<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 24, 1996
REGISTRATION NO. 33-89014
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 2
TO
REGISTRATION STATEMENT
ON
FORM S-2
UNDER
THE SECURITIES ACT OF 1933
----------------
EUROPA CRUISES CORPORATION
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
DELAWARE 4400 59-293546
(PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
(STATE OF INCORPORATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
----------------
150 153RD AVENUE, SUITE 202
MADEIRA BEACH, FLORIDA 33708
(813) 393-2885
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES AND PRINCIPAL PLACE OF BUSINESS)
----------------
LESTER E. BULLOCK, PRESIDENT
150 153RD AVENUE, SUITE 202
MADEIRA BEACH, FLORIDA 33708
(813) 393-2885
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
THE COMMISSION IS REQUESTED TO SEND COPIES OF ALL COMMUNICATIONS TO:
ANDREW M. STEINBERG, ESQ.
1750 K STREET N.W.
12TH FLOOR
WASHINGTON, D.C. 20036
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
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, check the following box. [X]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(l)
of this Form, check the following box. [X]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, $.001... $1,957,008 $2.00 $2,679,200 $923.86
</TABLE>
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(1) Includes 1,457,008 shares offered by selling shareholders at an estimated
price of $1.1525 per share (of which 57,008 shares are Beneficially owned
by the Chapter 7 Bankruptcy Trustee of the Stuart-James Company,
Incorporated) and an additional 500,000 shares underlying warrants
exercisable by a different selling shareholder at $2.00 per share.
(2) Estimated for purposes of calculating the registration fee, pursuant to
Rule 457(c) and Rule 457(g).
----------------
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.
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- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER 29, 1995
PROSPECTUS
1,957,008 SHARES
EUROPA CRUISES CORPORATION
COMMON STOCK
------------
This Prospectus covers 1,957,008 shares of Common Stock (the "Shares") of
Europa Cruises Corporation (the "Company") consisting of (i) 500,000 shares
underlying common stock purchase warrants ("Warrants") owned by FLC Holding
Corporation ("FLC"), exercisable at $2.00 per share, such Warrants having been
previously issued to FLC in connection with the purchase by the Company of the
EuropaSky, in July, 1992 (ii) 1,200,000 shares beneficially owned by Lagoon
Cruise Line, Inc. ("Lagoon") issued to Lagoon in connection with the purchase
by the Company of the Stardancer in August, 1994 (iii) 200,000 shares
beneficially owned by Gaming-Invest, Inc. issued by the Company upon conversion
at $1.00 per share of a Promissory Note originally issued to Serco
International Limited and purchased by Gaming-Invest, Inc. (iv) 57,008 shares
representing shares underlying stock purchase Warrants originally issued to
Stuart-James Company Incorporated, the underwriter of the Company's initial
public offering in 1989, transferred to Marc Geman, counsel to the underwriter,
and subsequently transferred to John E. Fitzgibbons, Trustee of the Chapter 7
Bankruptcy Estate of The Stuart-James Company Incorporated (collectively, the
"Selling Shareholders"). The Warrants have been exercised and the 57,008 shares
are beneficially owned by the Chapter 7 Bankruptcy Trustee, John E.
Fitzgibbons. See "SELLING SHAREHOLDERS." The Company will receive no proceeds
from the sale of Common Stock by the Selling Shareholders. However, the Company
may receive proceeds from the exercise of the Warrants, of which there is no
assurance. See "USE OF PROCEEDS."
The sales of Shares by the Selling Shareholders hereunder may be effected
from time to time through underwriters or through customary brokerage channels,
through broker-dealers acting as agents or brokers or through dealers acting as
principals, who may then resell the Shares through the NASDAQ Small Cap Market
System, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices, or by a combination of
such methods. If an underwriter is involved in the offering of any Shares, the
underwriter's discount will be set forth in a Prospectus Supplement. In the
event of distribution of these securities, the persons effecting such resales
and the Selling Shareholders might be deemed to be underwriters within the
meaning of the Securities Act of 1933, as amended.
The Company has agreed to pay the expenses of registering the Shares,
including filing, accounting, legal and miscellaneous expenses in connection
with the registration which are estimated at $75,000. The Selling Shareholders
will pay or assume brokerage commissions or other charges incurred in effecting
any sale by them of the Shares.
The Company's Common Stock is traded on the NASDAQ Small Cap Market System
under the symbol "KRUZ". On September 29, 1995, the closing bid and ask price
of the Company's Common Stock on the NASDAQ Automated Quotation System was
$ bid, and $ asked.
------------
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE INFORMATION DISCUSSED
UNDER "RISK FACTORS."
------------
THE SHARES OF THE COMPANY'S COMMON STOCK OFFERED
PURSUANT TO THIS PROSPECTUS HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS, ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS IS DATED , 1995
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 CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission ("SEC"). The Company's reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth Street,
N.W., Room 1024, Washington, D.C., and at the following Regional Offices of the
Commission at 7 World Trade Center, 13th Floor, New York, New York 10048 and
Northwestern Atrium Center, 500 West Madison Street, 14th Floor, Chicago,
Illinois 60661. Copies of such material may be obtained at prescribed rates from
the Public Reference Section of the SEC, Washington, D.C. 10549. Such reports,
proxy statements and other information may also be inspected at the offices of
The National Association of Securities Dealers, 1735 K Street, N.W., Washington,
D.C. 20006, which supervises the NASDAQ system in which the Company's Common
Stock is traded.
Statements made in this Memorandum as to the contents of any contract,
agreement or other document referred to are not necessarily complete. With
respect to each such contract, agreement or other document to the Registration
Statement, reference is made to such exhibit for a more complete description of
the matter involved, and each such statement is qualified in its entirety by
such reference. Copies of the exhibits may be inspected, without charge, at the
offices of the Commission, or obtained at prescribed rates from the Public
Reference Section of the Commission at the address set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents and any amendments thereto, filed by the Company
with the Securities and Exchange Commission pursuant to the Exchange Act are
incorporated by reference in this Memorandum: (i) The Company's annual report on
Form 10-KSB for the year ended December 31, 1994; (ii) the Company's Quarterly
Reports on Form 10-QSB for the quarters ended March 31, 1995, June 30, 1995 and
September 30, 1995; (iii) the Company's Definitive Proxy Statement dated
November 1, 1994; and (iv) its Current Report on Form 8-K dated September 29,
1994, and filed with the Commission on October 5, 1994.
Upon request, the Company will provide without charge to each person to
whom a copy of this Memorandum has been delivered a copy of any or all of the
documents referred to above which have been or may be incorporated in this
Memorandum by reference, other than exhibits to such documents. Requests for
such copies should be directed to the office of the Secretary, Europa Cruises
Corporation, 150 - 153rd Avenue, Suite 202, Madeira Beach, Florida 33708.
Telephone requests may be directed to the office of the Secretary at (813) 393-
2885.
A copy of the Company's annual report on Form 10-KSB for the Company's last
fiscal year, quarterly report on Form 10-QSB for the most recent quarter and
Definitive Proxy Statement must be delivered with this Prospectus.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information and financial statements appearing elsewhere herein or incorporated
herein by reference.
THE COMPANY
Europa Cruises Corporation (the "Company"), a Delaware corporation promotes
and operates cruise vessels which provide moderately-priced day and evening
cruises. The Company's business strategy is to emphasize the cruise experience,
rather than cruise destinations. The Company's cruises include a variety of
shipboard activities such as dining, casino operations, sightseeing, live music
and other entertainment. The Company currently operates four vessels. Three of
the Company's vessels, the EuropaStar, the EuropaSun, and the EuropaSky sail
from their respective ports in Ft. Myers, Key West and Madeira Beach, Florida.
The Company recently acquired a fourth vessel, the Stardancer which operates out
of a port at Marco Island, Florida. The Stardancer has been time-chartered to
an unaffiliated third party originally through April 30, 1995 (as of the date of
this amendment the charter has been extended to November 30, 1995). A permanent
port has not yet been secured for a fourth Company vessel. Until October 15,
1994, the Company's casinos were operated by Casinos Austria Maritime
Corporation pursuant to a Concession Agreement. The Company now operates all of
its casinos onboard each of its vessels and leases its gaming equipment from
Casinos Austria Maritime Corporation. As a result of the termination of the
Concession Agreement with Casinos Austria Maritime Corporation on October 15,
1994, the Company has increased personnel to run the casinos on each vessel
thereby increasing its operating expenses and increasing revenue. While the
Concession Agreement was in effect, the Company received sixty-five percent
(65%) of the gross gaming revenue. The termination of that agreement has
increased the Company's share to ninety-six and one-half percent (96.5%) of the
gross gaming revenue. Since the termination of the agreement, the trend
has been for an increase of net gaming revenue (gross gaming revenue less casino
operations costs). The Company expects this trend to continue.
The Company plans to spin-off to its shareholders, two wholly-owned
subsidiaries, Casino World, Inc. and Mississippi Gaming Corporation. Casino
World, Inc. plans to develop and operate a casino, hotel, and golf course at
Diamondhead, Mississippi. Europa shareholders will receive a dividend in the
form of Casino World, Inc. Common Stock. Casino World will acquire from Europa
all the issued and outstanding shares of Mississippi Gaming Corporation which
owns the proposed Diamondhead, Mississippi gaming site. On February 24, 1994
the Company, through Casino World, Inc., entered into a Letter of Intent with
Scneider Securities, Inc. for a public offering of common and preferred stock
for Casino World, Inc.. The Letter of Intent is still current but no issue date
has been set. In July, 1994, the Officers and Directors of Casino World, Inc.
were granted Key Employee gaming licenses by the Colorado Division of Gaming.
The Mississippi Gaming Commission has a memorandum of understanding with the
Colorado Division of Gaming and the Company expects that facilitation of the
Mississippi licenses to occur. On June 15, 1995, the Mississippi Gaming
Commission approved the site plan for the Diamondhead gaming site and the
Company is preparing applications for environmental permits to the Mississippi
Department of Marine resources and the U.S. Army Corps of Engineers. It will
take approximately 6 months from filing for these permits to be obtained. The
Company is unable to predict the date of the spin off at this time. Further,
the Company will be unable to treat the spin off as a tax free event. At the
time of the spin off, the Company will recognize income to the extent that the
amount received from Casino World exceeds the book value of the Company's
investment in Mississippi Gaming Corporation. The spin off will not effect the
Company's future operations and will improve its financial position to the
extent that the Company recognizes income from the sale of Mississippi Gaming
Corporation. Although additional capital is not needed to effect the spin off,
it is expected that the spin off will not occur until additional capital is
acquired. The proposed gaming operations in Mississippi are subject to numerous
risks and uncertainties including but
-3-
<PAGE>
not limited to the availability of financing, licensing and the receipt of
permits from the Mississippi Department of Marine Resources and the U.S. Army
Corps of Engineers (the "Corps"). A lawsuit has recently been filed in the
United States District Court for the District of Columbia by environmental
groups opposed to further development of gaming in Mississippi. The Defendants
in the lawsuit are the Corps and the U.S. Environmental Protection Agency
("EPA"). The Plaintiffs have requested that the Court enjoin the Corps from
issuing any further permits under the Clean Water Act for construction of
casinos in Mississippi until an Environmental Impact Statement has been
prepared. In light of these uncertainties and other risks affecting the
Company's proposed gaming operations in Mississippi, there are no assurances
that the necessary regulatory approvals can be obtained or that financing will
be available. The Company does not have the financial resources to develop its
proposed Mississippi dockside gaming facility. Accordingly, there are no
assurances that the spin-off of Casino World to Europa shareholders will be
successfully completed. See "RISK FACTORS."
The Company was incorporated under the laws of the State of Delaware on
November 15, 1988. Its executive offices are located at 150 - 153rd Avenue,
Suite 202, Madeira Beach, Florida 33708 and its telephone number is (813) 393-
2885. The Company's operations are carried on through its subsidiaries and as
used herein, the term "Company" refers to Europa Cruises Corporation, and its
subsidiary companies.
-4-
<PAGE>
RECENT EVENTS AND DEVELOPMENTS
Management Changes. Lester E. Bullock, 41, replaced Charles H. Reddien as
- ------------------
President of the Company in July 18, 1994. From January, 1994 to June, 1994 Mr.
Bullock was Vice President of Operations at the Company. From January 1, 1992
through December 31, 1993, Mr. Bullock was General Manager of the Company
responsible for all port operations. In 1991, Mr. Bullock was Casino Pit
Manager in Ft. Myers, Florida for Casinos Austria Maritime Corporation. From
1989 to 1990, Mr. Bullock was General Manager of the Sonesta Beach Resort and
Crystal Casino in Oranjestead, Aruba. From 1984 through 1989, Mr. Bullock held
various managerial and administrative positions at the Tropicana Resort and
Casino in Las Vegas, Nevada and the Dunes Hotel Casino and Country Club in Las
Vegas, Nevada. Mr. Bullock received a B.S. in Business, Marketing and Finance
from Arizona State University in 1974.
Debra Gladstone, CPA replaced Charles M. Kleim as Chief Financial Officer in
September, 1995. From August, 1993 until September, 1995, Ms. Gladstone worked
for BDO Seidman in Washington, DC and Miami Beach, Florida. From April, 1992
through July 1993, Ms. Gladstone worked at the Division of Corporate Finance for
the Securities and Exchange Commission in Washington, DC. Ernst Walter,
Executive Vice President, and Sharon Petty, Vice President-Finance and
Administration, each served as Chief Financial Officer for the Company on an
interim basis during 1994.
Proposed Sales Tax Adjustments. On November 28, 1994, the Florida Department of
- ------------------------------
Revenue issued to the Company a Notice of Intent to make Sales and Use Tax Audit
Changes for the period February 1, 1989 through June 30, 1994. The proposed
Audit Changes, including penalties and interest total $6,515,681. The Florida
Department of Revenue seeks to assess sales tax on gaming revenue, passenger
fares, the purchase, sale and lease of fixed assets, repairs and other items.
The Company strongly disagrees with the proposed Audit Changes and intends to
vigorously contest the factual, statutory, and regulatory issues which form the
basis for the proposed Audit Changes. The Company believes many of the proposed
Audit Changes will be resolved in the Company's favor. However, the outcome of
this matter is uncertain and if the Company is not successful in challenging the
proposed Audit Changes by the Florida Department of Revenue, the additional
Sales and Use Tax the Company will be required to pay would have a major
substantial adverse impact on the Company's financial condition.
On June 28, 1989, the Department of Revenue issued Technical Assistance
Advisement (TAA 89 (A) - 034 to Europa Cruise Line, Ltd. (the entity which is
now known as Europa Cruises Corporation). This TAA appeared to resolve the
admissions tax issue and the tax on purchases issued in favor of Europa. The
Department revised this TAA in 1990, purporting to "clarify" that it had
actually intended to conclude that the admissions tax was applicable. The
revision did not revisit the tax on purchases. On April 21, 1995, the Assistant
General Counsel for the Florida Department of Revenue issued a recommendation to
the auditor responsible for the Europa sales tax assessments that the TAA issued
on June 28, 1989 should be honored. Therefore, the Assistant General Counsel
recommended that the assessment for Europa Cruise Line, Ltd., be eliminated for
the period from June 28, 1989 to May 2, 1990. The Assistant General Counsel
further recommends that the TAA be honored for all purchases made by Europa
Cruise Line, Ltd., if such purchases were for supplies appropriate to carry out
the purposes for which the Vessel was designed. The recommendation is limited to
assessments for Europa Cruise Line, Ltd. However, the Company intends to pursue
the argument that the successor entities are entitled to the benefits of the
TAA. The recommendation of General Counsel for the Department of Revenue
regarding the TAA will reduce the sales tax assessment by the Department of
Revenue. However, it is not possible for the Company to estimate the amount of
the reduction in the sales tax assessment at this time. Although the Company
cannot predict the ultimate disposition of these issues, the Company believes it
has substantial legal and factual defenses to the department's assertions of tax
and the Company will resist those assertions with vigor. See "RISK
FACTORS."
Debt Refinance. On May 16, 1995, the Company refinanced all its debt,
- --------------
including payoff of the first mortgage on the Diamondhead, Mississippi property,
with proceeds from a loan from First Union National Bank of Florida in the
amount of $6,446,331.67 secured by First Preferred Ship's Mortgages on the
Europa Star, Europa Sun, Europa Sky and Stardancer. Additionally, stock pledge
agreements were executed by the Company in favor of First Union
pledging
-5-
<PAGE>
100% of the stock of wholly owned subsidiaries, Europa Cruises of Florida No.1,
Inc., Europa Cruises of Florida No.2, Inc., Europa Sky Corporation, Europa
Stardancer Corporation and Europa Leasing Corporation. Additionally, the
financing needed to spin off Casino World and Mississippi Gaming Corporation and
to begin gaming operations in Mississippi is expected to come from either a
joint venture partner (The Company has been in discussions with possible joint
venture partners to develop the casino resort. These discussions are in the
early stages but are expected to result in a definitive relationship prior to
the Diamondhead site receiving all construction permits) or a future public
offering. (On February 23, 1994, Casino World, Inc., entered into a letter of
intent for a public offering of 3,000,000 shares of Series A 5% convertible
preferred stock of Casino World, Inc. That letter of intent remains in effect
and a public offering is anticipated by the end of 1996).
Officers and Directors. On June 26, 1995, agents of the United States
- -----------------------
government arrested Ernst Walter, a member of the Board of Directors and an
Officer of the Company pursuant to an extradition request filed by the Austrian
government. The Austrian government requested extradition in connection with an
ongoing criminal investigation involving the trading by Austroinvest
International, Serco International and their affiliates in the securities of
several companies including Europa Cruises Corporation. It is unclear as to
whether or not Mr. Walter has actually been charged with any criminal offense in
Austria or whether he is the subject of an ongoing criminal investigation. The
criminal and civil systems in Austria differ significantly from those in the
United States.
On August 4, 1995 the United States District Court for the Middle District of
Florida ordered Mr. Walter's extradition to Austria. On November 14, 1995, Mr.
Walter resigned from the Board of Directors. That same day the remaining Board
members elected Piers Hadley to the Board to serve Mr. Walter's remaining term.
RISK FACTORS
THE SHARES OFFERED BY THE SELLING SHAREHOLDERS ARE SPECULATIVE AND INVOLVE
A HIGH DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE
POSSIBILITY OF THE LOSS OF THEIR ENTIRE INVESTMENT.
1. DEPENDENCE ON CRUISE REVENUES. The Company has high fixed costs of
operations and is dependent on passenger revenues to meet its expenses. The
Company's fuel costs and wages, which represent the majority of its operating
expenses, are fixed and cannot be reduced when passenger loads decrease,
passenger fares must be lowered because of competitive pressures or when rising
fuel or labor costs cannot be fully passed through to customers. In the event
that only one or two vessels are operating, passenger revenues received from
such vessels must be high enough to cover certain expenses associated with the
inoperative vessel. While the Company has generated sufficient revenues in the
aggregate since inception to cover its fixed expenses, there is no guarantee
that it will be able to continue to do so.
2. COMPETITION. The Company competes with a variety of other vacation
activities in the areas where it operates vessels, including short-term cruises,
resort attractions and sporting and other recreational activities. The Company
is in direct competition in the St. Petersburg - Tampa metropolitan area with
two cruise vessels used for day cruises, one operated by Empress Cruise Lines.
Empress Cruises Lines also operates a day cruise vessel, the Crown Empress, in
Clearwater, Florida. There is also a day cruise operation in Tarpon Springs,
Florida which competes with the Company's operations in the Tampa - St.
Petersburg metropolitan area. Although no other day cruise vessels with
gambling operations currently are based in the Ft. Myers metropolitan area, the
Company expects competition in Ft. Myers from other day cruise operators. The
Company is aware of other firms that operate day cruise vessels in Fort
Lauderdale, Miami, Palm Beach, Port Canaveral, and Jacksonville, Florida, which
could be repositioned to the St. Petersburg - Tampa Bay and Ft. Myers
metropolitan areas or any other area to which the Company's vessels may be
repositioned. All of the competing firms offer day cruises with published fares
ranging from $25 to $49. Although the Company's standard prices for its cruises
are currently $39 per person for morning departures and $49 per person for
evening departures, the Company is often required to adjust these rates due to
competitive pressures and seasonal
-6-
<PAGE>
demand. A lowering of prices may have a material adverse impact on the financial
condition and results of operations of the Company.
Proposed dockside gaming operations in Mississippi will be subject to
significant competition in Mississippi from other gaming enterprises located in
Mississippi and Louisiana, many of which are significantly better capitalized
than the Company. By the end of calendar year 1994, there were thirty-one (31)
dockside casinos in operation in the State of Mississippi alone. In New
Orleans, Louisiana, there are plans to open one of the world's largest casinos.
The Company is also subject to significant competition from other gaming
establishments in Atlantic City, New Jersey, Las Vegas, Nevada, Colorado,
Indiana, Minnesota, and Connecticut. Furthermore, the legalization of gaming in
the State of Florida, Texas, Alabama, and other jurisdictions, and the rapid
expansion of gaming on Indian land throughout the United States would have a
material adverse affect on the Company's proposed dockside gaming operations in
Mississippi.
3. SAFETY OF LIFE AT SEA CONVENTION. The Safety of Life at Sea Convention
(the "Convention") sets forth minimum safety standards for vessels engaged in
international voyages. Any foreign flag vessel engaging in an international
voyage from a United States port must receive evidence of compliance with the
Convention from its country of registry, as well as a certificate from the
United States Coast Guard certifying compliance with such standards.
The Company believes that the Company's operations are in all substantial
and material respects in compliance with the Convention. However, there are no
formal or informal regulations or legal or administrative opinions as to whether
the Company's vessels engage in international voyages. If the Coast Guard were
to determine that the vessels were not so engaged, the Convention would not be
applicable to the Company's operations. In such event, (a) the vessels might be
deemed to be engaged in coastwise trade, prohibited under the Jones Act, 46
U.S.C. (S) 289, because of the vessels foreign ownership and, thus, the Company
could be subject to a substantial monetary fine and/or (b) the Coast Guard could
require the vessels to comply with United States safety standards, which are
generally stricter than the standards established by Panama. Furthermore, the
Coast Guard is authorized to apply United States safety standards to vessels
subject to the Convention if the Coast Guard determines that the lives of United
States citizens are at risk. There can be no assurance that such vessels will
comply with United States safety standards and that the Company will not be
forced to bear the cost of any modifications to the vessels necessary to bring
them in compliance with such standards.
4. GAMING STATUTES. Federal legislation enacted in 1948, 18 U.S.C.
(S)(S)1081, 1082 and 1085 (the "Gambling Act"), prohibits any citizen, resident
of the United States or any other person within the jurisdiction of the United
States from establishing, operating or owning an interest in a gambling ship on
the high seas or otherwise within the jurisdiction of the United States.
Section 1081 of the Gambling Act defines a gambling ship as "a vessel used
principally for the operation of one or more gambling establishments." Any
person who violates the Gambling Act is subject to a fine of up to $10,000 or
imprisonment of not more than two years, and the vessels used in violation of
the Gambling Act could be forfeited to the United States Government. There are
no formal or informal regulations or legal or administrative opinions as to the
application of the Gambling Act to business operations such as those conducted
by the Company.
If the Company's operations were found by a court of law in a litigation
commenced by a United States Attorney's Office to violate the Gambling Act, the
vessels chartered by the Company could be forfeited to the United States
Government without compensation to the owners or the Company or the Company
could be required to change its operations. A material change in the Company's
operations, such as the removal of casinos from the vessels, could result in a
substantial decrease in revenues.
-7-
<PAGE>
5. LEGALIZATION OF GAMING IN FLORIDA. In November of 1994, Florida voters
rejected an Amendment to the Florida Constitution which would have authorized
casinos throughout the State of Florida which are existing and operating
parimutuel facilities, including race tracks and jai alai frontons, and up to
seven other casinos in the state (but not more than one per county) as
authorized by the Florida Legislature. It is likely that the gaming industry
will continue to pursue legalization of gaming in Florida. The Company believes
that the legalization of gaming in Florida would have a material adverse impact
on the Company's operations.
6. DEPENDENCE ON MANAGEMENT. The Company's success is dependent upon the
efforts of its current President, Lester E. Bullock. Since the business of
gaming has expanded significantly, competition for qualified employees will be
intense. There is no assurance that such persons can be retained or readily
replaced, and there is no assurance that the Company can continue to add
qualified people as required. Loss of the services of any of the Company's
executive officers could materially and adversely affect the business of the
Company. See "PROSPECTUS SUMMARY - Recent Events and Developments".
7. CONTROL BY PRINCIPAL SHAREHOLDERS. The Europa Cruises Corporation
Employee Stock Ownership Plan ("ESOP"), Serco International Limited ("Serco")
and Austroinvest International ("Austroinvest"), the principal shareholders of
the Company, own an aggregate of 6,486,570 shares of Common Stock or
approximately 28.9% of the outstanding voting securities. Since holders of
Common Stock do not have cumulative voting rights under the Company's
Certificate of Incorporation, the trustees of the ESOP, the majority of whom are
also directors of the Company, and Serco are in a position to elect all of the
Company's directors and to control the Company.
8. LEGAL PROCEEDINGS. The Company is involved in various legal proceedings
including but not limited to litigation in Delaware and Florida with Charles S.
Liberis, a former officer and director and a principal stockholder of Company.
The Company is also involved in litigation with the owners of the EuropaJet, a
vessel formerly chartered by the Company. Pending and any future litigation
brought by Mr. Liberis against the Company may have an adverse impact on the
Company's ability to secure financing for expansion of day cruise operations and
proposed dockside gaming in Mississippi. The outcome of this litigation cannot
be presently determined. See "Legal Proceedings" in Part II - OTHER INFORMATION
in the Company's Form 10-QSB for the quarterly period ended March 31, 1995 and -
"Certain Litigation". See also "LEGAL PROCEEDINGS" in this Prospectus.
9. SALES TAX AUDIT. On November 28, 1994, the Florida Department of
Revenue issued to the Company a Notice of Intent to make Sales and Use Tax Audit
Changes for the period February 1, 1989 through June 30, 1994, by the Florida
Department of Revenue. The proposed Audit Changes, including penalties and
interest total $6,515,681. The Florida Department of Revenue seeks to assess
sales tax on gaming revenue, passenger fares, the purchase, sale and lease of
fixed assets, repairs and other items. The Company strongly disagrees with the
proposed Audit Changes and intends to vigorously contest the factual, statutory,
and regulatory issues which form the basis for the proposed Audit Changes. The
Company believes many of the proposed Audit Changes will be resolved in the
Company's favor. However, the outcome of this matter is uncertain and if the
Company is not successful in challenging the proposed Audit Changes by the
Florida Department of Revenue, the additional Sales and Use Tax the Company will
be required to pay would have a major substantial adverse impact on the
Company's financial condition.
On June 28, 1989, the Department of Revenue issued Technical Assistance
Advisement (TAA 89 (A) - 034 to Europa Cruise Line, Ltd. (the entity which is
now known as Europa Cruises Corporation). This TAA appeared to resolve the
admissions tax issue and the tax on purchases issued in favor of Europa. The
Department revised this TAA in 1990, purporting to "clarify" that it had
actually intended to conclude that the admissions tax was applicable. The
revision did not revisit the tax on purchases. On April 21, 1995, the Assistant
General Counsel for the Florida Department of Revenue issued a recommendation to
the auditor responsible for the Europa sales tax assessments that the TAA issued
on June 28, 1989 should be honored. Therefore, the Assistant General Counsel
recommended that
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the assessment for Europa Cruise Line, Ltd., be eliminated for the period from
June 28, 1989 to May 2, 1990. The Assistant General Counsel further recommends
that the TAA be honored for all purchases made by Europa Cruise Line, Ltd., if
such purchases were for supplies appropriate to carry out the purposes for which
the Vessel was designed. The recommendation is limited to assessments for Europa
Cruise Line, Ltd. However, the Company intends to pursue the argument that the
successor entities are entitled to the benefits of the TAA. The recommendation
of General Counsel for the Department of Revenue regarding the TAA will reduce
the sales tax assessment by the Department of Revenue. However, it is not
possible for the Company to estimate the amount of the reduction in the sales
tax assessment at this time.
10. ABSENCE OF CASH DIVIDEND. The Company has not declared or paid any
cash dividends on its Common Stock since its incorporation and does not, in the
foreseeable future, intend to pay any cash dividends on shares of Common Stock.
Any future determination as to declaration and payment of cash dividends will be
made at the discretion of the Board of Directors. See "DESCRIPTION OF
SECURITIES - Dividend Policy".
11. CONFLICTS OF INTEREST. One of Europa's three directors is also a
directors of Casino World, Inc., a subsidiary of Europa which the Company plans
to spin-off to Europa shareholders. Europa is engaged in cruise vessel gaming
operations in the State of Florida and Casino World, Inc. is planning to operate
a dockside casino in Mississippi. The Company has not established an Audit
Committee to review and act upon potential conflict of interest situations
involving the Company on the one hand, and executive officers and other members
of the Board of Directors on the other hand. There are no assurances that any
conflicts of interest will be resolved in the Company's favor since the
majority of the Board of Directors of Casino World, Inc. are independent of the
Company.
The common director does not have a substantial financial interest in
either entity and cannot benefit any more or less than other small stockholder
of the Company. Also, since the Company owns all the stock of Casino World,
Inc., there is no fiduciary duty to minority stockholders (of Casino World,
Inc.) Since it is the intent of the Company to transfer ownership of the
property from Mississippi Gaming Corporation to Casino World, Inc. for the fair
market value of said property, the Company will not benefit to the exclusion of
Casino World, Inc.
12. NATURE OF THE GAMING INDUSTRY. Adverse changes in general and local
economic conditions will adversely impact investments in gaming enterprises,
like other entertainment investments. These conditions and other factors beyond
the Company's control include (i) competition from other casinos and amusement
properties; (ii) changes in regional and local population and disposable income
composition; (iii) the need for renovations, refurbishment and improvements;
(iv) unanticipated increases in operating costs; (v) changes in federal, state
and local laws, rules and regulations; (vi) legal restrictions as to the use of
signs, billboards and other forms of roadside advertising typically utilized in
marketing entertainment properties; (vii) restrictive changes in zoning and
similar land use laws and regulations, or in health, safety and environmental
laws, rules and regulations; (viii) the inability to secure property and
liability insurance to fully protect against all losses or to obtain such
insurance at reasonable costs; (ix) the exercise of the power of eminent domain;
(x) seasonality; (xi) changes or cancellations in local tourist, athletic or
cultural events; (xii) changes in travel patterns or preferences which may be
affected by increases in gasoline prices, changes in airline schedules and
fares, strikes, weather patterns and/or relocation or construction of highways,
among other factors.
13. INDEMNIFICATION OF OFFICERS AND DIRECTORS. The Company's Articles of
Incorporation provide that under certain circumstances officers and directors of
the Company may be indemnified by the Company for expenses incurred in legal
actions to which they are parties or are threatened to be made parties as a
result of their activities in the operation of the Company. Any successful
indemnification under that provision could reduce or deplete the assets of the
Company. See "RISK FACTORS - Legal Proceedings."
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14. FACTORS LIMITING EXPANSION AND AFFECTING DAY CRUISE OPERATIONS. The
Company plans to expand its cruise activities by operating cruises from other
United States and foreign ports. The criteria to be used by the Company in
selecting such ports include suitable population base, presence of the port in
an established vacation market, suitable docking facilities and water depth,
availability of United States Customs clearance in United States ports, ability
to comply with state and local laws, favorable weather and sea conditions, close
proximity to international waters and competition. The degree of competition
and the absence of any one of the other previously mentioned criteria in a port
could preclude the Company from establishing operations at such port or force
the Company to reposition a vessel from an established port to a new port.
Certain ports may require the use of vessels larger than those owned by the
Company. Certain states either have adopted legislation or are considering
adopting legislation that could adversely affect the Company's ability to
operate profitably. For example, a bill was introduced in the Florida Senate
that would have prohibited a vessel with gaming equipment from operating in the
territorial waters of Florida unless such a vessel engaged in transportation to
and from a country other than the United States at least once every thirty days.
Although the bill was rejected by the Florida House of Representatives, adoption
of such a bill would result in increased operating expenses and decreased cruise
revenues. Moreover, the expansion of the Company's activities into foreign
ports may be subject to complex foreign governmental rules and regulations. No
assurances can be given that the Company will be able to obtain ports which are
suitable for the Company's purposes, or if any such ports are obtained, that the
Company will be able to obtain additional vessels, on terms acceptable to the
Company, to operate from such ports.
15. PROPOSED SPIN-OFF OF CASINO WORLD SUBSIDIARY. The Company plans to
spin-off its wholly-owned subsidiaries, Casino World, Inc. and Mississippi
Gaming Corporation. Casino World, Inc. plans to develop and operate a casino,
hotel, and golf course at Diamondhead, Mississippi. Europa shareholders will
receive a dividend in the form of Casino World, Inc. Common Stock. Casino World
will acquire from Europa all the issued and outstanding shares of Mississippi
Gaming Corporation which owns the proposed Diamondhead, Mississippi gaming site.
The spin-off of Casino World, Inc. and Mississippi Gaming Corporation is subject
to numerous uncertainties including the lack of available financing, obtaining
the necessary regulatory approvals, the absence of necessary licenses and
permits from Federal and state regulatory authorities, opposition by
environmental groups to the development of gaming facilities on the Mississippi
Gulf Coast and the outcome of certain litigation recently filed by environmental
groups against the Army Corps of Engineers and the Environmental Protection
Agency seeking to enjoin the Corps from issuing any further permits under the
Clean Water Act until an environmental impact statement on the effects of gaming
operations in areas along the Mississippi Gulf Coast is prepared. Although the
Company is not a party to this litigation, an injunction prohibiting the Army
Corps of Engineers and the Environmental Protection Agency from issuing permits
for Casino projects on the Mississippi Gulf Coast would substantially delay the
Company's plans to expand in Mississippi.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common
Shares offered by the Selling Shareholders. However, the Company may receive
proceeds from the exercise of the Warrants, which there is no assurance. The
net proceeds to the Company from the exercise of the Warrants to purchase
500,000 shares of Common Stock will be approximately $950,000, assuming all of
the Warrants are exercised and after deducting expenses of the offering
estimated at $50,000. Such proceeds will be used for working capital purposes.
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SELLING SHAREHOLDERS
The following table sets forth the number of shares of the Company's Common
Stock being offered for sale under this Registration Statement by each of the
Selling Shareholders. Except as noted below, the persons named in the table
have not held any position or office with the Company or any of its
predecessors or had any material relationship with the Company in the past
three years.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES NUMBER OF SHARES
- ---- OWNED TO BE SOLD
------------------- -------------------
<S> <C> <C>
FLC Holding Corporation 500,000(1) 500,000(2)
Lagoon Cruise Line, Inc. 1,200,000(3) 1,200,000
Gaming-Invest Corporation 200,000(4) 200,000
John E. Fitzgibbons, 57,008(5) 57,008
Trustee
- ---------------------
</TABLE>
(1) Represents shares underlying stock purchase Warrants which were originally
issued in connection with the purchase of the EuropaSky. The Warrants were
originally issued at an exercise price of $5.25 per share and the exercise
price was subsequently reduced to $2.00 per share.
(2) Assumes exercise of all of the Warrants presently held by FLC Holding
Corporation, of which there is no assurance. As of the date of this
Prospectus the exercise price of the Warrants held by FLC is substantially
above the current market price of the Company's Common Stock.
(3) The 1,200,000 shares were issued in connection with the purchase by the
Company of a recently acquired vessel, the Stardancer. The value
attributed to such shares by the Company and Lagoon Cruise Line, Inc.
("Lagoon") at the time the vessel Stardancer was purchased was $1.25 per
share. Europa has guaranteed to Lagoon that the gross selling price
received by Lagoon in the aggregate for all sales of Stock (as "Stock" is
defined below) during a period of nine (9) months from the date of this
Prospectus (the "Selling Period"), plus the value of the Stock not sold by
Lagoon upon expiration of the Selling Period, ("Remaining Stock") shall not
be less than One Million Five Hundred Thousand Dollars ($1,500,000). This
guarantee includes the value of stock in Casino World, Inc., and
Mississippi Gaming Corporation that Lagoon will receive from the spin-off.
For this purpose, the term "Stock" includes the 1,200,000 Shares of Common
Stock in Europa offered by Lagoon and all shares of Common Stock of Casino
World, Inc. when and if distributed to shareholders of Europa. At the end
of the Selling Period, the Remaining Stock shall be valued at an amount
equal to the average price as reported in the Wall Street Journal at which
-------------------
such shares were traded on the NASDAQ Market System or as reported by any
other stock quotation system for the immediately preceding five business
days. If the value of said Remaining Stock plus the gross selling price for
all Stock sold by Lagoon during the Selling Period is less than $1,500,000,
then, within 30 days after the expiration of the Selling Period, Europa is
obligated to pay to Lagoon, the difference, if any, between $1,500,000 and
the combined amount of the gross selling price of Stock sold plus the value
of the Remaining Stock. If the value of said Remaining Stock plus the
gross selling price for all Stock sold by Lagoon during the Selling Period
is equal to or greater than $1,500,000, no further amounts are due from
Europa to Lagoon under the Guaranty. If the value of said Remaining Stock
plus the gross selling price from the sale of Stock sold by Lagoon during
the Selling Period is equal to or greater than $1,750,000, the Promissory
Note executed by Europa Stardancer Corporation, payable to Lagoon shall
accrue interest at the rate of zero percent (0%) per annum. Lagoon has also
granted an irrevocable proxy to Lester E. Bullock, President to vote the
shares which will terminate on the earlier to occur of the sale of the
shares by Lagoon or February 26, 1996.
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(4) The shares were acquired in October, 1994 upon conversion of a promissory
note in the principal amount of a $200,000 at a conversion price of $1.00
per share. The promissory note was originally issued to Serco
International, Ltd. and sold to Gaming-Invest Corporation, the current
holder of the shares. Gaming-Invest elected to convert the Promissory Note
into shares of the Company's Common Stock.
(5) Represents shares underlying stock purchase Warrants which were originally
issued to Stewart James Company, a broker dealer who acted as Underwriter
in connection with the Company's initial public offering in 1989. The
Warrants were subsequently transferred to Marc Geman, counsel to the
underwriter, and again transferred by Mr. Geman to John E. Fitzgibbons,
Trustee of the Chapter 7 Bankruptcy Estate of The Stuart-James Company
Incorporated pursuant to a settlement agreement between Geman and the
Trustee. Pursuant to agreements between the Company, Geman and the
Trustee, the Trustee was issued 57,008 shares of the Company's common stock
in December, 1994. These shares were issued in a cashless exchange for the
Warrants.
PLAN OF DISTRIBUTION
This Registration Statement covers 1,957,008 shares of the Company's
Common Stock. All of the Shares offered hereby are being sold by the Selling
Shareholders. Although the Company may realize proceeds upon the exercise of
the stock purchase warrants, it will receive no proceeds from the sale of Common
Stock by the Selling Shareholders.
The distribution of the Shares by the Selling Shareholders is not
subject to any underwriting agreement. The Selling Shareholders may sell the
Shares covered by this Registration Statement through the NASDAQ National
Market System, at prices and terms then prevailing, through customary brokerage
channels, in private transactions or otherwise, either through broker-dealers
acting as agents or brokers for the seller, or through broker-dealers acting as
agents or principals, who may then resell the Shares through the NASDAQ Market
System, at private sale or otherwise, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. Such broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Shareholders
and/or the purchasers of the Shares for whom they may act as agent, which
compensation may be in excess of customary commissions. The Selling
Shareholders and any broker-dealers that participate with the Selling
Shareholders in the distribution of the Shares may be deemed to be underwriters
and any commissions received by them and any profit on the resale of the Shares
positioned by them might be deemed to be underwriting discounts and commissions
under the Securities Act. The Selling Shareholders will pay any transaction
costs associated with effecting any sales that may occur.
The Selling Shareholders are not restricted as to the price or prices
at which they may sell their Shares. Sales of such Shares may depress the
market price of the Company's Common Stock. Moreover, the Selling Shareholders
are not restricted as to the number of Shares which may be sold at any one time,
and it is possible that a significant number of Shares could be sold at the same
time which may also have a depressive effect on the market price of the
Company's Common Stock.
LEGAL PROCEEDINGS
On May 11, 1993, the Company filed a Civil Action in the United
Stated District Court for the Northern District of Florida against Liberis, and
Harlan G. Allen, Jr., the Company's former Chief Financial Officer, seeking
compensatory and punitive damages. The Complaint alleged violations of Sections
10(b) and 16(b) of the Securities Exchange Act of 1934 and violations of the
Racketeer Influenced and Corrupt Organizations Act ("RICO"). The
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Complaint also alleges that Messrs. Liberis and Allen engaged in schemes to
defraud Europa, breached their fiduciary duties to Europa, and converted
corporate assets of the Company. On October 18, 1993, the United States
District Court for the Northern District of Florida entered an Order which
granted in part and denied in part a motion to dismiss the action and gave
Europa leave to amend its complaint. The Court denied Liberis' motion to
dismiss Court III alleging a violation of Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 (fraud in the sale of securities) and also
denied defendant's motion to dismiss Count XI alleging civil theft pursuant to
Section 772.11, Florida statutes. The Court dismissed with prejudice Court II
alleging violations of Section 12(2) of the Securities Exchange Act of 1933.
Europa was granted leave to amend Counts IV, V, VI, and VII seeking relief under
the Federal Racketeer Influenced and Corrupt Organizations Act ("RICO")(18
U.S.C. SS 1961, et seq.). Europa was also granted leave to amend Count X
-------
alleging breaches of fiduciary duty by Liberis and Allen. On October 29, 1993,
Europa filed a fourth Amended Complaint against Liberis and Allen. The Company
and Allen have entered into a Settlement Agreement resolving their disputes and
the Company dismissed the federal civil action against Allen with prejudice. A
further motion by Liberis to dismiss Europa's fourth Amended Complaint was
denied by the U.S. District Court on December 17, 1993. Liberis then filed a
Motion for Partial Summary Judgement with respect to the alleged violations of
the RICO statute and certain other claims. All parties have agreed to a stay of
action in this matter pending final judgement of the action brought in Delaware
by Liberis. Final judgement in Delaware will resolve this action on the basis
of res judicata and collateral estoppel.
On July 30, 1993, Charles Liberis attempted to exercise 1,417,500
Europa Common Stock purchase options at $.15625. The Company refused Liberis'
attempt to exercise these options. On August 30, 1993, Charles S. Liberis filed
a Compliant for Specific Performance of Stock Options against the Company in
Delaware Chancery Court. On or about October 7, 1993, the Company filed an
Answer denying the substantive allegations of the counterclaims on or about
October 27, 1993. On May 2, 1995, Liberis amended his Complaint seeking damages
for Europa's refusal to allow Liberis to exercise his stock options. Because
any shares issued to Liberis pursuant to exercise of the stock options are
"restricted securities," and could not have been sold prior to August 1, 1995,
the Company believes there is no basis for the Liberis' damage claim. The
parties have completed discovery and trial in this matter has been completed.
Post trial briefs have been submitted and oral arguments are expected to be
heard before April, 1996.
On December 23, 1994, United States District Court for the Northern
District of Florida entered an Order granting in part and denying in part
Liberis' Motion for Partial Summary Judgment. The Court entered Summary
Judgment in favor of Liberis with respect to Europa's RICO allegations and
Europa's allegations that Liberis had realized short-swing profits in violation
Section 16(b) of the Securities and Exchange Act of 1934 ("Exchange Act"). The
Court also entered judgment in favor of Liberis with respect to Europa's
allegations that Liberis violated Sections 13(d) and 14(a) of the Exchange Act
during the 1993 Proxy contest. The Court denied Liberis' Motion for Partial
Summary Judgment with respect to Europa's allegations that Liberis engaged in a
scheme to defraud Europa in connection with the EuropaJet Charter Agreement and
the repricing of certain stock options to Liberis and further denied Liberis
Motion for Partial Summary Judgment with respect to Europa's allegations that
Liberis' breached his fiduciary duties to the Company by using Company funds to
acquire properties in his own name. Liberis did not seek summary judgment with
respect to Europa's allegations of securities fraud under Section 10(b) of the
Securities and Exchange Act of 1934 and Rule 10b-5 and allegations of civil
theft under Section 772.11, Florida statutes. As previously stated all parties
have agreed to a stay of action in this matter pending final judgement of the
action brought in Delaware by Liberis.
On December 15, 1994, the Company was sued by Harrell Z. Browning,
Liquidating Trustee of the Burton Securities S.A. Liquidating Trust (hereinafter
"Liquidating Trustee") in the United States Bankruptcy Court for the Southern
District of Texas Corpus Christi Division. The Complaint alleges that the
Company breached a contract to purchase the M/V Le Mistral when Europa refused
to consummate the purchase of the Le Mistral and seeks damages in excess of
$750,000. The Company believes the agreement to purchase the Le Mistral was
properly terminated and that the Company is entitled to a refund of $85,000 from
the Liquidating Trustee. On December 14, 1994, the United States Bankruptcy
Court entered an Order requiring the Trustee to immediately return to Europa the
full amount of
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Europa's cash deposit together with all interest earned thereon. The Company has
been advised that the Liquidating Trustee will move to vacate the Bankruptcy
Court Order requiring the return of Europa's $85,000 cash deposit.
In February, 1994, following attachment of one of the Company's
vessels by Sea Lane, the Company entered into a partial settlement agreement
with Sea Lane with respect to the Company's obligations under the Bareboat
Charter Agreement. The Company's liability, if any, for damages arising out of
the condition of the EuropaJet upon its redelivery to Sea Lane remains in
dispute. The Company believes its liability for required repairs and
maintenance to the EuropaJet when the vessel was returned to Sea Lane is
approximately $150,000. However, the owners of the vessel have informed the
Company that they believe the Company's liability for damages to the EuropaJet
under the charterparty agreement is approximately $700,000. The Settlement
Agreement further provides that if the Company and Sea Lane are unable to settle
this dispute with respect to the condition of the EuropaJet when it was re-
delivered to Sea Lane, the amount of the Company's remaining obligation to Sea
Lane would be determined in binding arbitration. On January 31, 1994 Sea Lane
filed a Motion to Compel Arbitration. On November 30, 1994 the Company filed
an Opposition to the Motion to Compel Arbitration on the grounds that the
arbitration clause in the Settlement Agreement was procured by fraud. At the
same time the Company also asked the Court to disqualify the law firm of
Douglass & Stroup from representing Sea Lane on the grounds that Glen Kolk,
maritime counsel to the Company is "Of Counsel" to the Douglass & Stroup law
firm. The U.S. District Court for the Southern District of Florida, Admiralty
Division has determined that the claim by Sea Lane with respect to the
condition of the EuropaJet upon redelivery will be decided in arbitration and
Sea Lane has indicated that Douglass & Stroup will not continue to represent
Sea Lane. Presently, the parties are in the process of choosing an arbitrator
and no date has been scheduled for said arbitration.
On March 15, 1995, Europa Cruises of Florida, Inc. and Europa
Cruises of Florida 2, Inc. were named as defendants along with thirty-one other
defendants in a class action filed in the U.S. District Court in Orlando,
Florida against the owners, operators and distributors to cruise ship casinos
which utilized casino video poker machines and electronic slot machines alleging
violations of the Federal Civil RICO statute, common law fraud and deceit,
unjust enrichment and negligent misrepresentation. The plaintiff in this action
had brought a similar action against most major land-based casino operations in
the United States. The earlier action, which did not name the Company or any of
its subsidiaries as defendants, was transferred from the U.S. District Court in
Orlando, Florida to the U.S. District Court in Las Vegas, Nevada. The plaintiff
contends in both actions that the defendants, owners and operators of casinos,
including cruise ship casinos along with the distributors and manufacturers of
video poker machines and electronic slot machines have engaged in a course of
fraudulent an misleading conduct intended to induce people to play their
machines based on a false understanding that these machines operate in a truly
random fashion. The plaintiff alleges these machines actually follow fixed,
preordained sequences that are not random, but rather are both predictable and
subject to manipulation by defendants and others. The plaintiff seeks damages in
excess of $1 billion dollars against all defendants. Although this action is in
the very early stages, management believes there is no support for plaintiff's
allegations.
DESCRIPTION OF SECURITIES
The Company is authorized to issue 50,000,000 shares of Common Stock,
par value $.001 per share of which 22,310,306 shares were issued and
outstanding as of December 31, 1994, and 5,000,000 shares of Preferred Stock,
par value $.01 per share, of which 3,216,000 are outstanding.
Common Stock
------------
At a meeting of stockholders at which a quorum is present, a majority
of the votes cast decides all questions, unless the matter is one upon which by
express provision of law a different vote is required. There
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is no cumulative voting with respect to the election of directors, which means
that the holders of a majority of shares at a meeting at which a quorum is
present can elect all the directors if they choose to do so, and in such event,
the holders of the remaining shares would not be able to elect any directors.
The holders of validly issued and outstanding shares of Common Stock
are entitled to one vote per share held of record on all matters to be voted
upon by stockholders. The holders of Common Stock have no preemptive rights and
have no rights to convert their Common Stock into any other securities. All
outstanding shares of Common Stock have been validly issued and are fully paid
and nonassessable.
The holders of Common Stock are entitled to receive ratably such
dividends as the Board of Directors may declare out of funds legally available
therefor, when, as and if so declared. If the event of a liquidation,
dissolution or winding up of the Company, holders of Common Stock are entitled
to share ratably in all assets remaining after payment of liabilities.
The payment by the Company of dividends, if any, in the future rests
within the discretion of its Board of Directors and will depend, among other
things, upon the Company's earnings, its capital requirements and its financial
condition, as well as other relevant factors. The Company has not paid any
cash dividends. It is the present policy of the Company's Board of Directors to
retain all earnings to finance the growth and development of the Company's
business. The Board of Directors intends to review its dividend policy from
time to time in light of the Company's earnings, financial condition and other
relevant factors.
No person or entity may become the record or beneficial owner of 5% or
more of the Company's common stock unless such person or entity agrees, if
requested, to provide personal background and financial information to gaming
authorities , consent to a background investigation, and respond to questions
from gaming authorities. The Company may repurchase or redeem shares, at fair
market value, held by any person or entity whose status as a shareholder, in
the opinion of the Company's Board of Directors, jeopardizes the approval,
continued existence, or renewal by any gaming regulatory authority, of a
license to engage in gaming operations, of a contract to manage gaming
operations, or any other tribal, federal or state license or franchise sought
or held by the Company or any of its subsidiaries.
Preferred Stock
---------------
The Company's Board of Directors may, without further action by the
shareholders, issue one or more series of Preferred Stock (up to an aggregate
of 5,000,000 shares), fix the dividend rate, conversion rights, rights and
terms of redemption (including sinking fund provisions), redemption prices,
liquidation preferences and other terms of any wholly unissued series of
Preferred Stock and determine the designation of and (subject to the aggregate
limit of 5,000,000 shares) the number of shares constituting any such unissued
series. The issuance of Preferred Stock may be used to delay or deter an
unfriendly takeover of the Company and may be adverse to the voting rights of
holders of the Company's Common Stock.
On June 14, 1993, the Company issued 926,000 shares of Series S
Preferred stock at $1.08 under a Regulation S offering to a major shareholder,
Austroinvest International Limited. The preferred shares are redeemable, non-
convertible, carry a $.035 per share annual dividend, with no participation in
Casino World, Inc., and no registration rights. The Company may redeem the
shares at any time, paying 1% per quarter from the date of issue. Proceeds
from the stock sale were used in the exercise of purchase option on the
Diamondhead gaming site.
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On September 13, 1993, the Company issued 900,000 shares of Series S-
NR Preferred Stock at $1.11 per share to a major shareholder, Serco. The
Preferred shares are non-redeemable, non-convertible, and earn a $.033 per
share cumulative dividend, payable annually. Proceeds from the stock sale were
used to retire the second mortgage on the Diamondhead property of $1,000,000.
On June 15, 1994, the Company sold 1,390,000 shares of the Company's
Series S-PIK Junior, Cumulative, Convertible, Non-Redeemable, Non-Voting
Preferred Stock, ($.01 par value). Each share of Series S-PIK Preferred Stock
is convertible into one share of the Company's Voting Common Stock, at any time
after February 15, 1995. The Series S-PIK Preferred Stock ranks Junior to the
Series S and Series S-NR Preferred Shares as to the distribution of assets upon
liquidation, dissolution, or winding up of the Company. Upon liquidation of
the Company, the Preferred Stock will have a liquidation preference to the
extent of $2.25 per share. A quarterly dividend of $0.045 per share of Series
S-PIK Preferred Stock will be payable to shareholders of record as of March
15th, June 15th, September 15th, and December 15th of each year from legally
available funds and are cumulative. At the option of the Company, for a period
of three years, dividends on the Preferred Stock may be paid by issuing shares
of the Company's Common Stock to the holders of the Preferred Stock.
Dividend Policy
---------------
The Company has not paid any cash dividends on its Common Stock since
its inception, does not anticipate paying any cash dividends on its Common
Stock in the foreseeable future. The Company intends to retain earnings, if
any, to provide funds for general corporate purposes and the expansion of the
Company's business. Any future dividends will be dependent upon the earnings
of the Company, its financial requirements and other relevant factors.
Transfer Agent and Registrar
----------------------------
The transfer agent and registrar for the Company's Common Stock is
Continental Stock Transfer and Trust Company, 2 Broadway, New York, New York
10004.
Reports to Shareholders
-----------------------
As a reporting company under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the Company files periodic reports with the
Securities and Exchange Commission. The Company is also required to deliver
proxy statements and an Annual Report to its shareholders, including financial
statements audited by its independent accountants, in connection with its
annual meeting of shareholders. The Company complies with the proxy
solicitation rules contained in the 1934 Act. The Company may also prepare and
deliver quarterly and other interim statements to shareholders as management
deems appropriate.
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Under Section 145 of the Delaware General Corporation Law, as amended,
a corporation may indemnify its officers and directors against certain
liabilities which they may incur in such capacities. The Company's Certificate
of Incorporation provides that the Company's directors shall not be liable to
the Company or its
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<PAGE>
stockholders for monetary damages for breaches of fiduciary duties as a
director except to the extent that exculpation from liabilities is not
permitted under the Delaware General Corporation law as in effect at the time
such liability is determined.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 of 1933 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 whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
LEGAL MATTERS
The validity of the Shares of Common Stock offered hereby will be
passed upon for the Company by the Law Offices of Victor B. Gersh, 1150
Connecticut Avenue, N.W., Suite 900, Washington, D.C. 20036. Mr. Gersh is the
record and beneficial owner of 100,000 shares of Common Stock and of an option
to purchase 100,000 shares of Europa Cruises Corporation Common Stock at
$1.0625 per share.
EXPERTS
The financial statements incorporated by reference in this Prospectus
have been audited by BDO Seidman, independent certified public accountants, to
the extent and for the periods set forth in their report (which contains an
explanatory paragraph regarding uncertainties as to the outcome of certain
litigation) incorporated herein by reference, and are incorporated herein in
reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
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<PAGE>
PART II
INFORMATION NOT REQUESTED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
-----------------------------------------------------
The following table sets forth the estimated expenses to be incurred
by the Company in connection with the issuance and distribution of the
securities being registered hereby:
<TABLE>
<S> <C>
SEC registration fee............. $ 923.86
Accounting fees and expenses..... 10,000.00
Legal fees and expenses.......... 25,000.00
Blue Sky fees and expenses....... 2,500.00
Printing and engraving expenses.. 10,000.00
Miscellaneous.................... 1,577.14
TOTAL...................... $50,000.00
</TABLE>
All the above expenses other than the SEC registration fee are estimates.
Item 15. Indemnification of Directors and Officers.
---------------------------------------------------
The Company is a Delaware corporation. Reference is made to Section 145 of
the Delaware General Corporation Law, as amended which provides that a
corporation may indemnify any person who was or is a party to or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reasons 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 reasonably incurred by him in
connection with such action, suit or proceeding if be acted in good faith and
in manner be reasonably believed to be in or not opposed to be 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.
Section 145 further provides that a corporation similarly 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 attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to be the best interests of the corporation and except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Delaware Court of Chancery
or the court in which such action or suit was brought shall determine upon
application that, despite and adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnify for such expenses which the Court of Chancery or such other court
shall deem proper. The Company's Certificate of Incorporation
II-1
<PAGE>
further provides that the Company shall indemnify its directors and officers to
the full extent permitted by the law of the State of Delaware.
The Company's Certificate of Incorporation provides that the Company's
Directors shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except to the extent that
exculpation from liabilities is not permitted under the Delaware General
Corporation Law as in effect at the time such liability is determined.
The Company maintains an indemnification insurance policy covering all
directors and officers of the Company and its subsidiaries.
Item 16. Exhibits and Financial Statement Schedules.
----------------------------------------------------
Exhibit
Number
-------
1 Not applicable.
2 Not applicable.
4.1 Subscription and Investment Agreement between Europa Cruises Corporation
and Lagoon Cruise Line, Inc. dated August 26, 1994.
4.2 Warrant Agreement between Europa Cruises Corporation and FLC Holding
Corp dated July 8, 1992.
4.2.1 Consent and Amendment of Credit Agreement Note and Warrant by and among
FLC Holding Corp. ("FLC"), EuropaSky Corporation ("EuropaSky"), Europa
Cruises Corporation and Casino World, Inc. ("Casino"), dated May 27,
1993 without Exhibits.
4.3 Warrant Agreement between Europa Cruises Corporation and The Stuart-
James Company Incorporated dated June 29, 1989.
4.3.1 Warrant Certificates and Assignments for 125,520 shares and 17,000
shares registered in the name of Marc N. Geman dated June 22, 1994.
4.3.2 Motion to Approve Settlement Agreement Among Trustee, Marc N. Geman and
Chatfield Dean & Co., Inc. dated October 8, 1993 with Settlement
Agreement dated October 6, 1993 attached.
4.3.4 Order Approving Settlement Agreement Among Trustee, Marc N. Geman and
Chatfield Dean & Co., Inc.
4.3.5 Agreement between Marc N. Geman and Europa Cruises Corporation dated
June 15, 1993.
4.4 Convertible Promissory Note between Europa Cruises Corporation and Serco
International Ltd. dated November 11, 1993: Transfer by Serco
International Ltd. to Gaming Invest Corp. and election to convert
Promissory Note by Gaming-Invest Corp.
II-2
<PAGE>
5 Opinion of Victor B. Gersh, Attorney-at-Law, 1150 Connecticut Avenue,
N.W., Suite 900, Washington, D.C. 20036, regarding the legality of the
securities registered under this Registration Statement.
7 Not applicable.
8 Not applicable.
10.1 Consulting Agreement between Europa Cruises Corporation and Casinos
Austria Maritime Corporation dated September 16, 1994.
10.1.1 Equipment Lease between Europa Cruises Corporation and Casinos Austria
Maritime Corporation dated October 13, 1994.
10.1.2 Promissory Note payable to Casinos Austria Maritime Corporation dated
December 30, 1994, and Second Naval Mortgage on the M/V Stardancer.
10.1.3 Subordination Agreement between Lagoon Cruise Line, Inc., Europa
Stardancer Incorporation and Casinos Austria Maritime Corporation.
13.1 Annual Report on Form 10-KSB for the year ended December 31, 1993.
13.2 Form 10-QSB for the quarter ended September 30, 1994.
15 Not applicable.
16 Not applicable.
24.1 Consent of Victor B. Gersh, Attorney-at-Law, counsel for the
Registrant, to the use of his opinion with regard to the legality of
the securities covered by the Registration Statement and to the
references to such firm in the Prospectus filed as part of the
Registration Statement is contained in such opinion as Exhibit 5 to
this Registration Statement.
24.2 Consent of BDO Seidman independent certified accountants for the
Registrant.
25 Not applicable.
26 Not applicable.
27 Not applicable.
28 Not applicable.
29 Not applicable.
II-3
<PAGE>
Item 17. Undertakings.
----------------------
(a) The undersigned registrant hereby undertakes that:
(1) (For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or Rule
497(h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective; and
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof.
(3) 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 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, indirectly or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 of 1933 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 whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-2 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Pinellas County, Florida on the 22th day of January, 1996.
----
EUROPA CRUISES CORPORATION
BY: /S/ LESTER E. BULLOCK
---------------------------------------------
LESTER E. BULLOCK, PRESIDENT
Known all persons by these presents that each person whose signature
appears below constitutes and appoints ANDREW M. STEINBERG or DEBORAH A. VITALE
his/her attorney in fact with power of substitution for him/her in any and all
capacity to sign Amendments to this registration on Form S-2 and to file same
with exhibits thereto and other documents in connection therewith with the
Securities and Exchange Commission hereby ratifying and confirming all that
said Attorney in fact or his/her substitute(s) may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Lester E. Bullock President January 22, 1996
----------------------------
Lester E. Bullock
/s/ Debra Gladstone Chief Financial Officer January 22, 1995
----------------------------
Debra Gladstone
/s/ Lester E. Bullock Director January 22, 1995
----------------------------
Lester E. Bullock
/s/ Deborah A. Vitale Director January 22, 1995
- -----------------------------
Deborah A. Vitale
/s/ Piers Hedley Director January 22, 1995
----------------------------
Piers Hedley
II-5
