As filed with the Securities and Exchange Commission on July 7, 1997
Registration No. 333-05105
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 2
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COUNTRY STAR RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 62-1536550
(State or other juris- (I.R.S. Employer Identi-
diction of incorpora- fication number)
tion or organization)
4929 Wilshire Boulevard, Los Angeles, California 90010 213/634-5588
(Name, address, including zip code, and telephone number, including area code,
of registrant's principal executive office)
--------------------
DAN J. RUBIN, CHIEF EXECUTIVE OFFICER
COUNTRY STAR RESTAURANTS, INC.
4929 Wilshire Boulevard
Los Angeles, California 90010
213/634-5588
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
COPIES TO:
ROBERT L. DAVIDSON, ESQ.
WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP
270 MADISON AVENUE
NEW YORK, NEW YORK 10016
Telephone No. 212/545-4600
Facsimile No. 212/686-0114
Approximate date of commencement of proposed sale to the public: As soon as
practicable after effective date of the 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]
(continued overleaf)
<PAGE>
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 future 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.
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed
Proposed Maximum
Title of each Amount Maximum Aggregate Amount of
class of securities to be Offering Price Offering Registration
to be registered Registered Per Share(1) Price(1) Fee
- --------------------------------------------------------------------------------
Common Stock
Par Value
$.001 Per Share 2,955,419 $.5313 $1,570,214 $475.82(2)
================================================================================
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c).
(2) Registrant previously paid $371.65 in connection with the filing of Post
Effective Amendment No. 1 to this Registration Statement. The balance due
of $104.17 has been paid with the filing of this Post Effective Amendment
No. 2.
<PAGE>
CROSS-REFERENCE SHEET
Pursuant to Item 501(b)
Item Number and Caption Location or Heading
in Form S-3 in Prospectus
- ----------------------- -------------------
1. Forepart of Registration Facing Page or Registra-
Statement and Outside Front tion Statement: Cover
Cover Page of Prospectus. Page of Prospectus.
2. Inside Front and Outside Inside Front and Outside
Back Cover Pages of Prospectus. Back Cover Pages of
Prospectus.
3. Summary Information, Risk Prospectus Summary; The
Factors and Ratio of Earnings Company; Risk Factors.
to Fixed Charges.
4. Use of Proceeds. Prospectus Summary.
5. Determination of Offering Price. *
6. Dilution. *
7. Selling Security Holders. Cover Page; Selling
Shareholders.
8. Plan of Distribution. Cover Page; Plan of
Distribution.
9. Description of Securities to Incorporation of Certain
be Registered. Documents by Reference.
10. Interests of Named Experts *
and Counsel.
11. Material Changes The Company; Risk Factors
Description of Capital;
Stock.
12. Incorporation of Certain Infor- Incorporation of Certain
mation by Reference. Documents by Reference.
13. Disclosure of Commission Position *
on Indemnification for Securities
Act Liabilities.
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* Omitted as not applicable.
<PAGE>
DATED July 7, 1997
PROSPECTUS
COUNTRY STAR RESTAURANTS, INC.
2,955,419 shares of Common Stock
$.001 par value per share
This Prospectus relates to (i) 1,003,989 shares of common stock, $.001 par
value (the "Common Stock"), of Country Star Restaurants, Inc., a Delaware
corporation (the "Company"), held by, and which may be offered from time to time
by, a number of persons and entities (collectively, the "Selling Stockholders"),
and (ii) 1,951,430 shares of Common Stock issuable upon the exercise of
1,951,430 common stock purchase warrants (the "Warrants") issued to, and which
may be exercised and offered from time to time by certain of the Selling
Stockholders. The shares of Common Stock registered hereunder and issuable upon
the exercise of the Warrants are sometimes referred to as the "Securities." All
costs in connection with the registration of the Securities are being borne by
the Company. See "Selling Stockholders." The Company will not receive any of the
proceeds from the sale of the Securities pursuant to this Prospectus, although
the Company will receive net proceeds from the exercise of Warrants equal to the
exercise prices thereof which range from $.21 to $3.00 per share.
The Common Stock is quoted on the NASDAQ National Market under the symbol
"CAFE." The last reported bid and asked price of the Common Stock on NASDAQ on
May 28, 1997 were $3/8 and $13/32, per share, respectively.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE PURCHASED ONLY
BY THOSE PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. THE COMPANY HAS
INCURRED SUBSTANTIAL OPERATING LOSSES. SEE "RISK FACTORS" BEGINNING ON PAGE 4.
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.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY
STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
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The Selling Stockholders directly or through agents, dealers or
underwriters to be designated from time to time may sell the Securities on terms
to be determined at the time of sale. To the extent required, the number of
Securities to be sold, the respective purchase price and public offering price,
the name of any agent, dealer or underwriter and any applicable commissions or
discounts with respect to a particular offer will be set forth in and
accompanied by a Prospectus Supplement. See "Plan of Distribution."
The Selling Stockholders and any agents, dealers or underwriters that
participate with the Selling Stockholders in the distribution of their shares
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), and any commissions received by them
and any profits on the resale of the Selling Stockholders' shares, may be deemed
to be underwriting commissions or discounts under the Securities Act. Under
applicable rules and regulations promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), any person engaged in a distribution
of securities may not simultaneously bid for or purchase securities of the same
class for a period of two (2) business days prior to the commencement of such
distribution. In addition, and without limiting the foregoing, the Selling
Stockholders will be subject to the applicable provisions of the Exchange Act
and the rules and regulations thereunder, including, without limitation, Rules
10b-2, 10b-5, 10b-6 and 10b-7, in connection with transactions in the Securities
during the effectiveness of the Registration Statement of which this Prospectus
forms a part. All of the foregoing may affect the marketability of the
Securities.
The date of this Prospectus is July 7, 1997.
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company in accordance with the Exchange Act
can be inspected and copies made at the public reference facilities maintained
by the Commission at Room 1204, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661 and 7 World Trade Center, New York, New York
10048. Copies of such material can be obtained at prescribed rates from the
public reference section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments thereto, the "Registration Statement"), with
respect to the Securities offered hereby. As permitted by the rules and
regulations of the Commission, this Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information about the Company and the Securities
offered hereby, reference is made to the Registration Statement and the exhibits
thereto, which may be examined without charge at the public reference facilities
maintained by the Commission at Room 1204, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies of which may be obtained from the
Commission upon payment of the prescribed fees.
No person has been authorized by the Company to give any information or to
make any representation other than as contained in this Prospectus and, if given
or made, such information or representation must not be relied upon as having
been authorized by the Company. Neither the delivery of this Prospectus nor any
distribution of the shares of the Common Stock issuable under the terms of this
Prospectus, under any circumstances, create any implication that there has been
no change in the affairs of the Company since the date hereof.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference the following documents
heretofore filed with the Commission: the Annual Report of the Company on Form
10-KSB for the fiscal year ended December 31, 1996 and Amendment No. 1 to such
Report dated April 29, 1997; the Current Reports of the Company on Form 8-K
dated January 5, 1996 and March 18, 1996; the Current Reports of the Company on
Form 8-K dated January 16, 1997, February 12, 1997, March 29, 1997, April 21,
1997, May 7, 1997 and May 28, 1997; and the Quarterly Report of the Company on
Form 10-QSB for the period ended March 31, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering hereby shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated herein by
reference shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein (or in any other
subsequently filed document which also is incorporated herein by reference)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed to constitute a part hereof except as so modified or
superseded.
The Company will provide, without charge to each person to whom a
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated herein by reference, other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into the information that is incorporated into the Prospectus. Such
written requests should be directed to the Secretary of the Company at 4929
Wilshire Boulevard, Suite 428, Los Angeles, California 90010, 213/634-5588.
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<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
descriptions and financial information and statements appearing elsewhere in
this Prospectus and the documents incorporated herein by reference.
The Company
The Company, Country Star Restaurants, Inc., develops, constructs, owns and
operates country music theme restaurants combining high quality, moderately
priced food with a casual, family oriented environment.
The Company's principal offices are located at 4929 Wilshire Boulevard,
Suite 428, Los Angeles, California 90010, 213/634-5588.
The Offering
Up to 2,955,419 shares of Common Stock are being offered pursuant to this
Prospectus which may be offered from time to time by the Selling Stockholders
for their own account.
Plan of Distribution
The Selling Stockholders, directly or through agents or underwriters, may
offer and sell from time to time all or any part of the Securities held by them
in amounts and on terms to be determined or at quoted prices then prevailing on
the NASDAQ National Market. See "Plan of Distribution."
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<PAGE>
RISK FACTORS
Investment in the Company's securities involves a high degree of risk.
Investors should carefully consider the following factors, among others,
relating to the Company.
Continuing Losses; Going Concern Qualification; Inability to Pay Current
Trade Debt. The Company opened its first Country Star Restaurant in August, 1994
and two more restaurants in 1996. The Company has continued to incur operating
losses. For the fiscal year ended December 31, 1996, the Company had a net loss
of $16,780,000. The Company's independent certified public accountants have
rendered a going concern qualification to their opinion on the Company's 1996
financial statements and stated that the Company has experienced significant
losses in 1995 and 1996, and is experiencing cash flow shortages and that these
factors "raise substantial doubt about the Company's ability to continue as a
going concern." See Report of Independent Certified Public Accountants, dated
April 11, 1997 in the Company's Annual Report on Form 10-KSB to Stockholders for
1996. The Company has been unable to fully pay trade debt to its creditors and
has made a written offer to all creditors to settle outstanding claims on the
basis of $.40 for every dollar of debt. The Company's ability to generate
operating and net income in the future will depend on the success of its
operating restaurants, and the successful implementation of its expansion
strategy. There can be no assurance that the Company will be profitable in the
future.
Need for Additional Capital and Financing. During 1996 the Company
continued to fund its operations by the private sale of the Company's equity
securities and development financing arrangements relating to Country Star Las
Vegas. The Company anticipates that it will continue to have substantial capital
needs that cannot be funded completely from operations and will be required to
raise additional capital through equity or debt financings. Such sources of
financing, if available, may include bank financing, third party equity
investors, capital leases, private limited partnerships, joint venture financing
and sale leaseback arrangements.
The Company has entered into a definitive agreement with NevStar
Restaurants, LLC ("NevStar") that provides, among other things, for (i) $4.5
million of equity financing for Country Star Las Vegas, and (ii) the right to
provide up to an additional $12.5 million of equity financing for future Country
Star Restaurants (the "Development Financing Agreement"). In the event that
NevStar does not provide any additional financing to the Company other than with
respect to Country Star Las Vegas, and in the event that the Company were not
successful in securing any other sources of financing on terms and conditions
acceptable
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<PAGE>
to the Company, or at all, the Company's expansion strategy would be materially
adversely affected.
Control by and Dependence Upon Chief Executive Officer and a Principal
Lender. The Company's Chief Executive Officer and President, Dan Rubin, is also
a principal lender to the Company and has the right to appoint three members of
the Board of Directors. The Company is subject to the control of Mr. Rubin and
is dependent upon his services for the operation of the Company and its
business. The loans made to the Company by Mr. Rubin, an institutional investor
and certain other investors are secured by a lien on substantially all of the
assets of the Company. Under this secured financing arrangement Mr. Rubin made
available to the Company a $3,500,000 line of credit loan of which $500,000 has
been lent and additional advances may be made in his discretion.
Atlanta Restaurant Litigation; Contractor Lien Claims. The Company's
landlord with respect to the Atlanta restaurant instituted litigation during
April, 1997 alleging that the Company is holding over in the premises beyond the
leased term and seeking to have the Atlanta Restaurant turned over to it. The
landlord previously notified the Company that it was in default under its lease
obligations and alluded to the following alleged events of default, among
others: (i) the alleged failure to achieve lien-free completion of the Atlanta
restaurant; (ii) the alleged abandonment by the Company of the Atlanta
restaurant; and (iii) the alleged failure of the Company to remedy certain
construction defects. The Company intends to defend the action vigorously. The
Company contends that many of the landlord's allegations of default were false,
that others which were not false have been cured and that others were directly
caused by the landlord's bad faith in performing its obligations under the
lease. Certain contractors have filed lien claims, of approximately $1,200,000
against the Company's Atlanta and Las Vegas restaurants that have not been
cleared by the posting of a bond or any payment. Of that amount, the Company
believes that approximately $600,000 represent invalid lien claims, either
because the contractor has already been paid, or because the contractor did not
perform agreed upon services or provide agreed upon materials or because the
liens have been bonded.
NASD Review of Common Stock Listing: The National Association of Securities
Dealers, Inc. (the "NASD") has advised the Company that the NASD is reviewing
the eligibility of the Company's Common Stock to continue to be included in the
NASD National Market stock listings. The NASD's decision on eligibility will
consider financial and market factors, some of which may not be fully satisfied
by the Company. If the Company is unable to satisfy the NASDAQ requirements for
continued listing in the National Market System or other NASDAQ listings,
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<PAGE>
trading of the Common Stock may thereafter be conducted in the over-the-counter
market in the so-called "pink sheets" or NASDAQ's OTC Bulletin Board. As a
result, the liquidity of the Company's Common Stock could be impaired.
Site Locations. The choice of site location for each Country Star
Restaurant is extremely important to the potential success of the particular
establishment. The Company will be competing with a wide range of establishments
in attempting to identify and secure desirable locations. Although the Company
believes that it will be able to locate additional suitable sites, there can be
no assurance that such sites will be available or viable or on economic terms
acceptable to the Company.
Development and Construction Delays. In connection with the development and
construction of the Country Star Restaurants, a number of events over which the
Company will have no control could occur which might materially adversely affect
the costs and completion time of such projects. Such events include governmental
regulatory approvals, shortages of or the inability to obtain labor and/or
materials, inability of the general contractor or subcontractors to perform
under their contracts, strikes, adverse weather conditions and acts of God,
availability and cost of needed debt or lease financing, and changes in Federal,
state or local laws or regulations. In addition, the Company will also be
dependent on unaffiliated third parties to complete the construction of its
Country Star Restaurants. Accordingly, there can be no assurance that the
Company will be able to complete any Country Star Restaurant in a timely manner
or within its proposed budget.
Need for Additional Personnel. The Company's ability to successfully open
and operate additional Country Star Restaurants will depend upon the Company's
hiring and retaining additional personnel who are experienced in the operation
of casual dining restaurants, of which there can be no assurance. The Company's
failure to hire additional experienced personnel will have a material adverse
effect on the ability of the Company to open and successfully operate Country
Star Restaurants and to expand its operations thereafter.
Significant Industry Competition; Special Restaurant Industry
Considerations. The restaurant industry is intensely competitive with respect to
price, service, location and food quality. There are many competitors of the
Company, such as Planet Hollywood(R) and Hard Rock Cafe(R), that are better
established, have substantially greater financial, marketing and other
resources, have been in existence for a substantially longer period of time and
have greater name brand recognition. Further, the restaurant industry is
significantly affected by many external factors, including
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<PAGE>
changes in the national economy or in regional or local economics, changes in
the demographics of areas in which restaurants are situated, changes in consumer
preferences and demands (including increased awareness of nutrition), and
increases in the number and density of restaurants in a particular locale.
Factors such as inflation and food costs may also affect the restaurant
industry. There can be no assurance that the Company will be able to
successfully compete in the restaurant industry. Further, casinos in Las Vegas,
in an attempt to attract patrons, will often subsidize restaurants located on
their premises. Country Star Las Vegas will also have to compete with those
restaurants which, because they are subsidized by the casinos in which they are
located, are able to offer reduced prices. Nevertheless, the Company does not
intend to adopt a special pricing strategy for Country Star Las Vegas, as the
Company does not believe that the failure to do so will have a material adverse
effect on the Company.
Intellectual Property Rights. The Company has made such appropriate filings
and registrations that it has deemed appropriate and sufficient in its business
judgment to protect the Company's name in all appropriate categories, and taken
such other actions necessary to obtain and protect all trademarks, copyrights,
tradenames, tradedress and all other intellectual property rights, relating to
its Country Star Restaurants, although there can be no assurance that the
Company will be able to effectively protect its rights. To date, the Company has
been issued a Federal registration by the United States Patent and Trademark
Office for the "Country Star" trademark for clothing and restaurant services.
Third parties may attempt to exercise alleged rights in any of the trademarks,
copyrights or other intellectual property rights or appropriate any trademarks,
copyrights, or other intellectual property rights established by the Company,
and the Company's failure or inability to establish appropriate copyrights and
trademarks, or to adequately protect any of its intellectual property rights,
may have a material adverse effect on the Company.
Potential Anti-Takeover Effect of Development Financing Agreement. The
Development Financing Agreement provides that in the event of a takeover of the
Company, NevStar shall have the right, at its option, to cause a potential
acquiror to purchase, at a pre-determined formula, NevStar's equity interest in
some or all of the Country Star Restaurants that it has financed. Since under
the Development Financing Agreement up to five (5) Country Star Restaurants may
receive financing, the added cost to a potential acquiror to acquire such
interests may be significant, and thus may be a deterrent to such potential
acquiror deciding to purchase the Company.
No Dividends with Respect to Common stock. The Company has not paid any
dividends since inception and does not intend to pay
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<PAGE>
dividends in the foreseeable future with respect to its Common Stock.
Anti-Takeover Law: Issuance of Other Stock. The Company is subject to the
provisions of Section 203 of the General Corporation Law of Delaware, an
anti-takeover statute enacted in 1988. As a result of Section 203, potential
acquirors of the Company may be discouraged from attempting to effect
acquisition transactions with the Company, thereby possibly depriving holders of
the Company's securities of certain opportunities to sell or otherwise dispose
of such securities at above-market prices pursuant to such transactions.
In addition, the board of directors of the Company (the "Board of
Directors") may issue one or more series of preferred stock or additional Common
Stock without any action on the part of the stockholders of the Company, the
existence and/or terms of which may adversely affect the rights of holders of
the Common Stock or the Preferred Stock. In addition, the issuance of any such
additional preferred stock or Common Stock may be used as an "anti-takeover"
device without further action on the part of the stockholders. Issuance of
additional preferred stock or Common Stock, which may be accomplished through a
public offering or a private placement to parties favorable to current
management, may dilute the voting power of holders of Common Stock (such as by
issuing preferred stock with super voting rights) and may render more difficult
the removal of current management, even if such removal may be in the
stockholders' best interests.
Government Regulation. The Company is subject to various Federal, state and
local laws affecting its business. Each of the Company's restaurants will be
subject to licensing regulation by numerous governmental authorities, which may
include alcohol beverage control, building, health and safety, and fire agencies
in the state or municipality in which the restaurant is located. Difficulties in
obtaining or failure to obtain the necessary licenses or approvals could delay
or prevent the development of a new restaurant in an area.
Alcoholic beverage control regulations in each state require that the
Company's restaurants apply to the specific state authority and, in certain
locations, county and municipal authorities for a license or permit to sell
alcoholic beverages on the premises and to provide service for extended hours
and on Sundays. Typically, an alcoholic beverage license must be renewed
annually and may be revoked or suspended for cause at any time. Alcohol beverage
control regulations relate to numerous aspects of the daily operations of the
Company's restaurants, including minimum age of patrons and employees, hours of
operation, advertising, wholesale purchasing, inventory control and handling,
and storage and dispensing of alcoholic beverages.
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The failure of a restaurant to obtain or retain a liquor or food service license
would adversely affect the particular restaurant's operations.
Restaurants in most states are subject to "dram shop" laws and legislation,
which imposes liability on licensed alcoholic beverage servers for injuries or
damages caused by their negligent service of alcoholic beverages to a visibly
intoxicated person or to a minor, if such service is the proximate cause of the
injury or damage and such injury or damage is reasonably foreseeable. The
Company maintains liquor liability insurance as part of its existing
comprehensive general liability insurance, which it believes to be adequate to
protect against such liability, although there can be no assurance that it will
not be subject to a judgment in excess of such insurance coverage or that it
will be able to continue to maintain such insurance coverage at reasonable costs
or at all. The imposition of a judgment substantially in excess of the Company's
insurance coverage would have a material adverse effect on the Company. In the
event that such insurance coverage were to become unavailable in the future, it
could materially and adversely affect the Company.
The Company does not presently intend to install and operate any slot
machines for its own account in Country Star Las Vegas. In the event the Company
were to decide in the future to install and operate any slot machines in Country
Star Las Vegas for its own account, it would first be required to obtain the
necessary gaming approvals from the appropriate regulatory authorities in the
State of Nevada. The ownership and operation of casino gaming facilities and
slot machine routes in Nevada and the manufacture and distribution of gaming
devices in Nevada are subject to the Nevada Act and to licensing and regulatory
control by the Nevada State Gaming Control Board (the "Nevada Board"), the
Nevada Gaming Commission (the "Nevada Commission") and various local, city and
county regulatory agencies (collectively, the "Nevada Gaming Authorities").
Obtaining the necessary approvals, of which there can be no assurance, is a
lengthy and costly process. To date, the Company has not sought any such
approvals.
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THE COMPANY
General
Country Star Restaurants, Inc. (the "Company"), which was formed in May
1993, develops, constructs, owns and operates country music theme restaurants
combining high quality, moderately priced food with a casual, family-oriented
environment. World renowned rodeo personalities including Ty Murray, Charmayne
James and Joe Beaver and country music television personalities Lorianne Crook
and Charlie Chase serve as celebrity representatives and spokespersons for the
Company and endorse the Country Star Restaurants. The Company is also currently
seeking country music recording artists to serve as celebrity representatives.
The first Country Star(R) Restaurant opened in August 1994 in Hollywood,
California adjacent to Universal Studios Hollywood and the Universal Citywalk
development, a major tourist attraction. In 1996 the Company opened Country Star
Las Vegas on the "strip" in Las Vegas and Country Star Atlanta in the heart of
Buckhead. Each Country Star restaurant features an exciting, entertaining dining
experience, including an extensive display of country music memorabilia and
artifacts, video monitors, audio listening posts, and interactive audio-video
kiosks. The menus feature moderately priced American and country-style food such
as ribs, chili, chicken, burgers, salad, pizza, fish and desserts, which was
developed to be consistently reproducible domestically and internationally. Each
restaurant also sells a variety of merchandise with the Country Star logo,
including casual clothing, food products and other related items.
In recent years theme restaurants have gained increasing popularity, as a
number of such restaurants featuring a variety of different themes have opened.
The two most popular and well known restaurants of this genre are Planet
Hollywood(R) and Hard Rock Cafe(R), both of which combine an entertainment
component with a casual dining atmosphere. Aside from enhancing the dining
experience, the entertainment component also provides an additional revenue
stream, predominantly from merchandise sales. Patrons of theme restaurants have
evidenced a willingness to purchase souvenir T-shirts, hats, mugs, and other
items bearing the logo and reflecting the lifestyle of the particular theme
restaurant. These retail sales are typically at higher profit margins than food
and beverage sales, inclusive of labor costs.
The Company believes that its country music theme provides a distinctly
American experience which, combined with its casual, high-quality dining in a
state-of-the-art multimedia environment, is a format with wide demographic
appeal. The Company believes that the country music theme is an under-exploited
segment of
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quality dining in the restaurant industry and will fill a niche in the casual
dining segment of the restaurant industry, and therefore represents an
attractive opportunity for the Company.
Calendar year 1996 was a difficult one for the Company. The Company's
strategy entering 1996 was to develop and operate three flagship Country Star
Restaurants in key locations and then to replicate the Country Star concept in a
limited number of smaller restaurants that would be less expensive to develop
and construct. In accordance with this strategy, the Company opened two
additional flagship restaurants: Country Star Las Vegas commenced operations in
July, 1996 and Country Star Atlanta commenced operations in October, 1996. No
plans for opening any other restaurants have been finalized.
Unanticipated financial problems have arisen with respect to both the Las
Vegas and Atlanta restaurants. Operating expenses at both sites have
substantially exceeded budget. In addition, the Atlanta restaurant suffered from
substantial construction cost overruns and a delayed opening which prevented the
restaurant from operating during the 1996 Summer Olympics, which were held in
Atlanta. By early 1997, as a result of the mounting losses at the Las Vegas and
Atlanta restaurants, management determined that a major overhaul of corporate
strategy was required.
The most significant step taken was a change of management effected on
February 12, 1997, in which Dan Rubin, an investor in the Company, became Chief
Executive Officer and President. Immediately prior to Mr. Rubin assuming office,
a new Board of Directors was appointed to manage the Company.
In order to stem the rising operating losses and endeavor to put the
Company on a financially solvent course, management has taken a number of
interim and permanent measures.
First, management has temporarily closed the Atlanta restaurant with a
projected re-opening during Summer, 1997, and a gala re-opening party planned
for the week of July 4, 1997. Although the restaurant was completed and fully
staffed in late 1996, the restaurant has realized extremely limited customer
revenues. Management determined that the continued operation of the restaurant
as an under utilized establishment would only hurt the restaurant's
opportunities for long term success. Management intends that the re-opening be
accompanied by suitable publicity and news coverage in order to attract customer
interest. Management deemed it important to close the restaurant rather than
allow it to develop an unfavorable reputation in Atlanta.
Second, the Company has shifted the theme of its restaurants from "country
music" to "country." Although the country music
-11-
<PAGE>
recording stars that previously endorsed the Company have not renewed their
agreements with the Company, the Company is seeking new country music stars to
serve as celebrity representatives and the Company continues to enjoy the
endorsements of country music television personalities such as Lorianne Crook
and Charlie Chase. In addition, the Company has obtained as celebrity
representatives and spokespersons many representatives of the rodeo circuit,
including Ty Murray, the world rodeo champion. The Company's three restaurants
continue to emphasize their country music roots through extensive displays of
country music memorabilia and artifacts, video monitors, listening posts and
interactive audio-video kiosks for use by patrons. Management plans to increase
the use of live entertainment at all of its restaurants in order to attract
additional customers.
Third, management has determined that the best strategy for expansion will
be through joint ventures and licensing arrangements under which additional
Country Star Restaurants could be opened without the Company being required to
incur expensive construction, development and pre-opening costs. Management has
identified a number of publicly held and private companies that have indicated
strong interest in working with Country Star on a joint venture or licensing
basis.
Fourth, management has determined that the Company will not be able to pay
existing trade creditors of the Company in full and also realize its strategic
goals. Accordingly, the Company has made a written offer to all creditors to
settle their outstanding claims by accepting 40(cent) for every dollar owed to
such creditors by Country Star. The Company has agreed that it will be bound by
this offer provided that at least 80% (based on the amount of the claims) of the
creditors holding claims agree to this settlement. Management has pointed out to
its creditors that the proposed settlement is far more favorable to them than
the alternative of the Company filing a voluntary bankruptcy proceeding. Based
on conversations with a number of the creditors, management believes that there
is a high likelihood of success of the offer being accepted by the required
creditors holding 80% of the claims against the Company.
-12-
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth, as of the date hereof, the number of the
Company's shares of Common Stock beneficially owned by each Selling Stockholder,
the number of shares of Common Stock that are to be offered and sold by each
Selling Shareholder pursuant to this Prospectus, and the amount and percentage
of shares to be beneficially owned by each Selling Stockholder after the
offering assuming all shares being offered pursuant to this Prospectus are sold.
<TABLE>
<CAPTION>
Number of Number of
Shares Warrants
Number of Number of Beneficially Beneficially
Shares Owned Warrants Number of Owned Owned
Prior to Owned Prior Shares to After this After this
Name and Address Offering to Offering be Offered Offering(2) Offering(3)
- ---------------- -------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Bruce Sokoloff 177,778 171,430 349,208 (1) -0- -0-
55 East 52nd Street
29th Floor
New York, NY 10055
Josephthal Lyon & Ross, Inc. -0- 1,500,000 1,500,000 (1) -0- -0-
200 Park Avenue
New York, NY 10166
JW Charles, Inc. -0- 180,000 180,000 (1) -0- -0-
980 North Federal Highway
Suite 310
Boca Raton, FL 33432
Bonanza Construction 18,173 -0- 18,173 -0- -0-
5685 Spring Mountain Road
Las Vegas, NV 89102
Corridini Corporation 14,118 -0- 14,118 -0- -0-
4880 Valley Boulevard
Los Angeles, CA 90032
Phelps-Tointon 52,041 -0- 52,041 -0- -0-
1001 Buckingham Street
Fort Collins, CO 89524
Sands Plumbing 50,470 -0- 50,470 -0- -0-
3851 Familian Drive
Las Vegas, NV 89102
G.B. Mannisto, Inc. 102,909 -0- 102,909 -0- -0-
14982 N. 83rd Place, #200
Scottsdale, AZ 85260
</TABLE>
-13-
<PAGE>
<TABLE>
<CAPTION>
Number of Number of
Shares Warrants
Number of Number of Beneficially Beneficially
Shares Owned Warrants Number of Owned Owned
Prior to Owned Prior Shares to After this After this
Name and Address Offering to Offering be Offered Offering(2) Offering(3)
- ---------------- -------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ESC/Electronic Sign Corp. 300,000 -0- 300,000 -0- -0-
3133 North Ad Art Road
Stockton, CA 95215
Alan & Coralie Goldsmith 75,000 75,000 150,000 -0- -0-
Trust
11755 Wilshire Boulevard
Los Angeles, CA 90025
Alan J. Goldsmith 25,000 25,000 50,000 -0- -0-
Accountancy Corp.
Defined Benefit Trust
11755 Wilshire Boulevard
Los Angeles, CA 90025
Zukerman Gore & 188,500 40,000 188,500 -0- 40,000
Brandeis, LLP (4)
900 Third Avenue
New York, NY 10022
--------- --------- --------- --------- ---------
TOTAL 1,003,989 1,991,430 2,955,419 -0- 40,000
</TABLE>
- -----------
(1) Includes all shares of Common Stock issuable upon exercise of warrants
beneficially owned by the Selling Stockholder.
(2) Assumes all shares of Common Stock being offered pursuant to this
Prospectus are sold by the Selling Stockholder.
(3) Assumes all of the warrants beneficially owned by the Selling Stockholder
are exercised and the shares of Common Stock issuable upon such exercise
are offered for sale and sold by the Selling Stockholder, except for
warrants held by Zukerman Gore & Brandeis, LLP.
(4) Zukerman Gore & Brandeis, LLP served as consel to the Company until
February 1997.
-14-
<PAGE>
PLAN OF DISTRIBUTION
The Company will not receive any proceeds from the sale of the shares of
Common Stock by the Selling Stockholders pursuant to this Prospectus. The
securities offered by this Prospectus may be sold from time to time by all of
the Selling Stockholders. Usual and customary or specifically negotiated
brokerage fees or commissions may be paid by the Selling Stockholders.
The Selling Stockholders through whom such securities are sold may be
deemed "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered, and any
profits realized or commissions received may be deemed underwriting
compensation. The Company has agreed to indemnify the Selling Stockholders
against certain liabilities, including liabilities under the Securities Act.
At the time a particular offer of the shares is made by or on the behalf of
a Selling Stockholder, to the extent required, a Prospectus Supplement will be
distributed which will set forth the number of shares being offered and the
terms of the offering, including the name or names of any underwriters, dealers
or agents, the purchase price paid by any underwriter for shares purchased from
the Selling Stockholders, any discounts, commissions and other items
constituting compensation from the Selling Stockholders and any discounts,
commissions or concessions allowed or reallowed or paid to dealers, and the
proposed selling price to the public.
The shares of Common Stock may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, at varying prices
determined at the time of sale, or at negotiated prices. Such prices will be
determined by the Selling Stockholders or by agreement between the Selling
Stockholders and any underwriters.
In order to comply with the applicable securities laws of certain states,
if any, the shares of Common Stock will be offered or sold through registered or
licensed brokers or dealers in those states. In addition, in certain states the
shares of Common Stock may not be offered or sold unless they have been
registered or qualified for sale in such states or an exemption from such
registration or qualification requirement is available and is complied with.
Under applicable rules and regulations promulgated under the Exchange Act,
any person engaged in a distribution or securities may not simultaneously bid
for or purchase securities of the same class for a period of two (2) business
days prior to the commencement of such distribution. In addition, and without
limiting the foregoing, the Selling Stockholders will be subject
-15-
<PAGE>
to applicable provisions of the Exchange Act and the rules and regulations
thereunder, including without limitation Rules 10b-2, 10b-5, 10b-6 and 10b-7, in
connection with transactions in the shares during the effectiveness of the
Registration Statement of which this Prospectus is a part. All of the foregoing
may affect the marketability of the shares of Common Stock.
The Company will pay all of the expenses incident to the registration of
the shares of Common Stock other than any fees or expenses or any counsel
retained by the Selling Stockholders and any other out of pocket expenses
incurred by the Selling Stockholders or any person retained by the Selling
Stockholders in connection with the registration of the shares, fees and
expenses of compliance with state securities or blue sky laws and commissions
and discounts of underwriters, dealers or agents, if any. The expenses payable
by the Company are estimated to be $20,000.
-16-
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The authorized capital of the Company consists of (i) 250,000,000 shares of
common stock, par value $.001 per share (the "Common Stock"), 21,182,441 shares
of which were outstanding as of June 30, 1997; and (ii) 2,000,000 shares of
"blank check" preferred stock, par value $.001 per share ("Preferred Stock"),
none of which is outstanding.
Common Stock
Each share of Common Stock is entitled to one vote, either in person or by
proxy, on all matters that may be voted upon by the owners thereof at a meeting
of the stockholders, including the election of directors. The holders of Common
Stock (i) have equal, ratable rights to dividends from funds legally available
therefor, when, as and if declared by the Board of Directors of the Company;
(ii) are entitled to share ratably in all of the assets of the Company available
for distribution to holders of Common Stock upon liquidation, dissolution or
winding up of the affairs of the Company; (iii) do not have preemptive or
redemption provisions applicable thereto; and (iv) are entitled to one
noncumulative vote per share on all matters on which stockholders may vote at
all meetings of stockholders.
All shares of Common Stock issued and outstanding are, and those offered
hereby, when issued, will be fully paid and non-assessable, with no personal
liability attaching to the ownership thereof.
6% Cumulative Convertible Series A Preferred Stock
The Company's outstanding shares of Cumulative Convertible Series A
Preferred Stock have been automatically converted into shares of Common Stock as
of May 10, 1997 (the "Conversion Date"). Each outstanding share of Series A
Preferred Stock was converted into six (6) shares of Common Stock on the
Conversion Date. Former holders of Series A Preferred Stock have no rights as
preferred shareholders except to receive certificates for their Common Stock
upon delivery of their certificates for Series A Preferred Stock to the
Company's transfer agent.
Other Preferred Stock
As of the date hereof, there are no shares of preferred stock outstanding.
The Company's Certificate of Incorporation authorizes the issuance of "blank
check" preferred stock in one or more classes or series with such designations,
rights, preferences and restrictions as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors may, without prior
stockholder approval, issue
-17-
<PAGE>
preferred stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the relative voting power or other rights of the
holders of Common Stock. Preferred Stock could be used, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. Although the Company has no present intention of issuing
any shares of preferred stock, there can be no assurance that it will not do so
in the future. If the Company issues preferred stock, such issuance may have a
dilutive effect upon both the preferred and common stockholders.
Transfer Agent
The transfer agent and registrar for the Common Stock and Preferred Stock
is Continental Stock Transfer & Trust Company, located at 2 Broadway, New York,
New York 10005.
-18-
<PAGE>
MARKET FOR THE COMPANY'S COMMON EQUITY AND DIVIDENDS
Commencing on December 15, 1993, the date of the Company's initial public
offering, through April 21, 1995, the Company's Common Stock, par value $.001
per share (the "Common Stock") and redeemable warrants (the "Redeemable
Warrants") were quoted on the NASDAQ SmallCap Market. On April 21, 1995, the
Redeemable Warrants were redeemed by the Company and delisted from the NASDAQ
SmallCap Market. Since November 18, 1995, the Common Stock, as well as the
Company's 6% Series A Cumulative Convertible Preferred Stock (the "Preferred
Stock"), have been quoted on the NASDAQ National Market. The Preferred Stock was
automatically converted into Common Stock as of May 10, 1997. The high and low
bid quotations, on a quarterly basis, for the Redeemable Warrants for 1995
through their delisting on April 25, 1995, is set forth below, as are the high
and low bid quotations, on a quarterly basis, for the Common Stock since 1995
and the Preferred Stock since November 18, 1995, the date the Preferred Stock
commenced trading. All of the prices set forth below reflect inter-dealer
prices, without retail mark up, mark down or commission and may not reflect
actual transactions.
<TABLE>
<CAPTION>
Common Stock Redeemable Warrants Preferred Stock
1995 Quoted Bid Price Quoted Bid Price Quoted Bid Price
- ---- ------------------- -------------------- -------------------
High Low High Low High Low
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
First Quarter $4 3/4 $3 3/4 $2 3/8 $1 4/25 -- --
Second Quarter 5 1/2 3 5/8 1 14/25 1 3/8 -- --
Third Quarter 4 1/4 3 1/8 N/A N/A -- --
Fourth Quarter 3 7/6 1 7/8 N/A N/A $13 $11
<CAPTION>
Common Stock Preferred Stock
1996 Quoted Bid Price Quoted Bid Price
- ---- ------------------- -------------------
High Low High Low
---- --- ---- ---
<S> <C> <C> <C> <C>
First Quarter $3 3/4 $1 7/8 $22 1/4 11 3/8
Second Quarter 5 7/16 3 31 17 5/8
Third Quarter 4 9/16 2 1/8 26 3/4 14
Fourth Quarter 2 9/16 7/32 15 1/2 1 1/4
<CAPTION>
Common Stock Preferred Stock
1997 Quoted Bid Prices Quoted Bid Prices
- ---- ------------------- -------------------
High Low High Low
---- --- ---- ---
<S> <C> <C> <C> <C>
First Quarter $1 9/16 $ 15/32 $ 9 1/4 2 3/4
Second Quarter 21/32 1/4 3 3/4 1 3/4
</TABLE>
-19-
<PAGE>
On May 28, 1997, the closing bid and asked prices of Common Stock as
reported on the NASDAQ National Market were $3/8 and $13/32 respectively.
No cash dividends have been paid on the Common Stock by the Company and
management does not anticipate paying cash dividends in the foreseeable future.
-20-
<PAGE>
LEGAL MATTERS
The validity of the shares of Common Stock will be passed upon for the
Company by Wolf Haldenstein Adler Freeman & Herz LLP, New York, New York.
EXPERTS
The financial statements of the Company for the year ended December 31,
1996 incorporated in this Prospectus by reference to the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1996 have been so incorporated in
reliance on the report of Cacciamatta Accountancy Corporation, independent
accountants, given upon the authority of that firm as experts in auditing and
accounting.
-21-
<PAGE>
================================================================================
No dealer, salesman or other person has been authorized to give any
information or to make any representations not contained in this Prospectus and
if given or made, such information or representations must not be relied upon as
having been authorized by the Company or any Underwriter. Neither the delivery
of this Prospectus nor any sale made hereunder shall under any circumstances
create any implication that there has been no change in the affairs of the
Company since the date date hereof. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any of the securities offered
hereby by anyone in any jurisdiction in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make such offer or
solicitation in such offer or solicitation in such jurisdiction.
TABLE OF CONTENTS
Available Information ..................................................... 1
Incorporation of Certain Documents by Reference ........................... 2
Prospectus Summary ........................................................ 3
Risk Factors .............................................................. 4
The Company ............................................................... 10
Selling Stockholders ...................................................... 13
Plan of Distribution ...................................................... 15
Description of Capital Stock .............................................. 17
Market for the Company's Common Equity and Dividends ...................... 19
Legal Matters ............................................................. 21
Experts ................................................................... 21
================================================================================
================================================================================
COUNTRY STAR RESTAURANTS, INC.
2,955,419 Shares of Common Stock
Offered by Selling Stockholders
--------------
PROSPECTUS
--------------
July 7, 1997
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth expenses payable by the Company in
connection with the registration of the securities being registered. All of the
amounts shown are estimates, other than the Securities and Exchange Commission
Registration Fee.
SEC filing fee $ 475.82
Accounting fees and expenses 3,000.00
Legal fees and expenses 10,000.00
Printing and engraving 1,500.00
Transfer Agent's and Registrar fees 500
Miscellaneous expenses 4,524.18
---------
Total 20,000.00
=========
Item 15. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation provides for indemnification of
personal liability of the Directors of the Company to the fullest extent
permitted by paragraph "7" of Subsection (b) of Section 102 of the General
Corporation Law of the State of Delaware.
Article VII of the Amended By-Laws of the Company ("By-Laws"), which is set
forth below in its entirety, provides for indemnification of officers,
directors, employees and agents substantially to the extent permitted under the
Delaware General Corporation Law.
Article VII of the Amended By-Laws provides as follows:
"ARTICLE VII"
INDEMNIFICATION
The Corporation shall (a) 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 or officer 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, (b) indemnify any person who was or is a party or is
II-1
<PAGE>
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 reason of the
fact that he is or was a director or officer of the Corporation, or served at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with any such
action, suit or proceeding, in each case to the fullest extent permissible under
subsections (a) through (f) of Section 145 of the General Corporation Law of the
State of Delaware or the indemnification provisions of any successor statute and
(c) advance reasonable and necessary expenses in connection with such actions or
suits, and not seek reimbursement of such expenses unless there is a specific
determination that the officer or director is not entitled to such
indemnification. The foregoing right of indemnification shall in no way be
exclusive of any other rights of indemnification to which any such persons may
be entitled, under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, and shall inure to the benefit of the heirs, executors
and administrators of such a person.
The Company has entered into an Indemnification Agreement with each of its
Directors and certain officers, employees, agents or fiduciaries designated by
the Board of Directors or other party thereto to the fullest extent permitted by
applicable law. The agreement includes indemnification, to the extent permitted
by applicable law, against expenses, including reasonable attorneys' fees,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by the Indemnified Party in connection with any civil or
criminal action or administrative proceeding arising out of the Indemnified
Party's performance of his duties as a Director or officer of the Company. Such
indemnification is available if the Indemnified Party acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best interests
of the Company, and, with respect to any criminal action, had no reasonable
cause to believe his conduct was unlawful.
The Company maintains officers' and directors' liability insurance that
provides for a maximum of $2,000,000 of coverage, subject to a $100,000
corporate reimbursement per occurrence payable by the Company. Any payments made
by the Company under an Indemnification Agreement which are not covered by the
insurance policy may have an adverse impact on the Company's earnings.
ITEM 16. Exhibits.
Exhibit No.
II-2
<PAGE>
* 3.1 Certificate of Incorporation of the Company
** 3.2 Amendment to Certificate of Incorporation
*** 3.3 Amended By-Laws of the Company
*** 5.1 Opinion of Zukerman Gore & Brandeis, LLP
***** 5.2 Opinion of Wolf Haldenstein Adler Freeman & Herz LLP
*** 24.1 Consent of Zukerman Gore & Brandeis, LLP included in
Exhibit 5.1
*** 24.2 Consent of BDO Seidman, LLP
**** 24.3 Consent of Cacciamatta Accountancy Corporation
* Previously filed as an exhibit to the Company's
Registration Statement on Form SB-2, File No. 33-67526-A.
** Previously filed as an exhibit to the Company's
Registration Statement on Form S-1, File No. 33-96450.
*** Previously filed as an exhibit to the Company's
Registration Statement on Form S-3, File No. 333-05105.
**** Previously filed as an exhibit to the Company's Post Effective Amendment
No. 1 to the Registration Statement on Form S-3, File No. 333-05105.
**** Filed herewith.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(a)(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;
II-3
<PAGE>
(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 set forth in
the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on From S-3 or Form S- 8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference 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 the time shall be deemed to be the initial bona
fide offering thereof.
(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.
(a) The undersigned registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) and 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement 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.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to afford to directors, officers or 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 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter
II-4
<PAGE>
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 Act and will be governed by the final adjudication of
such issue.
II-5
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all the requirements for filing on Form S-3 and authorized this
Registration Statement to be signed on its behalf by the undersigned, in the
City of Los Angeles, State of California on July 7, 1997.
COUNTRY STAR RESTAURANTS, INC.
By: /s/ Dan J. Rubin
------------------------------
Dan J. Rubin, President
and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement was signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
President, Chief
Executive Officer
/s/ Dan J. Rubin and Director July 7, 1997
- --------------------------
Dan J. Rubin
/s/ Robert A. Nardone, Jr. Director July 7, 1997
- --------------------------
Robert A. Nardone, Jr.
/s/ Darren C. Rice Director July 7, 1997
- --------------------------
Darren C. Rice
/s/ William W. Wei Director July 7, 1997
- --------------------------
William W. Wei
EXHIBIT 5.2
WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP
270 Madison Avenue
New York, New York 10016
Telephone No. 212/545-4600
Facsimile No. 212/586-0114
July 7, 1997
Board of Directors
Country Star Restaurants, Inc.
11150 Santa Monica Boulevard
Los Angeles, CA 90025
Re: Country Star Restaurants, Inc;
Post-Effective Amendment No. 1
to Registration Statement on Form S-3
Gentlemen:
We have acted as counsel for Country Star Restaurants, Inc., a Delaware
corporation (the "Company") in connection with the preparation and filing by the
Company of Post-Effective Amendment No. 1 to registration statement on Form S-3,
and the prospectus that forms a part thereof (the "Registration Statement" and
"Prospectus," respectively) under the Securities Act of 1933, as amended,
relating to the offering by certain stockholders of the Company (collectively,
the "Selling Stockholders") of an aggregate of 2,955,419 shares of the Company's
common stock, par value $.001 per share (the "Common Stock"), including
1,951,430 shares of Common Stock issuable upon the exercise of 1,951,430 common
stock purchase warrants (the "Warrants").
We have examined the Certificate of Incorporation and the By-Laws of the
Company, the minutes of the various meetings and consents of the Board of
Directors of the Company, originals or copies of such records of the Company and
where applicable, agreements, certificates of pubic officials, certificates of
officers and representatives of the Company, and others, and such other
documents, certificates, records, authorizations, proceedings, statutes and
judicial decisions as we have deemed
<PAGE>
Board of Directors
Country Star Restaurants, Inc.
July 7, 1997
Page -2-
necessary to form the basis of the opinion expressed below. In such examination,
we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to originals of all
documents submitted to us as copies thereof. As to various questions of fact
material to such opinion, we have relied upon statements and certificates of
officers and representatives for the Company [and its predecessor-in-interest]
and others.
Based on the foregoing, we are of the opinion that:
1. All shares of Common Stock have been duly authorized and, when issued
and sold in accordance with the Prospectus, will be validly issued, fully paid
and nonassessable.
2. The shares of Common Stock issuable upon exercise of the Warrants have
been duly authorized, and when issued in accordance with its terms, will be
validly issued, fully paid and nonassessable.
We hereby consent to be named in the Prospectus as attorneys who have
passed upon the validity of the shares of Common Stock for the Company under the
caption "Legal Matters."
We further consent to your filing a copy of this opinion as an exhibit to
the Prospectus.
Very truly yours,
WOLF HALDENSTEIN ADLER FREEMAN
& HERZ LLP
-2-
