As filed with the Securities and Exchange Commission on November 13, 1997
Registration No. 333-36107
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
AMENDMENT NO. 3
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
AMERICAN BINGO & GAMING CORP.
(Name of Issuer in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
7990
----
(Primary Standard Industrial Classification Code Number)
74-2723809
----------
(I.R.S. Employee Identification No.)
____________________
515 Congress Avenue, Suite 1200
Austin, Texas 78701
(512) 472-2041
(Address and telephone number of principal executive offices and principal
place of business)
____________________
John Orton, Chief Financial Officer
American Bingo & Gaming Corp.
515 Congress Avenue, Suite 1200
Austin, Texas 78701
(512) 472-2041
(Name, address and telephone number of agent for service)
Copies of all communications to:
Michael H. Freedman, Esq.
Silverman, Collura, Chernis & Balzano, P.C.
381 Park Avenue South, Suite 1601
New York, New York 10016
(212) 779-8600
Approximate date of proposed sale to the public: From time to time or at
one time after the effective date of this Registration Statement as determined
by the Selling Securityholders.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended ("Securities Act"), other than securities offered only in
connection with dividend or reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to 462(c) under
the Securities Act, check the following box and list the Securities Act
registration 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. [ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Amount to Maximum Maximum
Title of Each Class of Be Offering Price Aggregate Amount of
Securities to be Registered Registered(1) (2) Per Share (3) Offering Price Registration Fee
=========================== ======================= ==================== ====================== =================
<S> <C> <C> <C> <C>
Common Stock (4). . . . . 391,469 $ 7.125 $ 2,789,216.63 $845.22
Common Stock (5). . . . . 445,500 $ 7.125 $ 3,174,187.50 $ 961.88
Common Stock (6). . . . . 700,000 $ 7.125 $ 4,987,187 $ 1,511.36
Warrants. . . . . . . . . . 237,500 $ 3.125 $ 742,187.50 $ 224.91
TOTAL . . . . . . . . . . . 1,774,469 $ 11,692,778.63 $ 3,543.37
=========================== ======================= ====================== =================
<FN>
(1) Pursuant to Rule 416 of the Securities Act of 1933, as amended, there are also being registered such
indeterminate number of additional shares of Common Stock as may become issuable upon conversion of the Series A
Convertible Preferred Stock, and upon exercise of Redeemable Common Stock Purchase Warrants, stock options and
warrants to prevent dilution resulting from stock splits, stock dividends or similar transactions.
(2) Pursuant to Rule 429, this Registration Statement also incorporates the following securities which were
originally registered on Form SB-2, File No. 333-85300, declared effective on December 14, 1994: (i) 2,062,500
Redeemable Common Stock Purchase Warrants ("Warrants"); (ii) 2,062,500 shares of Common Stock underlying Warrants;
(iii) 100,000 shares of Common Stock underlying Underwriter's Option ("Option"); (iv) 150,000 Warrants underlying the
Option; and (v) 150,000 shares of Common Stock issuable upon exercise of the Warrants underlying the Option. The
Company previously paid a registration fee of $4,027.44 to register the aforesaid securities.
Pursuant to Rule 429, this Registration Statement also incorporates the following securities which were
originally registered on Form SB-2, File No. 333-08171, declared effective on July 29, 1996: (i) 414,750 shares of
Common Stock registered on behalf of Selling Securityholders; (ii) 1,005,000 Warrants; and (iii) 1,005,000 shares of
Common Stock underlying Warrants. The Company previously paid a registration fee of $1,678.32 to register the
aforesaid securities.
(3)> Common Stock price per share calculated in accordance with Rule 457(c) of the Securities Act using the
last sale price for the Common Stock and Warrants on September 17, 1997.
(4) Common Stock held by Selling Securityholders.
(5) Common Stock underlying a stock option and warrants held by Selling Securityholders.
(6) Common Stock underlying Series A Convertible Preferred Stock.
</TABLE>
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, as amended ("Securities Act"), or
until the Registration Statement shall become effective on such date as the
Securities and Exchange Commission, acting pursuant to said Section 8(a), may
determine.
[TO BE INSERTED ALONG LEFTHAND SIDE OF PROSPECTUS COVER PAGE]
[RED HERRING LEGEND]
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of any offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any State.
DATED NOVEMBER 13, 1997 SUBJECT TO COMPLETION
AMERICAN BINGO & GAMING CORP.
391,469 SHARES OF COMMON STOCK
237,500 REDEEMABLE COMMON STOCK PURCHASE WARRANTS ("WARRANTS")
237,500 SHARES OF COMMON STOCK UNDERLYING WARRANTS
133,000 SHARES OF COMMON STOCK UNDERLYING WARRANTS ("B WARRANTS")
85,000 SHARES OF COMMON STOCK UNDERLYING A STOCK OPTION
700,000 SHARES OF COMMON STOCK UNDERLYING
SERIES A CONVERTIBLE PREFERRED STOCK
This Prospectus relates to the offer and sale from time to time by
certain selling securityholders ("Selling Securityholders") of up to (i)
391,469 shares of the Common Stock, $.001 par value ("Common Stock"),
of American Bingo & Gaming Corp. ("Company"); (ii) 237,500 Redeemable Common
Stock Purchase Warrants ("Warrants"); (iii) 455,500 shares of Common Stock to
be issued from time to time upon exercise of (a) Warrants, (b) a stock option
("Stock Option"), and (c) warrants for the purchase of 133,000 shares of
Common Stock ("B Warrants"). The B Warrants were issued by the Company in
connection with the private placement of its Series A Convertible Preferred
Stock, $.01 par value ("Preferred Stock"); and (iv) up to 700,000 shares of
Common Stock to be issued from time to time upon conversion of the Company's
Preferred Stock. This Prospectus also relates to such presently indeterminate
number of additional shares of Common Stock as may be issuable upon conversion
or exercise of the Preferred Stock, Warrants, B Warrants or Stock Option, or
payment of dividends on the Preferred Stock, based upon fluctuations in the
conversion price of the Preferred Stock, stock splits, stock dividends or
similar transactions, in accordance with Rule 416 under the Securities Act of
1933, as amended (the "Securities Act"). The Preferred Stock and the shares
of Common Stock issuable upon conversion thereof have been and will be issued
in transactions exempt from the registration requirements of the Securities
Act. See "Selling Securityholders" and "Plan of Distribution". This
Prospectus also relates to other securities as follows: (i) 414,750 shares of
Common Stock which were registered on behalf of Selling Securityholders in the
Company's registration statement declared effective July 29, 1996 ("July
Registration Statement"); (ii) 1,005,000 Warrants which were registered
in the July Registration Statement; (iii) 1,005,000 shares of Common
Stock underlying Warrants which were registered in the July Registration
Statement; (iv) 2,062,500 Warrants which were registered in the
registration statement declared effective on December 14, 1994 ("December
Registration Statement"); (v) 2,062,500 shares of Common Stock underlying
Warrants which were registered in the December Registration Statement;
(vi) 100,000 shares of Common Stock underlying the Underwriter's Option
("Option") which were registered in the December Registration Statement; (vii)
150,000 Warrants underlying the Option which were registered in the December
Registration Statement; and (viii) 150,000 shares of Common Stock issuable
upon exercise of the Warrants underlying the Option which were registered in
the December Registration Statement. The Common Stock, Warrants, and the
Common Stock underlying each of the Preferred Stock, Warrants, and B Warrants
are collectively referred to herein as "Securities".
The Company will not receive any proceeds from possible resales by the
Selling Securityholders of their respective shares of Common Stock of the
Company. The Company has agreed to indemnify certain of the Selling
Securityholders against certain liabilities, including certain liabilities
under the Securities Act, or contribute to payments which such Selling
Securityholders may be required to make in respect thereof. The Company will
receive gross proceeds of up to $17,574,000 upon exercise of the Warrants, B
Warrants and the Stock Option. There can be no assurance that any such
securities will be exercised.
The Selling Securityholders or pledgees, donees, transferees or other
successors in interest that receive such shares as a gift, partnership
distribution or other non-sale related transfer, may sell their shares of
Common Stock from time to time, in market transactions, in negotiated
transactions, through the writing of options, or a combination of such methods
of sale, at fixed prices which may be changed, at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Selling Securityholders may effect such transactions
by selling their shares of Common Stock to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the Selling Securityholders and/or the purchasers of such
shares of Common Stock for whom such broker-dealer may act as agents or to
whom they may sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions.) The
Company has agreed to bear all expenses in connection with the registration of
the shares of Common Stock to which this Prospectus relates.
The Common Stock and Warrants are quoted on the NASDAQ SmallCap Market
System ("Nasdaq") under the symbols "BNGO" and "BNGOW", respectively as well
as on the Boston Stock Exchange under the symbols "ABA" and "ABA/WS"
respectively. On September 17, 1997 the last sale price of the Common Stock
as reported on Nasdaq was $7.125 and the last sale price of the Warrants was
$3.125.
THESE SECURITIES ARE HIGHLY SPECULATIVE. THEY INVOLVE A HIGH DEGREE OF RISK.
THEY SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO SUSTAIN A TOTAL
LOSS OF THEIR ENTIRE INVESTMENT (SEE "RISK FACTORS" - PAGE 7)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is November , 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices at Room 1204, Everett McKinley
Dirksen Building, 219 South Dearborn Street, Chicago, Illinois 60604; and 7
World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material can also be obtained at prescribed rates from the Public Reference
Section of the Commission at its principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
This Prospectus does not contain all of the information set forth in the
Registration Statements of which this Prospectus is a part and which the
Company has filed with the Commission. For further information with respect
to the Company and the securities offered hereby, reference is made to the
Registration Statement, including the exhibits filed as a part thereof, copies
of which can be inspected at, or obtained at prescribed rates from the Public
Reference Section of the Commission at the address set forth above.
Additional updating information with respect to the Company may be provided in
the future by means of appendices or supplements to the Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus is delivered, upon written or oral request of
such person, a copy of any and all of the information that has been or may be
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents).
Requests should be directed to American Bingo & Gaming Corp., 515 Congress
Avenue, Suite 1200, Austin, Texas 78701 (512) 472-2041.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company with the
Commission and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-KSB and Form 10-KSB/A for its
fiscal year ended December 31, 1996;
(b) The Company's Quarterly Report on Form 10-QSB and Form 10-QSB/A for
the three month period ended March 31, 1997;
(c) The Company's Quarterly Report on Form 10-QSB and Form 10-QSB/A for
the six month period ended June 30, 1997;
(d) The Company's Current Reports on Forms 8-K (i) dated March 18, 1997,
filed with the Commission on March 18, 1997 and referencing events dated March
2, 1997; (ii) dated August 15, 1997, filed with the Commission on August 15,
1997 and referencing events dated August 14, 1997 and August 4, 1997; (iii)
dated October 23, 1997, filed with the Commission on October 24, 1997 and
referencing events dated on or about October 9, 1997; (iv) dated October 31,
1997, filed with the Commission on November 5, 1997 and referencing events
dated April 21, 1997; and (v) Form 8-K/A dated August 15, 1997, filed with the
Commission on November 5, 1997 and referencing events dated August 14, 1997
and August 4, 1997.
(e) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form SB-2, Registration No. 33-85300; and
(f) All other reports filed by the Company pursuant to Section 13(a) and
15(d) of the Exchange Act since the Company's fiscal year ended December 31,
1996.
All documents filed by the Company with the Commission pursuant to
sections 12, 14 or 15(d) of the Exchange Act subsequent hereto, but prior to
the termination of the offering of securities made by this Prospectus shall be
deemed to be incorporated by reference herein and to be part hereof from their
respective dates of filing.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus,
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein 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.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the Consolidated Financial Statements and Notes thereto
appearing elsewhere or incorporated by reference elsewhere in this Prospectus,
including information under "Risk Factors".
THE COMPANY
American Bingo & Gaming Corp. (the "Company") was incorporated under the
laws of the State of Delaware in 1994. The Company was formed to consummate
the acquisition of entities engaged in the operation of charity bingo
entertainment centers. The Company subsequently completed its initial public
offering in December 1994, from which approximately $5.2 million was raised
through the sale of 1,000,000 shares of Common Stock and 1,725,000 Warrants.
The Company, through its subsidiaries, provides facilities,
maintenance and management support for charities which utilize bingo events as
a means of fund raising. The Company collects rental revenues from
participating charities through the leasing of its bingo center facilities.
Revenues are also derived from the sale of bingo supplies and the operation
and/or lease of vending and concession outlets at the bingo centers. The
Company also derives a repidly increasing portion of revenues from its South
Carolina video gaming centers.
As of October 31, 1997, the Company operated 18 bingo centers in Texas,
Alabama and South Carolina. The Company recently closed two bingo centers in
Texas due to poor profitability, but has five additional centers under
Construction in South Carolina which are expected to open in the fourth
quarter of 1997. This will give the Company 23 bingo centers at yearend. The
Company's original goal for 1997 was 24-30 bingo centers, but the Company will
Not meet this goal due to increased focus on its video gaming business. As a
result of this increased gaming focus, the Company has seen an increase from 4
to 60 video gaming centers in South Carolina from the beginning fo 1997
through October 31, 1997. Gaming revenues comprised approximately 30.6% of the
Company's total 1997 revenues in the first half of fiscal 1997; management
expects gaming revenues to comprise over 50% of its quarterly revenues by the
end of 1997.
The Company has designed an aggressive expansion plan focused on
the acquisition and development bingo and video gaming centers
(collectively, the "Centers"). The Company's goal is to establish
itself as a major force in the estimated multi-billion dollar per year charity
bingo and gaming market. No assurances may be given that the Company's goals
will be achieved.
The Company is knowledgeable with respect to states whose legislation
permits charity bingo and gaming events. The Company identifies and analyzes
desirable bingo markets that offer favorable population and income
demographics. Where viable, the Company currently plans to establish Centers
in each of these markets. This can be accomplished either by building a new
bingo center or by acquiring an existing center.
The Company's principal executive offices are located at 515 Congress
Avenue, Suite 1200, Austin, Texas, 78701 and the telephone number of the
principal executive offices is (512) 472-2041.
RECENT DEVELOPMENTS
In July 1997, the Company sold 200 shares of Preferred Stock and B
Warrants for the purchase of an aggregate of 133,000 shares of Common Stock to
four investors, thereby raising $2,000,000, pursuant to Regulation D of the
Securities Act, and Rule 506 promulgated thereunder. The Preferred Stock is
convertible in accordance with the terms of the Certificate of Designations.
The Company is obligated to register, and is registering herein, the shares of
Common Stock underlying the Preferred Stock and the B Warrants. The Company
enlisted MG Securities as the placement agent and paid $160,000 as
commissions, along with the Stock Option for the purchase of 85,000 shares of
Common Stock.
<PAGE>
RISK FACTORS
The following factors should be considered carefully in evaluating the
Company's business and before making any investment in the Company.
1. Relatively New Venture, Need for Further Acquisitions.
------------------------------------------------------------
The Company's future success depends upon its ability to continue to
expand its existing operations through the acquisition of bingo and gaming
centers, and the establishment of new centers. There can be no assurance that
the Company will be successful in making such acquisitions or establishing new
centers. The Company is subject to all the risks inherent in attempting to
expand a relatively new business venture. These risks include the potential
inability of the Company to efficiently operate additional centers, the
existence of undisclosed actual or contingent liabilities, the inability to
fund the working capital requirements of additional Centers and the inability
to locate and/or establish Centers which have a positive effect on the
Company's operations. In 1995, the Company encountered a hostile regulatory
environment in Florida and found it necessary to dispose of its four centers
there. In 1997, the State of Texas passed various bingo laws which may be
harmful to the Company. There can be no assurance that the Company will
continue to achieve a level of profitability that will provide a return on
invested capital or will result in an increase in the market value of the
Company's securities.
2. Need for Additional Financing.
--------------------------------
The Company's business plan includes an aggressive program to identify
acquisition candidates that meet certain demographic and other criteria, and
to seek to acquire them. Growth to date has been funded initially with cash
advanced by shareholders and from operations, and since December 1994 with the
proceeds of the Company's initial public offering. The Company believes it
will have resources to enable it to make significant acquisitions. However,
there can be no assurance that the remaining cash, coupled with the Company's
available credit lines and Common Stock, which has been used as currency to
facilitate certain acquisitions, will enable the Company to finance all of its
acquisition plans. Moreover, additional funds may be needed to fund the
working capital requirements of newly acquired Centers. No assurance can be
given that additional needed financing will be available to the Company, or if
available, on terms acceptable to the Company. If further financing is
needed, but not available, the Company will be required to scale down its
acquisition plans.
3. Competition.
-----------
The Company competes with other Centers located in the general area where
the Company's subsidiaries presently operate. Competition is based on such
factors as location, comfort, cleanliness, personal relationships and other
amenities. The Company continues to seek to maximize the competitive
advantages of its facilities. The Company does expect to encounter increased
competition as it seeks to acquire additional Centers. Other forms of gaming,
principally non-charity operations also represent additional competitive
threats to the Company. There can be no assurance that additional competing
Centers will not be opened by parties not affiliated with the Company or that
existing Centers will not be refurbished to the extent that they are more
amenable to the charity bingo players and gaming players who presently
frequent the Company's Centers.
4. Dependence Upon Key Personnel.
--------------------------------
The Company is substantially dependent upon the continued services of
Gregory Wilson, its Chief Executive Officer, who is the Company's most
experienced person in the operation of charity bingo centers. In September
1996, Mr. Wilson entered into a three-year employment agreement with the
Company. The loss of the services of Mr. Wilson through incapacity or
otherwise could have a material adverse effect upon the Company's business and
prospects. To the extent that his services become unavailable, the Company
will be required to retain other qualified personnel, and there can be no
assurance that it will be able to recruit and hire qualified persons upon
acceptable terms. The Company maintains key person life and disability
insurance in the amount of $1,000,000 on the life of Mr. Wilson, with the
Company as beneficiary. However, in the event of loss, there can be no
assurance that the insurance proceeds will adequately compensate the Company.
5. Government Regulation.
----------------------
The Company believes that forty-five (45) states and the District of
Columbia have enacted laws permitting and controlling the operation of the
bingo centers. In some states the Company is required to obtain and maintain
permits and/or licenses from state and local regulatory agencies. State
regulations often limit the amount of revenues which the Company can generate
by limiting the number of sessions, revenues per session, number of locations
which may be operated, or other matters. Certain states may also restrict
bingo operators to locally formed entities or may restrict ownership to
private investors who are active in management. The Company believes it
currently complies with all regulations affecting its operations. However,
there can be no assurance that current laws and regulations will not be
changed or interpreted in such a way as to require the Company to alter its
present activities, further restrict profit margins or obtain additional
capital equipment in order to obtain or maintain licenses and permits.
6. No Assurance as to Future Acquisitions.
-------------------------------------------
The Company's business has grown solely through acquisitions and the
opening of new Centers. The Company's business plan calls for the acquisition
of entities engaged in the operation of charity bingo centers, and gaming
centers. The Company's ability to achieve its expansion plans depends in
large part on its sound business judgment relative to quality targets and its
negotiating strength. Acquisitions to date have been based on a multiple of
pre-tax income. Since the Company has become a public company, it has
acquired properties for a combination of cash, seller-financed notes and
stock, and hopes to continue to do so. If potential sellers are receptive to
accepting equity in the Company as part of the purchase price, the Company's
ability to expand will be enhanced. There can be no assurance, however, that
the Company's acquisition targets will continue to be receptive to such
proposals. Nor can there be assurance that the Company will succeed in
effecting future acquisitions of additional Centers that meet management's
criteria of profitability, physical attributes and demographics in the
targeted states and locales. Moreover there can be no assurance that once
acquisitions are made they will have a positive effect on the Company's
operations.
7. General Economic Risks.
------------------------
The Company's current and future business plans are dependent, in large
part, on the state of the general economy. Adverse changes in general and
local economic conditions may adversely impact on investment in the Company.
These conditions and other factors beyond the Company's control include, among
other factors,: (i) competition from other hospitality and entertainment
properties; (ii) changes in regional and local population and disposable
income composition; (iii) the need for renovations, refurbishment and
improvements; (iv) unanticipated increases in operating costs; (v) changes in
federal, state, local laws, rules and regulations including laws regulating
the environment, signage and the like; (vi) the inability to secure property
and liability insurance to fully protect against all losses, or to obtain such
insurance at reasonable cost; (vii) seasonality, and (viii)changes or
cancellation in local tourist, athletic or cultural events.
8. Possible Volatility of Stock Price.
--------------------------------------
There can be no assurance that a public market price for the Common Stock
or Warrants will continue. The market prices of the Common Stock and the
Warrants may be significantly affected by factors such as announcements by the
Company or its competitors, as well as variations in the Company's results of
operations and market conditions in the gaming industry in general. The
market prices may also be affected by movements in prices of stocks in
general. The relatively limited amount of publicly trading shares and
Warrants (the "float") renders the Company's securities especially susceptible
to sharp price fluctuations.
9. Shares Eligible for Future Sale.
-----------------------------------
A large number of shares of Common Stock presently outstanding are
currently eligible for public sale under the Securities Act. Possible or
actual sales of Common Stock in the future by existing shareholders may have a
depressive effect on the price of the Common Stock in the open market.
10. Possible Effects of Certain Articles of Incorporation and Bylaw
------------------------------------------------------------------
Provisions.
- -----------
The Company's Articles of Incorporation and Bylaws contain provisions
that may discourage acquisition bids for the Company. The Company has
substantial authorized but unissued capital stock available for issuance. The
Company's Articles of Incorporation contain provisions which authorize the
Board of Directors, without the consent of stockholders, to issue additional
shares of Common Stock and issue shares of Preferred Stock in series,
including establishment of the voting powers, designation, preferences,
limitations, restrictions and relative rights of each series of Preferred
Stock.
11. Absence of Cash Dividends.
----------------------------
The Board of Directors does not anticipate paying cash dividends on the
Common Stock for the foreseeable future and intends to retain any future
earnings to finance the growth of the Company's business. Payment of
dividends, if any, will depend, among other factors, on earnings, capital
requirements and the general operating and financial conditions of the
Company.
12. Risk of Redemption of Warrants.
----------------------------------
The Company may redeem the Warrants (with Investors Associates, Inc., the
Company's underwriter in its initial public offering, prior consent) for $.001
per Warrant, on 30 days' written notice, at any time after the average closing
bid quotation of the Common Stock on Nasdaq was at least $8.00 for 20
consecutive trading days ending three days prior to the notice of redemption.
Notice of redemption of the Warrants could cause the holders thereof to
exercise the Warrants and pay the exercise price at a time when it may be
disadvantageous for the holders to do so, to sell the Warrants at the current
market price when they might otherwise wish to hold the Warrants, or to accept
the redemption price, which is likely to be less than the market value of the
Warrants at the time of the redemption.
13. Investors May be Unable to Exercise Warrants, B Warrants, or Stock
------------------------------------------------------------------
Option.
- ------
For the term of the Warrants, B Warrants and Stock Option (collectively
in this paragraph, the "Warrants") the Company will attempt to maintain a
current effective registration statement with the Commission relating to the
shares of Common Stock issuable upon exercise of the Warrants. If the Company
is unable to maintain a current registration statement because the costs
render it uneconomical, or because the value of the shares of Common Stock
underlying the Warrants is less than the exercise price, or any number of
other reasons, the warrantholders will be unable to exercise the Warrants, and
the Warrants may become valueless. Although during the Offering, the Warrants
will not knowingly be sold in any jurisdiction in which they are not
registered or otherwise qualified, a purchaser of the Warrants may relocate
into a jurisdiction in which the shares of Common Stock underlying the
Warrants are not so registered or qualified. In addition, a purchaser of the
Warrants in the open market may reside in a jurisdiction in which the shares
of Common Stock underlying the Warrants are not registered or qualified. If
the Company is unable or chooses not to register or qualify or maintain the
registration or qualification of the shares of Common Stock underlying the
Warrants for sale in all of the states in which the Warrant holders reside,
the Company would not permit such Warrants to be exercised and Warrantholders
in those states may have no choice but to either sell their Warrants or let
them expire. Prospective investors and other interested persons who wish to
know whether or not the Common Stock may be issued upon the exercise of
Warrants by a Warrantholder in a particular state should consult with the
securities department of the state in question or send a written inquiry to
the Company.
14. Speculative Nature of Warrants.
---------------------------------
Warrants are generally more speculative than Common Stock which are
purchasable upon the exercise thereof. During the term of the warrants, the
holders thereof are given the opportunity to profit from a rise in the market
price of the Company's Common Stock, subject to the Company's right of
redemption. Historically, the percentage increase or decrease in the market
price of a warrant has tended to be greater than the percentage increase or
decrease in the market price of the underlying common stock. A warrant my
become valueless, or of reduced value, if the market price of the common
shares decreases, or increases only modestly, over the term of the warrant.
12. Penny Stock Regulation.
-------------------------
The trading of the Common Stock and Warrants, if any, may be subject to
Rule 15g-9 promulgated under the Exchange Act for non-Nasdaq and non-exchange
listed securities. Under such rule, brokers-dealers who recommend such
securities to persons other than established customers and accredited
investors must make a special written suitability determination for the
purchaser and receive the purchaser's written agreement to a transaction prior
to sale. Securities are exempt from this rule if the market price is at least
$5.00 per share.
The Commission has adopted regulations that generally define a "penny
stock" to be an equity security that has a market price of less than $5.00 per
share or an exercise price of less than $5.00 per share subject to certain
exceptions. Such exceptions include equity securities listed on Nasdaq and
equity securities issued by an issuer that has (i) net tangible assets of at
least $2,000,000, if such issuer has been in continuous operation for more
than three years, or (ii) net tangible assets of at least $5,000,000, if such
issuer has been in continuous operation for less than three years, or (iii)
average revenue of at least $6,000,000 for the preceding three years. Unless
an exception is available, the regulations require the delivery, prior to any
transaction involving a penny stock, of a risk of disclosure schedule
explaining the penny stock market and the risks associated therewith.
<PAGE>
USE OF PROCEEDS
The Company will not receive proceeds from any sale of the Selling
Securityholder Securities. The proceeds to be received by the Company from
the exercise of the Warrants, B Warrants and the Stock Option (assuming all of
such securities are exercised), will be $17,574,000. The Company intends to
use such proceeds for general corporate purposes. Pending use of the
proceeds, they will be invested in short term, interest bearing securities or
money market funds.
<PAGE>
DILUTION
The following discussion assumes that all of the Warrants, B Warrants and
the Stock Option are exercised:
As of June 30, 1997, the net tangible book value of the Common Stock,
based on the balance sheet at June 30, 1997, was $3,690,800 or $.79
per share. Net tangible book value per share represents the amount of the
tangible assets, $4,892,832, less the amount of its liabilities,
$1,202,032, divided by the number of shares of Common Stock outstanding
4,645,919. Without taking into account any changes in the net tangible book
value of the Company after June 30, 1997, other than giving effect to the
exercise of all of the Warrants (3,317,500 Warrants exercisable at $5.00
($16,587,500)), B Warrants (133,000 B Warrants exercisable at $5.50
($731,500)) and the Stock Option (85,000 options exercisable at $3.00
($255,000)), and the receipt of the net proceeds therefrom, the pro forma
net tangible book value of the Common Stock, would be $21,264,800. Upon
dividing the pro forma net tangible book value by the pro forma amount of
Common Stock outstanding (8,181,419), the pro forma net tangible book value
per share is $2.59 per share, representing an immediate increase in the
net tangible book value of $1.80 per share to the present shareholders
and an immediate dilution of $2.41 per share to new investors from the
exercise price of the Redeemable Stock Purchase Warrants ("Warrant Exercise
Price"). Dilution per share represents the difference between the Warrant
Exercise Price and the pro forma net tangible book value after the issuance of
all the shares of Common Stock issuable upon exercise of the Warrants, B
Warrants and the Stock Option (collectively, such issuances being referred to
as the "Stock Issuance").
The following table illustrates this dilution:
<TABLE>
<CAPTION>
<S> <C>
Warrant Exercise Price . . . . . . . . . . . . . $ 5.00
Net tangible book value prior to Stock Issuance $ .79
Increase attributable to new investors. . . . . $ 1.80
Pro Forma net tangible book value
per share after Stock Issuance . . . . . . . . . $ 2.59
Dilution of net tangible book value
per share to new investors . . . . . . . . . . . $ 2.41
</TABLE>
===================================
<PAGE>
RESALES BY SELLING SECURITYHOLDERS
This Prospectus relates to the proposed resale by the Selling
Securityholders of up to (i) 391,469 shares of Common Stock; (ii)
237,500 Warrants; (iii) 700,000 shares of Common Stock underlying the
Preferred Stock; and (iv) 455,500 shares of Common Stock underlying Warrants,
B Warrants and Stock Option. The following table sets forth as of September
17, 1997 certain information regarding the beneficial ownership of the Common
Stock of each Selling Securityholder and as adjusted to give effect to the
sale of the Common Stock and Warrants offered hereby. The Common Stock and
Warrants are being registered to permit public secondary trading of the Common
Stock and Warrants, and the Selling Securityholders may offer the Common Stock
and Warrants for resale from time to time. See "Plan of Distribution." The
Company will not receive any of the proceeds from the sale of the Common
Stock. If the Warrants are exercised, the Company would receive $17,574,000.
<TABLE>
<CAPTION>
Common Stock Common Stock Percentage
Names of Selling Beneficially Owned Offered By Owned After
Security Holders Prior to Offering(1) Beneficial Owner Offering(%)(2)
- ------------------------------- -------------------- ----------------- --------------
<S> <C> <C> <C>
Roy Stevens. . . . . . .. . . . 50,000 50,000 0
Focus Tech Investments, Inc.. . 223,500 100,000(3) **
Barry Goldstein . . . . . . . . 31,168 30,000(3) **
Michael Mims. . . . . . . . . . 100,000 100,000 0
Harold Dukes. . . . . . . . . . 9,969 9,969 0
M. F. Johnson . . . . . . . . . 20,000 20,000(3) 0
J.C. Crick. . . . . . . . . . . 20,000 20,000(3) 0
Lowell Lasley . . . . . . . . . 20,000 20,000(3) 0
Danny C. Dye. . . . . . . . . . 67,500 67,500(4) 0
Tom Nguyen. . . . . . . . . . . 20,000 20,000 0
Tom Vo. . . . . . . . . . . . . 2,000 2,000 0
Joe Thuan . . . . . . . . . . . 2,000 2,000 0
Robert Norman . . . . . . . . . 37,500 37,500 0
David Heller(4) . . . . . . . . 216,580 216,580(5)(10) 0
Plazacorp Investments Limited . 33,320 33,320(6)(10) 0
P.R.I.F. #4 . . . . . . . . . . 478,975 478,975(7)(10) 0
Sam Reisman . . . . . . . . . . 104,125 104,125(8)(10) 0
MG Securities . . . . . . . . . 85,000 85,000(9) 0
George M. Harrison, Jr.. . . . 50,000 50,000 0
Thomas M. Harrison . . . . . . 50,000 50,000 0
William J. Harrison. . . . . . 50,000 50,000 0
<FN>
** Less than 1%
(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares of Common Stock which such person has the right to
acquire such shares within 60 days of September 9, 1997. For purposes of computing the
percentage of outstanding shares of Common Stock held by each person or group of persons
named above, any security which such person or persons has or have the right to acquire
within such date is deemed to be outstanding but is not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person. Except as indicated
in the footnotes to this table and pursuant to applicable community property laws, the
Company believes based on information supplied by such persons, that the persons named
in this table have sole voting and investment power with respect to all shares of Common
Stock which they beneficially own.
(2) Assumes the sale of all Securities offered hereby.
(3) Represents Warrants and the shares of Common Stock underlying such Warrants.
(4) Represents (i) 20,000 shares of Common Stock; (ii) 47,500 Warrants; and (iii)
47,500 shares of Common Stock underlying such Warrants.
(5) Represents (i) 182,000 shares of Common Stock underlying the Preferred Stock;
and (ii) 34,580 shares of Common Stock underlying B Warrants.
(6) Represents (i) 28,000 shares of Common Stock underlying the Preferred Stock; and
(ii) 5,320 shares of Common Stock underlying B Warrants.
(7) Represents (i) 402,500 shares of Common Stock underlying the Preferred Stock;
and (ii) 76,475 shares of Common Stock underlying B Warrants.
(8) Represents (i) 87,500 shares of Common Stock underlying the Preferred Stock; and
(ii) 16,625 shares of Common Stock underlying B Warrants.
(9) Represents 85,000 shares of Common Stock underlying a Stock Option.
(10) The Certificate of Designations for the Preferred Stock and the B Warrants
issued in connection therewith provide that certain Selling Securityholders may not
convert their Preferred Stock or exercise their B Warrants at any time to acquire a
number of shares of Common Stock in excess of that number which would result in
beneficial ownership of more than 4.9% of the Company's outstanding Common Stock at any
time.
The Common Stock being offered hereby by certain of the Selling Securityholders may
be acquired, from time to time, upon (i) the conversion of the Series A Convertible
Preferred Stock which were acquired by them in a private placement transaction pursuant
to a Subscription Agreement, dated as of August 1, 1997, (ii) the payment by the Company
of dividends on the Preferred Stock in the form of Common Stock in lieu of cash
interest, and (iii) the exercise of B Warrants to purchase 133,000 shares of Common
Stock, which were acquired by certain of the Selling Securityholders from the Company in
connection with the sale of the Preferred Stock. This Prospectus also relates to such
presently indeterminate number of additional Shares as may be issuable upon conversion
of the Preferred Stock or payment of dividends on the Preferred Stock, based upon
fluctuations in the conversion price of the Series A Preferred Stock in accordance with
Rule 416 under the Securities Act.
In recognition of the fact that Selling Securityholders may wish to be legally
permitted to sell their shares of Common Stock when they deem appropriate, the Company
has filed with the Commission, under the Securities Act, a Registration Statement on
Form S-3, of which this Prospectus forms a part, with respect to the resale of the
shares of Common Stock from time to time on the Nasdaq or in privately negotiated
transactions and has agreed to prepare and file such amendments and supplements to the
Registration Statement as may be necessary to keep the Registration Statement effective
until the shares of Common Stock are no longer required to be registered for the sale
thereof by the Selling Securityholders. The Company has agreed to register a specified
number of shares of Common Stock for resale by the Selling Securityholders.
</TABLE>
<PAGE>
PLAN OF DISTRIBUTION
The Selling Securityholders may offer and sell shares of Common Stock and
Warrants from time to time in the discretion of the Selling Securityholders on
Nasdaq or the Boston Stock Exchange or in the over-the-counter market or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or at negotiated prices. The distribution of the
shares of Common Stock and Warrants may be effected from time to time in one
or more transactions including, without limitation: (a) a block trade in which
the broker-dealer so engaged will attempt to sell the Common Stock and
Warrants as agent, but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker or dealer
as principal and resale by such broker or dealer for its account pursuant to
this Prospectus; (c) ordinary brokerage transactions and transactions in which
the broker solicits purchasers; and (d) face-to-face or other direct
transactions between the Selling Securityholders and purchasers without a
broker-dealer or other intermediary. In effecting sales, broker-dealers or
agents engaged by the Selling Securityholders may arrange for other
broker-dealers or agents to participate. From time to time, one or more of
the Selling Securityholders may pledge, hypothecate or grant a security
interest in some or all of the common Stock owned by them, and the pledgees,
secured parties or persons to whom such securities have been hypothecated
shall, upon foreclosure in the event of default, be deemed to be Selling
Securityholders hereunder. In addition, the Selling Securityholders may from
time to time sell short the Common Stock of the Company, and in such
instances, this Prospectus may be delivered in connection with such short sale
and the Common Stock offered hereby may be used to cover such short sale.
Sales of Selling Securityholders' Common Stock and Warrants may also be
made pursuant to Rule 144 under the Securities Act, where applicable. The
Selling Securityholders' shares may also be offered in one or more
underwritten offerings, on a firm commitment or best efforts basis. The
Company will receive no proceeds from the sale of Common Stock by the Selling
Securityholders.
To the extent required under the Securities Act, the aggregate amount of
Selling Securityholders' Common Stock and Warrants being offered and the terms
of the offering, the names of any such agents, brokers, dealers or
underwriters and any applicable commission with respect to a particular offer
will be set forth in an accompanying Prospectus supplement. Any underwriters,
dealers, brokers or agents participating in the distribution of the Common
Stock and Warrants may receive compensation in the form of underwriting
discounts, concessions, commissions or fees from a Selling Securityholder
and/or purchasers of Selling Securityholders' shares of Common Stock and/or
Warrants, for whom they may act. In addition, sellers of Selling
Securityholders' shares of Common Stock and/or Warrants may be deemed to be
underwriters under the Securities Act and any profits on the sale of Selling
Securityholders' shares of Common Stock or Warrants by them may be deemed to
be discounts or commissions under the Securities Act. Selling Securityholders
may have other business relationships with the Company and its subsidiaries or
affiliates in the ordinary course of business.
From time to time each of the Selling Securityholders may transfer,
pledge, donate or assign Selling Securityholders' shares of Common Stock and
Warrants to lenders, family members and others and each of such persons will
be deemed to be a "Selling Securityholder" for purposes of this Prospectus.
The number of Selling Securityholders' shares of Common Stock and Warrants
beneficially owned by those Selling Securityholders who so transfer, pledge,
donate or assign Selling Securityholders' shares of Common Stock or Warrants
will decrease as and when they take such actions. The plan of distribution
for Selling Securityholders' shares of Common Stock and Warrants sold
hereunder will otherwise remain unchanged, except that the transferees,
pledgees, donees or other successors will be Selling Securityholders
hereunder.
Including, and without limiting the foregoing, in connection with
distributions of the Common Stock, a Selling Securityholder may enter into
hedging transactions with broker-dealers and the broker-dealers may engage in
short sales of the Common Stock in the course of hedging the positions they
assume with such Selling Securityholder. A Selling Securityholder may also
enter into option or other transactions with broker-dealers that involve the
delivery of the Common Stock to the broker-dealers, who may then resell or
otherwise transfer such Common Stock. A Selling Securityholder may also loan
or pledge the Common Stock to a broker-dealer and the broker-dealer may sell
the Common Stock so loaned or upon default may sell or otherwise transfer the
pledged Common Stock.
Under applicable rule and regulations under the Exchange Act, any person
engaged in the distribution of the Common Stock may not bid for or purchase
shares of Common Stock during a period which commences one business day (5
business days, if the Company's public float is less than $25 million or its
average daily trading volume is less than $100,000) prior to such person's
participation in the distribution, subject to exceptions for certain passive
market making activities. In addition and without limiting the foregoing,
each Selling Securityholder will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including, without
limitation, Regulation M which provisions may limit the timing of purchases
and sales of shares of the Company's Common Stock by such Selling
Securityholder.
The Company is bearing all costs relating to the registration of the
shares of Common Stock (other than fees and expenses, if any, of counsel or
other advisors to the Selling Securityholders). Any commissions, discounts or
other fees payable to broker-dealers in connection with any sale of the shares
of Common Stock and Warrants will be borne by the Selling Securityholder
selling such shares of Common Stock or Warrants.
The Company has agreed to indemnify the Selling Securityholders in
certain circumstances, against certain liabilities, including liabilities
arising under the Securities Act.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock of the Company is
American Stock Transfer & Trust Co., 40 Wall Street, New York, New York 10005.
LEGAL MATTERS
The legality of the shares offered hereby has been passed upon for the
Company by Silverman, Collura, Chernis & Balzano, P.C., 381 Park Avenue South,
Suite 1601, New York, New York 10016.
EXPERTS
The Company's consolidated financial statements incorporated by reference
in this Registration Statement, have been incorporated herein in reliance on
the reports of Weinick Sanders Leventhal & Co., LLP (successors to the
practice of Weinick, Sanders & Company, LLP), independent accountants, given
on the authority of that firm as experts in accounting and auditing.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company, the Company 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
Company of expense incurred or paid by a director, officer, or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person of the
Company in connection with the securities being registered, the Company will,
unless in the opinion of its counsel the matter has been settled by a
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issues.
<PAGE>
==============================================================
No dealer, salesman 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 made by this Prospectus and, if given
or made, such information or representations must not be relied upon as having
been authorized by the Company. Neither the delivery of this Prospectus nor
any sale made hereunder shall under any circumstances create any implication
that there has been no change in the affairs of the Company since the date
hereof. This Prospectus does not constitute an offer or solicitation by anyone
in any jurisdiction in which such offer or solicitation is not authorized or
in which the person making such offer or solicitation is not qualified to do
so or to anyone to whom it is unlawful to make such offer or solicitation.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
Available Information. . . . . . . . . . . . . . . . 3
Prospectus Summary . . . . . . . . . . . . . . . . . 5
Risk Factors . . . . . . . . . . . . . . . . . . . . 7
Use of Proceeds. . . . . . . . . . . . . . . . . . . 12
Dilution . . . . . . . . . . . . . . . . . . . . . . 13
Resales by Selling Securityholders . . . . . . . . . 14
Plan of Distribution . . . . . . . . . . . . . . . . 17
Transfer Agent . . . . . . . . . . . . . . . . . . . 19
Legal Matters. . . . . . . . . . . . . . . . . . . . 19
Experts. . . . . . . . . . . . . . . . . . . . . . . 19
Disclosure of Commission Position on Indemnification 19
</TABLE>
____________________
Until , 1997 all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a Prospectus. This delivery requirement is in addition to the
obligation of dealers to deliver a Prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee . . . . $ 3,107.30
Printing Expenses. . . . . . $ 10,000*
Legal Fees and Expenses. . . $ 15,000*
Accounting Fees and Expenses $ 1,000*
Transfer Agent Fees. . . . . $ 1,000*
Miscellaneous Expenses . . . $ 1,000*
TOTAL. . . . . . . . . . . $31,107.30
</TABLE>
__________
* Estimated
The Selling Security Holders will not be paying any portion of the
foregoing expenses of issuance and distribution.
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware and
Article 7 of the Company's Articles of Incorporation contain provisions for
indemnification of officers, directors, employees and agents of the Company.
The Articles of Incorporation require the Company to indemnify such persons to
the full extent permitted by Delaware law. Each person will be indemnified in
any proceeding if he acted in good faith and in a manner which he reasonably
believed to be in, or not opposed to, the best interest of the Company.
Indemnification would cover expenses, including attorney's fees, judgments,
fines and amounts paid in settlement.
The Company's Articles of Incorporation also provided that the Company's
Board of Directors may cause the Company to purchase and maintain insurance on
behalf of any present or past director or officer insuring against any
liability asserted against such person incurred in the capacity of direct or
officer or arising out of such status, whether or not the Company would have
the power to indemnify such person. The Company may seek to obtain directors'
and officers' liability insurance.
Item 16. EXHIBITS
* 4.1 Certificate of Designations of Series A Preferred Stock.
* 4.2 Form of Series A Preferred Stock Subscription Agreement.
* 5.1 Opinion of Silverman, Collura, Chernis & Balzano, P.C., special
counsel for the Registrant, as to the legality of the securities
being registered.
23.1 Consent of Weinick Sanders Leventhal & Co., LLP, Certified Public
Accountants.
*23.2 Consent of Silverman, Collura, Chernis & Balzano, P.C. (contained in
Exhibit 5.1).
* Previously filed
Item 17. UNDERTAKINGS.
(a) Rule 415 Offerings.
The undersigned small business issuer hereby undertakes that it will:
(1) File, during the period required by Rule 415, a post-effective
amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the Registration Statement; and
(iii) Includes any additional or changed material information on
the plan of distribution.
provided, however, the paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information
required in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) For determining liability under the Securities Act of 1933,
treat each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to be the
initial bona fide offering.
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
(b) Request for acceleration of effective date.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act"), may be permitted to directors, officers
and controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer 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 small business issuer of expenses
incurred or paid by a director, officer or controlling person of the small
business issuer in the successful defense of any action, suit or proceedings)
is asserted by such director, officer or controlling person in connection with
the securities being registered, the small business issuer 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 court.
(c) Reliance upon Rule 430A under the Securities Act.
The undersigned small business issuer hereby undertakes that it will:
(1) For determining any liability under the Securities Act of 1933,
as amended, treat the information omitted from the form of prospectus filed as
part of the registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the small business issuer under Rule 424(b)(1)
or (4) or 497(h) under the Securities Act as part of this registration
statement as of the time the Commission declared it effective.
(2) For determining any liability under the Securities Act of 1933,
as amended, treat each post-effective amendment that contains a form of
prospectus as a new registration statement for the securities offered in the
registration statement, and that offering of the securities at that time as
the initial bona fide offering of those securities.
SIGNATURES
In accordance with 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 of filing on Form S-3 and authorized this
Ammendment No. 3 to the Registration Statement to be signed on its
behalf by the undersigned, in the City of Austin, State of Texas on
November 13, 1997.
AMERICAN BINGO & GAMING CORP.
By: /s/ Gregory Wilson
--------------------
Gregory Wilson, Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration statement was signed by the following persons in the capacities
and on the dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------- --------------------------------- ------------------
<S> <C> <C>
/s/ Gregory Wilson Chief Executive Officer, November 13, 1997
- ---------------------------
Gregory Wilson President and Director
(Principal Executive Officer)
/s/ John Orton Chief Financial Officer November 13, 1997
- ---------------------------
John Orton (Principal Financial Officer
and Principal Accounting Officer)
---------------------------------
/s/ Courtland L. Logue, Jr. Chairman of the Board November 13, 1997
- ---------------------------
Courtland L. Logue, Jr.
/s/ Len Bussey Director November 13, 1997
- ---------------------------
Len Bussey
</TABLE>
Consent of Independent Accountants
We consent to the incorporation by reference in Amendment No. 3 of the
Registration Statement of American Bingo & Gaming Corp. on Form S-3 of our
report dated February 21, 1997, except for Notes 15 and 14 as to which the
dates are March 1, 1997 and October 30, 1997, respectively, on our audits of
the consolidated financial statements of American Bingo & Gaming Corp. and
subsidiaries as of December 31, 1996 and for the years ended December 31, 1996
and 1995, which report is included in the Company's Annual Report of Form 10-K
SB/A filed with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934. We also consent to the reference to our firm
under the caption "Experts".
WEINICK SANDERS LEVENTHAL & CO., LLP
(Formerly Weinick, Sanders & Co. LLP)
New York, N.Y.
November 13, 1997
