AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AUGUST 27, 1996
REGISTRATION NO. 333-5523
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INNOVATIVE GAMING CORPORATION OF AMERICA
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
MINNESOTA 41-1713864
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
4750 Turbo Circle
Reno, Nevada 89502
(702) 823-3000
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
------------------------------------
EDWARD G. STEVENSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
INNOVATIVE GAMING CORPORATION OF AMERICA
4750 TURBO CIRCLE
RENO, NEVADA 89502
(702) 823-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
WITH COPIES TO:
WILLIAM M. MOWER, ESQ.
DOUGLAS T. HOLOD, ESQ.
MASLON EDELMAN BORMAN & BRAND,
A PROFESSIONAL LIMITED LIABILITY PARTNERSHIP
3300 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402-4140
(612) 672-8200
APPROXIMATE DATE OF THE COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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.
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.
SUBJECT TO COMPLETION, DATED AUGUST 27, 1996
PROSPECTUS
Innovative Gaming Corporation of America
WARRANTS TO PURCHASE 125,000 SHARES OF COMMON STOCK
500,000 SHARES OF COMMON STOCK
------------------------------------
This Prospectus relates to 125,000 shares of Common Stock of
Innovative Gaming Corporation of America (the "Company") issuable upon exercise
of warrants issued to certain underwriters in the Company's initial public
offering (the "Underwriters' Warrants), 125,000 redeemable Common Stock Purchase
Warrants (the "Redeemable Warrants") issued upon exercise of the Underwriters'
Warrants and 125,000 shares of Common Stock issuable upon exercise of the
Redeemable Warrants.
Each Underwriters' Warrant entitles the holder to purchase a unit
consisting of one share of Common Stock and one Redeemable Warrant, at a price
of $6.90 per unit, until May 28, 1998. Each Redeemable Warrant entitles the
holder to purchase one share of Common Stock, at a price of $8.50 per share,
until May 30, 1997. The Company has the right to redeem the Redeemable Warrants,
at $0.01 per Redeemable Warrant, upon 30 days written notice, provided that the
closing bid price for the Common Stock exceeds $9.50 per share for any 20
consecutive trading days prior to such notice.
This Prospectus also relates to 250,000 shares of Common Stock
issuable upon exercise of certain warrants (the "Selling Shareholders' Warrants,
and collectively with the Underwriters' Warrants and the Redeemable Warrants,
the "Warrants") that are being sold by certain shareholders of the Company (the
"Selling Shareholders"). Such Selling Shareholders Warrants have exercise prices
ranging from $8.00 to $13.00 and have expiration dates of either September 7,
1998 or September 7, 1999.
The Company will receive approximately $862,500 if all Underwriters'
Warrants are exercised, approximately $1,062,500 if all the Redeemable Warrants
are exercised, and approximately $2,400,000 if all of the Selling Shareholders'
Warrants are exercised. The Company will receive no proceeds from the sale of
the Common Stock.
The Common Stock is listed on the Nasdaq National Market under the
symbol "IGCA." On August 21, 1996, the last sale price for the Common Stock as
reported on the Nasdaq National Market was $5.69.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DESCRIPTION OF CERTAIN
FACTORS WHICH SHOULD BE CONSIDERED BY INVESTORS BEFORE PURCHASING THE SECURITIES
OFFERED HEREBY.
------------------------------------
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.
NEITHER THE NEVADA GAMING CONTROL BOARD NOR THE NEVADA GAMING
COMMISSION NOR ANY OTHER GAMING AUTHORITY HAS PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
OR THE INVESTMENT MERITS OF THE SECURITIES
OFFERED HEREBY. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
------------------------------------
The date of this Prospectus is , 1996.
ADDITIONAL INFORMATION
This Prospectus is part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") which the Company has filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the securities offered hereby. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is made to the
Registration Statement. Statements made in this Prospectus as to the contents of
any contract, agreement or other document referred to herein are not necessarily
complete. With respect to each such contract, agreement or other document filed
as an exhibit to the Registration Statement, reference is made to the exhibit
for a more complete description of the matter involved, and each such statement
shall be deemed qualified in its entirety by such reference.
The Company is subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy and information statements and other
information with the Commission. Such reports, proxy and information statements
and other information as well as the Registration Statement and Exhibits of
which this Prospectus is a part filed by the Company may be inspected and copied
at the public reference facilities of the Commission, Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, DC 20549, as well as at the following
Regional Offices: 7 World Trade Center, 13th Floor, New York, New York 10048 and
500 West Madison Street--Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained from the Commission by mail at prescribed rates.
Requests should be directed to the Commission's Public Reference Section, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549. Material
filed by the Company can also be inspected at the offices of the National
Association of Securities Dealers, Inc., 1735 K Street N.W., Washington, D.C.
20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference and made a part hereof: (i) the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1995; (ii) the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1996 and the fiscal quarter ended June 30, 1996; and (iii) the
description of the Company's Common Stock included in its Registration Statement
on Form SB-2 (Registration No. 33-61492C) under the caption Description of
Securities.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, subsequent to the date of this
Prospectus and prior to the termination of the offering described herein shall
be deemed to be incorporated by reference in this Prospectus from the respective
dates those documents are filed. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus has been delivered, on the written or oral request of such
person, a copy of any or all of the documents referred to above which have been,
or may be, incorporated in this Prospectus by reference, other than exhibits to
such documents. Request for such copies should be directed to Innovative Gaming
Corporation of America, 4750 Turbo Circle, Reno, Nevada 89502, Attention: Edward
G. Stevenson, President and Chief Executive Officer.
RECENT DEVELOPMENTS
On May 23, 1996, the Company received unanimous approval by the Nevada
Gaming Commission for licensure as a manufacturer, distributor and slot operator
in the State of Nevada. The Company is now eligible to submit its products to
the Nevada gaming officials for approval.
On May 28, 1996, the Company's shareholders approved increasing the
shares reserved for issuance under the Company's 1992 Stock Option Plan by
445,000.
In July 1996, the Company announced that as part of its restructuring,
that Chief Operating Officer Barry Fentz was no longer with the Company.
On August 23, 1996 the Company received approval from the Nevada Gaming
Commission for a "public offering" with respect to the registration of the
warrants to purchase 125,000 Shares of Common Stock and 500,000 Shares of Common
Stock. Neither the Nevada Gaming Commission, nor any other gaming authority has
passed upon the accuracy or adequacy of this registration statement or the
investment merits of the Common Stock hereby registered.
RISK FACTORS
Each prospective investor should carefully consider the following
factors, among others, prior to purchasing any of the securities offered hereby.
NEW AND EXPANDING BUSINESSES
The Company is continuing to expand and diversify its business by
developing and introducing new products and entering into new lines of business
that complement and enhance the Company's existing businesses. The Company faces
the risks, expenses and difficulties frequently encountered by new and rapidly
expanding businesses, including, but not limited to, fluctuating cash flow,
initial high development costs of new products without corresponding sales
pending receipt of regulatory approvals and market introduction and acceptance
of new products. There is no assurance that the Company's products will be
accepted in the marketplace and that regulatory approvals will be obtained.
Furthermore, the Company will need to manage the transition to higher volume
operations, entrance into new markets, integration of operations, control of
overhead expense and the addition, training and management of qualified
personnel.
The Company's successful entry as a gaming machine manufacturer and
supplier is dependent upon numerous factors, including its ability to design,
manufacture, market and service gaming machines that achieve player and casino
acceptance while maintaining product quality and acceptable margins and to
compete against gaming machine suppliers with greater financial resources, name
recognition and established service networks and customer relationships. The
Company believes that it will need to develop gaming machines that offer
technological advantages or unique entertainment features in order for the
Company to be able to compete effectively in the gaming machine market.
RAPIDLY CHANGING TECHNOLOGY
The Company's business is characterized by rapidly changing technology
and frequent new product introductions and enhancements. The Company's success
will depend in part on its ability to continue to enhance its existing products
and to introduce in a timely manner new products that meet evolving customer
requirements and achieve market acceptance. There can be no assurance that the
Company will be successful in identifying, developing and marketing new products
or enhancing its existing products. The Company's business will be adversely
affected if the Company experiences delays in developing new products or
enhancements or if such products or enhancements do not gain customer
acceptance.
COMPETITION
The market for gaming machines is very competitive. There are a number
of established, well-financed and well-known companies that compete with the
Company's products. The Company will also compete with other established gaming
machine manufacturers such as International Game Technology, Bally Gaming
International, Inc., WMS Gaming, Inc. and Sigma Gaming, Inc. The development of
a successful new product or product design by a competitor could adversely
affect sales of the Company's products and, although the Company would endeavor
to respond quickly with its own competing products, no assurance can be made
that a significant new product designed by a competitor would not have a
material adverse effect on the Company's results of operations.
FACTORS AFFECTING PROFITABILITY AND GROWTH
All of the Company's revenues and profits are derived from the gaming
industry. The continued profitability and growth of the Company's business is
substantially dependent upon factors that are beyond the control of the Company,
including, among others, the pace of development, expansion and renovation of
casinos and other forms of casino gaming in new jurisdictions, the continued
popularity of casino gaming as a leisure activity. The expansion of the gaming
industry has slowed in recent years and the continued expansion of gaming
markets is dependent upon political, legal and other factors which are beyond
the control of the Company. As a result of these and other factors, there is no
assurance of the Company's continued growth or profitability.
DEPENDENCE UPON RELATIONSHIP WITH VENDORS AND SUPPLIERS
The Company has historically utilized one of its suppliers to
facilitate the flow of various parts and components from Japanese vendors. The
Company is not obligated to purchase parts and components from any specific
vendor and is not subject to any minimum purchase requirements. On February 2,
1996, the Company negotiated pricing for a minimum of two years for specific
electronic components with its Japanese suppliers in its efforts to reduce
product cost. With pricing of certain electronic parts solidified by contract,
the Company is utilizing a more domestic base of vendors for the balance of
components to reduce the reliance on exchange rate sensitivities. A significant
interruption or delay in the delivery of components from suppliers could have a
material adverse effect on the Company's results of operations.
PRODUCT PROTECTION
The Company's business is dependent upon its ability to protect its
proprietary software, hardware and other intellectual property. The Company
relies primarily on a combination of non-disclosure agreements for its key
employees, license agreements with its customers and suppliers and trade secret
protection to protect such intellectual property. Despite the Company's
precautions, it may be possible for unauthorized parties to copy or to "reverse
engineer" certain portions of the Company's products or to obtain and use
information that the Company believes is proprietary. Therefore, there is no
assurance that precautionary steps taken by the Company in this regard will be
adequate to deter misappropriation of its intellectual property or independent
third party development of functionally equivalent products or that the Company
can meaningfully protect its rights to such proprietary intellectual property.
The Company relies on a combination of patent, trade secret, copyright
and trademark law, nondisclosure agreements and technical security measures to
protect its rights pertaining to its products. The Company holds the patent for
Video Blackjack , Live Video Craps and Live Video Roulette. There can be no
assurance that such patents are valid. The Company may file for patents on
certain features of products that the Company may develop in the future. No
assurance can be given that, if applied for, any patents will be issued, or, if
issued, that such patents will be valid or will provide any significant
competitive protection for such products. Only certain features of Video
Blackjack, Live Video Craps, and any other products the Company may develop in
the future may be eligible for patent protection. Such protection may not
preclude competitors from developing products with features similar to the
Company's products.
GOVERNMENT REGULATION
The manufacture, distribution, sale and operation of gaming machines
are subject to extensive federal, state, provincial, tribal, and local
regulation, including licensing requirements. These regulations are constantly
changing and evolving, and may permit additional gaming or curtail gaming in
various jurisdiction in the future, which may have a material adverse impact on
the Company. The Company, its key personnel, and the Company's gaming machines
are required to hold various licenses from each jurisdiction in which the
Company does business. Generally, regulatory authorities have broad discretion
when granting, renewing or revoking such licenses. The failure of the Company,
any of its key personnel, or its gaming machines to obtain or retain a license
in any jurisdiction could have a material adverse effect on the Company or on
the ability of the Company, its key personnel, and its gaming machines to obtain
or retain required licenses in other jurisdictions. If the Company enters into
lease participation agreements under which the Company shares in the revenues
generated by gaming machines, the Company may be subject to additional
regulation as a gaming operator. Regulatory authorities may require significant
shareholders to submit to background investigations and respond to questions
from regulatory authorities, and may revoke the Company's licenses based upon
their findings.
Generally, holders of 10% or more of a corporation's common stock are
deemed significant shareholders, but certain jurisdictions, including Wisconsin,
have thresholds as low as 3%. Upon becoming licensed in certain jurisdictions,
including Mississippi, Nevada, and New Jersey, the Company may be required to
obtain such jurisdictions' prior approval for activities in other jurisdictions.
No assurance can be given that such licenses, permits or approvals will be given
or renewed. Regulations must be adopted and implemented before the Company can
commence operations in certain states, and most of the regulations concerning
gaming on Indian land continue to be promulgated. The Company cannot predict the
nature of the regulatory scheme in these jurisdictions, or in any jurisdiction
that may authorize gaming operations in the future. Any such regulatory scheme
may have an adverse effect on the Company, its key personnel and its
shareholders. See "Regulation" in the Company's Form 10-K for the year ended
December 31, 1995, for additional discussion regarding governmental regulation.
POTENTIAL REVENUE AND STOCK PRICE VOLATILITY
The Company's future operating results may vary substantially from
quarter to quarter. Revenues in any quarter are substantially dependent on
regulatory approval, receipt of orders and delivery and installation in that
quarter. Because the Company's staffing and operating expenses are based on
anticipated revenue levels, and a high percentage of the Company's costs are
fixed, in the short-term, the loss of any one order, or the failure to obtain
new orders as existing orders are completed, could have a material adverse
effect or cause significant fluctuations in the Company's revenues and cash flow
from quarter to quarter. Due to these and other factors, including the general
economy, stock market conditions or announcements by the Company or its
competitors, the market price of the securities offered hereby may be highly
volatile.
DEPENDENCE ON KEY PERSONNEL
The Company is highly dependent upon the personal efforts and abilities
of certain key personnel. The loss of the services of any member of management
could have a substantial adverse effect on the Company's ability to achieve its
objectives.
ABSENCE OF DIVIDENDS
The Company has not paid any dividends on its capital stock since its
incorporation and does not intend to pay any cash dividends in the foreseeable
future. The terms of the Company's outstanding preferred stock prohibit the
payment of cash dividends.
UNDESIGNATED STOCK
The Company's authorized capital consists of 100,000,000 shares of
capital stock. The Board of Directors, without any action by the Company's
shareholders, is authorized to designate and issue shares in such classes or
series (including classes or series of preferred stock) as it deems appropriate
and to establish the rights, preferences and privileges of such shares,
including dividends, liquidation and voting rights. Other than the presently
outstanding classes of capital stock, no other class of common stock, or
preferred stock, is currently designated and there is no current plan to
designate or issue any such securities. The rights of holders of preferred stock
and other classes of commons stock that may be issued may be superior to the
rights granted to the holders of the shares. Further, the ability of the Board
of Directors to designate and issue such undesignated shares could impede or
deter an unsolicited tender offer or takeover proposal regarding the Company and
the issuance of additional shares having preferential rights could adversely
affect the, voting power and other rights of holders of Common Stock.
CONFLICTS OF INTEREST
Grand Casinos is a principal shareholder of the Company. Two directors
of the Company, Lyle Berman and Stanley M. Taube, are officers, directors and
principal shareholders of Grand Casinos. The Company and Grand Casinos have
entered into an agreement that allows casinos owned or managed by Grand Casinos
or its affiliates to purchase the Company's video gaming machines at distributor
level prices. Messrs. Berman and Taube may have conflicts of interest with
respect to this agreement, any future agreements between the Company and Grand
Casinos, and with respect to the sale of the Company's video gaming machines to
competitors of Grand Casinos.
SHARES ELIGIBLE FOR FUTURE SALE
The sale, or availability for sale, of substantial amounts of Common
Stock in the public market subsequent to this offering of Common Stock may
adversely affect the prevailing market price of Common Stock and may impair the
Company's ability to raise additional capital by the sale of its equity
securities. Assuming the exercise of all Warrants, the Company will have
6,956,515 shares of Common Stock outstanding immediately following this
offering, of which 139,000 shares will be held by executive officers and
directors of the Company and 1,025,000 shares of Common will be held by Grand
Casinos, Inc. In addition, as of August 27, 1996, the Company had 693,500 shares
of Common Stock subject to outstanding options granted under its stock option
plans and through direct grants and 102,500 shares issuable upon exercise of a
warrant issued to Grand Casinos, Inc.
MINNESOTA ANTI-TAKEOVER LAW; RESTRICTIONS IN ARTICLES OF INCORPORATION;
POTENTIAL ANTI-TAKEOVER EFFECT
The Company is subject to Minnesota statutes regulating business
combinations and restricting voting rights of certain persons acquiring shares
of the Company, which may hinder or delay a change in control of the Company.
Beneficial owners of more than certain designated percentages of the Company's
securities are subject to certain reporting and qualification procedures
established by state and federal gaming authorities. The Company is authorized
under the Company's Articles of Incorporation, and may be required, under
certain circumstances, to redeem at fair market value securities held by persons
whose status as a security holder may jeopardize the Company's eligibility to
hold gaming licenses. Such restrictions may discourage acquisitions of blocks of
the Company's securities and may have an anti-takeover effect.
USE OF PROCEEDS
The net proceeds to be received by the Company if all of the Warrants
are exercised in full is estimated to be approximately $4,300,000. The net
proceeds will be used for working capital and general corporate purposes. The
Company will not receive any proceeds from the sale of the Common Stock by the
Selling Shareholders.
SELLING SHAREHOLDERS
The following table sets forth the number of shares of the Common Stock
owned by each Selling Shareholder as of the date hereof and after giving effect
to this offering. This table does not include the aggregate of 250,000 shares of
Common Stock issuable upon exercise of the Underwriters' Warrant and the
Redeemable Warrants. All Selling Shareholders are investment bankers or
financial consultants who provided consulting services to the Company. The
Company will not receive any proceeds from the sale of the Common Stock by the
Selling Shareholders.
<TABLE>
<CAPTION>
Amount of
Beneficial Shares Offered Beneficial
Ownership Prior by Selling Ownership After
Name to the Offering Shareholders the Offering
- ---- --------------- ------------ ------------
<S> <C> <C> <C>
Ladenburg, Thalman & Co. Inc. 0% 100,000 0%
Lions Gate Capital Corp. 0% 150,000 0%
</TABLE>
PLAN OF DISTRIBUTION
The Underwriters' Warrants were originally issued and purchased in May
1993 in connection with the Company's initial public offering of its Common
Stock. Each Underwriters' Warrant entitles the holder to purchase a unit
consisting of one share of Common Stock and one Redeemable Warrant, at a price
of $6.90 per unit, until May 28, 1998. Each Redeemable Warrant entitles the
holder to purchase one share of Common Stock, at a price of $8.50 per share,
until May 30, 1997. The Company has the right to redeem the Redeemable Warrants,
at $0.01 per Redeemable Warrant, upon 30 days written notice, provided that the
closing bid price for the Common Stock exceeds $9.50 per share for any 20
consecutive trading days prior to such notice. This Registration Statement is
being filed by, and at the expense of, the Company pursuant to obligations
contained in the Underwriters' Warrants. The Company agreed to file a
registration statement under the Securities Act covering the shares of Common
Stock underlying the Underwriters' Warrants promptly from the date the Company
received a written request from the majority of the holders of the Underwriters'
Warrants and agreed to use its best efforts to cause such registration statement
to be declared effective as soon as practicable thereafter, and to use its best
efforts to keep such registration statement effective.
100,000 Selling Shareholders' Warrants were issued to Ladenburg,
Thalman & Co. Inc. in connection with investment banking services provided to
the Company. 50,000 of such warrants are exercisable at $8.00 per warrant and
50,000 of such warrants are exercisable at $9.00 per warrant. Such warrants
expire September 7, 1999.
150,000 Selling Shareholders' Warrants were issued to Lions Gate
Capital corp. in connection with investor relation services provided to the
Company. Such warrants are exercisable and expire as follows:
Number Exercise Price Expiration Date
------ -------------- ---------------
25,000 $8.00 9/7/98
25,000 $8.00 9/7/99
25,000 $10.00 9/7/98
25,000 $10.00 9/7/99
25,000 $13.00 9/7/98
25,000 $13.00 9/7/99
The Shares may be sold from time to time by the Selling Shareholders,
or 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:
(a) a block trade 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; (b) purchases by a broker of dealer as
principal and resale by such broker or dealer for its account pursuant to this
prospectus; (c) an exchange distribution in accordance with the rules of such
exchange; and (d) ordinary brokerage transactions and transactions in which the
broker solicits purchases. In effecting sales, brokers or dealers engaged by the
Selling Shareholders may arrange for other brokers or dealers to participate.
Brokers or dealers will receive commissions or discounts from Selling
Shareholders 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 of 1933, as
amended (the "Act") in connection with such sales. In addition, any securities
converted by this prospectus which qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this prospectus.
LEGAL MATTERS
Certain legal matters in connection with the validity of the securities
offered hereby will be passed upon for the Company by Maslon Edelman Borman &
Brand, a Professional Limited Liability Partnership, Minneapolis, Minnesota.
EXPERTS
The financial statements of Innovative Gaming Corporation of America as
of December 31, 1995 and for the year then-ended incorporated by reference in
this Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto and are incorporated by reference herein in reliance
upon the authority of said firm as experts in giving said report.
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING MADE 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 SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OFFERED HEREBY TO ANY PERSON
IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
- -------------------------------
TABLE OF CONTENTS
- ------------------------------- PAGE
----
ADDITIONAL INFORMATION.......................................................2
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE........................................................2
RECENT DEVELOPMENTS..........................................................3
RISK FACTORS.................................................................4
USE OF PROCEEDS..............................................................8
SELLING SHAREHOLDERS.........................................................9
PLAN OF DISTRIBUTION........................................................10
LEGAL MATTERS...............................................................11
EXPERTS ...................................................................11
INNOVATIVE GAMING
CORPORATION OF AMERICA
500,000 SHARES
OF
COMMON STOCK
125,000 WARRANTS
TO PURCHASE
SHARES OF COMMON STOCK
---------------------
PROSPECTUS
---------------------
___________________, 1996
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution
of the securities registered hereby, other than underwriting discounts and fees,
are set forth in the following table:
Securities and Exchange Commission 2,215.52
Registration Fee
Accounting Fees 5,000.00
Legal Fees and Expenses 15,000.00
Miscellaneous 2,784.48
----------
Total 25 ,000.00
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is governed by Minnesota Statutes Chapter 302A. Minnesota
Statutes Section 302A.521 provides that a corporation shall indemnify any person
made or threatened to be made a party to any proceeding by reason of the former
or present official capacity of such person against judgments, penalties, fines,
including, without limitation, excise taxes assessed against such person with
respect to an employee benefit plan, settlements, and reasonable expenses,
including attorney's fees and disbursements, incurred by such person in
connection with the proceeding, if, with respect to the acts or omissions of
such person complained of in the proceeding, such person has not been
indemnified by another organization or employee benefit plan for the same
expenses with respect to the same acts or omissions; acted in good faith;
received no improper personal benefit and Section 302A.255, if applicable, has
been satisfied; in the case of a criminal proceeding, had no reasonable cause to
believe the conduct was unlawful; and in the case of acts or omissions by
persons in their official capacity for the corporation, reasonably believed that
the conduct was in the best interests of the corporation, or in the case of acts
or omissions by persons in their capacity for other organizations, reasonably
believed that the conduct was not opposed to the best interests of the
corporation. Subdivision 4 of Section 302A.521 of the Minnesota Statutes
provides that a company's articles of incorporation or bylaws may prohibit such
indemnification or place limits upon the same. The Company's articles and bylaws
do not include any such prohibition or limitation. As a result, the Company is
bound by the indemnification provisions set forth in Section 302A.521 of the
Minnesota Statutes.
As permitted by Section 302A.251 of the Minnesota Statutes, the
Articles of Incorporation of the Company provide that a director shall have no
personal liability to the Company and its shareholders for breach of his
fiduciary duty as a director, to the fullest extent permitted by law. The
Underwriting Agreement contains provisions under which the Company, on the one
hand, and the Underwriters, on the other hand, have agreed to indemnify each
other (including officers and directors of the Company and the Underwriters, and
any person who may be deemed to control the Company or the Underwriters) against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended.
ITEM 16. EXHIBITS.
EXHIBIT DESCRIPTION OF DOCUMENT
5 Opinion of Maslon Edelman Borman & Brand, a Professional
Limited Liability Partnership. (1)
23(1) Consent of Arthur Andersen LLP.
23(2) Consent of Maslon Edelman Borman & Brand, a Professional
Limited Liability Partnership
(included in Exhibit 5). (1)
24 Power of Attorney. (2)
-------------------
(1) Previously filed.
(2) Previously filed with respect to Edward G. Stevenson, Lyle Berman and
Stanley M. Taube and included herein on page II-3 for Scott Shackelton.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
to reflect in the Prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement; and (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;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 1 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Minneapolis, State of Minnesota, on August 27, 1996.
INNOVATIVE GAMING CORPORATION OF AMERICA
Registrant
By:
Name: Edward G. Stevenson
Title: President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that Scott Shackleton whose signature
appears below hereby constitutes and appoints Edward G. Stevenson and Craig M.
Bullis, each or either of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him or her and in
his or her name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and to file the same with all exhibits thereto, and other documents in
connection therewith with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his or her substitutes,
may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on the 27th day of August, 1996 by
the following persons in the capacities indicated:
SIGNATURE TITLE
/s/ Edward G. Stevenson President, Chief Executive Officer
Edward G. Stevenson and Director
(principal executive officer)
/s/ Scott Shackelton Chief Financial Officer
Scott Shackelton (principal financial officer)
*
Lyle Berman Director
*
Stanley M. Taube Director
*By /s/ Edward G. Stevenson
Edward G. Stevenson,
Attorney-in-Fact
EXHIBIT INDEX
EXHIBIT DESCRIPTION OF DOCUMENT PAGE
23(1) Consent of Arthur Andersen LLP.
Ex. -23.1
Auditors Consent
EXHIBIT 23(1)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement (Amendment No. 1) of
our report dated March 13, 1996 included in the Innovative Gaming Corporation of
America's Annual Report on Form 10-K for the year ended December 31, 1995 and to
all references to our firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
August 26, 1996
