As filed with the Securities and Exchange Commission on June 26, 1998
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
BIG ENTERTAINMENT, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA 65-0385686
- -------------------------------- ------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
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)
-----------------------
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)
-----------------------
COPIES OF COMMUNICATIONS TO:
DALE S. BERGMAN, P.A.
NINA S. GORDON, P.A.
BROAD AND CASSEL
201 SOUTH BISCAYNE BOULEVARD, SUITE 3000
MIAMI, FLORIDA 33131
TELEPHONE NO. (305) 373-9400
FACSIMILE NO. (305) 373-9443
-----------------------
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
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<PAGE>
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES AMOUNT TO OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED BE REGISTERED PER SHARE(1) PRICE(1) FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 248,053 $4.95 $1,227,862.35 $362.22
$.01 par value shares
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, 30,000 $9.68 $290,400.00 $85.67
$.01 par value(2) shares
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Common Stock, 7,231 $6.56 $47,435.36 $13.99
$.01 par value(3) shares
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, 55,000 $4.6589 $256,239.50 $75.59
$.01 par value(4) shares
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TOTAL:......................................................................................... $537.47
====================================================================================================================================
<FN>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(2) Represents shares issuable upon the exercise of a warrant issued by the
Company having an exercise price of $9.68 per share. Also includes such
additional shares as may be issuable as a result of the anti-dilution
provisions of said warrant.
(3) Represents shares issuable upon the exercise of a warrant issued by the
Company having an exercise price of $6.56 per share. Also includes such
additional shares as may be issuable as a result of the anti-dilution
provisions of said warrant.
(4) Represents shares issuable upon the exercise of warrants issued by the
Company having an exercise price of $4.6589 per share. Also includes such
additional shares as may be issuable as a result of the anti-dilution
provisions of said 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 JUNE _____, 1998
PROSPECTUS
340,284 SHARES
BIG ENTERTAINMENT, INC.
COMMON STOCK
This Prospectus relates to an aggregate of 340,284 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"), to be sold from time to time by certain shareholders of the Company
consisting of (i) 248,053 Shares held by certain shareholders and (ii) 92,231 of
the Shares issuable upon exercise of various warrants (the holders of said
shares and warrants collectively referred to as the "Selling Shareholders"). See
"Selling Shareholders." The Company will not receive any proceeds from the sale
of the Shares by the Selling Shareholders, but will receive up to an aggregate
of approximately $594,075 upon the exercise of the 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, the
Boston Stock Exchange, the Philadelphia Stock Exchange, or on any other exchange
on which the Common Stock may then be listed, in privately 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 June 22, 1998, the last reported sales price of the Common
Stock on the Nasdaq SmallCap Market was $4.875 per share.
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<PAGE>
SEE "RISK FACTORS" BEGINNING ON PAGE 7 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.
--------------------
THE DATE OF THIS PROSPECTUS IS JUNE ____, 1998
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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 Company's Annual Report on Form 10-KSB for the year ended December
31, 1997 and the Company's Quarterly Report on Form 10-QSB for the quarterly
period ended March 31, 1998, as filed by the Company with the Commission under
the Exchange Act are incorporated in and made a part of this Prospectus by
reference.
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
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<PAGE>
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 engaged in the
development and licensing of intellectual properties, the development and
licensing of books, and the operation of entertainment-related retail stores.
Big Entertainment conducts these activities through the Company and its wholly
and majority-owned subsidiaries, as well as through a joint venture known as
NetCo Partners ("NetCo Partners"), in which the Company has a 50% ownership
interest.
The Company has two operating divisions: the intellectual properties
division and the entertainment retail division.
The intellectual properties division owns the exclusive rights to
certain original characters and concepts, created by best-selling authors and
media celebrities, which it licenses across all media, including books, films
and television, multi-media software, toys and other products. The Company and
NetCo Partners acquire the rights to these intellectual properties pursuant to
agreements that generally grant them the exclusive rights to the intellectual
properties and the right to use the creator's name in the titles of the
intellectual properties (such as TOM CLANCY'S NETFORCE, MICKEY SPILLANE'S MIKE
DANGER, LEONARD NIMOY'S PRIMORTALS). The intellectual properties division also
includes a book licensing and packaging operation which focuses on developing
and executing book projects, typically with best-selling authors, which books
are then licensed for publication to book publishers such as HarperCollins,
Bantam Doubleday Dell, Random House, Simon & Schuster, Viking Press and Warner
Books.
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<PAGE>
The entertainment retail division operates a chain of retail studio
stores and "Entertainment Super/bullet/Kiosks" that sell entertainment-related
merchandise. Although all of the retail outlets are currently Company-operated,
Big Entertainment has entered into two separate franchise agreements that
provide in certain limited territorial areas for the future development of
franchised Big Entertainment studio stores and Super/bullet/Kiosks in those
areas. In addition, the Company has an agreement with The ABC Television Network
("ABC"), a division of The Walt Disney Company, pursuant to which the
entertainment retail division runs ABC video clips on the television monitors in
the Entertainment Super/bullet/Kiosks in exchange for promotional and
advertising spots on ABC affiliate television stations.
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.
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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 cause or contribute to such
difference in results include, but are not limited to, those discussed in the
sections captioned "Risk Factors" below as well as those discussed elsewhere in
this Prospectus and from time to time 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. The Company began generating revenues and
emerged from the development stage in the fourth quarter of 1994. Accordingly,
the Company has a relatively 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 $2,995,347
and $6,655,609 for the years ended December 31, 1997 and 1996, respectively and
$1,582,944 and $1,528,138 for the three months ended March 31, 1998 and 1997,
respectively. The Company had accumulated deficits of $25,223,610 and
$21,992,633 at December 31, 1997 and 1996, respectively, and $26,868,472 at
March 31, 1998.
The Company has made several modifications to its initial business plan
in an effort to reverse the losses that have been sustained since its inception.
During 1997, the Company stopped publishing comic books, an activity that
required a substantial amount of resources and had not proven to be profitable.
Essentially all of the overhead associated with comic book publishing has been
eliminated effective with the second quarter of 1997. At the same time, the
Company decided to expand its retail operations and has initiated this expansion
with the development of three prototype in-line retail stores. Substantial
resources were devoted to the development of the prototype in-line stores which
opened in the fourth quarter of 1997, including professional fees and expenses
incurred to design the new stores, the hiring of additional field and
administrative personnel, the selection and acquisition of new hardware and
software for a new retail accounting and merchandising system to be implemented,
and the capital expenditures for the new stores. The Company has also closed a
number of its unprofitable kiosk units, redeploying some of the units to
locations believed to be more profitable. In addition, the Company continues to
acquire and develop its base of intellectual properties, and to negotiate
additional licensing agreements thereon, which while not capital intensive,
requires a substantial amount of time from its senior executives. While the
Company believes that these measures will ultimately reverse its operating
losses, there can be no assurances that the revenues generated by the
intellectual property and retail divisions will be sufficient to offset the
associated expenses incurred.
AVAILABILITY OF CASH AND WORKING CAPITAL. The Company's cash and cash
equivalents at December 31, 1997 and 1996 totaled $887,153 and $1,675,852,
respectively. The Company had working capital deficit of $491,513 at December
31, 1997 compared to working capital of
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<PAGE>
$1,285,093 at December 31, 1996. At March 31, 1998, the Company had cash and
cash equivalents of $329,686 and a working capital deficit of $917,258. During
the year ended December 31, 1997, the Company used $4,012,481 of cash to fund
its operating activities and incurred a net loss of $2,995,347 during such
period. Net cash used in operating activities during the first quarter of 1998
was $1,530,023, and the Company's net loss during such quarter was $1,582,944.
The long-term financial success of the Company is dependent upon the Company's
ability to generate adequate revenue to offset operating expenses. The Company
continues to seek additional financing to fund its growth plan and for working
capital. Any such additional financing may result in dilution to the Company's
shareholders. Based on currently proposed plans and assumptions relating to its
operations, absent the Company's plans to expand its in-line studio stores (see
"-- Retail Operations," below), the Company believes that anticipated cash flows
from operations and its other potential sources of capital will be sufficient to
satisfy the Company's working capital requirements for approximately the next 12
months. If the Company's plans change or its assumptions prove to be inaccurate,
the Company may be required to seek further financing 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.
The Company's Chairman of the Board and Chief Executive Officer and the
Company's Vice Chairman and President have extended a $1.1 million unsecured
line of credit facility to the Company. The line of credit bears interest at the
JP Morgan Bank prime rate of interest. The outstanding balance under this line
of credit was $1,411,500 as of June 23, 1998. In addition, the Company's
Chairman of the Board and Chief Executive Officer and the Company's Vice
Chairman and President have represented that they would provide the Company, if
required, with an amount not to exceed $2.5 million during 1998 in order to
enable the Company to meet its working capital requirements for the balance of
1998; provided, however, that the commitment will terminate in the event the
Company raises no less than $2.5 million from other sources during the year. In
the event that the Company raises less than $2.5 million, the dollar amount of
the commitment will be reduced on a "dollar for dollar" basis to the extent of
such funds raised by the Company. This commitment is in addition to the existing
$1.1 million credit facility extended by these executives. Any such working
capital financing provided to the Company by the Company's Chairman and Chief
Executive Officer and the Company's Vice Chairman and President will be upon
terms negotiated and agreed to between them and the Company's Board of
Directors.
RETAIL OPERATIONS. The success of the Company's entertainment retail
division depends upon the Company's ability to open and operate Big
Entertainment studio stores and kiosks on a timely and profitable basis. The
Company has increased the number of its retail kiosks at a moderate pace, adding
10 new units in 1995, 10 new units in 1996 and four new units in 1997. These new
units coupled with the addition of three new in-line studio stores that were
opened in the fourth quarter of 1997 have necessitated that the Company incur
additional operating and administrative expenses in conjunction with its retail
operations. The Company has closed eight kiosks in 1998 and has not opened any
new kiosk locations. Instead, the Company intends to expand its retail
operations through the opening of additional Company-owned studio stores. The
successful realization of the Company's expansion plans depends on, among other
things, the ability of the Company and its franchisees to secure suitable sites,
to hire, train and retain qualified personnel; to obtain leases on favorable
terms; to secure any required financing; and the general business and economic
conditions in the localities of its retail outlets. The Company plans to
evaluate the results of its retail store expansion (particularly the new in-line
store concept) and to make modifications and/or curtail operating and
administrative costs where appropriate. There can be no assurance that the
Company will be successful in expanding or operating its retail outlets or
continuing the implementation of its franchise program.
COMPETITION. Competition is generally intense in the entertainment
industries in which the Company operates. In the licensing market, the Company
competes with a wide range of other corporations as well as individuals, many of
which have more financial resources than the Company. The Company's
entertainment retail division competes for sales with specialty stores and other
retail outlets which offer entertainment merchandise. There can be no assurance
that the Company will be able to compete successfully in any of these market
segments.
TRADEMARKS AND PROPRIETARY RIGHTS. The Company's intellectual
properties are the principal assets of the Company's licensing and publishing
divisions. The Company has filed
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applications for federal trademark registration of its existing trademarks and
files applications for trademark and copyright protection for each of its
intellectual properties. Although to date the Company has approximately 30 U.S.
registered trademarks and applications to register additional trademarks
pending, there can be no assurance that any such additional applications 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 but which is expected to be renewed for an additional five-year term. 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 of which $500,000 per
policy has been pledged to one of the Company's senior creditors. 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 30.5% 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.
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. The
Company's outstanding Series C Preferred Stock accrues cash dividends at the
annual rate of 4%. The Company intends to retain earnings remaining after
payment of such cash dividends 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 is a relatively limited trading market for the Common Stock.
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.
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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 3,367,000 shares of Common Stock held by existing shareholders and
186,405 shares of Common Stock held in escrow 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 registered under the Securities Act for resale by the holders
thereof, including the Shares, 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 1,014,543
shares of Common Stock, warrants to purchase an aggregate of 944,996 shares of
Common Stock, and 20,000 shares of Series C Preferred Stock convertible into
395,257 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 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.
ANTI-TAKEOVER PROVISIONS. 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 Company's
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 may issue additional shares of
preferred stock in the future for financing and other purposes, the Company does
not have any agreements to issue additional shares of preferred stock as of the
date of this Prospectus.
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The Company has adopted a Shareholders' Rights Plan and in September
1996 declared a dividend of one right ("a Right") for each outstanding share of
Common Stock. Each Right entitles the holder thereof to purchase from the
Company one share of Common Stock at a price of $25.00 per share upon the
occurrence of specific events. See "Description of Capital Stock --
Shareholders' Rights Plan." Such Rights may cause 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 Shareholders' Rights Plan is intended to
encourage a person interested in acquiring the Company to negotiate with, and to
obtain the approval of, the Board of Directors in connection with such a
transaction. The Shareholders' Rights Plan, however, may discourage a future
acquisition of the Company, including an acquisition in which shareholders might
otherwise receive a premium for their shares. As a result, shareholders who
might desire to participate in such a transaction may not have the opportunity
to do so.
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,
but may receive an aggregate of approximately $594,075 upon exercise of all of
the Warrants. Such proceeds, if any, will be used for working capital and other
corporate purposes.
Expenses expected to be incurred by the Company in connection with the
registration of the Shares are estimated at approximately $20,000.
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<TABLE>
<CAPTION>
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.
OWNERSHIP OF SHARES OWNERSHIP OF SHARES
OF COMMON STOCK NUMBER OF OF COMMON STOCK
NAME AND ADDRESS OF PRIOR TO OFFERING SHARES AFTER OFFERING(1)
SELLING SHAREHOLDER SHARES PERCENTAGE OFFERED HEREBY SHARES PERCENTAGE
------------------- ------ ---------- -------------- ------ ----------
<S> <C> <C> <C> <C> <C>
Taurus Equity Fund, L.P 157,321(2) 2% 157,321 0 *
c/o Wasserstein Perella & Co.
31 W. 52nd Street
New York, NY 10019
Apollo Capital Management 80,000 1% 80,000 0 *
Group L.P.
150 Second Avenue N.
Suite 860
St. Petersburg, FL 33701
The Seedling Fund L.P. 50,000 * 50,000 0 *
591 Stewart Avenue
Suite 550
Garden City, NY 11530
BankBoston Retail Finance, Inc. 30,000(3) * 30,000 0 *
40 Broad Street
Boston, MA 02110
Joseph Stein, Jr. 9,439(4) * 9,439 0 *
c/o Wasserstein Perella & Co.
31 W. 52nd Street
New York, NY 10019
TLP Leasing Programs, Inc. 7,231(5) * 7,231 0 *
One Financial Center, 21st Floor
Boston, MA 02111
Steinberg Family Trust 6,293(6) * 6,293 0 *
6610 Cross Country Boulevard
Baltimore, MD 21215
</TABLE>
- -------------------------
*Less than 1%.
12
<PAGE>
(1) Assumes that all shares are sold pursuant to this Registration
Statement 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) Consists of 107,321 shares of Common Stock and 50,000 shares issuable
upon exercise of a Warrant to purchase shares of Common Stock at a
price of $4.6589 per share.
(3) Consists of shares issuable upon exercise of a Warrant to purchase
shares of Common Stock at a price of $9.68 per share.
(4) Consists of 6,439 shares of Common Stock and 3,000 shares of Common
Stock issuable upon exercise of a Warrant to purchase shares of Common
Stock at a price of $4.6589 per share.
(5) Consists of shares issuable upon exercise of a Warrant to purchase
shares of Common Stock at a price of $6.56 per share.
(6) Consists of 4,293 shares of Common Stock and 2,000 shares of Common
Stock issuable upon exercise of a Warrant to purchase shares of Common
Stock at a price of $4.6589 per share.
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, the
Boston Stock Exchange, the Philadelphia Stock Exchange, or on any other exchange
on which the Common Stock may then be listed, in privately 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. 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.
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
13
<PAGE>
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 $20,000, 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 SECURITIES
GENERAL
The Company's authorized capital stock consists of 25,000,000 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 June 16, 1998, 7,343,832
shares of Common Stock and an aggregate of 360,446 shares of Preferred Stock
were outstanding, and 186,405 shares of Common Stock were issued and held in
escrow. 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.
14
<PAGE>
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 (8.50% as of the date of this
Prospectus). The Series A Preferred Stock is 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 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, Martin H. Greenberg and Asbury Park Press, Inc.)
agreed in connection with the sale of the Series A Preferred Stock that the
Company shall appoint one nominee of Tekno Simon, LLC ("Tekno Simon"), the
holder of all outstanding shares 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") of which 122,846 shares
are outstanding. The terms of the Series B Preferred Stock are identical to
those of the Series A Preferred Stock, except that the stated value of the
Series B Preferred Stock is $5.21 per share.
SERIES C PREFERRED STOCK. The Company has designated 100,000 shares of
the Preferred Stock as 4% $100 Series C Convertible Preferred Stock (the "Series
C Preferred Stock"), of which 20,000 shares are issued and outstanding. 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 a conversion price of
$5.06 per share. The Series C Preferred Stock has a liquidation preference of
$100 per share over the Common Stock. The Series C Preferred
15
<PAGE>
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, Series A Preferred Stock and Series B
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.
CERTAIN ANTI-TAKEOVER EFFECTS
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.
Additionally, the authority possessed by the Board of Directors to
issue Preferred Stock and the Company's Shareholders' Rights Plan described
below 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 Common Stock. Except as
described above, there are no agreements or understandings for the issuance of
Preferred Stock as of the date of this Prospectus.
SHAREHOLDERS' RIGHTS PLAN
The Company has implemented a Shareholders' Rights Plan providing for a
dividend distribution of one 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 to the shareholders of record on such
date, payable on September 4, 1996. 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.
16
<PAGE>
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 outstanding 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 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.
17
<PAGE>
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, 1997 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.
18
<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.................... 6
RISK FACTORS.................................. 7
USE OF PROEEDS................................ 11
SELLING SHAREHOLDERS.......................... 12
PLAN OF DISTRIBUTION.......................... 13
DESCRIPTION OF SECURITIES..................... 14
LEGAL MATTERS................................. 17
EXPERTS....................................... 18
340,284 Shares
BIG ENTERTAINMENT, INC.
Common Stock
--------------------------
PROSPECTUS
--------------------------
June__, 1998
===============================================================================
<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.... $ 537
Legal fees and expenses................................ 10,000
Accounting fees and expenses........................... 5,000
Miscellaneous.......................................... 4,463
-------
Total......................................... $20,000
=======
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, such
II-1
<PAGE>
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 (included in signature page).
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.
(iii) Include any additional or changed material
information on the plan of distribution.
II-2
<PAGE>
(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.
(c) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY
REFERENCE. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act 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.
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 26th day of
June, 1998.
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 his or her
true and lawful attorney-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 attorney-in-fact or his substitute, 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 June 26, 1998
- ----------------------- Executive Officer (Principal
MITCHELL RUBENSTEIN executive officer)
/S/ LAURIE S. SILVERS Vice Chairman of the Board and June 26, 1998
- ----------------------- President
LAURIE S. SILVERS
/S/ MARCI L.YUNES Chief Financial Officer June 26, 1998
- ----------------------- (Principal financial and
MARCI L. YUNES accounting officer)
II-4
<PAGE>
/S/ LAWRENCE GOULD Director June 26, 1998
- -----------------------
LAWRENCE GOULD
/S/ MARTIN H. GREENBERG Director June 26, 1998
- -----------------------
MARTIN H. GREENBERG
/S/ HARRY T. HOFFMAN Director June 26, 1998
- -----------------------
HARRY T. HOFFMAN
/S/ E. DONALD LASS Director June 26, 1998
- -----------------------
E. DONALD LASS
Director June __, 1998
- -----------------------
JULES L. PLANGERE
/S/ DEBORAH J. SIMON Director June 26, 1998
- -----------------------
DEBORAH J. SIMON
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
5.1 Opinion of Broad and Cassel.
23.2 Consent of Arthur Andersen LLP.
[BROAD AND CASSEL LETTERHEAD]
June 26, 1998
Big Entertainment, Inc.
2255 Glades Road, #237W
Boca Raton, Florida 33431-7383
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 of the
Company's common stock, par value $.01 per share (the "Common Stock"), included
in the Registration Statement on Form S-3 (the "Form S-3") filed with the U.S.
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the "Securities Act").
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
opinions 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 opinions, 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 of Common Stock being registered on behalf of the
Selling Shareholders as described in the Form S-3 have been duly and validly
issued, and are fully paid and non-assessable. Furthermore, we are of the
opinion that the shares of Common Stock being registered in the Form S-3 that
are issuable due to or upon exercise of the Company's warrants, shall, upon such
issuance as described in the Form S-3, be duly and validly issued and fully paid
and nonassessable.
<PAGE>
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.
This opinion has been prepared and is to be construed in accordance
with the Report on Standards for Florida Opinions, dated April 8, 1991, as
amended and supplemented, 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
Form S-3. We also consent to the use of our name under the caption "Legal
Matters" in the Prospectus constituting part of the Form S-3. 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,
/s/ BROAD AND CASSEL
--------------------
BROAD AND CASSEL
EXHIBIT 23.2
CONSENT OF ARTHUR ANDERSEN LLP
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 March 20, 1998 included in Big Entertainment, Inc.'s Form 10-KSB for the
year ended December 31, 1997, and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
- -----------------------
ARTHUR ANDERSEN LLP
Miami, Florida,
June 25, 1998
