Filed Pursuant to Rule 424(b)(4)
Registration No. 333-59299
PROSPECTUS
Sunrise International Leasing Corporation
143,850 Shares of Common Stock
This Prospectus relates to the offer and sale of up to 143,850 shares
of Common Stock (the "Shares"), $.01 par value, of Sunrise International Leasing
Corporation, a Delaware corporation (the "Company"), by certain persons
(collectively, the "Selling Stockholders") who received the Shares pursuant to
the Company's acquisition of The P. J. King Companies, Inc. d/b/a International
Leasing Corporation ("ILC") in February 1995. The Selling Stockholders may offer
their Shares from time to time through or to brokers or dealers in the
over-the-counter market at market prices prevailing at the time of sale or in
one or more negotiated transactions at prices acceptable to the Selling
Stockholders. (See "Plan of Distribution"). The Company will not receive any
proceeds from sales of Shares by the Selling Stockholders.
The Company will bear all expenses of the offering (estimated to be
$4,851), except that the Selling Stockholders will pay any applicable
underwriter's commissions and expenses, brokerage fees or transfer taxes, as
well as any fees and disbursements of counsel and experts for the Selling
Stockholders.
The Company's Common Stock is traded on the Nasdaq National Market
under the symbol "SUNL." The closing bid price of the Company's Common Stock on
July 27, 1998, as reported by the Nasdaq National Market, was $4.3125 per share.
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FOR INFORMATION CONCERNING CERTAIN RISKS RELATING
TO THIS OFFERING SEE "RISK FACTORS" BEGINNING ON PAGE 4
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THESE SECURITIES 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.
The date of this Prospectus is July 27, 1998.
<PAGE>
No person is authorized to give any information or to make any
representations, other than those contained or incorporated by reference in this
Prospectus, in connection with the offering contemplated hereby, and, if given
or made, such information or representations must not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any securities other than the
registered securities to which it relates. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any securities in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof or that the information contained or incorporated by reference herein is
correct as of any time subsequent to its date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C., 20549,
and at the Commission's regional offices in New York (75 Park Place, New York,
New York 10007) and Chicago (500 West Madison, Suite 1400, Chicago, Illinois
60661). Copies of such material can be obtained from the Public Reference
Section of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, since May 1996 the Company has
electronically filed with the Commission all reports, proxy and information
statements and other information regarding the Company required to be filed
electronically, which documents are available at http://www.sec.gov on the Web
site that the Commission maintains.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act of 1933 with respect to the securities offered
hereby. For further information with respect to the Company and such securities,
reference is made to such Registration Statement and to the exhibits thereto.
Any statement contained or incorporated by reference herein concerning the
provisions of any document is qualified in its entirety by reference to the copy
of such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission.
DOCUMENTS INCORPORATED BY REFERENCE
The Annual Report on Form 10-K for the fiscal year ended March 31, 1998
filed by the Company with the Commission pursuant to the Exchange Act, is hereby
incorporated by reference in this Prospectus and shall be deemed to be a part
hereof.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Shares shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
of such documents.
The Company will provide without charge to each person, including any
beneficial owner to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all of the documents
incorporated herein by reference (not including the exhibits to such documents,
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to Peter J. King,
President, telephone (612) 513-3200.
<PAGE>
THE COMPANY
Sunrise International Leasing Corporation, a Delaware corporation (the
"Company"), is the issuer of the Shares offered by the Selling Shareholders
pursuant to this Prospectus. The Company is engaged in the business of equipment
leasing. The Company's principal executive offices are located at 5500 Wayzata
Boulevard, Suite 725, Minneapolis, Minnesota 55416, and its telephone number is
(612) 513-3200.
RISK FACTORS
Prospective investors should carefully consider the following risk
factors.
1. Highly Competitive Industry. The equipment leasing business is
highly competitive. The Company competes with numerous companies, including
leasing companies, commercial banks and financial institutions, some of which
the Company relies on to obtain capital to finance its leases. Most of the
Company's competitors are significantly larger and have substantially greater
resources than the Company. The Company typically chooses not to compete with
large leasing companies for those leases in which the cost of the equipment
greatly exceeds the amount of non-recourse financing available.
2. Risk of Additional Loan and Lease Write-Offs. While the Company
believes that its current reserves are adequate, it continues to monitor a
restructured loan and a material lease, as to which, at March 31, 1998, the
Company had an aggregate book value of $4.1 million and an aggregate remaining
contractual balance of $9.5 million. While lessee payments are being received on
a monthly basis, there is no assurance that such payments will continue on an
uninterrupted basis or that the Company is adequately secured. Any future losses
on such loans and leases incurred in excess of the Company's reserves would
likely affect the Company's future earnings and cash flows, and may cause the
Company to be in violation of one or more of its covenants under its credit
agreements with its financing sources.
3. Financing. The Company's growth and profitability are dependent to a
great extent on the Company's ability to finance revenue producing assets. The
King Management Corporation's financing commitment, as well as continued
reduction in the amount of non-performing assets, have enhanced the Company's
ability to obtain required financing. While the Company has been successful in
obtaining required recourse and non-recourse financing to date, there is no
assurance that all required financing will be available in the future.
4. Major Customers/Vendors. At March 31, 1998 and March 31, 1997, no
leases outstanding to any individual lessee exceeded 5% of the total lease
portfolio, except in cases where the leases had been discounted without recourse
to a financial institution. However, 52.6% of the Company's total leasing
revenue for the year ended March 31, 1998 was generated through a single vendor
leasing program. Should this program terminate, the Company would continue to
realize related revenues for a period of up to three years. If the program were
to terminate, however, and the Company was unable to replace this business, the
Company's future financial results could be materially and adversely affected.
<PAGE>
5. Residual Values and Potential Rapid Obsolescence of Leased
Equipment. The value of the data processing equipment leased by the Company to
its customers represents a substantial portion of the Company's capital. At the
inception of each lease, the Company estimates the residual value of the leased
equipment, which is the estimated market value of the equipment at the end of
the initial lease term. The actual realized residual value of leased equipment
may differ from its estimated residual value, resulting in profit or loss when
the leased equipment is sold or leased again at the end of the initial lease
term. If a lessee defaults on a lease which has been discounted by the Company
to a financial institution, the financial institution may foreclose on its
security interest in the leased equipment, and the Company may not realize any
portion of such residual value. In addition, the high technology equipment which
comprises the bulk of the Company's lease portfolio is subject to rapid
technological obsolescence typical of the computer industry.
During the fiscal year ended March 31, 1998, the Company experienced
losses on a specific vendor program and established reserves to cover
anticipated losses in future periods. In addition, the Company will be
depreciating future equipment acquisitions from this vendor program more
quickly. The trend towards shortened product life cycles will continue to add
additional risk to maintaining historical leasing margins.
USE OF PROCEEDS
The Company will receive no proceeds from the sale of Shares by the
Selling Stockholders.
SELLING STOCKHOLDERS
Set forth below are the names of the Selling Stockholders, their
relationships to the Company, the number of shares of Common Stock of the
Company beneficially owned by each of them as of July 9, 1998, the number of
shares offered hereby and the percentage of the outstanding Common Stock to be
owned if all the shares registered hereunder are sold by the Selling
Stockholders. The shares offered hereby shall be deemed to include shares
offered by any pledgee, donee, transferee or other successor in interest of any
of the Selling Stockholders listed below, provided that this prospectus is
amended or supplemented if required by applicable law.
<TABLE>
<CAPTION>
Percentage of
Number of Shares Number of Shares Shares Owned After
Name Beneficially Owned Offered Hereby Sale of Shares
- ---- ------------------ -------------- --------------
<S> <C> <C> <C>
Andrew Sall (1) 5,029 5,029 *
Daniel W. Cadwell 6,035 6,035 *
Kelley A. Ross 1,508 1,508 *
Barry J. Schwach (2) 128,218(3) 120,718 *
James C. Teal 3,017 3,017 *
Denise A. Willhite 1,508 1,508 *
Susan L. Rehberger 6,035 6,035 *
</TABLE>
<PAGE>
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* Less than 1%.
(1) Mr. Sall served as a director of the Company from February 1995 until
October 1997.
(2) Mr. Schwach served as the Company's Chief Financial Officer from
February 1995 until November 1997.
(3) Includes 7,500 shares which may be acquired by Mr. Schwach upon
exercise of exercisable stock options.
PLAN OF DISTRIBUTION
The Selling Stockholders have advised the Company that all or a portion
of the Shares offered by the Selling Stockholders hereby may be sold from time
to time by the Selling Stockholders or, after amendment or supplement of this
prospectus, if required by law, by pledgees, donees, transferees or other
successors in interest. Such sales may be made in the over-the-counter market or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The Shares may be sold
by one or more of the following means: (a) ordinary brokerage or market making
transactions and transactions in which the broker or dealer solicits purchasers;
(b) block trades in which the broker or dealer so engaged will attempt to sell
the Shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction; and (c) purchases by a broker or dealer
as principal and resales by such broker or dealer for its account pursuant to
this Prospectus. In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from the Selling Stockholders in
amounts to be negotiated immediately prior to the sale. Such brokers or dealers
and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales. In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 under the Act may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Company and the Selling Stockholders have agreed to indemnify each
other against certain liabilities, including liabilities arising under the
Securities Act.
