<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
__________________
Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
__________________
THE L. L. KNICKERBOCKER CO., INC.
(Exact name of issuer as specified in its charter)
CALIFORNIA 33-0230641
(State or jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
_________________________
30055 COMERCIO
RANCHO SANTA MARGARITA, CALIFORNIA 92688
(714) 858-3661
(Address and telephone number of principal executive offices and principal place
of business)
__________________
GERALD A. MARGOLIS, ESQ.
9595 WILSHIRE BOULEVARD, SUITE 900
BEVERLY HILLS, CALIFORNIA 90212
(310) 550-0555
(Name, address and telephone number of agent for service)
Copies of communications to:
WILLIAM R. BLACK, ESQ.
29 SUMMITCREST
DOVE CANYON, CALIFORNIA 92679
PHONE: (714) 858-1089
FAX: (714) 888-7700
Approximate date of proposed sale to the public .................As soon as
Practicable following the effective date
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box [_]
If this Form is filed to register additional securities for an offering
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 this Form is a post effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering [_] _____________
If delivery of a prospectus is expected to be made pursuant to Rule 434,
please check the following box [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Title of each class of Amount to be Proposed Maximum Offering Proposed Maximum Amount of
Securities to be Registered Registered Price Per Share (1) Aggregate Offering Price Registration Fee
<S> <C> <C> <C> <C>
Common Shares 1,692,218 $11.38 $19,257,440.84 $6,640.50
</TABLE>
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<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
REG. S-K ITEM LOCATION IN PROSPECTUS
- ------------- ----------------------
<S> <C>
NAME OF REGISTRANT, TITLE AND
AMOUNT OF SECURITIES OFFERED,
STATEMENT REGARDING SELLING
SHAREHOLDERS, CROSS REFERENCE TO
MATERIAL RISKS, LEGEND, TABLE OF
PRICE AND PROCEEDS COVER PAGE OF PROSPECTUS
AVAILABLE INFORMATION, UNDERTAKING INSIDE FRONT COVER
DELIVERY OF PROSPECTUS BY DEALERS,
TABLE OF CONTENTS OUTSIDE BACK COVER
SUMMARY INFORMATION SUMMARY
RISK FACTORS RISK FACTORS
USE OF PROCEEDS USE OF PROCEEDS
DETERMINATION OF OFFERING PRICE DETERMINATION OF OFFERING PRICE
DILUTION DILUTION
SELLING SECURITIES HOLDERS SELLING SECURITIES HOLDERS
PLAN OF DISTRIBUTION PLAN OF DISTRIBUTION
INTERESTS OF NAMED EXPERTS INTERESTS OF NAMED EXPERTS
AND COUNSEL AND COUNSEL
DISCLOSURE OF COMMISSION POSITION DISCLOSURE OF COMMISSION POSITION ON
ON INDEMNIFICATION FOR SECURITIES ACT INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES LIABILITIES
</TABLE>
<PAGE>
PROSPECTUS
THE L. L. KNICKERBOCKER CO., INC.
1,692,218 Shares of Common Stock
Certain Selling Shareholders of The L. L. Knickerbocker Co., Inc. (the
"Company") are offering hereby 1,692,218 shares of the Company's Common Stock
(the "Common Stock").
Prior to this offering, the Company's Common Stock and Warrants have been
traded on NASDAQ National Market System under the trading symbol "KNIC" and
"KNICW", respectively. The securities to be registered hereby are to be offered
for the account of certain selling securities holders who received those
securities in certain transactions with the Company. See "Selling Securities
Holders".
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AS WELL AS
SUBSTANTIAL IMMEDIATE DILUTION. SEE "RISK FACTORS" AND "DILUTION".
_______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES ADMINISTRATOR NOR HAS THE COMMISSION
OR ANY STATE SECURITIES ADMINISTRATOR PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting Discounts and Proceeds to the
Price to Public (1) Commissions Company
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share $ 11.38 $ 2.63 $ 8.75
Total $19,257,441 $4,457,441 $14,800,000
=============================================================================================
</TABLE>
(1) The securities to be offered to the public will be offered at the
market. The common stock of the Company is currently traded on NASDAQ,
National Market System, and the closing price per share of the
Company's common stock on September 30 1996 was $11.38.
The date of this Prospectus is September 30, 1996
<PAGE>
ADDITIONAL INFORMATION
The Registrant is subject to the reporting requirements of the Exchange
Act and in accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports and other
information filed by the Registrant can be inspected and copied at the public
reference facilities maintained by the Commission in Washington DC, and at
certain of its regional offices. Copies of such material can be obtained from
the Public Reference Section of the Commission, Washington, DC 20549 at
prescribed rates.
The Registrant's securities are traded on NASDAQ National Market
System. Reports and other information concerning the Registrant can be
inspected at such exchange.
The Registrant undertakes to provide without charge to each person,
including any beneficial owner, to whom a prospectus is delivered, upon written
or oral request of such person, a copy of any and all the information that has
been incorporated by reference in the prospectus (not including the exhibits to
the information that has been incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that the prospectus
incorporates). Requests for such information should be directed to Ms. Peggy
Vicioso, Executive Vice President, The L. L. Knickerbocker Co., Inc. 30055
Comercio, Rancho Santa Margarita, California 92688 (714) 858-3661.
<PAGE>
SUMMARY
Certain Selling Shareholders of The L. L. Knickerbocker Co., Inc. (the
"Company") are offering hereby 1,692,218 shares of the Company's Common Stock
(the "Common Stock").
Prior to this offering, the Company's Common Stock and Warrants have
been traded on NASDAQ National Market System under the trading symbol "KNIC" and
"KNICW", respectively. The securities to be registered hereby are to be offered
for the account of certain selling securities holders who received the
securities in certain transactions with the Company. See "Selling Securities
Holders".
The securities to be offered to the public will be offered at the
market. The common stock of the Company is currently traded on NASDAQ, National
Market System, and the closing price per share of the Company's Common Stock on
September 30, 1996 was $11.38. See "Determination of Offering Price".
The company will receive no proceeds from the sale of the securities
registered hereby. The Company received net proceeds in the amount of
$14,800,000 from the issuance of convertible debentures to the Selling
Shareholders, who will receive the Common Stock registered hereby pursuant to
the conversion of such convertible debentures. The Company anticipates that the
net proceeds will be used to fund additional new product development, strategic
acquisitions and other general corporate purposes. Pending their use for the
foregoing purposes, the Company may invest the proceeds in whole or in part in
short-term, interest bearing obligations. See "Use of Proceeds".
The Selling Shareholders may from time to time sell all or a portion of
the Common Stock offered by the Selling Shareholders hereby in transactions at
prevailing market prices on the NASDAQ stock market, in private negotiated
transactions at negotiated prices, or in a combination of such methods of sale.
See "Plan of Distribution".
The securities offered hereby involve a high degree of risk as well as
substantial immediate dilution. See "Risk Factors" and "Dilution".
The mailing address, street address and telephone number for the
principal executive offices of the Company are 30055 Comercio, Rancho Santa
Margarita, California 92688; (714) 858-3661.
1
<PAGE>
RISK FACTORS
The purchase of these securities involves a high degree of risk. In
analyzing this offering, prospective investors should read the entire Prospectus
and carefully consider, among others, the following risk factors:
Dependence on Significant Customer
During the fiscal year ended December 31, 1995, one of the Company's
customers, QVC Network, a cable shopping network which runs programs to market
the Company's products, accounted for approximately 60% of the Company's 1995
revenues. In addition, QVC Network provides a direct or transferrable letter of
credit with its purchase orders and the Company is materially dependent on this
production financing in order to fill its orders. The Company may continue to
be dependent on this or other significant customers, the loss of which could
adversely affect the Company's business.
Dependence on Key Product Line
During the fiscal year ended December 31, 1995, one key product line,
the Marie Osmond Collectibles, accounted for 40.9% of the Company's sales. The
Company has been marketing this product line through QVC and the Walt Disney
Company since 1991, and the Company has a contract with Marie, Inc. to develop
and promote the product line for five years, with a five year renewal option.
The contract for development and promotion of the product is dependent on
minimum royalties being paid to Marie, Inc., however, and the continuing sales
of the product line is dependent on the continued acceptance of the product line
by QVC. There can be no assurance that the Company will be able to maintain the
present volume of sales of the Marie Osmond Collectibles product line, the loss
of which could adversely affect the Company's business.
Dependence on Key Personnel
The Company is dependent on its executive officers, the loss of any one
of whom would have an adverse effect on the Company. While the Company has
employment agreements with its President, Executive Vice President, Chief
Financial Officer and Vice President for a term of five years beginning July 1,
1996, with an option exercisable by the Company to extend the agreements for an
additional five years, unforeseen circumstances could cause these persons to no
longer be able to render their services to the Company. The Company maintains
key-man life insurance on the life of Mr. Louis L. Knickerbocker in the amount
of $1,000,000.
Dependence on New Products
The Company's future growth will be dependent on its ability to
identify and develop products which can be sold through the home shopping
industry and infomercials at acceptable profit margins, to acquire necessary
rights to market and distribute such products, and to enter into arrangements
with third-party manufacturers to produce the products. There can be no
assurance that the Company will be successful in identifying and developing
quality products that may be successfully marketed through the home shopping
industry and infomercials, in acquiring the rights to such products, or in
obtaining adequate supplies of such products from third-party manufacturers. A
failure to identify and develop new products for marketing through the home
shopping industry or infomercials would have a detrimental impact on the
Company's future performance.
Dependence on Independent Contractor Artists and Celebrities
The Company relies on independent contractor artists to provide design
work in the development of products and programs. Additionally, a significant
factor in the Company's ability to market its products and programs to its
customers is the Company's ability to secure contracts with celebrities who will
become involved in the development of products and act as spokespersons for
those products. The contracts with celebrities and others are further
contingent upon the Company meeting its minimum royalty obligations under those
contracts. The continued success of the Company is dependent on its ability to
attract and retain such independent contractor artists and celebrity
spokespersons. There can be no assurance that the Company will be able to
recruit and retain such personnel.
Industry Trends
The Company's historical growth has been based in part on both the
evolution of consumer tastes and preferences toward the Company's products and
the emergence of the direct marketing home shopping and infomercial segments.
While the Company is planning expansion into other direct marketing segments
such as mail order and catalogs, the viability among consumers of the home
shopping and infomercial marketing segments will remain key to the Company's
future operations. A change in consumer tastes and preferences regarding the
Company's products and the home shopping and infomercial marketing segments may
have an adverse effect on the Company's results of operations. There can be no
assurance that consumer tastes and preferences will continue to favor the
Company's products and marketing segments.
2
<PAGE>
Competition
The growth of the home shopping and infomercial industries has given
rise to fierce competition among product merchandisers for sales of products and
programs through the home shopping networks. The home shopping channels are
finite in number and have only 24 hours per day to air products. Air time
during the "prime time" viewing hours is especially limited. As a result, the
buyers for home shopping channels choose products which they feel are most
likely to provide them the highest response and return. The continued growth of
the Company is dependent on its ability to compete effectively with other
companies for the limited air time and purchasing decisions of the home shopping
channels. While the barriers to entry in the home shopping market are
significant due to the selectiveness of the buyers for the home shopping
channels, the competitive efforts of other large, well financed merchandisers
may have an adverse effect on the Company's results from operations.
Risks of Foreign Manufacturing
The Company is subject to the following risks inherent in foreign
manufacturing: fluctuations in currency exchange rates; economic and political
instability; transportation delays; restrictive actions by foreign governments;
nationalizations; the laws and policies of the United States affecting the
importation of goods (including duties, quotas and taxes); and trade and foreign
tax laws. In particular, the Company's costs could be affected adversely on a
short term basis if the currency of any country in which the Company conducts
business appreciated significantly relative to the United States dollar.
Substantially all of the Company's products are subject to United
States customs duties and regulations pertaining to the importation of goods.
The United States and the countries in which the Company's goods are
manufactured may, from time to time, impose new duties, tariffs, quotas or other
charges or restrictions, or adjust presently prevailing quotas, duties or tariff
levels, which could adversely the Company's financial condition or results from
operations or its ability to continue to import products at current or increased
levels. The Company cannot predict what regulatory changes may occur or the
type or amount of any financial impact on the Company which those changes may
have in the future.
Product Liability and Other Claims
The Company faces an inherent business risk of exposure to product
liability costs in the event that claims arise out of problems associated with
the use of the Company's products. The Company has not experienced any material
product liability costs or claims, however, the Company carries a policy of
product liability insurance against such contingencies. While the Company will
continue to attempt to take appropriate precautions, there can be no assurance
that it will avoid significant product liability exposure or that there will not
be a product liability claim in the future. The Company seeks to obligate
clients and suppliers of products to maintain product liability insurance
coverage for the benefit of the Company and to indemnify the Company against
such product liability. There can be no assurance, however, that such
arrangements can be made, or if made, will be effective to insulate the Company
from such claims. The Company may also be subject to other legal claims, such
as unfair competition and trademark infringement. Any legal claims, if brought,
could materially adversely affect the business or financial condition of the
Company. The Company maintains a policy of advertiser's liability insurance and
a policy of director's and officer's liability insurance. There can be no
assurance, however, that the liability insurance policies maintained by the
Company will be effective to insulate the Company from all covered claims.
Control by Existing Shareholders
The Common Stock currently owned beneficially by the President and a
Vice President of the Company represents approximately 46% of the outstanding
Common Stock. Accordingly, such persons will be able to control the Board of
Directors of the Company and to direct the Company's affairs. The Company's
Articles of Incorporation and by-laws do permit cumulative voting, however the
founding shareholders of the Company will continue to exercise control over the
Company's business and affairs.
Common Stock Eligible for Future Sale
Approximately 46% of the Company's outstanding shares of Common Stock
are "restricted securities" and may in the future be sold in compliance with
Rule 144 adopted under the Act. Rule 144 generally provides that beneficial
owners of Common Stock who have held such Common Stock for two years may sell
within a three-month period a number of shares not exceeding 1% of the total
outstanding shares or the average trading volume of the shares during the four
calendar weeks preceding such sale. Future sales of restricted Common Stock
under Rule 144 could negatively impact the market price of the Common Stock.
3
<PAGE>
Absence of Dividends
The Company has never paid any cash dividends on its Common Stock and
does not anticipate that it will pay dividends in the foreseeable future.
Instead, the Company intends to apply any earnings to the expansion and
development of its business.
Future Capital Requirements
In order to realize its objectives, the Company may have need for
additional capital in the future. If so, the Company intends to seek such
capital through public or private borrowing or equity financings. Any
additional equity financings may be dilutive to shareholders and debt financing,
if available, may involve restrictions on Common Stock dividends. Adequate
funds, whether through financial markets or other arrangements with corporate
partners or from other sources, may not be available when needed or on terms
acceptable to the Company. Insufficient funds may require the Company to delay,
scale back or eliminate some or all of its product development, market
development and corporate development programs with an adverse effect on the
Company's future performance.
Immediate Substantial Dilution
This offering will result in the immediate substantial dilution of
$9.86 per share of Common Stock, which amount represents the difference between
the net tangible book value per share of Common Stock after the offering and an
assumed public offering price of $11.38 per share of Common Stock. See
"Dilution."
USE OF PROCEEDS
The company will receive no proceeds from the sale of the securities
registered hereby. The Company received net proceeds in the amount of
$14,800,000 from the issuance of convertible debentures to the Selling
Shareholders, who received the Common Stock registered hereby pursuant to the
conversion of such convertible debentures. The Company anticipates that the net
proceeds will be used to fund additional new product development, strategic
acquisitions and other general corporate purposes. Pending their use for the
foregoing purposes, the Company may invest the proceeds in whole or in part in
short-term, interest bearing obligations.
DETERMINATION OF OFFERING PRICE
The securities to be offered to the public will be offered at the
market. The common stock of the Company is currently traded on NASDAQ, National
Market System, and the closing price per share of the Company's common stock on
September 30, 1996 was $11.38.
DILUTION
The net tangible book value of the Company as of December 31, 1995 was
$8,600,144, or $.63 per share after giving effect to the 5 for 1 stock split
approved by the Board of Directors in August 1995. Net tangible book value per
share represents total tangible assets less total liabilities, divided by the
13,752,285 shares of common stock outstanding as of December 31, 1995. After
giving effect to the sale of 1,692,218 shares of Common Stock in this offering
at an assumed public offering price of $11.38 per share and receipt of the
estimated net proceeds therefrom, the pro forma net tangible book value of the
Company as of December 31, 1995 would have been $23,400,144 or $1.52 per share.
This represents an immediate increase in net tangible book value of $.89 per
share to existing shareholders and an immediate dilution in net tangible book
value of $9.86 per share to new investors in this offering. The dilution to new
investors assuming the sale of shares under this offering is illustrated in the
following table:
<TABLE>
<CAPTION>
<S> <C>
Assumed public offering price per share............. $11.38
Net tangible book value before offering........... .63
Increase attributable to new investors(1)......... .89
------
Pro forma net tangible book value after offering.... 1.52
------
Dilution to new investors(2)........................ $ 9.86
======
- ------------------
</TABLE>
(1) Based on net proceeds from the issuance of convertible debentures to Selling
Shareholders.
(2) Determined by subtracting the pro forma net tangible book value per share
after the offering from the amount of cash paid by a new investor per share
of Common Stock.
4
<PAGE>
The foregoing information does not include 7,000,000 shares of Common
Stock reserved for issuance under the Company's Non-Qualified Stock Option Plan
as of June 30, 1996.
SELLING SECURITIES HOLDERS
The securities to be registered are to be offered for the accounts of
the following security holders (the "Selling Shareholders").
<TABLE>
<CAPTION>
AMOUNT HELD AMOUNT TO AMOUNT HELD
NAME PRIOR TO OFFER BE OFFERED FOLLOWING OFFER
---- -------------- ---------- ---------------
<S> <C> <C> <C>
Atwell & Co. f/b/o/
The Police & Fire Retirement
System of the City of Detroit 50,505 50,505 0
Berckeley Investment Group Ltd. 252,525 252,525 0
Buchanan Fund Ltd. 176,768 176,768 0
Buchanan Partners Ltd. 75,758 75,758 0
Deere Park Partners, L.P. 101,010 101,010 0
Financial Sciences of America 15,657 15,657 0
Infinity Investors, Ltd. (1) 505,051 505,051 0
Lark & Co. f/b/o/
Arkansas Teachers Retirement System 75,758 75,758 0
Pitt & Co. f/b/o/
Missouri State Employees' Retirement System 101,010 101,010 0
Professional Edge Fund L.P. 101,010 101,010 0
Trussal & Co. f/b/o/
Michigan Municipal Employees' Retirement System 75,758 75,758 0
Whittier Ventures LLC. 50,505 50,505 0
Consumer Venture Partners 79,590 79,590 0
Harlan P. Kleiman 20,354 20,354 0
Robert K. Schater 6,419 6,419 0
Joseph Gil 313 313 0
Thomas J. Griesel 1,566 1,566 0
Timothy Holmes 2,035 2,035 0
Steven Lamar 626 626 0
---------- ---------- -
Total 1,692,218 1,692,218 0
____________________________
</TABLE>
(1) The convertible debenture in the principal amount of US $5,000,000 issued
to Infinity provides for conversion of the debentures into Common Shares on
the basis of a floating conversion ratio tied to a percentage of the market
price of the Company's Common Shares, subject to a maximum of 952,381
Common Shares. The convertible debenture issued to Infinity limits the
conversion right of the holder such that in no instance shall the maximum
number of Common Shares into which the holder may convert the debenture
exceed, at any one time, an amount equal to the remainder of (i) 4.99% of
the then issued and outstanding Common Shares of the Company following such
conversion, minus (ii) the number of Common Shares of the Company held by
such holder.
PLAN OF DISTRIBUTION
The Common Shares may be sold from time to time by the Selling Shareholders
or their pledgees or donees. Such sales may be made In the over-the-counter
market or in negotiated transactions, at prices and on terms then prevailing or
at prices related to the then current market price or at negotiated prices. The
Common Shares be sold by means of (a) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to this
Prospectus and/or (b) ordinary brokerage transactions and transactions in which
the broker solicits purchasers. In affecting sales, brokers or dealers engaged
by Selling Shareholders may arrange for other brokers or dealers to participate.
Brokers or dealer will receive commissions or discounts from Selling
Shareholders in amounts to be negotiated immediately prior to the sale which
amounts will not be greater than that normally paid in connection with ordinary
trading transactions.
In order to comply with the securities laws of certain states, if
applicable, the securities offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
jurisdictions, the securities may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or an exemption from any
registration or qualification requirement is available and the requirements
thereof have been satisfied.
The company will receive no proceeds from the sale of the securities
registered hereby. The Company received net proceeds from the issuance of
convertible debentures to the Selling Shareholders, who received the Common
Stock registered hereby pursuant to the conversion of such convertible
debentures, in the amount of $14,800,000. All of the
5
<PAGE>
expenses incurred in connection with the registration of the securities offered
hereby will be paid by the Company, except for commissions of dealers or brokers
and any transfer fees incurred in connection with the sales of the securities by
the Selling Shareholders, which commissions and fees will be paid by the Selling
Shareholders.
There can be no assurance that the Selling Shareholders will sell all or
any of the securities offered by them hereby. To the extent required, the
specific securities to be sold by the Selling Shareholders in connection with a
particular offer will be set forth in an accompanying Prospectus supplement.
Before offers and sales of securities are made by Selling Shareholders, (a) to
the extent the securities are sold at a fixed price or by option at a price
other than the prevailing market price, this Prospectus will be amended to set
forth such price, and (b) if the compensation paid to broker-dealers is other
than usual and customary discounts, concessions or commissions, this Prospectus
will be amended to set forth the terms of the transaction.
DESCRIPTION OF SECURITIES TO BE REGISTERED
The securities to be registered hereby consist of shares of the Common
Stock of the Registrant. The authorized capital stock of the Company consists
of 100,000,000 shares of Common Stock, no par value. The following description
of the Company's capital stock is qualified in all respects by reference to the
Company's Amended Articles of Incorporation, which have been filed as an exhibit
to the Registration Statement on form SB-2 effective January 25, 1995.
As of December 31, 1995 13,752,285 shares of Common Stock were outstanding.
The holders of the Common Stock are entitled to receive dividends when and as
declared by the Board of Directors out of any funds lawfully available therefor.
Holders of Common Stock are entitled to one vote per share on all matters on
which the holders of Common Stock are entitled to vote and have cumulative
voting rights. There are no preemptive rights associated with any of the shares
of Common Stock. In the event of a liquidation, dissolution or winding up of
the Company, holders of Common Stock are entitled to share equally and ratably
in the assets of the Company, if any, remaining after the payment of all debts
and liabilities of the Company. The outstanding shares of Common Stock are, and
the shares of Common Stock offered by the Company hereby when issued will be,
fully paid and nonassessable.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Mr. William R. Black, counsel to the Company in connection with the filing
of this Registration Statement, is a member of the Board of Directors of the
Company and owns beneficially 30,000 shares of the Company's Common Stock. None
of the shares owned by Mr. Black are included in the shares to be registered
hereby.
MATERIAL CHANGES
Since the end of the latest fiscal year for which certified financial
statements were included in the latest annual report to securities holders and
filing of the report on Form 10-KSB filed April 15, 1996 under the Exchange Act,
there have been several material changes in the Registrant's affairs which have
occurred. Specifically, the Registrant has: (i) acquired 100% of the capital
stock of Krasner Group, Inc., a Delaware corporation with operations in the
industry in which Registrant operates, (ii) acquired 100% of the capital stock
of Harlyn International Corporation, a corporation based in Thailand with
operations in the industry in which Registrant operates, and (iii) acquired 40%
of the capital stock in Self-Heating Container, Inc. and Insta-Heat, Inc., two
California corporations in the business of manufacturing containers for
packaging food and drink products. These transactions are described with more
particularity in the reports on forms 8-K and 10-QSB filed with the Securities
and Exchange Commission.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents are specifically incorporated by reference into
this Prospectus:
(a) the contents of the Registrant's latest annual report on Form 10-
KSB filed pursuant to Section 13(a) of the Exchange Act which contains
financial statements for the Registrant's latest fiscal year for which
a Form 10-KSB was required to have been filed,
(b) All reports filed pursuant to Section 13(a) or 13(d) or 15(d) of the
Securities Exchange Act of 1934 (the 'Exchange Act"); and
(c) The description of the Registrant's ordinary shares contained in the
Registrant's registration statement on Form SB-2 filed pursuant to
Section 12 of the Securities Exchange Act of 1934.
All documents filed by the Registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934
subsequent to the date of this registration statement and prior to the filing of
a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents.
6
<PAGE>
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The By-Laws of the Company provide that the Company may indemnify any
Director, Officer, agent or employee as specified in Section 317 of the
California Corporations Code. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers
or persons controlling the Registrant pursuant to the foregoing provisions, the
Registrant has been informed 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.
7
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ADDITIONAL INFORMATION INSIDE FRONT COVER
SUMMARY 1
RISK FACTORS 2
USE OF PROCEEDS 4
DETERMINATION OF OFFERING PRICE 4
DILUTION 4
SELLING SECURITIES HOLDERS 5
PLAN OF DISTRIBUTION 6
DESCRIPTION OF SECURITIES TO BE REGISTERED 6
INTERESTS OF NAMED EXPERTS AND COUNSEL 6
MATERIAL CHANGES 6
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 6
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES 7
</TABLE>
UNTIL ________ ___, 1996 ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS 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.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Not Applicable
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The By-Laws of the Company provide that the Company may indemnify any
Director, Officer, agent or employee as specified in Section 317 of the
California Corporations Code (the "Code"). Specifically, Article X 4. of the
Company's Amended By-Laws provides as follows:
The corporation may indemnify any Director, Officer, agent or employee as
to those liabilities and on those terms and conditions as are specified in
Sec. 317 of the Code. In any event, the corporation shall have the right
to purchase and maintain insurance on behalf of any such persons whether or
not the corporation would have the power to indemnify such person against
the liability insured against.
Section 317 of the California Corporations Code provides that a
corporation shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any civil, criminal, administrative or
investigative proceeding (other than an action by or in the right of the
corporation to procure a judgment in its favor) by reason of the fact that the
person is or was a director, officer, employee or other agent of the
corporation, against expenses, judgments, fines, settlements and other amounts
actually and reasonably incurred in connection with the proceeding if that
person acted in good faith and in a manner the person reasonably believed to be
in the best interests of the corporation and, in the case of a criminal
proceeding, had no reasonable cause to believe the conduct of the person was
unlawful.
No indemnification shall be made under Section 317 in the event that:
(i) the person seeking indemnification shall have been adjudged to be liable to
the corporation and its shareholders, unless, and only to the extent that the
court before which the proceeding was pending shall determine, in view of all
the circumstances of the case, the person is fairly and reasonably entitled to
indemnity to the extent that the court determines; (ii) the person seeks
indemnity for amounts paid in settling or otherwise disposing of a pending
action without court approval; or (iii) the person seeks indemnity for expenses
incurred in defending a pending action which is settled or otherwise disposed of
without court approval.
Section 317 provides that indemnification under that section shall be
made by the corporation only if authorized in the specific case, upon
determination that indemnification is proper because the person has met the
applicable standards of conduct set forth in subdivision 317(b) or 317(c), by
(i) a majority vote of a quorum of directors who are not parties to the
proceeding; (ii) if such a quorum is not obtainable, by independent legal
counsel in a written opinion; (iii) approval of the shareholders, with the
shares owned by the person to be indemnified not entitled to vote thereon; or
(iv) the court in which the proceeding is or was pending upon application made
by the corporation or the person or the attorney or other person rendering
services in connection with the defense, whether or not the application by the
person or the attorney or other person rendering services in connection with the
defense is opposed by the corporation.
II-1
<PAGE>
The indemnification provided for in Section 317 for acts, omissions or
transactions while acting in the capacity of or while serving as, a director or
officer of the corporation but not involving breach of duty to the corporation
and its shareholders shall not be deemed exclusive of any other rights to which
those seeking indemnification may be entitled under any bylaw, agreement, vote
of shareholders or disinterested directors, or otherwise, to the extent the
additional rights to indemnification are authorized in the articles of
incorporation. Additionally, Section 317 provides that the corporation shall
have the power to purchase and maintain insurance on behalf of any agent of the
corporation against any liability asserted against or incurred by the agent in
that capacity or arising out of the agent's status as such whether or not the
corporation would have the power to indemnify the agent against that liability
under Section 317.
The Registrant's Articles of Incorporation do not provide for
additional rights to indemnification of directors, officers, employees or other
agents, however the board of directors of the Registrant, by resolution has
provided for the purchase and maintenance of liability insurance to cover the
directors of the Registrant.
Reference is hereby made to Item 17 entitled "Undertakings" of this
Registration Statement for the Company's undertaking with respect to submitting
claims for indemnification to a court of appropriate jurisdiction to determine
the question of whether such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended.
<TABLE>
<CAPTION>
ITEM 16. EXHIBITS*
<C> <S>
1.1 Revised form of Underwriting Agreement between the
Registrant and W. B. McKee Securities, Inc. as
Representative of the Underwriters**
3.1 Amended Articles of Incorporation of the Registrant**
3.2 Amended By-Laws of the Registrant **
4.1 Revised form of Underwriters' Warrant**
4.2 Revised form of Common Stock Certificate**
4.3 Investors Warrant Agreement**
4.4 Form of Warrant**
5. Opinion of William R. Black ***
23.1 Consent of William R. Black (included in Exhibit 5).***
23.2 Consent of Deloitte & Touche, LLP***
24. Power of Attorney**
</TABLE>
- -------------------
* Exhibits 2, 8, 12, 15, 25, 26, 27, 28 and 99 have been omitted because they
are not applicable.
** Incorporated by reference to Knickerbocker's Registration Statement on Form
SB-2 (File No. 33-85230-LA).
*** Filed herewith.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a) 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;
(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 (a)(i) and (ii) do not apply
-------- -------
if the registration statement is on Form S-3, and the information
required to be included in a post-effective amendment by those
paragraphs is contained in the periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the
registration statement.
(b) 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.
(c) 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.
(d) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
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 indemnification provisions described under Item 15,
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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Rancho Santa Margarita, State of California on
October 31, 1996.
THE L. L. KNICKERBOCKER CO., INC.
(Registrant)
By: /S/ LOUIS L. KNICKERBOCKER
----------------------------------------------
Name: Louis L. Knickerbocker
Title: President, Chief Executive Officer and
Chairman
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 Title Date
---- ----- ----
<S> <C> <C>
/S/ Louis L. Knickerbocker 10/31/96
- --------------------------- President, Chief Executive
Louis L. Knickerbocker Officer and Chairman
/S/ Anthony P. Shutts 10/31/96
- --------------------------- Chief Financial Officer
Anthony P. Shutts and Director
/S/ Gerald Margolis 10/31/96
- ---------------------------
Gerald Margolis Director
/S/ Peggy Vicioso
- --------------------------- Executive Vice President 10/31/96
Peggy Vicioso and Secretary
/S/ Tamara Knickerbocker
- --------------------------- Vice President 10/31/96
Tamara Knickerbocker
/S/ Farrah Fawcett 10/31/96
- --------------------------- Director
Farrah Fawcett
/S/ William R. Black 10/31/96
- --------------------------- Director
William R. Black
/S/ Lowell W. "Bud" Paxson 10/31/96
- --------------------------- Director
Lowell W. "Bud" Paxson
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
-------------
Number Description
- ------ -----------
<C> <S>
1.1 Revised form of Underwriting Agreement between the Registrant and W.
B. McKee Securities, Inc. as Representative of the Underwriters**
3.1 Amended Articles of Incorporation of the Registrant**
3.2 Amended By-Laws of the Registrant **
4.1 Revised form of Underwriters' Warrant**
4.2 Revised form of Common Stock Certificate**
4.3 Investors Warrant Agreement**
4.4 Form of Warrant**
5. Opinion of William R. Black ***
23.1 Consent of William R. Black (included in Exhibit 5).***
23.2 Consent of Deloitte & Touche, LLP***
24. Power of Attorney**
</TABLE>
____________________
* Exhibits 2, 8, 12, 15, 25, 26, 27, 28 and 99 have been omitted because they
are not applicable.
** Incorporated by reference to Knickerbocker's Registration Statement on Form
SB-2 (File No. 33-85230-LA).
*** Filed herewith.
II-5
<PAGE>
EXHIBIT 5
[LETTERHEAD OF WILLIAM R. BLACK, ATTORNEY AT LAW]
October 31, 1996
Board of Directors
The L. L. Knickerbocker Company, Inc.
30055 Comercio
Rancho Santa Margarita, California 92688
RE: REGISTRATION STATEMENT ON FORM S-3,
THE. L. L. KNICKERBOCKER CO., INC.
Ladies and Gentlemen:
I have acted as counsel to The L. L. Knickerbocker Company, Inc. (the
"Company") in connection with the Registration Statement on Form S-3 (the
"Registration Statement") to be filed by the Company pursuant to the Securities
Act of 1933, as amended, on or about October 21, 1996, with respect to 1,692,218
shares of the Company's Common Stock (no par value) (the "Common Stock") which
are being offered by the certain Selling Shareholders upon the conversion of
convertible debentures issued by the Company to those Selling Shareholders in
September 1996.
As counsel for the Company in connection with the preparation and
filing of such Registration Statement, I have examined, among other things, the
originals, or copies properly certified or otherwise identified to my
satisfaction as being in the form of the originals, of the following:
A. the corporate proceedings relating to the organization and
present existence of the Company, including its Registered Certificate of
Incorporation and all amendments thereto, and all acts of incorporators,
shareholders and directors in connection therewith;
B. the By-Laws of the Company as amended and as in effect at
relevant dates;
C. the Registration Statement as filed on form SB-2 pursuant to
the provisions of the Securities Act of 1933, as amended;
D. the annual report on form 10-KSB filed pursuant to Section 13(a)
of the Securities Exchange Act of 1934 (the "Exchange Act") on April 15, 1996;
and
E. all reports filed on behalf of the Company pursuant to Section
13(a) or 13(d) or 15(d) of the Exchange Act.
<PAGE>
BOARD OF DIRECTORS
THE L. L. KNICKERBOCKER COMPANY, INC.
OCTOBER 31, 1996
PAGE 2
Based upon my examination of the foregoing and of other data and
evidence deemed by me necessary in rendering this opinion, and upon
consideration of applicable law, I am of the opinion that:
1. the Company is a corporation validly organized and existing under
the laws of the State of California and is qualified to transact business in
that state;
2. the Shares, when issued and sold in accordance with the offering
described in the Registration Statement, will be legally issued, fully paid, and
nonassessable.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to Part II of the Registration Statement and
to the references made to me in the Registration Statement.
Very truly yours,
LAW OFFICES OF WILLIAM R. BLACK
/S/ William R. Black
----------------------------------------
By: William R. Black
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' REPORT
We consent to the incorporation by reference in this Registration Statement of
The L.L. Knickerbocker Co., Inc. on Form S-3 of our report dated March 24, 1996,
appearing in the Annual Report on Form 10-KSB of The L.L. Knickerbocker Co.,
Inc. for the year ended December 31, 1995.
/s/ DELOITTE & TOUCHE, LLP
Costa Mesa, California
October 30, 1996
