shares of common stock issued upon the
exercise of Series F Warrants.
(4) Includes 46,887 shares of common stock issued upon conversion of Series
C Preferred Stock and 7,500 shares of common stock issued upon the
exercise of Series F Warrants.
(5) MD Strategic L.P. is an investment partnership in which Meyer Duffy
Asset Management, LLC is the general partner. Mr. Donald J. Duffy, a
director of Bikers Dream, is a member of Meyer Duffy Management, LLC.
Shares beneficially owned by MD Strategic L.P. include 396,040 shares of
common stock issued upon conversion of Series C Preferred Stock, 160,000
shares of common stock issuable upon the exercise of Series F Warrants,
and 53,000 shares of common stock issuable upon the exercise of Series E
Warrants.
(6) MDV IV L.P. is an investment partnership in which Meyer Duffy
Asset Management, LLC is the general partner. Mr. Donald J. Duffy, a
director of Bikers Dream, is a member of Meyer Duffy Management, LLC.
Shares beneficially owned by MDV IV L.P. include 99,010 shares of common
stock issued upon conversion of Series C Preferred Stock and 65,000
shares of common stock issuable upon the exercise of Series F Warrants.
(7) Includes 8,251 shares of common stock issued upon conversion of Series C
Preferred Stock and 1,250 shares of common stock issuable upon the
exercise of Series F Warrants.
(8) Includes 49,505 shares of common stock issued upon conversion of Series
C Preferred Stock and 7,500 shares of common stock issuable upon the
exercise of Series F Warrants. and 5,000 shares of common stock issuable
upon exercise of Series E Warrants.
(9) Includes 8,251 shares of common stock issued upon conversion of Series C
Preferred Stock and 1,250 shares of common stock issuable upon the
exercise of Series F Warrants.
(10) Includes 8,251 shares of common stock issued upon conversion of Series C
Preferred Stock, 1,250 shares of common stock issuable upon the exercise
of Series F Warrants and 2,500 shares of common stock issuable upon the
exercise of Series E Warrants.
(11) Includes 8,251 shares of common stock issued upon conversion of Series C
Preferred Stock, 1,250 shares of common stock issuable upon the exercise
of Series F Warrants and 2,500 shares of common stock issuable upon the
exercise of Series E Warrants.
(12) Includes 16,502 shares of common stock issued upon conversion of Series
C Preferred Stock and 2,500 shares of common stock issuable upon the
exercise of Series F Warrants.
(13) Includes 33,004 shares of common stock issued upon conversion of Series
C Preferred Stock and 5,000 shares of common stock issuable upon the
exercise of Series F Warrants.
(14) Includes 7,599 shares of common stock issued upon conversion of Series C
Preferred Stock and 1,250 shares of common stock issuable upon the
exercise of Series F Warrants.
12
<PAGE> 16
(15) Includes 41,255 shares of common stock issued upon conversion of Series
C Preferred Stock and 6,250 shares of common stock issuable upon the
exercise of Series F Warrants.
(16) Includes 33,004 shares of common stock issued upon conversion of Series
C Preferred Stock and 5,000 shares of common stock issuable upon the
exercise of Series F Warrants.
(17) Includes 24,753 shares of common stock issued upon conversion of Series
C Preferred Stock and 3,750 shares of common stock issuable upon the
exercise of Series F Warrants.
(18) Includes 32,787 shares of common stock issued upon conversion of Series
C Preferred Stock and 5,000 shares of common stock issuable upon the
exercise of Series F Warrants.
(19) Includes 98,361 shares of common stock issued upon conversion of Series
C Preferred Stock and 15,000 shares of common stock issuable upon the
exercise of Series F Warrants.
(20) Includes 10,000 shares of common stock issuable upon the exercise of the
Series E Warrants.
(21) Includes 5,000 shares of common stock issuable upon the exercise of the
Series E Warrants.
(22) Includes 5,000 shares of common stock issuable upon the exercise of the
Series E Warrants
(23) Includes 2,000 shares of common stock issuable upon the exercise of the
Series E Warrants
(24) Includes 1,000 shares of common stock issuable upon the exercise of the
Series E Warrants
(25) Includes 20,000 shares of common stock issuable upon the exercise of the
Series E Warrants
(26) Includes 2,500 shares of common stock issuable upon the exercise of the
Series E Warrants
(27) Includes 1,500 shares of common stock issuable upon the exercise of the
Series E Warrants
(28) Includes 1,500 shares of common stock issuable upon the exercise of the
Series E Warrants
(29) Includes 1,000 shares of common stock issuable upon the exercise of the
Series E Warrants
(30) Includes 1,500 shares of common stock issuable upon the exercise of the
Series E Warrants
(31) Includes 5,000 shares of common stock issuable upon the exercise of the
Series E Warrants
(32) Includes 10,000 shares of common stock issuable upon the exercise of the
Series E Warrants
(33) Includes 103,000 shares of common stock issuable upon the exercise of
the Series E Warrants
13
<PAGE> 17
(34) Meyer Duffy Ventures III is an investment partnership in which Meyer
Duffy Asset Management, LLC, is the general partner. Mr. Donald J.
Duffy, a director of Bikers Dream, is a member of Meyer Duffy
Management, LLC. Shares beneficially owned by Meyer Duffy Ventures III
include 20,000 shares of common stock issuable upon the exercise of the
Series E Warrants.
(35) Includes 7,500 shares of common stock issuable upon the exercise of the
Series E Warrants.
(36) Includes 1,000 shares of common stock issuable upon the exercise of
Series E Warrants.
(37) Includes 2,500 shares of common stock issuable upon the exercise of the
Series E Warrants.
(38) Includes 5,000 shares of common stock issuable upon the exercise of the
Series E Warrants.
(39) Includes 500 shares of common stock issuable upon the exercise of the
Series E Warrants.
(40) Includes 2,500 shares of common stock issuable upon the exercise of the
Series E Warrants.
(41) Includes 833 shares of common stock issuable upon the exercise of the
Series E Warrants.
(42) Includes 833 shares of common stock issuable upon the exercise of the
Series E Warrants.
(43) Includes 457,500 shares of common stock issuable in connection with the
exercise of warrants.
(44) Includes 833 shares of common stock issuable upon the exercise of the
Series E Warrants.
(45) Includes the following shares of common stock issuable upon the
conversion of Series D Preferred Stock: Austost Anstalt Schaan (310,
800); Tusk Investments, Inc. (310,800); Nesher, Inc. (44,400); Amro
International, S.A. (177,600); Guarantee & Finance Corp. (44,400); and
Settondown Capital International, Ltd. (26,640). Includes the following
shares of common stock issuable upon the exercise of Series G Warrants
to purchase common stock issued in conjunction with Series D Preferred
Stock: Austost Anstalt Schaan (12,250); Tusk Investments, Inc. (12,250);
Nesher, Inc. (1,750); Amro International, S.A. (7,000); Guarantee &
Finance Corp. (1,750); and Settondown Capital International, Ltd.
(25,000). The number of shares of common stock shown as beneficially
owned prior to the offering by the selling shareholders holding Series D
Preferred Stock represents an estimate of the number of shares of common
stock to be offered by such selling shareholders. The actual number of
shares of common stock issuable upon conversion of the Series D
Preferred Stock is indeterminate, is subject to adjustment and could be
materially less or more than such estimated number depending on factors
which cannot be predicted by Bikers Dream at this time, including, among
other factors, the future market price of the common stock and
shareholder approval of the conversion of the Series D Preferred Stock
in accordance with the terms of the subscription agreement governing the
terms of sale of such Series D Preferred Stock. The total number of
shares of common stock listed in the table as issuable upon conversion
of the Series D Preferred Stock represents 14,800 shares of common stock
for each $25,000 of stated value of Series D Preferred Stock subscribed
for by the Series D holders and one share of common stock
14
<PAGE> 18
for each warrant to purchase common stock held by such holders. The
actual number of shares of common stock issuable upon conversion of the
Series D Preferred Stock shall equal the sum of the stated value of
$1,000 per share, as adjusted for any stock dividends, combinations or
splits with respect to such share, and accrued and unpaid dividends on
such share, divided by the conversion price. The conversion price shall
be equal to the lesser of: (1) 110% of the average closing bid price of
Bikers Dream common stock for the trading day immediately preceding the
date of the issuance of the shares of Series D Preferred Stock; or (2)
at 90% of the average of the four lowest closing bid prices for the 22
trading days immediately preceding the conversion of the respective
shares of Series D Preferred Stock. The closing bid price means the
closing bid price of Bikers Dream common stock as reported by Nasdaq or
the principal exchange or market where traded. Such number of shares
issuable upon conversion of the Series D Preferred Stock may be less
than or greater than the number of shares shown as beneficially owned by
the selling shareholders or otherwise covered by this prospectus.
(46) Includes 25,000 shares of common stock issuable upon exercise of
options.
PLAN OF DISTRIBUTION
The shares being offered hereby will be offered and sold by the selling
shareholders named in this prospectus, by their donees or transferees, or by
their other successors in interest. Bikers Dream will not receive any of the
proceeds from the sale of the shares pursuant to this prospectus. Bikers Dream
has agreed to bear the expenses of the registration of the shares, including
legal and accounting fees, other than fees of counsel, if any, retained
individually by the selling shareholders, and any discounts or commissions
payable with respect to sales of the shares.
The selling shareholders may offer and sell the shares from time to time
in transactions in the over-the-counter market or in negotiated transactions, at
market prices prevailing at the time of sale or at negotiated prices. The
selling shareholders have advised Bikers Dream that they have not entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares, nor is there an underwriter
or coordinating broker acting in connection with the proposed sale of shares by
the selling shareholders. Sales may be made directly or to or through
broker-dealers who may receive compensation in the form of discounts,
concessions or commissions from the selling shareholders or the purchasers of
shares for whom such broker-dealers may act as agent or to whom they may sell as
principal, or both . Such compensation may be in excess of customary
commissions.
From time to time, one or more of the selling shareholders may pledge or
grant a security interest in some or all of the shares owned by them. If the
selling shareholders default in performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares from time to time by
this prospectus. The selling shareholders also may transfer and donate shares in
other circumstances. The number of shares beneficially owned by selling
shareholders will decrease as and when the selling shareholders transfer or
donate their shares or default in performing obligations secured by their
shares. The plan of distribution for the shares offered and sold under this
prospectus will otherwise remain unchanged, except that the transferees, donees,
pledgees, other secured parties or other successors in interest will be selling
shareholders for purposes of this prospectus.
15
<PAGE> 19
The selling shareholders and any broker-dealers acting in connection
with the sale of the shares hereunder may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act of 1933, and any commissions
received by them and any profit realized by them on the resale of the shares as
principals may be deemed underwriting compensation under the Securities Act of
1933.
Bikers Dream has agreed to indemnify certain of the selling shareholders
against liabilities they may incur as a result of any untrue statement of a
material fact in the Registration Statement of which this prospectus forms a
part, or any omission herein or therein to state a material fact necessary in
order to make the statements made, in the light of the circumstances under which
they were made, not misleading. Such indemnification includes liabilities that
such selling shareholders may incur under the Securities Act of 1933. Bikers
Dream does not have to give such indemnification if the untrue statement or
omission was made in reliance upon and in conformity with information furnished
in writing to Bikers Dream by the selling shareholder for use in the
Registration Statement.
Bikers Dream has advised the selling shareholders of (1) the requirement
for delivery of this prospectus in connection with any sale of the shares, and
(2) the relevant cooling off period specified by Regulation M and restrictions
upon the selling shareholders' bidding for or purchasing securities of Bikers
Dream during the distribution of shares.
TRANSFER AGENT
The transfer agent for Bikers Dream's common stock is American
Securities Transfer, Incorporated, 1825 Lawrence Street, Suite 444, Denver,
Colorado 80202.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the securities
offered hereby will be passed upon for Bikers Dream by Miller & Holguin,
attorneys at law, Los Angeles, California.
EXPERTS
The consolidated financial statements of Bikers Dream contained in the
Annual Report on Form 10-KSB of Bikers Dream for the year ended December 31,
1998 and incorporated in this prospectus by reference, have been so included in
reliance on the report of Singer Lewak Greenbaum & Goldstein, LLP, independent
accountants, given on the authority of said firm as experts in accounting and
auditing.
16
<PAGE> 20
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy and
information statements and other information with the Securities and Exchange
Commission. Our SEC filings are available to the public over the Internet at the
SEC's web site at http://www.sec.gov. You may also read and copy any document we
file at the SEC's public reference rooms located at Room 1024, Judiciary Plaza,
450 5th Street, N.W., Washington, D.C. 20549, 7 World Trade Center, Suite 1300,
New York, New York 10048, and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. You may obtain information on the operation
of the SEC's public reference rooms by calling the SEC at 1-800-SEC-0330.
The SEC allows us to "incorporate by reference" the information we
file with them. This prospectus incorporates important business and financial
information about Bikers Dream which is not included in or delivered with this
prospectus. The information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC will
automatically update and supersede this information.
We incorporate by reference the following documents:
- our Annual Report on Form 10-KSB for the year ended December 31,
1998 as filed on April 15, 1999;
- our current report on Form 8-K filed on February 10, 1999;
- our preliminary Proxy Statement filed on April 22, 1999 in
connection with Bikers Dream's Annual Meeting of Stockholders to be
held on July 19, 1999;
- the description of our class of common stock as set forth under
Item 1 of our Form 8-A registration statement filed on March 17,
1987 and under "Description of Securities" in our Form S-18
registration statement No. 33-9879-LA filed on October 30, 1986,
together with the following updating information: (1) footnote 8 to
the Consolidated Financial Statements in our Quarterly Report on
Form 10-QSB for the period ended September 30, 1996; (2) paragraph
one of Item 2, Part II ("Changes in Securities"), of our Quarterly
Report on Form 10-QSB for the period ended September 30, 1997; and
(3) footnote 11 to the Consolidated Financial Statements our
Quarterly Report on Form 10-QSB for the period ended March 31,
1998; and
- future filings we make with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 until all of the
shares offered by the selling shareholders have been sold.
You may obtain a copy of these filings, without charge, by writing
or calling us at:
Bikers Dream, Inc.
3810 Wacker Drive
Mira Loma, California 91752
Attention: Mr. Herm Rosenman
(909) 360-2500
17
<PAGE> 21
If you would like to request these filings from us, please do so at
least five business days before you have to make an investment decision.
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information in this prospectus or the documents incorporated by reference is
accurate as of any date other than on the front of those documents.
----------------------
18
<PAGE> 22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant estimates that expenses in connection with the
distribution described in this Registration Statement will be as shown below.
All expenses incurred with respect to the distribution, except for fees of
counsel, if any, retained individually by the selling shareholders and any
discounts or commissions payable with respect to sales of the shares, will be
paid by Bikers Dream. See "Plan of Distribution."
<TABLE>
<S> <C>
SEC registration fee ............................. $ 3,391.32
Printing expenses ................................ 15,000.00
Accounting fees and expenses ..................... 3,000.00
Legal fees and expenses .......................... 25,000.00
Miscellaneous .................................... 5,000.00
----------
Total .................................... $51,391.32
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The liability of the Registrant's officers and directors is or may be
affected in such capacity by the following:
Section 317 of the California General Corporation Law makes provision
for the indemnification of officers and directors in terms sufficiently broad to
include indemnification under certain circumstances for liabilities, including
reimbursement for expenses incurred, arising under the Securities Act of 1933.
The Amended and Restated Articles of Incorporation of the Registrant authorize
the Registrant to provide indemnification of its officers, directors and agents
for breach of duty to the Registrant and its shareholders through bylaw
provisions or indemnification agreements, or both, in excess of the
indemnification otherwise permitted by California law, subject to certain
limitations.
The Registrant's Bylaws provide for the indemnification of its officers
and directors to the fullest extent permitted by law. In addition, the
Registrant currently maintains directors' and officers' liability insurance and
has entered into indemnification agreements with its directors and certain of
its officers.
In addition, as permitted by Section 204(a)(10) of the California
General Corporation Law, the Amended and Restated Articles of Incorporation of
the Registrant provide that the liability of a director of the Registrant for
monetary damages shall be eliminated to the fullest extent permissible under
California law. However, as provided by California law, such limitation of
liability will not act to limit the liability of a director for (i) acts or
omissions that involve intentional misconduct or a knowing and culpable
violation of law, (ii) acts or omissions that a director believes to be contrary
to the best interest of the Registrant or its shareholders or that involve the
absence of good faith on the part of the director, (iii) any transaction from
which a director derived an
II-1
<PAGE> 23
improper personal benefit, (iv) acts or omissions that show a reckless disregard
for the director's duty to the Registrant or its shareholders in circumstances
in which the director was aware or should have been aware, in the ordinary
course of performing a director's duties, of a risk of serious injury to the
Registrant or its shareholders, (v) acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of the director's
duty to the Registrant or its shareholders, (vi) any improper transactions
between a director and the Registrant in which the director has a material
financial interest or (vii) any unlawful distributions to the shareholders of
the Registrant or any unlawful loan of money or property to, or a guarantee of
the obligation of, any director of officer of the Registrant.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBITS
The following exhibits are filed or incorporated by reference as part of this
Registration Statement.
<TABLE>
<S> <C>
3.1 Articles of Incorporation, as amended, of Bikers Dream, Inc.
(formerly known as HDL Communications)(1)
3.1.1 Certificate of Amendment of Articles of Incorporation dated
June 21, 1996(2)
3.1.2 Certificate of Correction of Certificate of Amendment of
Articles of Incorporation dated July 25, 1997(3)
3.1.3 Certificate of Ownership of HDL Communications (now known as
Bikers Dream, Inc.)(1)
3.1.4 Certificate of Determination of Series B Convertible
Preferred Stock(3)
3.1.5 Certificate of Determination of Series C Convertible
Preferred Stock(4)
3.1.6 Certificate of Determination of Series D Convertible
Preferred Stock(5)
3.2 Bylaws, as amended, of Bikers Dream, Inc.(1)
4.1 Form of Certificate of Common Stock of Bikers Dream, Inc.(6)
4.2 Articles of Incorporation of the Company, as amended
(included as Exhibits 3.1, 3.1.1, 3.1.2, 3.1.4, 3.1.5 and
3.1.6)
4.3 By-laws , as amended, of the Company (included as Exhibit
3.2).
4.4 Form of Series D Preferred Stock Subscription Agreement(5)
5.1 Form of Opinion of Miller & Holguin as to the legality of
the securities being registered.(5)
23.1 Consent of Singer Lewak Greenbaum & Goldstein LLP
</TABLE>
II-2
<PAGE> 24
<TABLE>
<S> <C>
23.2 Consent of Miller & Holguin (included in its opinion filed
as Exhibit 5.1)(5)
</TABLE>
- ----------
(1) Previously filed as an exhibit to Bikers Dream's registration statement
on Form SB-2 (No. 33-92294) filed with the Commission on May 31, 1995.
(2) Previously filed as an exhibit to Bikers Dream's Form 10-KSB report for
the fiscal year ended December 31, 1996 filed with the Commission on
April 15, 1997.
(3) Previously filed as an exhibit to Bikers Dream's Form 10-QSB report for
the fiscal quarter ended September 30, 1997 filed with the Commission on
November 14, 1997.
(4) Previously filed as an exhibit to Bikers Dream's Form 10-QSB report for
fiscal quarter ended March 30, 1998 filed with the Commission on May 15,
1998.
(5) Previously filed as an exhibit to this registration statement on Form
S-3 (No. 333- 72167) as originally filed with the Commission on February
11, 1999.
(6) Previously filed as an exhibit to Bikers Dream's Form 10-KSB report
for the fiscal year ended December 31, 1998 filed with the Commission
on April 15, 1999.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that it will:
(1) File, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement to include any additional or changed material
information on the plan of distribution;
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration
statement of the securities offered, and the offering of
the securities at that time to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at
the end of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities, other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding, is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
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<PAGE> 25
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.
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<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Mira Loma, State of California, on May 13, 1999.
BIKERS DREAM, INC.
Registrant
By: /s/ Herm Rosenman
----------------------------------
Herm Rosenman
Chief Executive 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.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ Herm Rosenman Chief Executive Officer May 13, 1999
- -------------------------------- and Director
Herm Rosenman (Principal Executive Officer)
/s/ Donald J. Duffy Director May 13, 1999
- --------------------------------
Donald J. Duffy
/s/ Humbert Powell III Director May 13, 1999
- --------------------------------
Humbert Powell III
/s/ John Russell Director May 13, 1999
- --------------------------------
John Russell
/s/ Bruce A. Scott Director May 13, 1999
- --------------------------------
Bruce A. Scott
/s/ Anne Todd Controller May 13, 1999
- -------------------------------- (Principal Financial and
Anne Todd Accounting Officer)
</TABLE>
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<PAGE> 27
EXHIBITS INDEX
<TABLE>
<CAPTION>
Exhibit No. Title of Document
----------- ----------------------------------------------------------------
<S> <C>
3.1 Articles of Incorporation, as amended , of Bikers Dream, Inc.
(formerly known as HDL Communications)(1)
3.1.1 Certificate of Amendment of Articles of Incorporation dated June
21, 1996(2)
3.1.2 Certificate of Correction of Certificate of Amendment of
Articles of Incorporation dated July 25, 1997(3)
3.1.3 Certificate of Ownership of HDL Communications (now known as
Bikers Dream, Inc.)(1)
3.1.4 Certificate of Determination of Series B Convertible Preferred
Stock(3)
3.1.5 Certificate of Determination of Series C Convertible Preferred
Stock(4)
3.1.6 Certificate of Determination of Series D Convertible Preferred
Stock(5)
3.2 Bylaws, as amended, of Bikers Dream, Inc.(1)
4.1 Form of Certificate of Common Stock of Bikers Dream, Inc.(6)
4.2 Articles of Incorporation of the Company, as amended (included
as Exhibits 3.1, 3.1.1, 3.1.2, 3.1.4, 3.1.5 and 3.1.6)
4.3 By-laws , as amended, of the Company (included as Exhibit 3.2).
4.4 Form of Series D Preferred Stock Subscription Agreement(5)
5.1 Form of Opinion of Miller & Holguin as to the legality of the
securities being registered.(5)
23.1 Consent of Singer Lewak Greenbaum & Goldstein LLP
23.2 Consent of Miller & Holguin (included in its opinion filed as
Exhibit 5.1)(5)
</TABLE>
- ----------
(1) Previously filed as an exhibit to Bikers Dream's registration statement
on Form SB-2 (No. 33-92294) filed with the Commission on May 31, 1995.
(2) Previously filed as an exhibit to Bikers Dream's Form 10-KSB report for
the fiscal year ended December 31, 1996 filed with the Commission on
April 15, 1997.
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<PAGE> 28
(3) Previously filed as an exhibit to Bikers Dream's Form 10-QSB report for
the fiscal quarter ended September 30, 1997 filed with the Commission on
November 14, 1997.
(4) Previously filed as an exhibit to Bikers Dream's Form 10-QSB report for
fiscal quarter ended March 30, 1998 filed with the Commission on May 15,
1998.
(5) Previously filed as an exhibit to this registration statement on Form
S-3 (No. 333-72167) as originally filed with the Commission on February
11, 1999.
(6) Previously filed as an exhibit to Bikers Dream's Form 10-KSB report
for the fiscal year ended December 31, 1998 filed with the Commission
on April 15, 1999.
II-7
<PAGE> 1
EXHIBIT 5.1
May 13, 1999
Bikers Dream, Inc.
3810 Wacker Drive
Mira Loma, CA 91752
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
Our opinion has been requested in connection with the Registration
Statement to which this opinion is filed as an exhibit.
We have examined the Registration Statement and have examined, and
have relied as to matters of fact upon, the originals or copies, certified or
otherwise identified to our satisfaction, of such corporate records,
agreements, documents and other instruments and such certificates or comparable
documents of public officials and of officers and representatives of the
Company, and have made such other and further investigations, as we have deemed
relevant and necessary as a basis for the opinion hereinafter set forth. Based
on and subject to the above, it is our opinion that of the total 3,355,601
shares of common stock being registered, 1,282,212 shares which are currently
outstanding are duly authorized, legally issued, fully paid and non-assessable,
and 2,073,389 shares when issued as contemplated under the terms of the
warrants, the options and the convertible preferred stock governing their
issuance, will be duly authorized, legally issued, fully paid and
non-assessable.
We are members of the Bar of the State of California and we do not
express any opinion herein concerning any law other than the law of the State
of California and the federal law of the United States.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ MILLER & HOLGUIN
MILLER & HOLGUIN
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement on Form S-3 of our report, dated April 2, 1999, which
appears in the Annual Report on Form 10-KSB of Bikers Dream, Inc. and
subsidiaries for the year ended December 31, 1998. We also consent to the
reference to our Firm under the captions "Experts" in the aforementioned
Registration Statement.
/s/ SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
May 13, 1999
