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As filed with the Securities and Exchange Commission on October 8, 1996
Registration No.033-69110-S
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT
NO. 5 ON FORM S-3
[FORMERLY FORM SB-2]
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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ACRES GAMING INCORPORATED
(Exact name of Registrant as specified in its charter)
Nevada 88-0206560
(State of Incorporation) (I.R.S. Employer Identification No.)
815 N.W. Ninth Street
Corvallis, Oregon 97330
(541) 753-7648
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
Robert W. Brown
CHIEF FINANCIAL OFFICER
ACRES GAMING INCORPORATED
815 N.W. Ninth Street
Corvallis, Oregon 97330
(541) 753-7648
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies to:
Patrick J. Simpson, Esq.
Sehar S. Ahmed, Esq.
PERKINS Coie
1211 S.W. Fifth Avenue, Suite 1500
Portland, OR 97204
(503) 727-2000
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.
If any 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/
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723,506 SHARES OF COMMON STOCK AND
145,000 UNITS
CONSISTING OF 145,000 SHARES OF COMMON STOCK AND 72,500 REDEEMABLE COMMON STOCK
PURCHASE WARRANTS OF
ACRES GAMING INCORPORATED
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The Units offered hereby are being offered by Acres Gaming Incorporated
(the "Company") and may be issued and sold from time to time by the Company
upon exercise of certain underwriter's warrants (the "Underwriter's
Warrants") at an exercise price of $6.00 per share. Each Unit offered hereby
consists of one share of the Company's common stock, $.01 par value ("Common
Stock"), and one-half of a Redeemable Common Stock Purchase Warrant
("Redeemable Warrant"). The Common Stock and Redeemable Warrants are
detachable and are separately transferable following issuance. The Company
will receive proceeds from the exercise of the Underwriter's Warrants equal
to the exercise price of $6.00 per share. The shares of Common Stock being
offered hereby (the "Shares") consist of 723,506 Shares which may be issued
and sold from time to time by the Company upon exercise of Redeemable
Warrants. Each Redeemable Warrant entitles the holder ("Warrantholder")
thereof to purchase one share of Common Stock at a price equal to $7.50 per
share, subject to adjustment as a result of certain events. See "Description
of Securities." The Company will receive proceeds from the exercise of the
Redeemable Warrants equal to the exercise price of $7.50 per share.
The Company's Units, Common Stock and Redeemable Warrants are currently
traded over-the-counter on the Nasdaq Small Cap Market under the symbols
"AGAMU," "AGAM" and "AGAMW", respectively. On October 1, 1996, the closing
bid prices for the Units, the Common Stock and the Redeemable Warrants were
$16.75, $14.13 and $6.86, respectively.
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SEE "RISKS FACTORS" BEGINNING ON PAGE 4 OF THIS PROSPECTUS FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE UNITS AND THE SHARES.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
NEITHER THE NEVADA GAMING COMMISSION NOR THE NEVADA STATE GAMING CONTROL
BOARD NOR ANY OTHER GAMING AUTHORITY HAS PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS OR THE INVESTMENT MERITS OF THE SECURITIES
OFFERED HEREBY. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
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PRICE TO UNDERWRITING DISCOUNT PROCEEDS TO
PUBLIC AND COMMISSIONS COMPANY(1)
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PER SHARE(2) ............ $ 7.50 $ $ 7.50
PER UNITS(3) ............ $ 6.00 $ $ 6.00
TOTAL ................... $6,296,295 $ $6,296,295
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(1) Expenses of this offering, estimated at $55,216.00, are payable by the
Company.
(2) Based upon the exercise price of the Redeemable Warrants of $7.50 per
Share
(3) Based upon the exercise price of the Underwriter's Warrants of $6.00 per
Unit.
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THE DATE OF THIS PROSPECTUS IS OCTOBER 8, 1996
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AVAILABLE INFORMATION
The Company has filed Post-Effective Amendment No. 5 on Form S-3, which
amends the registration statement on Form SB-2 (File No. 33-69110-S) (the
"Registration Statement") first filed with the Securities and Exchange
Commission (the "Commission") on September 20, 1993, under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Units and
Shares offered hereby. The Prospectus does not contain all of the information
set forth in the Registration Statement and the exhibits thereto. For further
information with respect to the Company, the Units and the Shares, reference
is made to the Registration Statement and the exhibits thereto. Statements
made in this Prospectus as to the contents of any contract or other document
referred to are not necessarily complete, and in each instance reference is
made to the copy of such contract or other document filed as an exhibit to
the Registration Statement, each such statement being qualified in all
respects by such reference.
The Registration Statement is available for review at the Commission's
offices in Washington, D.C. All or part of the Registration Statement may be
inspected and copied, upon payment of the prescribed fees, at the Public
Reference Section of the Commission, 450 Fifth Street N.W., Judiciary Plaza,
Washington, D.C., 20549-1004 and at the Commission's Website at
http://www.sec.gov.
In addition, 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 Commission. Such reports, proxy statements and other information can
be inspected and copied at, and copies of such material obtained at
prescribed rates from, the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549-1004, at the Commission's Website at http://www.sec.gov and at the
Commission's regional offices located at 7 World Trade Center, Suite 1300,
New York, New York, 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois, 60661-2511.
The Company currently furnishes Annual Reports to its Shareholders and
intends to continue to do so.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to the
Exchange Act are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended June 30,
1996, including financial statements incorporated by reference.
2. The description of the Company's Common Stock contained in the
Registration Statement on Form 8-A filed with the Commission on
September 27, 1993, under Section 12(g) of the Exchange Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior
to the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing
of such documents (such documents, and the documents enumerated above, being
hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Prospectus, and the
Registration Statement of which it is a part, to the extent that a statement
contained herein or in any other subsequently filed Incorporated Document or
in an accompanying prospectus
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supplement modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus or Registration Statement.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of any
such person, a copy of any or all of the Incorporated Documents, other than
exhibits to such documents, unless such exhibits are specifically
incorporated by reference therein. Requests should be directed to Robert W.
Brown, Chief Financial Officer, at the Company's principal executive offices,
Acres Gaming Incorporated, 815 N.W. Ninth Street, Corvallis, Oregon, 97330,
telephone (541) 753-7648. The information relating to the Company contained
in this Prospectus does not purport to be comprehensive and should be read
together with the information contained in the Incorporated Documents.
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PROSPECTUS SUMMARY
THE COMPANY
Acres Gaming Incorporated (the "Company") develops, manufactures and
markets electronic game promotion, slot accounting, and game monitoring
systems to the casino gaming industry. Its Concept III products are designed
to enhance casino profitability by providing entertainment and incentives to
players of slot machines and collecting and analyzing data for use by casino
managers. The Concept III technology improves the efficiency of bonus and
incentive programs currently offered by many casinos, and makes possible
bonus and incentive programs that have not previously been offered. A number
of the primary manufacturers of slot machines have made extensive changes to
the software used in their machines to support the Concept III technology.
The Company currently offers products in four major categories:
- Bonusing
- Progressive jackpots
- Slot accounting
- Player tracking
Bonusing and progressive jackpot systems, which provide players with
opportunities for additional play and special pay-outs, are designed to
enhance interest in the machines and games to which they are attached. The
slot accounting products collect, analyze and report data to casino managers
to satisfy accounting and regulatory requirements and to enable casino
management to analyze the performance of each gaming device by type and
location. Player tracking systems allow a casino to monitor the playing
patterns of individual players or selected groups of players and to develop
incentives and promotions for those players.
Concept III and its component products are a modular, integrated system.
The slot accounting, player tracking, progressive jackpot and bonusing
modules can be purchased and installed individually or as an integrated
system. Modularity permits a casino to introduce Concept III in stages,
adding modules as additional functions are desired. The modular design also
is intended to permit products that may be developed in the future to be
integrated into the Concept III system.
The Company was incorporated under the laws of the State of Nevada in
January 1985. The Company's principal office is located at 815 N.W. Ninth
Street, Corvallis, Oregon 97330. Its telephone number is (541) 753-7648.
RISK FACTORS
An investment in the Units and in the Shares offered hereby involves a
high degree of risk. This Prospectus contains, in addition to historical
information, forward-looking statements that involve risks and uncertainties.
The Company's actual results could differ materially from the results
discussed in the forward-looking statements. Prospective investors should
consider the following factors, among others, in making a decision concerning
purchase of the Units or the Shares offered hereby:
LIMITED OPERATING HISTORY; LOSSES. Although the Company was incorporated
in January 1985, the Company did not make initial installations of its
Concept III product line until the fiscal year ended June 30, 1992. The
Company's limited operating history makes the prediction of future operating
results difficult. For the fiscal year ended June 30, 1996, the Company had
revenues of $6,942,000 and a net loss of $1,641,000. The Company also
incurred net losses for the fiscal years ended June 30, 1995, 1994, 1993 and
1992. At June 30, 1996, the Company had an accumulated deficit of $7,313,000.
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PRODUCT CONCENTRATION. The Company derives substantially all of its
revenues from the sale of products in its Concept III system and the Company's
future success will depend on its ability to continue to generate sales of
these products. A decline in demand or prices for the Company's Concept III
system, whether as a result of new product introduction or price competition
from competitors, technological changes, or failure of the Company's Concept
III system to address customer requirements or otherwise, could have a
material adverse effect on the Company's revenues and operating results.
MANAGEMENT OF GROWTH. The Company has recently experienced significant
growth in its business, which has placed, and if sustained will continue to
place, a substantial burden on its operational, administrative and financial
resources. The Company's ability to compete effectively and to manage future
growth, if any, would require the Company to continue to improve its financial
and management controls, reporting systems and procedures on a timely basis
and expand, train and manage its employees. Any failure by the Company to
implement and improve any of the foregoing could have a material adverse
effect on the Company's business, operating results and financial condition.
STRATEGIC ALLIANCE. In August 1996, the Company executed a letter of
intent to implement a strategic alliance with International Gaming Technology
("IGT"). IGT is the largest manufacturer of slot machines in the world. The
agreement includes a $5 million investment from IGT in return for 519,481
newly issued shares of the Company's 3% convertible preferred stock, with a
12 month option to purchase an additional 519,481 shares at the same price.
The strategic alliance, however, may not be fully implemented or, if
implemented, such alliance could materially and adversely affect the
Company's financial condition and results of operations. In addition,
customers and potential customers of the Company who are competitors of IGT
may view this strategic alliance unfavorably.
LIQUIDITY. If exercised in full, the gross proceeds to the Company from
the exercise of the Redeemable Warrants and the Underwriter's Warrants would
be approximately $6,296,295. In addition, if the strategic alliance between
IGT and the Company is implemented, IGT will be providing $5 million in
financing to the Company. However, the Company may not obtain proceeds from
either the exercise of the Redeemable Warrants or the Underwriter's Warrants
or from the strategic alliance with IGT, sufficient funds to maintain new
product development efforts and expected levels of operations may not be
available and additional capital from other sources, if and when needed by
the Company, may not be available on terms acceptable to the Company.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS. The Company's quarterly
operating results have fluctuated in the past, and may fluctuate
significantly in the future, due to a number of factors, including, among
others, the size and timing of customer orders, the timing and market
acceptance of new products by the Company, changes in the level of operating
expenses, technological advances and new product introductions by the
Company's competitors, competitive conditions in the industry, regulatory
approval and general economic conditions. Product development and marketing
costs are often incurred in periods before any revenues are recognized from
the sales of products, and gross margins are lower and operating expenses are
higher during periods in which such product development expenses are incurred
and marketing efforts are commenced. At its current stage of operations, the
Company's quarterly revenues and results of operations may be materially
affected by the receipt or loss of any one order and by the timing of the
delivery, installation and regulatory approval of any one order. The Company
may not be able to attain or maintain profitable operations on a consistent
basis. The Company believes that period to period comparisons of its
financial results may not be meaningful and should not be relied upon as
indications of future performance. Fluctuations in operating results may
result in volatility in the price of the Company's Common Stock.
RISKS OF TECHNOLOGICAL CHANGE. The markets in which the Company
competes are subject to frequent technological changes and one or more of the
Company's competitors may develop alternative technologies for
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bonusing, progressive jackpots, slot accounting, player tracking or game
promotions. The Company's future results of operations will depend upon its
ability to improve and market its existing products and to successfully
develop, manufacture and market new products. While the Company plans to
expend a significant portion of its revenues on research and development and
on product enhancement, the Company may not be able to continue to improve
and market its existing products or develop and market new products, or
technological developments may cause the Company's products or technology to
become obsolete or noncompetitive. Any failure by the Company to anticipate
or respond adequately to technological developments and customer requirements
could materially and adversely affect the Company's operating results.
COMPETITION. The market for electronic slot accounting, player tracking,
progressive jackpot systems and game promotion systems is highly competitive.
Many of the Company's competitors have substantially greater financial,
marketing and technological resources than the Company and the Company may
not be able to compete successfully with them.
PATENTS AND TRADEMARKS. The Company relies on a combination of patent,
trade secret, copyright and trademark law, nondisclosure agreements and
technical security measures to protect its products. The Company has applied
for U.S. patents on certain features of its Concept III product line, and may
in the future apply for other U.S. patents and corresponding foreign patents.
The Company may also file for patents on certain features of products that
the Company may develop in the future. Notwithstanding these safeguards, it
is possible for competitors of the Company to obtain its trade secrets and to
imitate its products. Furthermore, others may independently develop products
similar or superior to those developed or planned by the Company. While the
Company may obtain patents with respect to certain of its products, the
Company many not have sufficient resources to defend such patents, such
patents may not afford all necessary protection and competitors may develop
equivalent or superior products which may not infringe such patents.
GOVERNMENT REGULATION; POTENTIAL RESTRICTIONS ON SALES. The Company is
subject to gaming regulations in each jurisdiction in which its products are
sold or are used by persons licensed to conduct gaming activities. The
Company's products generally are regulated as "associated equipment,"
pursuant to which gaming regulators have discretion to subject the Company,
its officers, directors, key employees, other affiliates, and certain
shareholders to licensing, approval and suitability requirements. In the
event that gaming authorities determine that any person is unsuitable to act
in such capacity, the Company will be required to terminate its relationship
with such person, and under certain circumstances, the Company has the right
to redeem its securities from persons who are found unsuitable. See
"Description of Securities -- Common Stock.'' Products offered and expected
to be offered by the Company include features that are not available on
products currently in use. These new features may, in some cases, result in
additional regulatory review and licensing requirements for the products or
the Company. Compliance with such regulatory requirements may be time
consuming and expensive, and may delay or prevent a sale in one or more
jurisdictions. In addition, associated equipment generally must be approved
by the regulatory authorities for its use by each licensed location within
the jurisdiction, regardless of whether the Company is subject to licensing,
approval, or suitability requirements. Failure by the Company to obtain, or
the loss or suspension of, any necessary licenses, approvals or suitability
findings, may prevent the Company from selling or distributing its product in
such jurisdiction. Such results may have a material adverse effect on the
Company. From time to time, the Company enters into contracts that are
contingent upon the Company and/or the customer obtaining the necessary
regulatory approvals to sell or use the Company's products or to operate a
casino. Failure to timely obtain such approvals may result in the termination
of the contract of sale and the Company may be required to return all amounts
paid pursuant to such contract. Failure to obtain necessary regulatory
approvals could have a material adverse effect on the Company.
DEPENDENCE ON FOUNDER. The Company's operations are materially dependent
upon the services of John F. Acres, Chief Executive Officer and principal
shareholder of the Company. The Company does not
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currently have an employment or non-competition agreement with Mr. Acres.
The Company maintains "key person" insurance on the life of Mr. Acres,
payable to the Company, in the sum of $7,000,000. The loss of the services of
Mr. Acres would materially and adversely affect the Company's business.
CONTROL BY EXISTING MANAGEMENT. John F. Acres, the Chief Executive
Officer of the Company, beneficially owns approximately 41% of the Company's
outstanding shares of Common Stock. Because of such ownership, Mr. Acres is
able to control the affairs of the Company, including the election of
directors. See "Description of Securities -- Common Stock."
ABSENCE OF DIVIDENDS. The Company has not paid any dividends on its
Common Stock since its inception and does not anticipate paying any dividends
in the foreseeable future. Earnings of the Company, if any, are expected to be
used to finance the development and expansion of the Company's business. Any
future decision with respect to dividends will depend on future earnings,
future capital needs and the Company's operating and financial condition,
among other factors. See "Description of Securities -- Common Stock."
EXERCISE OF OPTIONS AND WARRANTS. As of June 30, 1996, 756,375 shares
of Common Stock were subject to outstanding stock options under the Company's
Stock Option Plan at exercise prices ranging from $3.00 to $10.00 per share
and approximately 1,068,600 shares were issuable upon exercise of outstanding
warrants at exercise prices ranging from $4.75 to $9.00 per share. While
outstanding options and warrants are exercisable, the holders thereof have
the opportunity to profit from a rise in the market price of the common
stock. The Company may find it more difficult to raise additional equity
capital while the options and warrants are outstanding. At any time when the
holders might be expected to exercise their options and warrants, the Company
would probably be able to obtain additional equity capital on terms more
favorable than those provided in the options and warrants being exercised.
Holders of options and warrants do not have any of the rights or privileges
of shareholders of the Company prior to exercise of the options and warrants.
USE OF PROCEEDS
The gross proceeds to the Company from the exercise of the Redeemable
Warrants and the Underwriter's Warrants are estimated to be as much as
$6,296,295, assuming all of the Redeemable Warrants and the Underwriter's
Warrants are exercised, or as little as nothing. The net proceeds (if any)
from the exercise of the Redeemable Warrants and the Underwriter's Warrants
will be used to finance the operation and expansion of the Company's
business. The Company expects to use approximately $4,000,000 of the net
proceeds for research and development costs in connection with the
enhancement of the Company's Concept III product line, approximately
$100,000,000 for expansion of sales and support activities by hiring of
additional personnel, approximately $500,000 to fund capital expenditures
for computers and other equipment, primarily for use by the Company's
engineering staff. The Company anticipates that the remaining net proceeds
(if any) will be used for funding of inventories, and other general corporate
and working capital purposes. The foregoing discussion assumes that the
Company will receive net proceeds of $6,296,295. Since the actual amount of
net proceeds is uncertain, the foregoing uses and amounts only represent
management's current expectations as to the application of such proceeds as
they are received by the Company.
DESCRIPTION OF SECURITIES
COMMON STOCK
The Company is authorized to issue up to 50,000,000 shares of Common
Stock, $.01 par value. As of August 31, 1996, these were 7,621,600 shares
outstanding and approximately 230 holders of record of the Company's Common
Stock. The Company estimates that there are over 1,000 beneficial owners of
the Company's stock.
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Holders of Common Stock are entitled to receive such dividends as are
declared by the Board of Directors of the Company out of funds legally
available for the payment of dividends. The Company intends to retain any
earnings to finance the development of its business. Accordingly, the Company
does not anticipate payment of any dividends on the Common Stock in the
foreseeable future. In the event of any liquidation, dissolution or winding
up of the Company, the holders of Common Stock will be entitled to receive a
pro rata share of the net assets of the Company remaining after payment or
provision for payment of the debts and other liabilities of the Company.
Holders of Common Stock are entitled to one vote per share in all
matters to be voted upon by shareholders. There is no cumulative voting for
the election of directors, which means that the holders of shares entitled to
exercise more than 50% of the voting rights in the election of directors are
able to elect all of the directors. Holders of Common Stock have no
preemptive rights to subscribe for or to purchase any additional shares of
Common Stock or other obligations convertible into shares of Common Stock
which may hereafter be issued by the Company.
The Company's Articles of Incorporation provide that the Company may
redeem, at fair market value, securities held by any person or entity whose
status as a security holder, in the opinion of the Board of Directors of the
Company, may result in the disapproval, modification or non-renewal of any
contract or the loss or non-reinstatement of any license or franchise from
any governmental agency held by the Company or any of its subsidiaries, which
license or franchise is conditioned upon some or all of the holders of
capital stock meeting certain criteria. These restrictions are contained in a
legend on each certificate evidencing shares of Common Stock.
In addition, on December 21, 1995, the Company was licensed by the
Nevada Gaming Commission ("Nevada Commission") as a publicly traded
corporation ("Registered Corporation"). Under the Nevada Gaming Control Act
("Nevada Act"), any beneficial holder of the Company's voting securities,
regardless of the number of shares owned, may be required to file an
application, be investigated and have his suitability as a beneficial holder
of the Company's voting securities determined if the Nevada Commission has
reason to believe that such ownership would otherwise be inconsistent with
the declared policies of the State of Nevada.
The Nevada Act requires any person who individually, or in conjunction
with others, directly or indirectly acquires beneficial ownership of more
than 5% of the voting securities of the Company to report such acquisition to
the Nevada Commission within ten days following the required, or voluntary,
reporting of such acquisition with the Commission. Likewise, the Nevada Act
requires any person who individually, or in conjunction with others, directly
or indirectly acquires beneficial ownership of more than 10% of the voting
securities of the Company to report such acquisition to the Nevada Commission
in the same manner, and further, to apply to the Nevada Commission for a
finding of suitability to be associated with the Company within 30 days after
the chairman of the Nevada Board mails a written notice to such person(s)
requiring such filing. Under certain circumstances, an "institutional
investor," as defined in the Nevada Act, which acquires more than 10%, but
not more than 15%, of the voting securities of the Company may apply to the
Nevada Commission for a waiver of such finding of suitability if such
institutional investor holds the voting securities for investment purposes
only.
All of the outstanding shares of Common Stock, including the Shares
offered hereby, are, or upon the exercise of the Redeemable Warrants or the
Underwriter's Warrants will be, fully paid and non-assessable. Holders of
Common Stock of the Company are not liable for further calls or assessments.
REDEEMABLE WARRANTS AND UNDERWRITER'S WARRANTS
A total of 868,506 shares of Common Stock may be sold pursuant to this
Prospectus upon exercise of the Redeemable Warrants and Underwriter's
Warrants. The Redeemable Warrants were issued by the Company in
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November 1993 at an exercise price of $7.50 per share, subject to adjustment
as a result of certain events. The Redeemable Warrants are exercisable until
October 28, 1996, unless earlier called for redemption by the Company. The
Redeemable Warrants are redeemable, in whole, by the Company at a redemption
price of $.01 per Redeemable Warrant at any time, subject to certain
conditions, on not less than 30 days written notice. If the Redeemable
Warrants are called for redemption, Warrantholders may exercise their rights
until the close of business on the date fixed for redemption, unless extended
by the Company. In connection with its initial public offering, the Company
granted 145,000 Underwriter's Warrants in November 1993. Each Underwriter's
Warrant entitles the holder to purchase one Unit, consisting of one share of
Common Stock and one-half Redeemable Warrant, for an exercise price of $6.00.
The Underwriter's Warrants expire in November 1998. There are 723,506
Redeemable Warrants (including the Redeemable Warrant component of the
Underwriter's Warrants) and 145,000 Underwriter's Warrants outstanding.
NEVADA CORPORATION LAW
The Company is governed by the provisions of Chapter 78 of the Nevada
Revised Statutes, including, without limitation, Sections 78.378 through
78.3793 and 78.411 through 78.444 of the Nevada General Corporation Law.
Section 78.379 provides that an acquiring person shall obtain only such rights
in acquired control shares as are conferred by a resolution of the shareholders
of a corporation. Generally, this section applies to the acquisition,
directly or indirectly, of beneficial ownership of shares that would, when
added to all other shares beneficially owned by the acquiring person, enable
the acquiring person to exercise 20% or more of all the voting power of the
corporation in the election of directors. In general, Section 78.438
prohibits a resident domestic Nevada corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years
after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed
manner. "Business combination" includes mergers, asset sales and other
transactions resulting in a financial benefit to the interested stockholder.
An "interested stockholder" is a person who is the beneficial owner, directly
or indirectly, of 10% or more of the corporation's voting stock or who is an
affiliate or associate of the corporation and at any time within three years
prior to the date in question was the beneficial owner, directly or
indirectly, of 10% or more of the corporation's voting stock.
INDEMNIFICATION AND WAIVER OF DIRECTOR LIABILITY
The Nevada corporation law provides that a Company may indemnify its
officers, directors and employees for liability arising out of certain
actions. The Company has included in its Articles of Incorporation and Bylaws
provisions to indemnify its directors and officers to the fullest extent
permitted by Nevada General Corporations Law. Such indemnification may be
available for liabilities arising in connection with this offering. Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may be permitted to directors, officers or persons controlling the Company
pursuant to such indemnification provisions, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
The Company has adopted in its Articles of Incorporation a provision
which limits personal liability for breach of the fiduciary duty of its
directors, to the extent provided by Section 78.037 of the Nevada General
Corporations Law. Such provision eliminates the personal liability of
directors for damages occasioned by breach of fiduciary duty, except for
liability based on the director's duty of loyalty to the Company, liability
for acts or omissions involving intentional misconduct, fraud or a knowing
violation of law, liability based on payments of improper dividends, and
liability for acts occurring prior to the date such provision was added.
PAGE 9
<PAGE>
TRANSFER AGENT AND REGISTRAR
Norwest Bank Minnesota, National Association, South St. Paul, Minnesota,
is the Transfer Agent and registrar for the Common Stock of the Company.
PLAN OF DISTRIBUTION
All of the Units to be issued upon exercise of the Underwriter's
Warrants and all of the Shares to be issued upon the exercise of the
Redeemable Warrants are to be offered for the account of the Company. The
Company will not pay any sales commissions or other seller's compensation in
connection with the exercise of the Underwriter's Warrants or the Redeemable
Warrants. Shares issued upon the exercise of the Underwriter's Warrants or
the Redeemable Warrants will be freely tradable by the holders thereof,
subject to compliance with applicable state securities laws and except for
such Shares received by persons who may be deemed to be "affiliates" of the
Company (within the meaning of Rule 144). Persons who are deemed to be
affiliates of the Company within the meaning of Rule 144 may not publicly
offer or sell such Shares received upon exercise of the Underwriter's
Warrants or the Redeemable Warrants except pursuant to an effective
registration statement under the Securities Act or pursuant to Rule 144
(without regard to the applicable holding period provided thereunder). The
Company has not been advised when or whether the holders of the Underwriter's
Warrants or the Redeemable Warrants intend to exercise the Underwriter's
Warrants or the Redeemable Warrants, or if they do so, whether they intend to
sell their securities received as a result of such exercise.
LEGAL MATTERS
The validity of certain of the Shares of Common Stock offered
hereby has been passed upon for the Company by Winthrop & Weinstine, P.A.,
Minneapolis, Minnesota. The validity of the Units offered hereby (including
the other Shares of Common Stock offered hereby) has been passed on by Perkins
Coie, Portland, Oregon.
EXPERTS
The audited financial statements of the Company incorporated by
reference in this Prospectus and elsewhere in this Registration Statement,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said report.
PAGE 10
<PAGE>
- -----------------------------------------------------------
- -----------------------------------------------------------
No dealer, salesperson or any other person has been
authorized to give any information or to make any
representations other than those contained in this
Prospectus in connection with the offer contained herein,
and, if given or made, such information or
representations must not be relied upon as having been
authorized by the Company. This Prospectus does not
constitute an offer of any securities other than those to
which it relates or an offer to sell, or a solicitation
of an offer to buy, those to which it relates in any
state to any person to whom it is not lawful to make such
offer in such state. The delivery of this Prospectus at
any time does not imply that the information herein is
correct as of any time subsequent to its date.
----------------
TABLE OF CONTENTS
Page
----
Available Information................................ 2
Incorporation of Certain Documents by Reference...... 2
Risk Factors......................................... 3
Use of Proceeds...................................... 6
Description of Securities............................ 6
Plan of Distribution................................. 9
Legal Matters........................................ 9
Experts.............................................. 9
- -----------------------------------------------------------
- -----------------------------------------------------------
- -----------------------------------------------------------
- -----------------------------------------------------------
723,506 Shares of Common Stock
and
145,000 Units
Consisting of 145,000 Shares of
Common Stock and 72,500 Redeemable
Common Stock Purchase Warrants
ACRES GAMING
INCORPORATED
October 8, 1996
- -----------------------------------------------------------
- -----------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
AMOUNT
----------
SEC Registration Fee........................... 216.00
Accounting Fees and Expenses*.................. 5,000.00
Legal Fees and Expenses*....................... 27,500.00
Blue Sky Fees and Expenses*.................... 2,500.00
Printing, including Registration Statement,
Prospectus, etc.*............................ 15,000.00
Miscellaneous Expenses*........................ 5,000.00
----------
TOTAL EXPENSES*................................ $55,216.00
----------
----------
-------------
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.751 of the Nevada General Corporations Law provides that a
corporation may indemnify its current and former officers, directors,
employees and agents against expenses (including attorneys' fees), judgments,
penalties, fines and amounts paid in settlement and which were incurred in
connection with actions, suits or proceedings, except by an action by or in
the right of the corporation, in which such persons are parties by reason of
the fact that they are or were an officer, director, employee or agent of the
corporation, if they (i) have not been adjudged to be liable to the
corporation, (ii) acted in good faith, (iii) in the case of a criminal
proceeding, had no reasonable cause to believe the conduct was unlawful and
(iv) reasonably believed that the conduct was in the best interests of the
corporation. Section 78.752 also permits a corporation to purchase and
maintain insurance on behalf of its officers, directors, employees and agents
against any liability which may be asserted against, or incurred by, such
persons in their capacities as officers, directors, employees and agents of
the corporation, whether or not the corporation should have the power to
indemnify the person against the liability under the provisions of such
section.
The Company has adopted in its Articles of Incorporation a provision
which limits personal liability for breach of the fiduciary duty of its
directors, to the extent provided by Section 78.037 of the Nevada General
Corporations Law. Such provision eliminates the personal liability of
directors for damages occasioned by breach of fiduciary duty, except for
liability based on the director's duty of loyalty to the Company, liability
for acts or omissions involving intentional misconduct, fraud or a knowing
violation of law, liability based on payments of improper dividends, and
liability for acts occurring prior to the date such provision was added.
Article IX of the Bylaws of the Company provides that the directors,
officers and representatives of the Company shall have the rights to
indemnification in accordance with, and to the fullest extent provided by,
Section 78.751 of the Nevada General Corporations Law.
II-1
<PAGE>
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
5.1* Opinion of Winthrop & Weinstine, P.A., regarding legality of
certain of the Shares of Common Stock being registered
5.2 Opinion of Perkins Coie regarding legality of the Units, including
the other Shares of Common Stock being registered.
23.1 Consent of Authur Andersen LLP
23.2* Consent of Winthrop & Weinstine, P.A. (included in the opinion
filed as Exhibit 5.1)
23.3 Consent of Perkins Coie (included in the opinion filed as
Exhibit 5.2)
_____________
* Incorporated by reference from Amendment No. 1 to the Company's
Registration Statement on Form SB-2 filed with the Commission on October
13, 1993.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) 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 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 Act
and will be governed by the final adjudication of such issue.
II-2
<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 Post-Effective Amendment No. 5 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 Corvallis, State
of Oregon, on October 7, 1996.
ACRES GAMING INCORPORATED
By: /s/ JOHN F. ACRES
-----------------------------
John F. Acres
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints John F. Acres and Robert W. Brown, or either of them, such person's
true and lawful attorney-in-fact and agent with full power of substitution
and resubstitution for such person and in such peron's name, place and stead,
in any and all capacities, to sign the Registration Statement on Form S-3 of
Acres Gaming Incorporated and any or all amendments (including post-effective
amendments) to the Registration Statement, and to file the same, with all
exhibits hereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or either of them, or their substitute or substitutes, may
awlfully 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/ John F. Acres Chief Executive Officer, Secretary October 7, 1996
- ------------------------- and Director (Principal Executive
John F. Acres Officer)
/s/ Robert W. Brown Chief Financial Officer and October 7, 1996
- ------------------------- Treasurer (Principal Financial and
Robert W. Brown Accounting Officer)
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
TO FORM S-3
FOR ACRES GAMING INCORPORATED
Exhibit
Number Description
- ------- -----------
5.1* Opinion of Winthrop & Weinstine, P.A., regarding legality of
certain of the shares of Common Stock being registered
5.2 Opinion of Perkins Coie regarding legality of the Units,
including the other Shares of Common Stock being registered.
23.1 Consent of Arthur Andersen LLP
23.2* Consent of Winthrop & Weinstine, P.A. (included in the opinion
filed as Exhibit 5.1)
23.3 Consent of Perkins Coie (included in the opinion filed as
Exhibit 5.2)
- ----------------
* Incorporated by reference from Amendment No. 1 to the Company's Registration
Statement on Form SB-2 filed with the Commission on October 13, 1993.
<PAGE>
EXHIBIT 5.2
October 7, 1996
Acres Gaming Incorporated
815 NW Ninth Street
Corvallis, Oregon 97330
RE: POST-EFFECTIVE AMENDMENT NO. 5 ON
FORM S-3 TO REGISTRATION STATEMENT NO. 033-69110-S
Ladies and Gentlemen:
We have acted as counsel to Acres Gaming Incorporated (the "Company") in
connection with the preparation of Post-Effective Amendment No. 5 on Form S-3 to
Registration Statement (No. 033-69110-S) (the "Registration Statement"), under
the Securities Act of 1933, as amended (the "Act"). This opinion addresses
145,000 Units, consisting of 145,000 shares of the Company's Common Stock, $.01
par value (the "Common Stock"), 72,500 Redeemable Common Stock Purchase Warrants
of the Company (the "Redeemable Warrants"), which may be issued from time to
time upon the exercise of certain underwriters' warrants (the "Underwriter's
Warrants"), and 72,500 Shares of Common Stock, which may be issued and sold from
time to time by the Company upon exercise of the Redeemable Warrants. Other
counsel have previously opined on the issuance of other securities registered
under the Registration Statement. We have examined the Registration Statement
and such documents and records of the Company and certificates of public
officials as we have deemed necessary for the purposes of this opinion.
Based upon and subject to the foregoing, we are of the opinion that:
(i) the Underwriter's Warrants have been validly authorized and, when they
have been exercised, and the Units, consisting of one share of Common Stock and
one-half Redeemable Warrant, have been duly delivered against payment therefor
pursuant to the terms of the Underwriter's Warrants, the Units and their
constituent parts will be validly issued, fully paid and nonassessable; and
(ii) the Redeemable Warrants have been validly authorized and when they
have been exercised and the shares of Common Stock have been duly delivered
against payment therefor pursuant to the terms of the Redeemable Warrants,
such shares will be validly issued, fully paid and nonassessable.
We do not express any opinions in this letter concerning any laws other
than the Nevada General Corporations Law and the federal laws of the United
States of America.
We hereby consent to the filing of this opinion as Exhibit 5.2 to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
This opinion has been prepared solely for your use in connection with the
Registration Statement, and should not be quoted in whole or in part or
otherwise be referred to, nor be relied upon by, nor be filed with or furnished
to any governmental agency or other person or entity, except as otherwise
provided in this paragraph, without the written consent of the firm.
Very truly yours,
PERKINS COIE
<PAGE>
Exhibit 23.1
to Form S-3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-3 registration statement
of our report dated August 9, 1996 included in Acres Gaming
Incorporated's Form 10-K for the year ended June 30, 1996 and to
all references to our firm included in this registration statement.
ARTHUR ANDERSEN LLP
Portland, Oregon
October 7, 1996
