<PAGE>
As filed with the Securities and Exchange Commission on June 4, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
FOTOBALL USA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0614889
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
3738 RUFFIN ROAD
SAN DIEGO, CALIFORNIA 92123
(619) 467-9900
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
MICHAEL FAVISH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
FOTOBALL USA, INC.
3738 RUFFIN ROAD
SAN DIEGO, CALIFORNIA 92123
(619) 467-9900
(Name, address, including zip code, and telephone number,
include area code, of agent for service)
--------------------
Copies to:
CHARLES I. WEISSMAN, ESQ.
SWIDLER BERLIN SHEREFF FRIEDMAN, LLP
919 THIRD AVENUE, 20TH FLOOR
NEW YORK, NEW YORK 10022
(212) 891-9268
TELECOPIER NO.: (212) 758-9526
----------------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
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 being 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 supplement 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. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Title of each Proposed maximum Proposed maximum
class of securities Amount to offering aggregate Amount of
to be registered be registered price per share(1) offering price registration fee
---------------- ------------- ------------------ -------------- ----------------
<S> <C> <C> <C> <C>
Common stock,
par value
$.01 per share 52,500 shares $5.4375 $285,468.75 $79.36
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) promulgated under the Securities Act of 1933, as
amended. Based on the average of the high and low sale prices of
Fotoball's common stock as reported by the Nasdaq National Market on
June 2, 1999.
- --------------------------------------------------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
2
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 4, 1999
PROSPECTUS
52,500 SHARES OF COMMON STOCK
FOTOBALL USA, INC.
We are furnishing this document to you to allow the selling stockholders
named in this document to sell up to 52,500 shares of common stock of Fotoball
USA, Inc. in private or market transactions. Fotoball will not receive any
proceeds from the sale of these shares of common stock, although it will receive
proceeds from the exercise of options by the selling stockholders to acquire the
shares of common stock they are selling. See "The Offering" on page 2 and
"Selling Stockholders" on page 7.
The common stock is quoted on the Nasdaq National Market under the
symbol "FUSA". On June 2, 1999, the closing bid price was $5.50 per share of
common stock.
All costs, expenses and fees in connection with the registration of the
shares of common stock will be paid by Fotoball, except that each selling
stockholder will pay his or its own selling commissions and fees. See "Plan of
Distribution" on pages 8-9.
WE URGE YOU TO READ CAREFULLY THE "RISK FACTORS" SECTION, BEGINNING ON
PAGE 3, WHERE WE DESCRIBE SPECIFIC RISKS ASSOCIATED WITH THESE SECURITIES,
TOGETHER WITH THIS DOCUMENT, BEFORE YOU MAKE YOUR INVESTMENT DECISION.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this document is _____________, 1999
<PAGE>
FOTOBALL USA, INC.
Fotoball designs, develops and manufactures high quality custom sports
products. These products are sold through independent manufacturers'
representatives and directly to a nationwide network of over 2,000 retailers.
Additionally, Fotoball designs, develops and manufactures high quality custom
sports and non-sports related products for promotional programs. These products
are sold to corporations, including sales to amusement park and entertainment
related companies, for resale or promotional use.
Fotoball currently has licenses with
o Major League Baseball Properties
o Major League Baseball Players Association
o National Association of Professional Baseball Leagues,
Inc., representing professional minor league baseball
o National Football League Properties, Inc.
o NFL Players Inc.
o National Hockey League Enterprises
o NHL Players' Association
o over 300 colleges and universities
o certain entertainment properties, including Nickelodeon's
"Rugrats" and "Blue's Clues" characters.
These licenses give Fotoball the right to use, for commercial purposes, the
names and logos of sports leagues, teams, colleges and universities and the
likenesses of certain sports figures and cartoon characters.
Fotoball USA, Inc., a California corporation and the predecessor to
Fotoball, was incorporated under California law on December 13, 1988. Fotoball
was incorporated under Delaware law on April 27, 1994, for the purpose of
merging and continuing the business of Fotoball California. On July 29, 1994,
Fotoball California merged with and into Fotoball.
THE OFFERING
Securities Offered by Fotoball................... None
Securities Offered by the Selling Stockholders... 52,500 shares of common stock,
par value $.01 per share
Common Stock Outstanding as of April 30, 1999
(excluding shares of common stock issuable upon
exercise of options or warrants) ................ 2,699,242 shares
Nasdaq Symbol for Common Stock................... FUSA
Use of Proceeds.................................. Fotoball will not receive any
proceeds from the sale of
common stock by the selling
stockholders. All of the
proceeds from the sale of
common stock offered by this
document will be received by
the selling stockholders.
2
<PAGE>
RISK FACTORS
We urge you to carefully consider the following factors and other
information in this document before you make your decision whether to become a
Fotoball stockholder.
EFFECT OF NON-RENEWAL OF MATERIAL
LICENSES OR FAILURE TO ACQUIRE
ADDITIONAL LICENSES..................... Our business is based primarily upon
the use of identifying marks and
images on many of our products
pursuant to license arrangements. Our
licensing arrangements expire at
various times through March 31, 2000.
We may not be successful in obtaining
new licenses or renewing current
licenses on terms acceptable to us.
The non-renewal of one or more of our
licenses, particularly with
professional baseball or the NFL, or
our inability to acquire new licenses
could cause our business to suffer.
NON-EXCLUSIVE LICENSE AGREEMENTS........ Many of our products are sold under
non-exclusive license agreements, and
licensors may license more than one
vendor in a particular product line.
We cannot prevent other competitors
from obtaining competing licenses to
sell the same or similar products. Any
licenses obtained by competitors may
cause our business to suffer. See
"Competition" below.
COMPETITION............................. Our businesses are highly competitive.
We compete frequently with a number of
well-established companies,
particularly Rawlings Sporting Goods
Company, Inc., Baden Sports Inc.,
Franklin Sports, Inc. and Wilson
Sporting Goods, Inc. Many of our
competitors are considerably larger
and have greater financial and other
resources.
VARIABILITY OF OPERATING RESULTS AND
EFFECTS OF SEASONALITY ................. We have historically experienced
significant quarter-to-quarter
variability in our sales, net income
and gross margins. See "Variability of
Gross Margins" below. Also, due to the
one-time nature of promotions
projects, our promotions business is
highly subject to quarter-to-quarter
variability. Our business is also
subject to variability due to the
seasonality of our licensed sports
product business, especially baseball.
3
<PAGE>
VARIABILITY OF GROSS MARGINS............ Historically, we have realized higher
gross margins on our retail sales as
compared to promotions sales. Our
gross margins fluctuate, particularly
between quarters, based in part on:
o the mix of promotions and retail
sales
o the type of product sold
o the size of promotions
o the extent of competition
SENSITIVITY TO CONSUMER TRENDS.......... Our business is vulnerable to a number
of factors beyond our control,
including:
o changes in consumer tastes
o enthusiasm for spectator sports
o popularity of sports teams
o the interest of consumers in
collecting souvenirs, especially
souvenirs relating to professional
sports
There can be no assurance that we will
be successful in tailoring our product
lines to consumer trends.
LACK OF PATENT PROTECTION .............. We do not rely upon any material
patents or licensed technology in the
operation of our business. We do not
believe that it is possible to be
issued a patent on our printing
process. We cannot prevent our
techniques, processes and formulations
from becoming known to, or
independently developed by, our
competitors.
TECHNOLOGY ADVANCES MAY RENDER OUR
PROCESS INFERIOR........................ Our future success will be dependent,
in large part, upon our proprietary
printing process and our ability to
keep pace with advancing printing and
photographic technology. New printing
or photographic technology may be
developed that renders our current
printing process and products obsolete
or inferior.
DEPENDENCE ON MICHAEL FAVISH............ Our success is largely dependent on
the personal efforts of Michael
Favish, Fotoball's President and Chief
Executive Officer. Mr. Favish has a
five-year employment agreement with
Fotoball expiring August 11, 1999. The
loss of the services of Mr. Favish
would cause our business to suffer. We
are currently discussing a three-year
extension of Mr. Favish's employment
agreement with him.
4
<PAGE>
RELIANCE ON CHINA FOR MANUFACTURING AND We obtain significant portions of the
SUPPLIES................................ raw materials used in the production
of our products in the Far East,
especially China. We manufacture an
increasingly greater percentage of our
products overseas and we are
increasingly shifting the imprinting
of our products to companies located
in China to capitalize on
significantly lower manufacturing
costs. There can be no assurance that
China will continue to enjoy most
favored nation trading status in the
future or that conditions on China's
MFN status will not be imposed. Any
revocation of or conditions on China's
MFN trading status could cause our
business to suffer.
SHARES ELIGIBLE FOR FUTURE SALE......... As of April 30, 1999, we have
2,699,242 shares of common stock
outstanding. We have registered
1,424,445 of our shares, including the
shares being registered in this
document, which therefore are freely
tradeable under the Securities Act. We
have not registered the up to
1,274,797 remaining shares.
EFFECT OF OUTSTANDING OPTIONS AND
WARRANTS................................ As of April 30, 1999, there were
outstanding stock options to purchase
an aggregate of
o 512,550 shares of common stock at
per share exercise prices ranging
from $1.69 to $5.25
o 1,411,673 shares of common stock
issuable upon exercise of
outstanding warrants with a per
share exercise price of $6.50
o 110,000 shares of common stock
reserved for issuance upon
exercise of warrants with a per
share exercise price of $9.90
Each warrant is exercisable until
August 11, 1999. We have the ability
to extend the warrants or lower the
exercise price at any time. We may
redeem the warrants for $.01 per
warrant at any time upon not less than
30 days' prior written notice, if the
last sale price of the common stock
has been at least $9.75 per share for
the 20 consecutive trading days ending
on the third day prior to the date on
which the notice of redemption is
given.
The exercise of our outstanding stock
options and warrants will dilute the
percentage ownership of our
stockholders, and any sales in the
public market of common stock
underlying such stock options or
warrants may adversely affect
prevailing market prices for the
common stock.
5
<PAGE>
VOLATILITY OF STOCK PRICE............... The market value of the common stock
in the future may be higher or lower
than the price of the common stock on
the date of this document.
DIVIDENDS UNLIKELY...................... We do not currently pay cash
dividends, and we do not expect to pay
any dividends in the near future.
CERTAIN ANTI-TAKEOVER PROVISIONS AND
INDEMNIFICATION......................... We have approved certain charter
provisions which may discourage third
parties from pursuing a non-negotiated
takeover of Fotoball and preventing
certain changes in control, including
o a shareholder rights plan
o the approval for issuance of
"blank check" preferred stock
In addition, we have approved charter
provisions to limit the personal
liability of our directors for
monetary damages for breach of their
fiduciary duties, except for liability
that cannot be eliminated under
Delaware law, and to indemnify our
directors and officers to the fullest
extent permitted by Delaware law. We
have been advised that in the opinion
of the SEC indemnification for
liabilities arising under the
Securities Act to directors, officers,
and controlling persons is against
public policy as expressed in the
Securities Act and is, therefore,
unenforceable.
6
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
selling stockholders as of the dates set forth below. We will not receive any
proceeds from the sale of any shares of common stock by the selling
stockholders.
<TABLE>
<CAPTION>
Beneficial Ownership
Beneficial Common Stock of Common Stock
Name of Ownership of Offered After Giving Effect to
Selling Stockholder Common Stock for Sale Proposed Sale (5)
------------------- ------------ ---------- ------------------
<S> <C> <C> <C>
Integrated Corporate 25,000 25,000 0
Relations Inc. (1)
ADR Management Group, Inc. (2) 90,000 15,000 75,000
W.A.B. Growth Equity 12,000 10,000 2,000
Research (3)
Salvatore DiMascio (4) 14,500 2,500 12,000
------- ------ ------
Total 141,500 52,500 89,000
======= ====== ======
</TABLE>
- ----------
(1) Information is as of May 24, 1999. The shares to be sold represent
common stock issuable upon exercise of options with an exercise price of
$4.20 per share.
(2) Information is as of May 24, 1999. The shares to be sold represent
common stock issuable upon exercise of options with an exercise price of
$2.675 per share.
(3) Information is as of May 24, 1999. The shares to be sold represent
common stock issuable upon exercise of options with an exercise price of
$4.00 per share.
(4) Information is as of May 24, 1999. The shares to be sold represent
common stock issuable upon exercise of options with an exercise price of
$1.375 per share. Mr. DiMascio is a director of Fotoball.
(5) Assumes all registered shares of common stock are sold.
7
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders may sell their shares of common stock from time
to time.
The 52,500 shares of common stock being sold hereby may be offered to
purchasers by any means permitted by the Securities Act directly by any of the
selling stockholders or through underwriters, brokers, dealers or agents from
time to time in one or more of the following types of transactions:
o block trades in which the broker or dealer will attempt to sell
the securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction
o purchases by a broker or dealer as principal for resale by such
broker or dealer for its account
o ordinary brokerage transactions and transaction in which the
broker solicits purchasers
o privately negotiated transactions
o short sales
Such transactions may occur
o in the over-the-counter market
o other than in the over-the-counter market
o through the writing of options, whether such options are listed
on an options exchange or otherwise.
Any such transactions may be
o at market prices prevailing at the time of sale
o at prices related to such prevailing market prices
o at varying prices determined at the time of sale
o at negotiated or fixed prices, in each case as determined by the
selling stockholders and such underwriters, brokers, dealers or
agents or purchasers.
If the selling stockholders effect such transactions by selling shares to or
through underwriters, brokers, dealers or agents, such underwriters, brokers,
dealers, or agents may receive compensation in the form of discounts,
concessions or commissions from the selling stockholders and/or the purchasers
of securities for whom they may act as agent. These discounts, concessions or
commission as to particular underwriters, brokers, dealers or agents may be in
excess of those customary in the types of transactions involved. The selling
stockholders and any dealers or agents that participate in the distribution of
securities offered hereby may be deemed to be underwriters, and any profit on
the sale of such securities by them and any discounts, commissions, or
concessions received by any such dealers or agents might be deemed to
underwriting discounts and commissions under the Securities Act.
The securities offered hereby may be sold pursuant to this document or
pursuant to an available exemption from the registration requirements of the
Securities Act, such as the provisions of Rule 144 promulgated under the
Securities Act, to the extent applicable. Under the securities law of certain
states, the securities offered hereby may be sold in such states only through
registered or licensed brokers or dealers. In addition, if the common stock is
delisted from the Nasdaq National Market, in certain states it is possible that
the securities may not be sold unless the securities have been registered or
qualified for sale in such state or an exemption from registration of
qualification is available and is complied with. There can be no assurance that
the selling stockholders will sell any or all of the securities offered hereby.
We will pay substantially all of the expenses incident to this offering,
other than commissions and fees of others employed by a selling stockholder. We
will not receive any of the proceeds from the sale of any of the shares of
common stock by the selling stockholders.
8
<PAGE>
Each selling stockholder will be subject to applicable provisions, if
any, of the Exchange Act and rules and regulations thereunder, including those
provisions which limit the timing of purchases and sales of any of the
securities by the selling stockholders. All of the foregoing may affect the
marketability of the securities.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational reporting requirements of the
Exchange Act and, in accordance therewith, files reports, including Annual
Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current Reports on
Form 8-K, proxy statements and other information with the SEC. You may read and
copy any materials filed by us with the SEC at the SEC's Public Reference Room
at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on
the operation of the Public Reference Room by calling the SEC at 1-
800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy
and information statements and other information regarding issuers that file
electronically with the SEC. The address of the SEC's Web site is
http://www.sec.gov.
This document does not contain all the information set forth in the
Registration Statement on Form S-3 and the exhibits thereto, including any
amendments thereto, of which this document is a part, and which Fotoball has
filed with the SEC under the Securities Act. Reference is made to such
Registration Statement for further information with respect to Fotoball and the
shares of common stock offered hereby.
Statements contained herein or incorporated herein by reference
concerning the provisions of documents are summaries of such documents and each
statement is qualified in its entirety by reference to the copy of the
applicable document if filed with the SEC.
No person is authorized to give any information or to make any
representation with respect to the matters described in this document other than
those contained herein or in the documents incorporated by reference herein and,
if given or made, such information or representation must not be relied upon as
having been authorized by Fotoball. This document does not constitute an offer
to sell, or a solicitation of an offer to purchase, the securities offered
hereby, in any jurisdiction in which, or to any person to whom, it is unlawful
to make such offer or solicitation of an offer. Neither the delivery of this
document nor any sale made hereby shall, under any circumstances, create any
implication that there has been no change in our affairs since the date hereof,
or that the information herein is correct as of any time subsequent to its date.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This document contains "forward-looking statements" within the meaning
of the federal securities laws. These forward-looking statements include, among
others, statements of expectations, beliefs, future plans and strategies,
anticipated events or trends, and similar expressions concerning matters that
are not historical facts. The forward-looking statements in this report are
subject to risks and uncertainties that could cause actual results to differ
materially from those expressed in or implied by the statements, including
o the ability to maintain and renew its significant licensing
arrangements
o increasing competition from other sports product licensed
companies, including companies that have or may receive the same
or similar licensing rights as Fotoball's and may have
substantially greater financial resources than Fotoball
o the ability of Fotoball to maintain the growth momentum of its
retail division by continuing to expand its national mass
merchant relationships, maintain the appeal and desirability of
its existing product lines and continue to develop new product
offerings
9
<PAGE>
o the ability to increase its overall gross margins, or its
inability to maintain the higher level of gross margins realized
from its sports related products
We have discussed these factors and other risks and uncertainties affecting
Fotoball under the heading "Risk Factors" beginning on page 3 of this document
and in other filings by Fotoball with the SEC.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
WE HAVE INCORPORATED CERTAIN IMPORTANT BUSINESS AND FINANCIAL
INFORMATION ABOUT FOTOBALL THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS
DOCUMENT, INCLUDING ANY EXHIBITS THAT ARE SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH INFORMATION. WE WILL PROVIDE TO EACH PERSON, INCLUDING ANY BENEFICIAL
OWNER, TO WHOM THIS DOCUMENT IS DELIVERED, A COPY OF ANY OR ALL OF THE
INFORMATION THAT HAS BEEN INCORPORATED BY REFERENCE IN THIS DOCUMENT, WITHOUT
CHARGE, UPON WRITTEN OR ORAL REQUEST TO FOTOBALL USA, INC., 3738 RUFFIN ROAD,
SAN DIEGO, CALIFORNIA 92123, TELEPHONE (619) 467-9900, ATTENTION: SECRETARY.
The following documents filed by Fotoball with the SEC are hereby
incorporated by reference into this document and made a part hereof:
o our Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998
o our Quarterly Report on Form 10-QSB for the fiscal quarter
ended March 31, 1999
o the description of our securities contained in our Registration
Statement on Form 8-A, filed with the Commission on August 1,
1994, as amended by Amendment No. 1 thereto filed with the SEC on
October 18, 1996.
All documents and reports filed by Fotoball pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this document and
before the termination of the offering shall be deemed to be incorporated by
reference in this document and to be a part hereof from the dates of filing of
such documents or reports. Any statement contained herein or in a document
incorporated herein by reference will be deemed to be modified or superseded for
the purpose of this document to the extent that a statement contained herein or
in any subsequently filed document which also is incorporated herein by
reference modifies or supersedes such statement. Any such statement so modified
or superseded will not be deemed, except as so modified or superseded, to
constitute a part of this document.
LEGAL MATTERS
The validity of the issuance of the securities offered pursuant to this
document will be passed upon for Fotoball by Swidler Berlin Shereff Friedman,
LLP, New York, New York.
EXPERTS
The financial statements of Fotoball at December 31, 1997 and 1998
appearing in our Annual Report on Form 10-KSB for the year ended December 31,
1998 have been audited by Hollander, Lumer & Co. LLP, independent auditors, as
set forth in their reports thereon appearing therein, and are incorporated
herein by reference in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.
10
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the offering are:
Accounting fees and expenses* $ 1,000.00
Legal fees and expenses* 10,000.00
Miscellaneous* 3,920.64
SEC registration fees 79.36
-----------
Total $ 15,000.00
===========
- ------------------
* Estimated.
All of these expenses will be paid by Fotoball.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The indemnification of officers and directors of Fotoball is governed by
Section 145 of the DGCL and the Certificate and By-Laws of Fotoball. Among other
things, the DGCL permits indemnification of a director, officer, employee or
agent in civil, criminal, administrative or investigative actions, suits or
proceedings (other than an action by or in the right of the corporation) to
which such person is a party or is threatened to be made a party by reason of
the fact of such relationship with the corporation or the fact that such person
is or was serving in a similar capacity with another entity at the request of
the corporation against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him if such
person acted in good faith and in a manner 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, if he had no reasonable cause to believe his
conduct was unlawful. No indemnification may be made in any such suit to any
person adjudged to be liable to the corporation unless and only to the extent
that the Delaware Court of Chancery or the court in which the action was brought
determines that, despite the adjudication of liability, such person is under all
circumstances, fairly and reasonably entitled to indemnity for such expenses
which such court shall deem proper. Under the DGCL, to the extent that a
director, officer, employee or agent is successful, on the merits or otherwise,
in the defense of any action, suit or proceeding or any claim, issue or matter
therein (whether or not the suit is brought by or in the right of the
corporation), he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him. In all cases in which
indemnification is permitted (unless ordered by a court), it may be made by the
corporation only as authorized in the specific case upon a determination that
the applicable standard of conduct has been met by the party to be indemnified.
The determination must be made by a majority vote of a quorum consisting of the
directors who were not parties to the action or, if such a quorum is not
obtainable, or even if obtainable, if a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or by the
stockholders. The statute authorizes the corporation to pay expenses incurred by
an officer or director in advance of a final disposition of a proceeding upon
receipt of an undertaking by or on behalf of the person to whom the advance will
be made, to repay the advances if it shall ultimately be determined that he was
not entitled to indemnification. The DGCL provides that indemnification and
advances of expenses permitted thereunder are not to be exclusive of any rights
to which those seeking indemnification or advancement of expenses may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors, or otherwise. The DGCL also authorizes the corporation to purchase
II-1
<PAGE>
and maintain liability insurance on behalf of its directors, officers, employees
and agents regardless of whether the corporation would have the statutory power
to indemnify such persons against the liabilities insured.
The Certificate provides that no director of Fotoball shall be
personally liable to Fotoball or its stockholders for monetary damages for
breach of fiduciary duty as a director except for liability (i) for any breach
of the director's duty of loyalty to Fotoball or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for paying a dividend or approving a stock
repurchase in violation of Section 174 of the DGCL or (iv) for any transaction
from which the director derived an improper personal benefit.
The By-Laws provide that directors, officers and others shall be
indemnified to the fullest extent authorized by the DGCL, as in effect (or, to
the extent indemnification is broadened, as it may be amended), against any and
all judgments, fines and amounts paid in settling or otherwise disposing of
threatened, pending or completed actions, suits or proceedings, whether civil,
criminal, administrative or investigative and expenses incurred by such person
in connection therewith. The By-Laws further provide that, to the extent
permitted by law, expenses so incurred by any such person in defending a civil
or criminal action or proceeding shall, at his request, be paid by Fotoball in
advance of the final disposition of such action or proceeding.
The By-Laws provide that the right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final disposition
shall not be exclusive of any other right which any person may have or acquire
under any statute, provision of the Certificate or By-Laws or otherwise.
Fotoball maintains directors and officers liability and company
reimbursement insurance which, among other things, (i) provides for payment on
behalf of its officers and directors against loss as defined in the policy
stemming from acts committed by directors and officers in their capacity such
and (ii) provides for payment on behalf of Fotoball against such loss but only
when Fotoball shall be required or permitted to indemnify directors or officers
for such loss pursuant to statutory or common law or pursuant to duly effective
Certificate or By-Law provisions.
ITEM 16. EXHIBITS
(a) Exhibits
3.1(2)(P) (Amended and Restated Certificate of Incorporation of Fotoball
USA, Inc., a Delaware corporation (incorporated herein by
reference to Exhibit 3.1(2) of the Registration Statement on
Form SB-2 (File No. 33-80508) (the "Form SB-2")).
3.2(2)(P) (Amended and Restated By-laws of Fotoball USA, Inc., a
Delaware corporation (incorporated herein by reference to
Exhibit 3.2(2) of the Form SB-2).
4.1(P) Specimen Stock Certificate (incorporated herein by reference
to Exhibit 4.4 of the Form SB-2).
4.2(1) Specimen Form of Rights Certificate (incorporated herein by
reference to Exhibit 2.1 of the Registration Statement on
Form 8-A (File No. 0-21239) (the "Form 8-A").
4.2(2) Form of Rights Agreement, dated as of August 19, 1996, between
Fotoball USA, Inc. and Continental Stock Transfer & Trust
Company (incorporated herein by reference to Exhibit 2.2 of
the Form 8-A).
II-2
<PAGE>
4.2(3) Form of Certificate of Designation, Preferences and Rights of
Series A Preferred Stock (incorporated herein by reference to
Exhibit 2.3 of the Form 8-A).
4.2(4) Summary of Rights Plan (incorporated herein by reference to
Exhibit 2.4 of the Form 8- A).
4.3(M) Stock Option Agreement dated January 30, 1998 with Salvatore T.
DiMascio (incorporated herein by reference to Exhibit 10.3(5) of
the 1997 Form 10-KSB).
4.4 Stock Option Agreement dated August 11, 1997 with ADR Management
Group Ltd. (incorporated herein by reference to Exhibit 10.4(10)
of the 1997 Form 10-KSB).
4.5* Stock Option Agreement dated as of April 1, 1999 with Integrated
Corporate Relations, Inc.
4.6* Letter Agreement dated April 19, 1999 with W.A.B. Growth Equity
Research.
5.1* Opinion of Swidler Berlin Shereff Friedman, LLP.
23.1* Consent of Hollander, Lumer & Co. LLP
23.2* Consent of Swidler Berlin Shereff Friedman, LLP (included as
part of Exhibit 5.1).
24.1 Power of Attorney (contained on Page II-5 hereto).
* Filed herewith.
(M) Indicates exhibits relating to executive compensation.
(P) Indicates that document was originally filed with the SEC in
paper form and that there have been no changes or amendments to
the document which would require filing of the document
electronically with this document.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
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
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement;
II-3
<PAGE>
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement.
Provided, however, that paragraphs (1)(i) and (ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the company pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(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.
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 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions set forth in response to
the foregoing provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter 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-4
<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 San Diego, State of California, on the 28th day of
May, 1999.
FOTOBALL USA, INC.
By: /s/ Michael Favish
------------------------------
Michael Favish
President, Chief Executive Officer and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
whose signature appears below constitutes and appoints Michael Favish, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution for the undersigned and on his or her behalf,
and in his or her name, place and stead, in any and all capacities to execute
and sign any and all amendments or post-effective amendments to this
Registration Statement and any registration statement or amendment to such
registration statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
SEC, granting unto said attorney-in-fact and agent, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact or his or her substitute or substitutes, may lawfully do or
cause to be done by virtue hereof and the registrant hereby confers like
authority on its behalf.
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>
NAME AND SIGNATURE TITLE DATE
------------------ ----- ----
<S> <C> <C>
President and Chief Executive Officer and a May 28, 1999
/s/ Michael Favish Director (Principal Executive Officer and
- ---------------------------------- Principal Financial Officer)
Michael Favish
/s/ Salvatore DiMascio Director May 28, 1999
- ----------------------------------
Salvatore DiMascio
/s/ Nicholas Giordano Director May 28, 1999
- ----------------------------------
Nicholas Giordano
/s/ Joel K. Rubenstein Director May 28, 1999
- ----------------------------------
Joel K. Rubenstein
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
4.5 Stock Option Agreement dated as of April 1, 1999 with Integrated
Corporate Relations, Inc.
4.6 Letter Agreement dated April 19, 1999 with W.A.B. Growth Equity
Research.
5.1 Opinion of Swidler Berlin Shereff Friedman, LLP.
23.1 Consent of Hollander, Lumer & Co. LLP.
II-6
<PAGE>
EXHIBIT 4.5
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Option Agreement") is made and
entered into as of the 1st day of April, 1999, by and between Fotoball USA,
Inc., a Delaware corporation (the "Company"), and Integrated Corporate
Relations, Inc., a Connecticut corporation (the "Optionee").
The Board of Directors (the "Board") of the Company adopted a
resolution granting the Optionee, subject to the terms contained in that certain
agreement (the "Agreement") dated as of April 1, 1999, by and between the
Company and Optionee, a stock option (the "Option") to purchase 25,000 shares
(the "Shares"), of the Company's common stock, par value $.01 per share (the
"Common Stock"), on the terms and subject to the conditions set forth in the
Agreement. The Option was not granted under the Company's 1998 Stock Option
Plan.
The Option is not intended to satisfy the requirements for an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"). The Company makes no representations or warranties as
to the income, estate or other tax consequences to the Optionee of the grant or
exercise of the Option or the sale or other disposition of the Shares acquired
pursuant to the exercise thereof.
1. (a) The price at which the Optionee shall have the
right to purchase the Shares under this Option Agreement shall be $4.20, 120% of
the Fair Market Value (as defined in Paragraph 4 hereof) of the Shares on the
date of such grant (March 31, 1999 closing price), subject to adjustment as
provided in Paragraph 3 below.
(b) Unless the Option is previously terminated or
accelerated pursuant to this Option Agreement, 3,125 shares of the Option shall
vest on the last day of each calendar quarter commencing June 30, 1999 until and
including March 31, 2001. In no event shall any Shares be purchasable under this
Agreement after March 31, 2004 (the "Expiration Date"). The Option shall cease
to be exercisable thirty (30) days after the date of termination of the
Agreement.
2. (a) Subject to Section 422 of the Code, neither the
Option nor any right under the Option shall be assignable, alienable, saleable
or transferable by the Optionee without the written consent of the Company, or
by the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined in the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder.
(b) The Option shall not be pledged, alienated,
attached, or otherwise encumbered or transferred in any manner without the
written consent of the Company, and any purported pledge, alienation,
attachment, encumbrance, or transfer thereof without the written consent of the
Company shall be void and unenforceable against the Company.
3. In the event that the Board or a committee thereof shall
determine that the outstanding shares of Common Stock are affected by any (i)
subdivision or consolidation of shares, (ii) dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
(iii) recapitalization or other capital adjustment of the Company or (iv)
merger,
<PAGE>
consolidation or other reorganization of the Company or other rights to purchase
Shares or other securities of the Company, or other similar corporate
transaction or event, such that an adjustment is determined by the Board or a
committee thereof to be appropriate in order to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available hereunder,
then the Board or a committee thereof shall, in such manner as it may deem
necessary to prevent dilution or enlargement of the benefits or potential
benefits intended to be made hereunder, adjust any or all of (x) the number and
type of Shares which may be subject to the Option, (y) the number and type of
Shares subject to the unexercised portion of the Option, and (z) the grant,
purchase, or exercise price with respect to the Option or, if deemed
appropriate, make provision for a cash payment to the Optionee. In computing any
adjustment under this paragraph, any fractional share shall be eliminated;
provided, however, in each case, that (i) each such adjustment shall be made in
such manner as not to constitute a cancellation and reissuance of a
Non-Qualified Stock Option for purposes of Section 162(m) of the Code, or the
regulations promulgated thereunder, to the extent that such reissuance would
result in the grant of such Options in excess of the maximum permitted to be
granted to the Optionee in any fiscal year; and (ii) the number of Shares
subject to any Option denominated in Shares shall always be a whole number.
4. Subject to the term of the Agreement, the Option shall
be exercised when written notice of such exercise, signed by a duly authorized
officer of the entity entitled to exercise the Option, has been delivered or
transmitted by registered or certified mail, to the Secretary of the Company at
its principal office. Said written notice shall specify the number of Shares
purchasable under the Option which such entity then wishes to purchase and shall
be accompanied by such documentation, if any, as may be required by the Company
as provided in Paragraph 6 below and be accompanied by payment of the aggregate
Option price. Such payment of the aggregate Option price shall be, without
limitation, in the form of cash, Shares, outstanding Options or other
consideration, or any combination thereof, having a Fair Market Value on the
exercise date equal to the exercise price of the Option or portion thereof being
exercised. Delivery of said notice and such documentation shall constitute an
irrevocable election to purchase the Shares specified in said notice and the
date on which the Company receives said notice and documentation shall, subject
to the provisions of Paragraphs 5 and 6 hereof, be the date as of which the
Shares so purchased shall be deemed to have been issued. The person entitled to
exercise the Option shall not have the right or status as a holder of the Shares
to which such exercise relates prior to receipt by the Company of such payment,
notice and documentation. For purposes of this Agreement, "Fair Market Value"
shall mean, with respect to Shares or other securities, (i) the closing price
per Share of the Shares on the principal exchange on which the Shares are then
trading, if any, on such date, or, if the Shares were not traded on such date,
then on the next preceding trading day during which a sale occurred; or (ii) if
the Shares are not traded on an exchange but are quoted on the Nasdaq National
Market ("Nasdaq") or a successor quotation system, (1) the last sales price (if
the Shares are then listed on Nasdaq) or (2) the mean between the closing
representative bid and asked prices (in all other cases) for the Shares on such
date as reported by Nasdaq or a successor quotation system; or (iii) if the
Shares are not publicly traded on an exchange and not quoted on Nasdaq or a
successor quotation system, the mean between the closing bid and asked prices
for the Shares on such date as determined in good faith by the Board or a
committee thereof; or (iv) if the Shares are not publicly traded, the fair
market value established by the Board or a committee thereof acting in good
faith.
5. Anything in this Agreement to the contrary
notwithstanding, in no event may the Option be exercisable if the Company shall,
at any time and in its sole discretion, determine that (i) the listing,
registration or qualification of any Shares otherwise deliverable upon such
exercise,
- 2 -
<PAGE>
upon any securities exchange or under any state or federal law, or (ii) the
consent or approval of any regulatory body or the satisfaction of withholding
tax or other withholding liabilities is necessary or desirable in connection
with such exercise. In such event, such exercise shall be held in abeyance and
shall not be effective unless and until such withholding, listing, registration,
qualification, consent, or approval shall have been affected or obtained free of
any conditions not acceptable to the Company.
The Board or a committee thereof may require as a
condition to the right to exercise the Option hereunder that the Company receive
from the person exercising the Option, representations, warranties and
agreements, at the time of any such exercise, to the effect that the Shares are
being purchased for investment only and without any present intention to sell or
otherwise distribute such Shares and that the Shares will not be disposed of in
transactions which, in the opinion of counsel to the Company, would violate the
registration provisions of the Securities Act of 1933, as then amended, and the
rules and regulations thereunder. The certificate issued to evidence such Shares
shall bear appropriate legends summarizing such restrictions on the disposition
thereof.
All certificates for Shares delivered pursuant to the
Option or the exercise thereof shall be subject to such stop transfer orders and
other restrictions as the Board or a committee thereof may deem advisable under
the rules, regulations, and other restrictions of the Securities and Exchange
Commission, any stock exchange upon which such Shares or other securities are
then listed, and any applicable federal or state securities laws, and the Board
or a committee thereof may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware and applicable federal law.
Subject to subparagraph 2(a) hereof, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors or assigns, as the case may be.
IN WITNESS WHEREOF, the parties have witnessed this Agreement to
be duly executed and delivered as of the date first above written.
FOTOBALL USA, INC.
By: /s/ Michael Favish
--------------------------------------
Michael Favish
President and Chief Executive Officer
INTEGRATED CORPORATE RELATIONS, INC..
By: /s/ Thomas M. Ryan
--------------------------------------
Thomas M. Ryan, Senior Partner
- 3 -
<PAGE>
EXHIBIT 4.6
W.A.B. Growth Equity Research
555 S. Barrington, Suite 211
Los Angeles, CA 90049
Phone: (310) 472-7411
Fax: (310) 472-5954
April 19, 1999
Mr. Michael Favish
President, CEO
Fotoball USA, Inc.
3738 Ruffin Road
San Diego, CA 92723
Dear Michael:
I agree to provide consulting services to Fotoball for a twelve-month period
starting April 16, 1999 and ending April 16, 2000. In return, I will receive
from Fotoball 10,000 stock options priced 15% above the close on April 16 (3
1/2) or at $4.00 per share. 2,500 of these options will vest immediately; 2,500
options will vest July 16, 1999; 2,500 options will vest October 16, 1999 and
the remaining 2,500 options will vest January 16, 2000. These options will
expire April 16, 2004 and will be adjusted accordingly for stock dividends
and/or stock splits. If these terms are agreeable, please sign and fax the
agreement back to me. I look forward to working with you.
Sincerely,
W.A.B. Growth Equity
/s/William Block /s/Michael Favish 4/21/99
- ------------------------ --------------------- -------
William Block, President Michael Favish Date
<PAGE>
EXHIBIT 5.1
June 4, 1999
Fotoball USA, Inc.
3738 Ruffin Road
San Diego, California 92123
Dear Sirs:
Fotoball USA, Inc., a Delaware corporation (the "Company"),
intends to transmit for filing with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933, as amended, on Form S-3
(the "Registration Statement") which relates to 52,500 shares of the Company's
common stock, par value $.01 per share (the "Shares"), which are being offered
for sale by the selling stockholders named in the Registration Statement (the
"Selling Stockholders"). This opinion is an exhibit to the Registration
Statement.
We have acted as counsel to the Company in connection with the
proposed offer and sale of the Shares as contemplated by the Registration
Statement. However, we are not general counsel to the Company and would not
ordinarily be familiar with or aware of matters relating to the Company unless
they are brought to our attention by representatives of the Company. We have
examined copies (in each case signed, certified or otherwise proved to our
satisfaction) of the Company's Certificate of Incorporation and By-Laws as
presently in effect, minutes and other instruments evidencing actions taken by
the Company's directors and stockholders, and such other documents and
instruments relating to the Company and the proposed offering as we have deemed
necessary under the circumstances. In our examination of all such agreements,
documents, certificates and instruments, we have assumed the genuineness of all
signatures and the authenticity of all agreements, documents, certificates and
instruments submitted to us as originals and the conformity with the originals
of all agreements, instruments, documents and certificates submitted to us as
copies. Insofar as this opinion relates to securities to be issued in the
future, we have assumed that all applicable laws, rules and regulations in
effect at the time of such issuance are the same as such laws, rules and
regulations in effect as of the date hereof.
We note that we express no opinion on the laws of any
jurisdiction other than the laws of the State of New York, the federal laws of
the United States and, to the extent set forth in the succeeding sentence, the
laws of the State of Delaware. Insofar as the opinions set forth
<PAGE>
Fotoball USA, Inc.
June 4, 1999
Page 2
below relate to the laws of the State of Delaware, we have relied solely upon
our reading of standard compilations of the Delaware General Corporation Law, as
presently in effect.
Based on the foregoing, and subject to and in reliance on the
accuracy and completeness of the information relevant thereto provided to us, it
is our opinion that:
9. The Company has been duly incorporated under the laws of
the State of Delaware and has an authorized capital stock
consisting of 15,000,000 shares of common stock, par
value $.01 per share, and 1,000,000 shares of preferred
stock, par value $.01 per share.
10. The Shares issued or to be issued to the Selling
Stockholders have been duly authorized and (subject to
the effectiveness of the Registration Statement and
compliance with applicable state securities laws) are or,
when issued and paid for in accordance with the terms of
the stock options relating thereto, will be legally and
validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and as an exhibit to any filing made by the Company
under the securities or "Blue Sky" laws of any state.
This opinion is furnished to you in connection with the filing of
the Registration Statement, and is not to be used, circulated, quoted or
otherwise relied upon for any other purposes, except as expressly provided in
the preceding paragraph.
Very truly yours,
/s/ SWIDLER BERLIN SHEREFF FRIEDMAN, LLP
SWIDLER BERLIN SHEREFF FRIEDMAN, LLP
SBSF, LLP:CIW:GA:JSH:AMF
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the heading "Experts" and
to the incorporation by reference of our report dated February 5, 1999 with
reference to our audit of the financial statements of Fotoball USA, Inc. as of
December 31, 1998 and for the year then ended, in the Registration Statement on
Form S-3 dated June 4, 1999.
/s/ HOLLANDER LUMER & CO. LLP
HOLLANDER LUMER & CO. LLP
Los Angeles, California
June 4, 1999
