As filed with the Securities and Exchange Commission on February 5, 1997
Registration No. ____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BIG ENTERTAINMENT, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 65-0385686
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
2255 GLADES ROAD, SUITE 237 WEST
BOCA RATON, FLORIDA 33431
(561) 998-8000
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(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
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MITCHELL RUBENSTEIN
CHIEF EXECUTIVE OFFICER
BIG ENTERTAINMENT, INC.
2255 GLADES ROAD, SUITE 237 WEST
BOCA RATON, FLORIDA 33431
TELEPHONE NO. (561) 998-8000
FACSIMILE NO. (561) 998-2974
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES OF COMMUNICATIONS TO:
DALE S. BERGMAN, P.A.
BROAD AND CASSEL
201 SOUTH BISCAYNE BOULEVARD, SUITE 3000
MIAMI, FLORIDA 33131
TELEPHONE NO. (305) 373-9400
FACSIMILE NO. (305) 373-9443
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Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
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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]
<PAGE>
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. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SHARES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE (1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
Common Stock, 195,495
$.01 par value..................... shares $6.0625 $1,185,188.44 $359.15
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Common Stock, 363,635
$.01 par value(2).................. shares $6.3250 $2,299,991.38 $696.97
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Total........................................................................................................ $1,056.12
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<FN>
(1) Estimated solely for the purpose of calculating the registration fee and
pursuant to Rule 457.
(2) Represents shares issuable upon conversion of certain shares of
convertible preferred stock and exercise of certain warrants, as more
fully set forth on the cover page of the Prospectus included herein. Also
includes such additional shares as may be issuable as a result of the
anti-dilution provisions of the convertible preferred stock and warrants.
</FN>
</TABLE>
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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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
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 FEBRUARY 5, 1997
PROSPECTUS
559,130 SHARES
BIG ENTERTAINMENT, INC.
COMMON STOCK
This Prospectus relates to an aggregate of 559,130 shares (the
"Shares") of Common Stock, par value $.01 per share (the "Common Stock"), of Big
Entertainment, Inc., a Florida corporation ("Big Entertainment" or the
"Company"), consisting of (i) 316,205 Shares issuable upon conversion of the
Company's 4% $100 Series C Convertible Preferred Stock (the "Series C Preferred
Stock"), (ii) 47,430 Shares issuable upon exercise of warrants to purchase
Common Stock (the "Placement Agent's Warrants") issued to the placement agent
(the "Placement Agent") in connection with the private placement of the shares
of Series C Preferred Stock, and (iii) 195,495 Shares proposed to be sold from
time to time by certain shareholders of the Company (the "Selling
Shareholders"). The shares of Series C Preferred Stock are convertible and the
Placement Agent's Warrants are exercisable beginning on June 20, 1997 (six
months from the date of issuance). See "The Company--Recent Developments" and
"Selling Shareholders." The Company will not receive any proceeds from the sale
of the Shares by the Selling Shareholders or from the conversion of the Series C
Preferred Stock, but will receive up to an aggregate of $300,000 upon the
exercise of the Placement Agent's Warrants.
The Selling Shareholders have advised the Company that they may from
time to time sell all or a portion of the Shares offered hereby in one or more
transactions in the over-the-counter market, on the Nasdaq SmallCap Market, on
any exchange on which the Common Stock may then be listed, in negotiated
transactions or otherwise, or a combination of such methods of sale, at market
prices prevailing at the time of sale or prices related to such prevailing
market prices or at negotiated prices. The Selling Shareholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Shareholders and/or purchasers of
the Shares for whom they may act as agent (which compensation may be in excess
of customary commissions). The Selling Shareholders and any participating
broker-dealers may be deemed to be "underwriters" as defined in the Securities
Act of 1933, as amended (the "Securities Act"). Neither the Company nor the
Selling Shareholders can estimate at the present time the amount of commissions
or discounts, if any, that will be paid by the Selling Shareholders on account
of their sales of the Shares from time to time. The Company has agreed to
indemnify the Selling Shareholders against certain liabilities, including
certain liabilities under the Securities Act. See "Plan of Distribution."
The Common Stock is quoted on the Nasdaq SmallCap Market under the
symbol "BIGE" and is listed on the Boston and Philadelphia Stock Exchanges under
the symbol "BIG." On January 31, 1997, the last reported sales price of the
Common Stock on the Nasdaq SmallCap Market was $6-1/16 per share.
---------------------
<PAGE>
SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN RISKS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES.
---------------------
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.
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THE DATE OF THIS PROSPECTUS IS __________, 1997
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied (at prescribed rates) at the public reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and
at the following regional offices located at Seven World Trade Center, Suite
1300, New York, New York 10048, and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and may also be obtained from the Commission's website
located at http://www.sec.gov. Quotations relating to the Company's Common Stock
appear on the Nasdaq SmallCap Market, and reports, proxy statements and other
information concerning 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. Quotations also appear on the Boston and Philadelphia
Stock Exchanges and the previously mentioned information may be inspected at One
Boston Place, Boston, Massachusetts 02108, and 1900 Market Street, Philadelphia,
Pennsylvania 19103, respectively.
The Company has filed with the Commission a Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act with respect to
the Shares. This Prospectus, which is a part of the Registration Statement, does
not contain all the information set forth in, or annexed as exhibits to, such
Registration Statement, certain portions of which have been omitted pursuant to
rules and regulations of the Commission. For further information with respect to
the Company and the Shares, reference is hereby made to such Registration
Statement, including the exhibits thereto. Copies of the Registration Statement,
including exhibits, may be obtained from the aforementioned public reference
facilities of the Commission upon payment of the fees prescribed by the
Commission, or may be examined without charge at such facilities. Statements
contained herein concerning any document filed as an exhibit are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement. Each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission under
the Exchange Act are incorporated in and made a part of this Prospectus by
reference:
(a) the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995;
(b) the Company's Quarterly Reports on Form 10-QSB for the fiscal
quarters ended March 31, 1996, June 30, 1996 and September 30,
1996; and
(c) the Company's Current Report on Form 8-K filed on September 4,
1996.
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<PAGE>
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date hereof and prior to the
termination of the sale of all of the Shares shall be deemed to be incorporated
by reference herein and to be a part hereof from the date of filing of such
documents. 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 documents, which also are incorporated or
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus except as so modified or superseded.
This Prospectus incorporates documents by reference that are not
presented herein or delivered herewith. The Company hereby undertakes to
provide, without charge, to each person, including any beneficial owner, to whom
a copy of this Prospectus is delivered, on the written or oral request of such
person, a copy of any or all of the information incorporated herein by
reference. Exhibits to any of such documents, however, will not be provided
unless such exhibits are specifically incorporated by reference into such
documents. The requests should be addressed to: Mitchell Rubenstein, Chief
Executive Officer, Big Entertainment, Inc., 2255 Glades Road, Suite 237 West,
Boca Raton, Florida 33431, telephone number (561) 998-8000.
THE COMPANY
GENERAL
Big Entertainment is a diversified entertainment company, which owns
exclusive rights to certain original characters and concepts created by certain
best-selling authors and media celebrities, including, for example, Tom Clancy,
Leonard Nimoy, Mickey Spillane and Arthur C. Clarke. The Company uses
illustrated novels to introduce, test and develop new characters and concepts in
the marketplace as a means of exploring the potential of these characters and
concepts (collectively, its "intellectual property") for licensing across all
media, including films, television, books, multimedia software, toys and other
merchandise. The Company acquires the rights to its intellectual properties
pursuant to agreements which grant it, on an exclusive basis, all rights in all
media as well as the right to use the creator's name in the title of the
intellectual property. Big Entertainment also operates a book licensing and
packaging division and an entertainment retail division.
The Company's intellectual properties include, among others: TOM
CLANCY'S NETFORCE; LEONARD NIMOY'S PRIMORTALS; ARTHUR C. CLARKE'S CRIOSPHINX;
GENE RODDENBERRY'S XANDER IN LOST UNIVERSE; ISAAC ASIMOV'S I/bullet/BOTS; MICKEY
SPILLANE'S MIKE DANGER; JOHN JAKES' MULLKON EMPIRE; ANNE MCCAFFREY'S ACORNA:
QUEEN OF THE UNICORNS; ANNE MCCAFFREY'S SARABAND; MARGARET WEIS' TESTAMENT OF
THE DRAGON; TED WILLIAMS' MIRROR WORLD; NEIL GAIMAN'S MR. HERO -- THE NEWMATIC
MAN; NEIL GAIMAN'S TEKNOPHAGE; NEIL GAIMAN'S LADY JUSTICE; and NEIL GAIMAN'S
WHEEL OF WORLDS. Certain of the Company's intellectual properties are owned by a
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<PAGE>
joint venture known as NetCo Partners ("NetCo Partners"), owned 50% by the
Company and 50% by C.P. Group, Inc. ("C.P. Group"), in which Tom Clancy is a
substantial shareholder. The Company is continually negotiating with other
best-selling authors to create and develop additional intellectual properties
for the Company and/or for NetCo Partners.
A number of the Company's and/or NetCo Partners' intellectual
properties have been licensed for use in feature films, television series, books
and merchandise by various licensees, including Warner Books (a division of
Time-Warner, Inc.) for hardcover and paperback book publishing rights; Playmates
Toys, Inc. for a line of toys; HarperCollins (a division of Rupert Murdoch's
News Corporation) for hardcover and paperback book publishing rights; Alliance
Productions, Ltd., a division of Alliance Communications Corporation, the
largest Canadian entertainment company, for television rights; Sierra On-Line, a
publisher of interactive entertainment, productivity and educational software,
for CD-ROM rights; and Miramax Films (a division of The Walt Disney Company) for
feature film and television rights. The Company's licensing agreements generally
provide for the payment by the licensee of advances to the Company or NetCo
Partners, as the case may be, as well as royalty payments based on sales after
the advance has been earned out. The Company and NetCo Partners are actively
negotiating additional licensing opportunities for their intellectual
properties.
Big Entertainment's 51%-owned book licensing and packaging division,
Tekno Books, is a leading book packager of fiction and non-fiction, with
approximately 885 books published to date (approximately 167 published since the
fourth quarter of 1994, when the Company acquired its interest in Tekno Books)
and approximately another 125 under contract that are forthcoming. In addition
to providing access to a number of best-selling authors, Tekno Books creates
book projects by developing concepts, negotiating publishing agreements and
executing substantially all aspects of the book projects. Tekno Books has worked
with approximately 50 New York Times bestselling authors, including Tom Clancy,
Jonathan Kellerman, Mary Higgins Clark, Dean Koontz, Tony Hillerman, Robert
Ludlum and Scott Turow. These books have been published with more than 60
American publishers (including HarperCollins, Doubleday, Random House, Simon &
Schuster, Viking Penguin and Warner Books), translated into 28 languages, and
selected by 17 different book clubs. Tekno Books is also a leading producer of
novels and anthologies in the science fiction, fantasy, mystery, horror and
Western genres.
Big Entertainment's entertainment retail division currently operates 27
"Entertainment Super/bullet/Kiosks," which are free standing stores that are
located in malls and sell a variety of entertainment-related merchandise, and a
540-square-foot retail store in the Mall of America. The Super/bullet/Kiosks
feature a futuristic design with an overhead band of video monitors that show
movie trailers and promotional spots. The Company plans to progress towards its
goal of becoming a national chain by opening additional Entertainment
Super/bullet/Kiosks and in-line stores in the future, including Company-owned
and possibly franchised units.
Big Entertainment was organized in January 1993 by Mitchell Rubenstein
and Laurie S. Silvers and commenced operations in the fourth quarter of 1994.
Mr. Rubenstein and Ms. Silvers are founders of the Sci-Fi Channel, a 24-hour
national cable television network which was acquired from Mr. Rubenstein and Ms.
Silvers by USA Network (a partnership of Viacom and the Universal division of
The Seagram Company, Ltd.) in March 1992.
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<PAGE>
The principal executive offices of the Company are located at 2255
Glades Road, Suite 237 West, Boca Raton, Florida 33431, and its telephone number
is (561) 998-8000.
RECENT DEVELOPMENTS
AMENDMENT OF AGREEMENT WITH TEKNO SIMON. To facilitate expansion of its
entertainment retail division, in November 1995, the Company established a
long-term relationship with the largest U.S. shopping mall developer, the
Simon-DeBartolo Group, and its Co-Chairman, Melvin Simon. Tekno Simon, LLC
("Tekno Simon"), an affiliate of Mr. Simon, initially invested a total of
$1,360,000 in shares of the Company's preferred stock to fund the cost of
developing 17 Entertainment Super/bullet/Kiosks (at $80,000 per kiosk). Pursuant
to this agreement, Tekno Simon has acquired 217,600 shares of the Company's
Series A Variable Rate Convertible Preferred Stock (the "Series A Preferred
Stock"). Tekno Simon also currently beneficially owns 163,912 shares of the
Company's Common Stock and Deborah J. Simon, who is Melvin Simon's daughter and
a director of the Company, beneficially owns 8,928 shares of Common Stock.
The Company's agreement with Tekno Simon was amended in October 1996 to
extend the funding arrangement through March 31, 1997, pursuant to which the
Company may fund the development of eight additional kiosks. As of the date of
this Prospectus, $160,000 in additional funding has been provided to the Company
for the development of two additional kiosks. This amendment also provided that
the subsequent stock purchases will be of shares of the Company's Series B
Variable Rate Convertible Preferred Stock (the "Series B Preferred Stock") in
lieu of the Series A Preferred Stock. See "Description of Capital Stock --
Preferred Stock" for descriptions of the terms of the Series A Preferred Stock
and Series B Preferred Stock.
SALE OF SERIES C PREFERRED STOCK. In December 1996, the Company sold
20,000 shares of Series C Preferred Stock in a private placement to a single
accredited strategic investor for an aggregate purchase price of $2,000,000. The
Company received proceeds of approximately $1,840,000, after deducting fees of
the Placement Agent. The Company agreed to use not less than 50% of the net
proceeds for the development, construction and operation of Entertainment
Super/bullet/Kiosks or in-line retail facilities, with the balance to be used
for general corporate purposes. The Placement Agent, who assisted the Company
with the transaction, also received Placement Agent's Warrants, which entitle it
to purchase 47,430 shares of Common Stock at an exercise price of $6.325 per
share for a period of five years from the date of issuance. The shares of Series
C Preferred Stock are convertible and the Placement Agent's Warrants are
exercisable beginning six months after the date of issuance. See "Description of
Capital Stock--Preferred Stock" for a description of the terms of the Series C
Preferred Stock. The Company agreed to register the shares of Common Stock to be
received upon conversion of the Series C Preferred Stock and exercise of the
Placement Agent's Warrants, which shares are included in the Shares covered by
this Prospectus. Under the purchase agreement, the Company has agreed to provide
the holder of the Series C Preferred Stock and the Placement Agent with
indemnification in the event certain liabilities, including certain liabilities
under the Securities Act, occur.
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<PAGE>
FORWARD-LOOKING STATEMENTS
The Company cautions readers that certain important factors may affect
the Company's actual results and could cause such results to differ materially
from any forward-looking statements that may be deemed to have been made in this
Prospectus or that are otherwise made by or on behalf of the Company. For this
purpose, any statements contained in this Prospectus that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the generality of the foregoing, words such as "may," "will," "expect,"
"believe," "anticipate," "intend," "could," "estimate" or "continue" or the
negative variations thereof or comparable terminology are intended to identify
forward-looking statements. Factors which may affect the Company's results
include, but are not limited to, the risks and uncertainties associated with a
reliance on entertainment properties based on popular characters and story
concepts developed by best-selling authors and media celebrities, as well as the
Company's limited operating history, prior operating losses, need for future
capital, competition in the publishing and entertainment industries, and
dependence on management. The Company is also subject to other risks detailed
herein or detailed from time to time in the Company's filings with the
Commission. Factors that could cause or contribute to such difference in results
include, but are not limited to, those discussed in section captioned "Risk
Factors" below, as well as those discussed elsewhere in this Prospectus and in
the Company's filings with the Commission.
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<PAGE>
RISK FACTORS
THE SHARES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK. BEFORE INVESTING IN THE COMMON STOCK, PROSPECTIVE PURCHASERS SHOULD
CAREFULLY CONSIDER THE MATTERS SET FORTH BELOW AS WELL AS THE OTHER INFORMATION
SET FORTH IN THIS PROSPECTUS.
LIMITED OPERATING HISTORY. Prior to the fourth quarter of 1994, the
Company was a development stage company that had not generated any revenues from
operations and had devoted most of its efforts to various organizational
activities, including developing a business strategy. Accordingly, the Company
has a limited operating history from which an evaluation of the Company's
prospects may be made. The Company's prospects must be considered in light of
the numerous risks, expenses, problems and difficulties typically encountered in
connection with the establishment of a new business, the development and
introduction of new products, and the competitive environment in which the
Company is operating. There can be no assurance that the Company can
successfully implement its current operating plan.
OPERATING LOSSES AND ACCUMULATED DEFICIT. The Company has incurred
significant net losses since its inception, including net losses of $8,439,892
and $4,711,246 for the year ended December 31, 1995 and the nine months ended
September 30, 1996, respectively. At September 30, 1996, the Company had an
accumulated deficit of $20,024,452. Based on the Company's current operating
plan, the Company expects to continue to incur losses from operations through at
least the first quarter of the 1997 fiscal year, and possibly thereafter, until
such time as the Company is able to attain adequate revenues to offset its
operating expenses. There can be no assurance that the Company will ever achieve
profitable operations.
FINANCIAL CONDITION. At September 30, 1996, the Company had cash and
cash equivalents of $861,229 and working capital of $643,642. For the nine
months ended September 30, 1996, the Company used $5,262,428 of cash to fund its
operating activities and incurred a net loss of $4,711,246 during such period.
The long-term financial success of the Company is dependent upon the Company's
ability to generate adequate revenue to offset operating expenses. Based on
currently proposed plans and assumptions relating to its operations, the Company
believes that anticipated cash flow from operations and its other current
capital resources will be sufficient to satisfy the Company's working capital
requirements for a period of approximately 12 months following the end of 1996.
If the Company's plans change or its assumptions prove to be inaccurate, the
Company may be required to seek additional funds or to curtail its operations.
There can be no assurance that any additional financing, if required, will be
available to the Company, or that if available, such financing will be on terms
favorable to the Company.
RETAIL OPERATIONS. The success of the Company's entertainment retail
division depends upon the Company's ability to open and operate Entertainment
Super/bullet/Kiosks on a timely and profitable basis. The Company intends to
expand its retail operations through the opening of additional Company-owned
Entertainment Super/bullet/Kiosks and the implementation of a franchising
program. The successful realization of these plans depends on, among other
things, the ability of the Company and its franchisees to secure suitable sites;
to hire, train and retain qualified
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<PAGE>
personnel; to obtain leases on favorable terms; to secure any required
financing; and the general business and economic conditions in the localities of
the Super/bullet/Kiosks. There can be no assurance that the Company will be
successful in expanding or operating its chain of Entertainment
Super/bullet/Kiosks or implementing its franchise program.
COMPETITION. Competition is generally intense in the areas of the
publishing and entertainment industry in which the Company operates and other
segments of the entertainment industry. The Company's illustrated novels compete
against publications from numerous other publishers, many of which have greater
financial and other resources than the Company. In the licensing market, the
Company competes with a wide range of other corporations as well as individuals.
The Company's Entertainment Super/bullet/Kiosks compete for sales with specialty
stores and traditional book and periodical retailers such as newsstands,
convenience stores, drug stores, supermarkets, mass merchandisers, national
bookstore chains, toy stores, novelty shops and hobby shops. There can be no
assurance given that the Company can compete favorably in any of these market
segments.
TRADEMARKS AND PROPRIETARY RIGHTS. The Company's trademarks and rights
to characters are the principal assets of the Company's licensing and publishing
divisions. The Company has filed applications for federal trademark registration
of its existing trademarks and files applications for trademark and copyright
protection for each of its titles and featured characters. There can be no
assurance that any such application, when filed, will be approved, or that the
Company will have the financial and other resources necessary to enforce its
proprietary rights against infringement by others. The inability of the Company
to obtain adequate protection of or to enforce its proprietary rights could have
a material adverse effect on the Company.
DEPENDENCE ON MANAGEMENT. Mitchell Rubenstein, the Company's Chairman
of the Board and Chief Executive Officer, and Laurie S. Silvers, the Company's
Vice Chairman and President, have been primarily responsible for the
organization of the Company and the development of its business. Each of them
has entered into an employment agreement with the Company that expires in July
1998. Such employment agreements generally provide, among other things, that the
Company's termination of either of such agreements without "cause" will also
constitute a termination of the other agreement without "cause" (as defined in
such agreements), and that an executive whose employment agreement is terminated
without cause shall continue to receive his or her salary until the expiration
of the term of the agreement. The Company is the beneficiary of $1,000,000 in
key man insurance on the lives of each of these executives. The loss of the
services of either of these individuals would have a material adverse effect on
the Company. The Company's future success will also be dependent upon its
ability to attract and retain qualified and creative management, administrative
and other personnel.
SIGNIFICANT INFLUENCE OF PRINCIPAL SHAREHOLDERS. As of the date of this
Prospectus, the Company's executive officers and directors beneficially owned in
the aggregate approximately 33% of the outstanding shares of Common Stock. As a
result, such persons have the ability to significantly influence the outcome of
any matters submitted to a vote of the Company's shareholders.
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NO DIVIDENDS. The Company has not paid any cash dividends on its Common
Stock since its inception. Dividends on the Company's Series A Preferred Stock
and Series B Preferred Stock are payable solely in shares of Common Stock.
Dividends on the Company's Series C Preferred Stock accrue cash dividends at the
annual rate of 4%. The Company intends to retain earnings remaining after
payment of such cash dividends, if any, to finance the development and expansion
of its business.
TRADING MARKET FOR COMMON STOCK. The Company's Common Stock is quoted
on the Nasdaq SmallCap Market and the Boston and Philadelphia Stock Exchanges.
There currently are a relatively limited number of shares of Common Stock in the
hands of the public and a relatively limited trading market for the Common
Stock. Consequently, purchasers of Shares may have a limited ability to dispose
of their shares of Common Stock in the public market. Furthermore, there can be
no assurance that a more active trading market for the Common Stock will develop
or, if developed, that it would be sustained.
POTENTIAL VOLATILITY OF STOCK PRICE. The market price of the Common
Stock could be subject to significant fluctuation in response to the Company's
operating results and other factors, including general price fluctuations in
securities markets. From time to time the stock markets have experienced extreme
price and volume fluctuations. This volatility has had significant effects on
the market prices of securities issued by many companies, especially smaller
public companies, often for reasons unrelated to their operating performance.
SHARES ELIGIBLE FOR FUTURE SALE. As of the date of this Prospectus,
approximately 3,338,851 shares of Common Stock held by existing shareholders
constitute "restricted shares" as defined in Rule 144 under the Securities Act
("Rule 144"), and may only be sold if such shares are registered under the
Securities Act or sold in accordance with Rule 144 or another exemption from
registration under the Securities Act. Sales under Rule 144 are subject to the
satisfaction of certain holding periods, volume limitations, manner of sale
requirements, and the availability of current public information about the
Company. Substantially all of the Company's restricted shares of Common Stock
are either eligible for sale pursuant to Rule 144 or have been (including the
Selling Shareholders' Shares offered hereby) registered under the Securities Act
for resale by the holders thereof, which will permit the sale of such registered
shares of Common Stock in the open market or in privately negotiated
transactions without compliance with the requirements of Rule 144. The Company
is unable to estimate the amount, timing or nature of future sales of
outstanding Common Stock. Sales of substantial amounts of the Common Stock in
the public market may have an adverse effect on the market price thereof.
EFFECT OF OUTSTANDING OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES. As
of the date of this Prospectus, the Company has outstanding options granted
under the Company's stock option plans to purchase an aggregate of 765,988
shares of Common Stock, warrants (including the Placement Agent's Warrants) to
purchase an aggregate of 617,266 shares of Common Stock, 217,600 shares of
Series A Preferred Stock convertible into 217,600 shares of Common Stock, 29,767
shares of Series B Preferred Stock convertible into 29,767 shares of Common
Stock, and 20,000 shares of Series C Preferred Stock convertible into 316,205
shares of Common Stock. As long as such options, warrants and convertible
securities remain unexercised or are not converted, as the case may be, the
terms under which the Company could obtain additional
-10-
<PAGE>
capital may be adversely affected. Moreover, the holders of the options,
warrants and convertible securities may be expected to exercise or convert them
at a time when the Company would, in all likelihood, be able to obtain any
needed capital by a new offering of its securities on terms more favorable than
those provided by such securities.
AUTHORIZATION OF PREFERRED STOCK. The Company's Articles of
Incorporation authorize the issuance of "blank check" preferred stock with such
designations, rights and preferences as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors is empowered,
without shareholder approval, to issue shares of preferred stock with dividend,
liquidation, conversion, voting or other rights that could adversely affect the
voting power or other rights of the holders of the Company's Common Stock. In
the event of issuance, the preferred stock could also be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. Although the Company has no intention as of the date of
this Prospectus to issue any shares of its preferred stock, other than as
described in "The Company--Recent Developments," there can be no assurance that
the Company will not issue additional shares in the future.
USE OF PROCEEDS
The Company will receive no proceeds from the sale of any of or all of
the Shares of Common Stock being offered by the Selling Shareholders hereunder
or upon conversion of the Series C Preferred Stock, but will receive an
aggregate of $300,000 upon exercise of all of the Placement Agent's Warrants.
Expenses expected to be incurred by the Company in connection with the
registration of the Shares are estimated at approximately $10,000.
-11-
<PAGE>
SELLING SHAREHOLDERS
The Company has been advised by the Selling Shareholders that none of
the Selling Shareholders has or had a position, office or other material
relationship with the Company or any of its affiliates within the past three
years. Unless otherwise indicated, the following table sets forth certain
information with respect to the ownership of the Company's Common Stock by each
Selling Shareholder as of the date of this Prospectus.
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES NUMBER OF OWNERSHIP OF SHARES
NAME AND ADDRESS OF SELLING OF COMMON STOCK SHARES OF COMMON STOCK
SHAREHOLDER PRIOR TO OFFERING OFFERED HEREBY AFTER OFFERING(1)
--------------------------- ----------------------- -------------- -----------------------
SHARES PERCENTAGE SHARES PERCENTAGE
------- ---------- ------ ----------
<S> <C> <C> <C> <C> <C>
Thomas Isenberg..................... 6,000 * 6,000 0 --
55 West 84th Street
Apt. 8
New York, New York 10024
Barry S. Halperin................... 164,447 2.7% 82,947(2) 81,500(2) 1.3%
2500 North Military Trail
Suite 225
Boca Raton, Florida 33431
Theodore Bolotin IRA................ 18,000 * 18,000 0 --
21224 Harron Court
Boca Raton, Florida 33433
Howard Weiss and Karen
Weiss, TBTE....................... 88,548 1.5% 88,548 0 --
7155 Mandarin Drive
Boca Raton, Florida 33433
<FN>
- -------------------------
* Less than 1%.
(1) Assumes that all Shares are sold pursuant to this offering and that no other shares of
Common Stock are acquired or disposed of by the Selling Shareholders prior to the
termination of this offering. Because the Selling Shareholders may sell all, some or none
of their Shares or may acquire or dispose of other shares of Common Stock, no reliable
estimate can be made of the aggregate number of Shares that will be sold pursuant to this
offering or the number or percentage of shares of Common Stock that each Selling
Shareholder will own upon completion of this offering.
(2) The 81,500 shares of Common Stock not included in this offering were acquired by Mr. Halperin
in the open market and therefore are not subject to registration rights.
</FN>
</TABLE>
In addition, the Company is registering (i) 316,205 shares of Common
Stock issuable upon conversion of 20,000 shares of Series C Preferred Stock and
(ii) an aggregate of 47,430 shares of Common Stock issuable upon exercise of the
Placement Agent's Warrants. See "The Company--Recent Developments" and
"Description of Capital Stock--Preferred Stock." The
-12-
<PAGE>
shares of Series C Preferred Stock are convertible and the Placement Agent's
Warrants are exercisable beginning on June 20, 1997 (six months from the date of
issuance).
PLAN OF DISTRIBUTION
The Selling Shareholders have advised the Company that they may from
time to time sell all or a portion of the Shares offered hereby in one or more
transactions in the over-the-counter market, on the Nasdaq SmallCap Market, on
any exchange on which the Common Stock may then be listed, in negotiated
transactions or otherwise, or a combination of such methods of sale, at market
prices prevailing at the time of sale or prices related to such prevailing
market prices, or at negotiated prices. The Selling Shareholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Shareholders and/or purchasers of
the Shares for whom they may act as agent (which compensation may be in excess
of customary commissions). In connection with such sales, the Selling
Shareholders and any broker-dealers or agents participating in such sales may be
deemed to be underwriters as that term is defined under the Securities Act.
Neither the Company nor the Selling Shareholders can estimate at the present
time the amount of commissions or discounts, if any, that will be paid by the
Selling Shareholders on account of their sales of the Shares from time to time.
Under the securities laws of certain states, the Shares may be sold in
such states only through registered or licensed broker-dealers or pursuant to
available exemptions from such requirements. In addition, in certain states the
Shares may not be sold therein unless the Shares have been registered or
qualified for sale in such state or an exemption from such requirement is
available and is complied with.
The Company will pay certain expenses in connection with this offering,
estimated to be approximately $10,000, but will not pay for any underwriting
commissions and discounts, if any, or counsel fees or other expenses of the
Selling Shareholders. The Company has agreed to indemnify the Selling
Shareholders, their directors, officers, agents and representatives, and any
underwriters, against certain liabilities, including certain liabilities under
the Securities Act. The Selling Shareholders have also agreed to indemnify the
Company, its directors, officers, agents and representatives against certain
liabilities, including certain liabilities under the Securities Act.
The Selling Shareholders and other persons participating in the
distribution of the Shares offered hereby are subject to the applicable
requirements of Rule 10b-6 promulgated under the Exchange Act in connection with
sales of the Shares.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 11,000,000 shares of
Common Stock, par value $.01 per share, and 1,000,000 shares of preferred stock,
par value $.01 per share (the "Preferred Stock"). As of the date of the
Prospectus, 6,095,601 shares of Common Stock and
-13-
<PAGE>
an aggregate of 267,367 shares of Preferred Stock were outstanding. The transfer
agent for the Common Stock is American Stock Transfer & Trust Company, New York,
New York.
COMMON STOCK
Each share of Common Stock entitles the holder to one vote on all
matters submitted to a vote of the shareholders. The holders of Common Stock are
entitled to receive dividends, when, as and if declared by the Board of
Directors, in its discretion, from funds legally available therefor. Upon
liquidation or dissolution of the Company, the holders of Common Stock are
entitled to share ratably in the assets of the Company, if any, legally
available for distribution to shareholders after the payment of all debts and
liabilities of the Company and the liquidation preference of any outstanding
shares of the Company's Preferred Stock. The Common Stock has no preemptive
rights and no subscription, redemption or conversion privileges. The Common
Stock does not have cumulative voting rights, which means that the holders of a
majority of the outstanding shares of Common Stock voting for the election of
directors will be able to elect all members of the Board of Directors. A
majority vote will also be sufficient for other actions that require the vote or
concurrence of shareholders. All of the outstanding shares of Common Stock are,
and the shares to be sold in this offering will be, when issued and paid for,
fully paid and nonassessable.
PREFERRED STOCK
GENERAL. The Board of Directors has the authority to issue up to
1,000,000 shares of Preferred Stock in one or more series and to fix the number
of shares constituting any such series, the voting powers, designations,
preferences and relative participation, optional or other special rights and
qualifications, limitations or restrictions thereof, including the dividend
rights and dividend rate, terms of redemption (including sinking fund
provisions), redemption price or prices, conversion rights and liquidation
preferences of the shares constituting any series, without any further vote or
action by the shareholders. The issuance of Preferred Stock by the Board of
Directors could affect the rights of the holders of Common Stock. For example,
such issuance could result in a class of securities outstanding that would have
preferences with respect to voting rights and dividends, and in liquidation,
over the Common Stock, and could (upon conversion or otherwise) enjoy all of the
rights appurtenant to Common Stock.
SERIES A PREFERRED STOCK. The Company has designated 217,600 shares of
Preferred Stock as the Company's Series A Preferred Stock, and has issued
217,600 shares of such Series A Preferred Stock as of the date of this
Prospectus. The Series A Preferred Stock has a stated value of $6.25 per share
and accrues non-cash dividends, payable quarterly in shares of Common Stock
based on prevailing market prices for the Common Stock. The dividends accrue on
the stated value of the outstanding shares of Series A Preferred Stock at a
variable rate equal to a specified bank prime rate (8.25% as of December 20,
1996). During the two-year period commencing on November 28, 1995, the Series A
Preferred Stock is convertible at the option of the holders into shares of
Common Stock on a one-for-one basis. After the conversion period expires, the
Series A Preferred Stock will be redeemable at the Company's option for $7.1875
per share in cash. The holders of the Series A Preferred Stock will be entitled
to vote together with the holders of Common Stock on all matters, with each
share of Series A Preferred Stock
-14-
<PAGE>
having one vote. The Series A Preferred Stock will have a liquidation preference
of $7.1825 per share over the Common Stock. The Company and certain holders of
Common Stock (Mitchell Rubenstein, Laurie S. Silvers, Asbury Park Press, Inc.
and Martin H. Greenberg) agreed in connection with the sale of the Series A
Preferred Stock that the Company shall appoint one nominee of the current holder
of the Series A Preferred Stock to the Company's Board of Directors and that
such shareholders shall vote their shares for election of such nominee to the
Company's Board of Directors. Such holder's current nominee on the Board is
Deborah J. Simon, who was appointed to the Board in November 1996.
SERIES B PREFERRED STOCK. The Company has designated 142,223 shares of
Preferred Stock as its Series B Variable Rate Convertible Preferred Stock, par
value $.01 per share (the "Series B Preferred Stock"). In October 1996, the
Company entered into an amendment to the stock purchase agreement regarding the
sale of the Series A Preferred Stock, whereby Tekno Simon, the purchaser of such
series, agreed to purchase shares of Series B Preferred Stock, instead of
additional shares of Series A Preferred Stock as originally provided by the
agreement. The terms of the Series B Preferred Stock are identical to those of
the Series A Preferred Stock, except that the purchase price per share of the
Series B Preferred Stock will be subject to adjustment on the earlier of March
31, 1997 or completion of all of the fundings under the amended agreement, based
on the market prices of the Common Stock at the time of each such funding, but
in no event shall the purchase price be greater than $6.25 per share or less
than $4.50 per share. As of the date of this Prospectus, 29,767 shares of Series
B Preferred Stock are currently issuable under the amended agreement (based on
the initial purchase price of $5.375 per share as provided in the amended
agreement, subject to adjustment as described above).
SERIES C PREFERRED STOCK. In December 1996, the Board of Directors
designated 100,000 shares of the Company's Preferred Stock as the 4% $100 Series
C Convertible Preferred Stock (the "Series C Preferred Stock"), and 20,000 of
such shares were sold in a private placement to a single accredited strategic
investor. The Series C Preferred Stock pays quarterly cash dividends at the
annual rate of 4% and is convertible into shares of Common Stock based on an
initial conversion price of 110% of the market price of the Common Stock on the
date of the transaction (resulting in an initial conversion price of $6.325),
subject to certain adjustments. The Series C Preferred Stock will have a
liquidation preference of $100 per share over the Common Stock. The Series C
Preferred Stock ranks junior to the Series A Preferred Stock and Series B
Preferred Stock as to payment of dividends and liquidation rights. Each share of
Series C Preferred Stock is entitled to one vote per share, together with the
holders of shares of the Company's Common Stock and Series A Preferred Stock, as
a single class on all matters presented to a vote of the Company's shareholders,
except as otherwise expressly required by law. The Company may determine to
issue additional shares of Series C Preferred Stock in the future. There can be
no assurances that the Company will be able to negotiate and consummate any
further sales of Series C Preferred Stock.
ANTI-TAKEOVER EFFECTS. The authority possessed by the Board of
Directors to issue Preferred Stock could potentially be used to discourage
attempts by others to obtain control of the Company through merger, tender
offer, proxy contest or otherwise by making such attempts more difficult to
achieve or more costly. The Board of Directors may issue Preferred Stock with
voting and conversion rights that could adversely affect the voting power of the
holders of
-15-
<PAGE>
Common Stock. Except as described above, there are no agreements or
understandings for the issuance of Preferred Stock and the Board of Directors
has no intention to issue additional shares of Preferred Stock as of the date of
this Prospectus.
CERTAIN FLORIDA LEGISLATION
Florida has enacted legislation that may deter or frustrate takeovers
of Florida corporations. The Florida Control Share Act generally provides that
shares acquired in excess of certain specified thresholds will not possess any
voting rights unless such voting rights are approved by a majority vote of a
corporation's disinterested shareholders. The Florida Affiliated Transactions
Act generally requires supermajority approval by disinterested shareholders of
certain specified transactions between a public corporation and holders of more
than 10% of the outstanding voting shares of the corporation (or their
affiliates). Florida law and the Company's Articles of Incorporation also
authorize the Company to indemnify the Company's directors, officers, employees
and agents. Pursuant to such authorization, the Company has entered into
agreements with each of its directors and certain of its officers providing for
indemnification to the fullest extent permitted by law.
SHAREHOLDERS' RIGHTS PLAN
The Company has implemented a shareholders' rights plan providing for a
dividend distribution of one right (a "Right") for each outstanding share of
Common Stock. On August 23, 1996, the Board of Directors declared a dividend of
one Right for each outstanding share of Common Stock, payable on September 4,
1996 to the shareholders of record on that date. Each Right entitles the holder
thereof to purchase from the Company one share of Common Stock at a price of
$25.00 per share (the "Exercise Price"). The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement") between the Company
and American Stock Transfer & Trust Company, as Rights Agent, dated as of August
23, 1996.
The Rights will expire 10 years after issuance, unless earlier redeemed
by the Company as provided in the Rights Agreement at a price of $.01 per Right.
The Rights are not currently exercisable and automatically trade together with
the Common Stock.
The Rights, unless earlier redeemed, will become exercisable upon the
occurrence of certain events as defined in the Rights Agreement, which generally
would result in a change in control of the Company or the acquisition of 15% or
more of the Company's Common Stock in transactions not approved by the Board of
Directors prior to consummation thereof. Unless the Rights are earlier redeemed,
in the event that, after the Rights become exercisable, the Company were to be
acquired in a merger or other business combination (in which any shares of the
Company's Common Stock are changed into or exchanged for other securities or
assets) or more than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) were to be sold or transferred in one or a
series of related transactions, the Rights Agreement provides that proper
provision will be made so that each holder of record of a Right will have the
right to receive, upon payment of the Exercise Price, that number of shares of
common stock of the acquiring company having a market value at the time of such
transaction
-16-
<PAGE>
equal to two times the Exercise Price. In addition, unless the Rights are
earlier redeemed, if a person or group becomes an "acquiring person" (as defined
in the Rights Agreement), the Rights Agreement provides that proper provision
will be made so that each holder of record of a Right, other than such acquiring
person (whose Rights will thereupon become null and void), will thereafter have
the right to receive, upon payment of the Exercise Price, that number of shares
of the Company's Common Stock having a market value at the time of the
transaction equal to two times the Exercise Price.
The number of shares of Common Stock issuable upon exercise of the
Rights and the Exercise Price of the Rights are subject to certain adjustments
as set forth in the Rights Agreement. Until a Right is exercised, the holder, as
such, will have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends.
The Rights will have certain anti-takeover effects by causing
substantial dilution to a person or group that attempts to acquire the Company
in a manner or on terms not approved by the Board of Directors. The Rights,
however, should not deter any prospective offeror willing to negotiate in good
faith with the Board of Directors, nor should the Rights interfere with any
merger or other business combination approved by the Board of Directors.
SHARES ELIGIBLE FOR FUTURE SALE
See "Risk Factors -- Shares Eligible for Future Sale."
LEGAL MATTERS
The validity of the Shares is being passed upon for the Company by
Broad and Cassel, a partnership including professional associations, 201 South
Biscayne Boulevard, Suite 3000, Miami, Florida 33131.
EXPERTS
The financial statements of the Company incorporated by reference in
this Prospectus from the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1995 have been audited by Arthur Andersen LLP, independent
certified public accountants, as indicated in its report with respect thereto,
and is incorporated herein in reliance upon the authority of said firm as
experts in accounting and auditing.
-17-
<PAGE>
================================================================================
No dealer, salesperson or any other person has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus in connection with the offering made hereby, and
any information or representation not contained or incorporated herein must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the Shares described in the cover page hereof, or an offer
to sell or a solicitation of an offer to buy the Shares offered hereby in any
jurisdiction where, or to any person to whom, it is unlawful to make such offer
or solicitation. Neither the delivery of this Prospectus nor any sales made
hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
----------
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION..............................................3
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE.............................................3
THE COMPANY........................................................4
FORWARD-LOOKING STATEMENTS.........................................7
RISK FACTORS.......................................................8
USE OF PROCEEDS...................................................11
SELLING SHAREHOLDERS..............................................12
PLAN OF DISTRIBUTION..............................................13
DESCRIPTION OF CAPITAL STOCK......................................13
LEGAL MATTERS.....................................................17
EXPERTS...........................................................17
559,130 Shares
BIG ENTERTAINMENT, INC.
Common Stock
------------------------------
PROSPECTUS
------------------------------
_______________, 1997
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company estimates that its expenses in connection with this
registration statement will be as follows:
Securities and Exchange Commission registration fee... $ 1,056.12
Legal fees and expenses............................... 7,000.00
Accounting fees and expenses.......................... 1,000.00
Miscellaneous......................................... 943.88
--------------
Total........................................ $ 10,000.00
==============
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has authority under Section 607.0850 of the Florida
Business Corporation Act (the "FBCA") to indemnify its directors and officers to
the extent provided for in the FBCA. The Company's Amended and Restated Articles
of Incorporation provide that the Company shall indemnify and may insure its
officers and directors to the fullest extent permitted by law. The Company has
also entered into agreements with each of its directors and executive officers
wherein it has agreed to indemnify each of them to the fullest extent permitted
by law.
The provisions of the FBCA that authorize indemnification do not
eliminate the duty of care of a director, and in appropriate circumstances
equitable remedies such as injunctive or other forms of nonmonetary relief will
remain available under Florida law. In addition, each director will continue to
be subject to liability for (a) violations of criminal laws, unless the director
had reasonable cause to believe his conduct was lawful or had no reasonable
cause to believe his conduct was unlawful, (b) deriving an improper personal
benefit from a transaction, (c) voting for or assenting to an unlawful
distribution, and (d) willful misconduct or conscious disregard for the best
interests of the Company in a proceeding by or in the right of the Company to
procure a judgment in its favor or in a proceeding by or in the right of a
shareholder. The statute does not affect a director's responsibilities under any
other law, such as the federal securities laws. The effect of the foregoing is
to require the Company to indemnify the officers and directors of the Company
for any claim arising against such persons in their official capacities if such
person acted in good faith and in a manner that he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission,
II-1
<PAGE>
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
Pursuant to certain registration rights agreements, each of the Company
and the Selling Shareholders has agreed to indemnify the others and their
directors, officers, agents and representatives (and with respect to the
indemnification by the Company, any underwriters) against certain civil
liabilities that may be incurred in connection with this offering, including
certain liabilities under the Securities Act.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
5.1 Opinion of Broad and Cassel.
23.1 Consent of Broad and Cassel (included in Exhibit 5.1 hereto).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (see page II-4 of the Registration Statement).
ITEM 17. UNDERTAKINGS.
(a) RULE 415 OFFERING. The undersigned Registrant hereby
undertakes to:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section
10(a)(3) of the Securities Act.
(ii) Reflect in the prospectus any facts or events
which, individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
II-2
<PAGE>
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial BONA
FIDE offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
(b) REQUEST FOR ACCELERATION OF EFFECTIVE DATE. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boca Raton, State of Florida, on this 3rd day of
February, 1997.
BIG ENTERTAINMENT, INC.
By:/s/MITCHELL RUBENSTEIN
-------------------------------
Mitchell Rubenstein
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Mitchell Rubenstein and Laurie S.
Silvers his true and lawful attorneys-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ MITCHELL RUBENSTEIN Chairman of the Board and Chief February 3, 1997
- ----------------------------------- Executive Officer (principal
MITCHELL RUBENSTEIN executive officer and principal
financial and accounting officer)
/s/ LAURIE S. SILVERS Vice Chairman of the Board and February 3, 1997
- ----------------------------------- President
LAURIE S. SILVERS
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ MARTIN H. GREENBERG Director February 3, 1997
- -----------------------------------
MARTIN H. GREENBERG
/s/ HARRY T. HOFFMAN Director February 3, 1997
- -----------------------------------
HARRY T. HOFFMAN
/s/ LAWRENCE GOULD Director February 3, 1997
- -----------------------------------
LAWRENCE GOULD
/s/ JULES L. PLANGERE, JR. Director February 3, 1997
- -----------------------------------
JULES L. PLANGERE, JR.
/s/ E. DONALD LASS Director February 3, 1997
- -----------------------------------
E. DONALD LASS
Director
- -----------------------------------
DEBORAH J. SIMON
Director
- -----------------------------------
JOHN W. WALLER
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
5.1 Opinion of Broad and Cassel.
23.2 Consent of Arthur Andersen LLP
BROAD AND CASSEL
ATTORNEYS AT LAW
201 SOUTH BISCAYNE BOULEVARD
MIAMI CENTER, SUITE 3000
MIAMI, FLORIDA 33131
(305) 373-9400
February 3, 1997
Big Entertainment, Inc.
2255 Glades Road, Suite 237 West
Boca Raton, Florida 33431
RE: BIG ENTERTAINMENT, INC. (THE "COMPANY")
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
You have requested our opinion with respect to the shares (the
"Shares") of the Company's common stock, $.01 par value (the "Common Stock"),
included in the Company's registration statement on Form S-3 (the "Registration
Statement"). The Registration Statement is being filed with the U.S. Securities
and Exchange Commission pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), on behalf of certain selling shareholders and certain other
holders of securities of the Company, as named therein.
Capitalized terms used but not otherwise defined herein shall have the
meanings as set forth in the Registration Statement.
As counsel to the Company, we have examined the original or certified
copies of such records of the Company, and such agreements, certificates of
public officials, certificates of officers or representatives of the Company and
others, and such other documents as we deem relevant and necessary for the
opinion expressed in this letter. In such examination, we have assumed the
genuineness of all signatures on original documents, and the conformity to
original documents of all copies submitted to us as conformed or photostatic
copies. As to various questions of fact material to such opinion, we have relied
upon statements or certificates of officials and representatives of the Company
and others.
Based on, and subject to the foregoing, we are of the opinion that the
issued and outstanding Shares included in the Registration Statement are, and
the Shares underlying the Series C Preferred Stock and Placement Agent's
Warrants, when issued as described in the Registration Statement, will be, duly
and validly issued, fully paid and non-assessable.
In rendering this opinion, we advise you that members of this Firm are
members of the Bar of the State of Florida, and we express no opinion herein
concerning the applicability or effect of any laws of any other jurisdiction,
except the securities laws of the United States of America referred to herein.
<PAGE>
Big Entertainment, Inc.
February 3, 1997
Page 2
This opinion has been prepared and is to be construed in accordance
with the Report on Standards for Florida Opinions, dated April 8, 1991, issued
by the Business Law Section of The Florida Bar (the "Report"). The Report is
incorporated by reference into this opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the use of our name in the section
captioned "Legal Matters" in the Prospectus constituting part of the
Registration Statement. In giving such consent, we do not thereby admit that we
are included within the category of persons whose consent is required under
Section 7 of the Securities Act, or the rules and regulations promulgated
thereunder.
Very truly yours,
BROAD AND CASSEL
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this Form S-3 registration statement of our report
dated February 16, 1996 (except with respect to the matter discussed in Note 4
as to which the date is March 26, 1996) included (or incorporated by reference)
in Big Entertainment, Inc.'s 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
Miami, Florida
January 31, 1997
