As filed with the Securities and Exchange Commission on May 15, 2000
Registration Statement No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
COMMODORE HOLDINGS LIMITED
--------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
BERMUDA N/A
- ------------------------------- ------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
4000 HOLLYWOOD BLVD., SUITE 385-S
HOLLYWOOD, FLORIDA 33021
(954) 967-2100
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(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------
FREDERICK A. MAYER
CHIEF EXECUTIVE OFFICER
COMMODORE HOLDINGS LIMITED
4000 HOLLYWOOD BLVD., SUITE 385-S
HOLLYWOOD, FLORIDA 33021
(954) 967-2100
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(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------
COPIES TO:
KATHLEEN L. DEUTSCH, P.A.
BROAD AND CASSEL
201 SOUTH BISCAYNE BOULEVARD
MIAMI CENTER, SUITE 3000
MIAMI, FLORIDA 33131
TELEPHONE: (305) 373-9400
TELECOPIER: (305) 373-9443
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE
TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER THIS
REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================= ======================== ===================== ===================== ====================
PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER MAXIMUM AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED SHARE OFFERING PRICE(1) REGISTRATION FEE
- --------------------------------- ------------------------ --------------------- --------------------- --------------------
<S> <C>
Common Stock, par value $.01
per share(2) 655,555 $4.50 $2,950,000 $ 778.80
- --------------------------------- ------------------------ --------------------- --------------------- --------------------
Common Stock, par value $.01
per share(3) 75,000 $6.25 $468,750 $ 123.75
- --------------------------------- ------------------------ --------------------- --------------------- --------------------
Common Stock, par value $.01
per share(3) 57,500 $5.16 $296,700 $ 78.33
- --------------------------------- ------------------------ --------------------- --------------------- --------------------
TOTAL....................................................................................... $ 980.88
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee and
pursuant to Rule 457.
(2) Represents shares issuable upon the conversion of Series C convertible
preferred stock and dividends on the Series C convertible preferred stock.
Also includes such additional shares as may be issuable as a result of the
anti-dilution provisions of the Series C convertible preferred stock.
(3) Represents shares issuable upon the exercise of certain warrants. Also
includes such additional shares as may be issuable as a result of the
anti-dilution provisions of the warrants.
The Registration Statement also includes an indeterminate number of
shares of common stock that may become issuable to prevent dilution resulting
from stock splits, stock dividends and conversion price or exercise price
adjustments, which are included pursuant to Rule 416 under the Securities Act of
1933.
-------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
================================================================================
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO SELL
THESE SECURITIES IN ANY STATE WHERE THE SALE IS NOT PERMITTED.
PROSPECTUS
SUBJECT TO COMPLETION, DATED MAY 15, 2000
788,055 SHARES OF COMMON STOCK
COMMODORE HOLDINGS LIMITED
Commodore Holdings Limited is a provider of single and multi-day
cruises in North America under its two brands, Commodore Cruise Line and Crown
Cruise Line. We also operate the vessel for the educational Semester at Sea
program.
The shares we are registering are either currently held by or will be
issued to certain of our shareholders upon conversion of our series C preferred
stock or upon the exercise of warrants. We are registering these shares pursuant
to commitments with these shareholders to register the sale of these shares. We
will pay the expenses of registering the shares.
Our common stock is quoted on The Nasdaq National Market under the
symbol "CCLN." On May 12, 2000, the last reported sales price for our common
stock on The Nasdaq National Market was $2.0625 per share.
YOU SHOULD CAREFULLY CONSIDER THE RISKS OF INVESTING IN OUR COMMON
STOCK. THESE RISKS ARE DISCUSSED BEGINNING ON PAGE 3 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
THE DATE OF THIS PROSPECTUS IS ______________, 2000.
<PAGE>
TABLE OF CONTENTS
PAGE
ABOUT COMMODORE HOLDINGS LIMITED..............................................1
RISKS OF INVESTING IN OUR SHARES..............................................3
FORWARD-LOOKING STATEMENTS....................................................5
PROCEEDS FROM THE SALE OF OUR SHARES..........................................5
SELLING STOCKHOLDERS..........................................................6
HOW THE SHARES MAY BE DISTRIBUTED.............................................6
OUR CAPITAL STOCK.............................................................7
CERTAIN FOREIGN ISSUER CONSIDERATIONS........................................13
LEGAL OPINION................................................................14
EXPERTS .....................................................................14
WHERE YOU CAN FIND MORE INFORMATION..........................................14
UNLESS THE CONTEXT OTHERWISE REQUIRES, ALL REFERENCES TO "COMMODORE
HOLDINGS LIMITED," THE "COMPANY," "WE," "US" OR "OUR" INCLUDE COMMODORE HOLDINGS
LIMITED AND ITS SUBSIDIARIES.
You should rely only on the information incorporated by reference or
contained in this prospectus or any supplement. We have not authorized any
person to provide you with different information. We are not making an offer to
sell the securities in any jurisdiction except where the offer or sale is
permitted. You should assume that the information appearing in this prospectus
is accurate only as of the date on the front cover of this prospectus. Our
business, financial condition, results of operations and prospects may change
after that date.
------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR MISREPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THE SECURITIES TO WHICH IT RELATES OR ANY OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL. 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 OUR AFFAIRS SINCE THE DATE HEREOF
OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
-i-
<PAGE>
THIS IS A SUMMARY AND DOES NOT CONTAIN ALL THE INFORMATION THAT MAY BE
IMPORTANT TO YOU. YOU SHOULD READ THE MORE DETAILED INFORMATION CONTAINED LATER
IN THIS PROSPECTUS AND ALL OTHER INFORMATION, INCLUDING THE FINANCIAL STATEMENTS
AND THE RELATED FOOTNOTES, INCORPORATED BY REFERENCE INTO THIS PROSPECTUS, AS
DISCUSSED IN THE "WHERE YOU CAN FIND MORE INFORMATION" SECTION OF THIS
PROSPECTUS.
ABOUT COMMODORE HOLDINGS LIMITED
GENERAL
Commodore Holdings Limited is a provider of single and multi-day
cruises in North America. In addition, we offer educational cruises. We
currently own four ships, the S/S Enchanted Isle, the S/S Universe Explorer, the
M/V Enchanted Sun and the M/V Crown Dynasty. We also operate the M/V Enchanted
Capri pursuant to a charter agreement.
We offer our cruises under our two cruise brands, Commodore Cruise Line
and Crown Cruise Line. The Commodore Cruise brand serves the standard market and
offers both traditional cruises and single and multi-day cruises emphasizing
gaming. The Crown Cruise brand serves the premium cruise market.
We also operate the educational Semester at Sea program through a joint
venture agreement with Seawise Foundation, Inc. During the summer when
educational cruises are not offered, we operate cruises to Alaska under the
World Explorer Cruises brand.
OUR STRATEGY
Our principal operating strategies are to identify underserved markets
where there are significant barriers to entry and niche themes. We select
smaller classic ships and refit them to meet the needs of each such market. We
implement our strategy by actively following consumer trends, identifying niche
markets that have cruise components, selecting complimentary successful
businesses, if appropriate, and developing strategic alliances or joint ventures
to serve these markets.
OUR STRATEGIC ALLIANCES AND JOINT VENTURES
We have entered into several strategic alliances and joint ventures in
order to enhance our ability to serve the niche markets we have identified. The
following is a brief summary of some of these relationships.
o Sea-Comm, Inc. is a joint venture with Seawise Foundation, Inc.
The purpose of Sea-Comm is to charter the Universe Explorer to
Seawise, which operates the educational Semester at Sea program
and to operate cruises to Alaska.
o Capri Cruises is a joint venture with Isle of Capri Casinos, Inc.
Capri Cruises operates the Enchanted Capri on two- and five-day
cruises that emphasize gaming. We operate the vessel and Isle of
Capri manages the casino onboard the vessel as an "Isle of Capri"
casino.
o Crown Cruises Limited, one of our subsidiaries, space charters
approximately 72% of the cabins aboard the Crown Dynasty to Apple
Vacations. This vessel offers cruises from
1
<PAGE>
Aruba during the winter months, and cruises to Bermuda and Canada
from the Philadelphia and Baltimore areas during the spring and
summer.
o Coronado Seas, LLC is a joint venture with the Viejas Band of
Kumeyaay Indians and Promociones Turisticas de Rosarito, S.A. de
C.V. Coronado operates day cruises that emphasize gaming from San
Diego, California to Rosarito, Baja California, Mexico. We operate
the vessel, Viejas manages the casino aboard the vessel and
Promociones manages the pier in Rosarito.
OUR HISTORY
We were incorporated in Bermuda in April 1995. Our executive offices
are located at 4000 Hollywood Boulevard, Suite 385-S, Hollywood, FL 33021, and
our telephone number is (954) 967-2100.
2
<PAGE>
RISKS OF INVESTING IN OUR SHARES
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AND THE OTHER
INFORMATION IN THIS PROSPECTUS BEFORE DECIDING TO INVEST IN OUR COMMON STOCK.
OUR BUSINESS, FINANCIAL CONDITION AND OPERATING RESULTS COULD BE ADVERSELY
AFFECTED BY ANY OF THE FOLLOWING FACTORS, WHICH COULD CAUSE THE TRADING PRICE OF
OUR COMMON STOCK TO DECLINE AND YOU TO LOSE PART OR ALL OF YOUR INVESTMENT.
ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US, OR THAT WE
CURRENTLY THINK ARE IMMATERIAL, MAY ALSO IMPAIR OUR BUSINESS OPERATIONS.
OUR ASSETS ARE HIGHLY ENCUMBERED BY LIENS.
The Company has debt in the amount of approximately $112,000,000. Of
this debt, approximately $104,000,000 is secured by liens on our assets,
including all four of our vessels. This high level of indebtedness requires that
we devote a significant portion of our cash flows from operations to the payment
of principal and interest on the indebtedness. In addition, the high level of
debt:
o limits our ability to obtain additional financing for working
capital, capital expenditures and vessel and other asset
purchases;
o requires us to maintain certain minimum levels of cash and certain
minimum financial ratios which may require us to raise additional
cash or curtail certain activities such as marketing; and
o makes us more vulnerable to economic downturns and competitive
pressures.
If we are unable to meet our obligations under our indebtedness, our business,
financial condition and results of operation could be materially adversely
affected.
OUR CRUISE SHIPS ARE OLDER AND MAY REQUIRE MORE MAINTENANCE THAN THE NEWER
VESSELS OPERATED BY OUR COMPETITORS.
Four of the five cruise ships we operate are older vessels than those
used by most of our competitors. These older vessels require more maintenance
and are generally less efficient than the more modern vessels. We may have to
spend significant resources maintaining the vessels in our fleet and this could
have a material adverse effect on our business and results of operations.
WE OPERATE IN A HIGHLY COMPETITIVE INDUSTRY WHERE OUR COMPETITORS HAVE
SIGNIFICANTLY MORE RESOURCES THAN US.
We compete for passengers with several larger cruise line companies
with more experience and greater financial resources, as well as with other
land-based vacation alternatives. We compete primarily based on our service
quality, the type and variety of itineraries we offer, and on price. Fixed costs
represent a significant portion of our operating costs, which cannot be reduced
when competition reduces our passenger loads or ticket prices. Our competitors
have been building a large number of new ships recently, which means that there
will be more ships competing for passengers. Although we believe that we
maintain a competitive advantage by focusing our operations on niche and
underserved markets, there can be no assurance that we will be able to continue
competing successfully in the cruise line market.
3
<PAGE>
ANY CHANGES IN U.S. INCOME TAX LAWS MAKING OUR INCOME TAXABLE COULD HAVE A
MATERIAL ADVERSE EFFECT.
We are a foreign corporation engaging in business in the United States,
which makes us subject to various U.S. taxes including corporate income tax and
branch profits tax. We currently qualify for a tax exemption under Section
883(a) of the Internal Revenue Code of 1986. This exemption imposes on us a
series of stringent requirements on an ongoing basis. Our ability to rely on the
exemption may be affected by declines in the market value of our shares of
common stock relative to the value of our preferred stock, de-listing from
Nasdaq, changes in the Bermuda or Panama tax laws or changes in Section 883(a).
Any of these changes would subject our income to complex tax rules and could
have a material adverse effect on our results of operations and financial
condition.
WE HAVE NOT PAID AND DO NOT ANTICIPATE PAYING DIVIDENDS ON OUR COMMON STOCK.
To date, we have not paid any dividends on our common stock and do not
expect to declare or pay any in the near future. Our outstanding loans and
preferred stock place restrictions on our ability to pay dividends on our common
stock.
IF ONE OR MORE OF OUR CRUISE SHIPS IS DAMAGED OR DESTROYED IT COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
We depend on the operation of our cruise ships to earn a profit. If any
of our cruise ships is damaged or destroyed due to a hurricane, storm or other
natural disaster or for some other reason, our operations could be suspended
until such time as the vessel is repaired or replaced. The repairs necessary may
in some cases be delayed if we do not have sufficient funds for such repairs. We
maintain hull and machinery insurance as well as increased value insurance on
all of our vessel, as well as loss of hire insurance to cover loss of revenues
in certain situations. There can be no assurance, however, that any proceeds
received from such insurances will be sufficient to compensate us for the loss
we suffer as a result of the damage or destruction of any of our vessels.
OUR OPERATIONS ARE SUBJECT TO SUBSTANTIAL GOVERNMENT REGULATION, AND FAILURE TO
COMPLY WITH, OR CHANGES IN, THOSE REGULATIONS COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR OPERATIONS.
Our cruise ships are registered in Panama and the Bahamas, and are
subject to regulations issued by Panama and the Bahamas and other international
treaties. These regulations include rules governing the safety of ships and its
passengers. In addition our ships are subject to periodic inspection by the
United States Coast Guard to determine compliance with safety regulations. We
believe that our cruise ships substantially comply with all applicable
regulations and that we have all licenses required to operate our business, but
there can be no assurances that we will continue to comply with these
regulations. If we fail to comply with these regulations or the regulations
change, our operations may be materially adversely affected.
In addition to safety standards, we are also subject to regulations
prohibiting dumping and relating to environmental protection. Under these laws,
we are prohibited from discharging materials including plastics and
petrochemicals into the waterways. We have obtained insurance against the cost
of environmental damage caused by oil pollution occasioned at or while in
transit in the sea. We have not and cannot purchase insurance for any civil or
criminal fines imposed on us for violation of these laws. We conduct regular
training and maintain established procedures to prohibit and prevent dumping of
prohibited substances but there can be no assurances that an uninsured loss will
not occur as a result of a violation of these regulations.
4
<PAGE>
Lastly, there have been several efforts in prior congressional sessions
to adopt bills that would apply United States labor laws to nonresident alien
crews of foreign registered ships sailing from U.S. ports. Although, there is no
current bill under consideration, there can be no assurances that such bill will
not be reconsidered at some future time. The application of U.S. labor laws or
additional government regulations of any nature to our operations could have a
substantial adverse impact on our operations and the cruise industry as a whole.
WE RELY ON THE EXPERTISE OF OUR CURRENT MANAGEMENT TEAM.
We depend on certain members of our senior management team,
particularly our chief executive officer, Frederick A. Mayer. We have executed
employment agreements with each of our key management members but we do not
maintain keyman life insurance policies on any of their lives. If we were to
lose their services, it could have a material adverse effect on our operations.
Our success is also dependent on our ability to continue to attract and
retain additional qualified financial and marketing personnel. Competition for
qualified employees is intense in our industry. If we are unable to attract and
retain highly skilled employees, it could have a material adverse effect on our
operations.
YOUR RIGHTS AS A SECURITY HOLDER MAY BE LESS UNDER BERMUDA LAW THAN UNDER U.S.
JURISDICTIONS.
Our corporate affairs are governed by our memorandum of association,
bye-laws and the corporate law of Bermuda. The rights of security holders of
Bermuda corporations are not as extensive as the rights of security holders of
corporations in jurisdictions within the United States. It may be more difficult
for you to protect your interests from actions by our board of directors than it
might otherwise be if we were incorporated in a jurisdiction within the United
States. In addition, there is uncertainty as to whether a Bermuda court would
enforce judgments entered in other jurisdictions and whether it would entertain
a lawsuit for violations of United States securities laws.
OUR BOARD OF DIRECTORS HAS BROAD DISCRETION TO ISSUE PREFERRED STOCK WITH
RIGHTS, PREFERENCES AND PRIVILEGES THAT MAY DISCOURAGE, DELAY OR PREVENT A
CHANGE OF CONTROL.
Our bye-laws authorize the issuance of up to 10,000,000 shares of
preferred stock with such designations, rights and preferences as our board of
directors may determine in its sole discretion. Our board could issue shares of
preferred stock with dividend, liquidation and voting rights superior to those
of our common stock. In addition, these shares of preferred stock could be
utilized to discourage, delay or prevent a change of control of the Company.
YOUR INTEREST MAY BE DILUTED IF WE ISSUE ADDITIONAL SHARES IN CONNECTION WITH
THE EXERCISE OF OUTSTANDING STOCK OPTIONS AND WARRANTS AND THE CONVERSION OF
OTHER SECURITIES.
As of the date of this prospectus, we have reserved for issuance
1,500,000 shares of our common stock for the exercise of stock options under our
employee and director stock plans. To date, we have granted options to purchase
a total of 754,012 shares of our common stock under these plans. We also have
reserved for issuance 2,886,905 shares for the exercise of outstanding warrants
and 3,190,705 for the conversion of outstanding convertible securities. The
exercise and conversion prices of these securities vary between $1.00 and $8.00
per share. If the holders of these securities exercise or convert them, which
they are most likely to do when the market price for our shares exceeds the
exercise or conversion price, then the issuance of any or all of these reserved
shares may dilute your interest in our common stock.
5
<PAGE>
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based
these forward-looking statements on our current expectations and projections
about future events. These forward-looking statements are subject to risks,
uncertainties and assumptions about us, including, among other things:
o our future capital needs for the purchase of additional vessels;
o our ability to compete in a saturated industry against modern and
larger fleets;
o the high percentage of debt on our assets;
o our need to make expensive upgrades to our aging vessels; and
o the general economic conditions of our industry.
We undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this prospectus might not occur.
PROCEEDS FROM THE SALE OF OUR SHARES
We will receive no proceeds from the sale of any of or all of the
shares being offered by the selling stockholders under this prospectus or upon
conversion of the preferred stock. We will receive approximately $765,450 upon
the exercise of the warrants for which we are registering the underlying shares
of common stock, if the "cashless" exercise provisions of the warrants are not
used. We will use the funds for working capital and other corporate purposes.
We estimate that we will spend approximately $38,481 in connection with
the registration of the shares.
SELLING STOCKHOLDERS
The following tables sets forth certain information with respect to the
beneficial ownership of our common stock by the selling stockholders as of the
date of this prospectus. No selling stockholder has been employed by, held
office in, or had any other material relationship with us or any of our
affiliates within the past three years.
<TABLE>
<CAPTION>
NAME OF SELLING OWNERSHIP OF SHARES NUMBER OF OWNERSHIP OF SHARES
STOCKHOLDER OF COMMON STOCK SHARES OF COMMON STOCK
PRIOR TO OFFERING OFFERED HEREBY AFTER OFFERING(1)
- ----------------------------------------- ---------------------------- --------------- ------------------------
SHARES PERCENTAGE SHARES PERCENTAGE
------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Strong River Investments, Inc. 455,120(2) 4.999% 730,555(3) 0 0
H.C. Wainwright & Company, Inc.(4) 26,000 * 26,000 0 0
Scott Weisman (4) 12,500 * 12,500 0 0
Jason Adelman (4) 7,000 * 7,000 0 0
Matthew Balk (4) 7,000 * 7,000 0 0
Eric Singer (4) 5,000 * 5,000 0 0
</TABLE>
6
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- -----------------------------
* Represents less than 1%.
(1) Assumes that all shares are sold pursuant to this offering and that no
other shares of common stock are acquired or disposed of by the selling
stockholders prior to the termination of this offering. Because the
selling stockholders may sell all, some or none of their shares or may
acquire or dispose of other shares of common stock, no reliable
estimate can be made of the aggregate number of shares that will be
sold pursuant to this offering or the number or percentage of shares of
common stock that each selling stockholder will own upon completion of
this offering.
(2) Represents a portion of the shares issuable upon conversion of our
series C convertible preferred stock and the exercise of a warrant to
purchase our common stock. The terms of the series C preferred stock
and warrant restrict the ability of the holders to convert or exercise
their securities, as the case may be, to the extent that the number of
shares of common stock beneficially owned by them and their affiliates
exceeds 4.999% of the common stock following the conversion or
exercise. Each holder may waive this limitation on not less than 61
days' notice to us.
(3) Without this 4.999% limitation set forth above, the maximum number of
shares beneficially owned by Strong River Investments, Inc. would equal
the number of shares offered in this prospectus, which consists of
730,555 shares of common stock issuable upon conversion of 250
outstanding shares of our series C preferred stock at a conversion
price of $4.50 per share and as dividends, and 75,000 shares of common
stock issuable upon the exercise of a warrant having an exercise price
of $6.25 per share.
(4) Represents shares issuable upon the exercise of a warrant to purchase
shares of our common stock at an exercise price of $5.16 per share.
HOW THE SHARES MAY BE DISTRIBUTED
The selling stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
common stock is traded or in private transactions. These sales may be at fixed
or negotiated prices. The selling stockholders may use any one or more of the
following methods when selling common stock:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the common
stock as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o privately negotiated transactions;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling stockholders may also sell common stock under Rule 144 of
the Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
7
<PAGE>
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
Because the selling stockholders may be deemed to be "underwriters,"
the selling stockholders will be subject to prospectus delivery requirements
under the Securities Act. In addition, in the event of a "distribution" of
securities, the selling stockholders, any selling broker-dealer and any
"affiliated purchasers" may be subject to Regulation M under the Securities
Exchange Act of 1934, which prohibits certain activities for the purpose of
pegging, fixing or stabilizing the price of securities in connection with an
offering.
We are required to pay all fees and expenses incident to the
registration of the common stock, including up to $4,000 of the fees and
disbursements of counsel to the selling stockholders but excluding selling
expenses incurred by the selling stockholders related to the common stock,
including underwriters' discounts, non-accountable expense allowances and
commissions, if any. We have agreed to indemnify the selling stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act. The selling stockholders have agreed to indemnify us
and our officers, agents and representatives against certain liabilities under
the Securities Act.
OUR CAPITAL STOCK
As of the date of this prospectus, our capital stock consists of
100,000,000 shares of common stock, par value $.01 per share, 8,649,118 shares
of which are outstanding and 10,000,000 shares of preferred stock, par value
$.01 per share, 500,250 shares of which are outstanding. Excluding the publicly
traded warrants, we also have outstanding options, warrants and convertible
debentures to purchase an aggregate of 5,772,301 shares of our common stock.
COMMON STOCK
Subject to the rights of the holders of any preferred stock that may be
outstanding, each holder of common stock on the applicable record date is
entitled to receive any dividends declared by the board of directors out of
available funds and, in the event of our liquidation, to share pro rata in any
distribution of our assets after we have paid our liabilities and the
liquidation preference of any outstanding preferred stock.
Each holder of common stock is entitled to one vote for each share held
of record on the applicable record date on all matters presented to a vote of
the stockholders, including the election of directors. Holders of common stock
have no cumulative voting rights or preemptive rights to purchase or subscribe
for any stock or other securities, and there are no conversion rights or
redemption or sinking fund provisions with respect to such stock. All
outstanding shares of common stock are, and the shares of common stock being
sold in this offering will be, when issued, fully paid and nonassesable.
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PUBLIC WARRANTS
We have outstanding a total of 610,618 warrants to purchase a total of
305,309 shares of our common stock at an exercise price of $5.65 per share.
These warrants are traded on The Nasdaq National Market under the symbol
"CCLNW." The warrants are only exercisable in pairs, with each two warrants
entitling the registered holder to one share of common stock. The warrants are
exercisable until July 2001 and may be redeemed by us at a redemption price of
$.05 per warrant with 25 days' written notice to the warrant holders if the
average closing bid price for our common stock for 20 consecutive trading days
ending not more than 15 days prior to the date warrant holders are given notice
is in excess of $8.48 per share. The exercise price and number of warrants is
subject to adjustment in certain circumstances.
TRANSFER AGENT FOR OUR COMMON STOCK AND WARRANTS
The transfer agent for our common stock and warrants is American Stock
Transfer and Trust Company, 40 Wall Street, 46th Floor, New York, New York
10005.
PREFERRED STOCK
Our board of directors is authorized to issue up to 10,000,000 shares
of preferred stock in one or more series and to fix, by resolution, conditional,
full, limited or no voting powers, and the designations, preferences, the number
of shares, dividend rates, conversion or exchange rights, redemption provisions
or other special rights of the shares constituting any class or series as the
board of directors may deem advisable without any further vote or action by the
stockholders. Any shares of preferred stock issued by us could have priority
over our common stock with respect to dividends or liquidation rights and could
have voting and other rights of stockholders. We currently have outstanding
500,000 shares of series B convertible preferred stock and 250 shares of series
C convertible preferred stock.
SERIES B CONVERTIBLE PREFERRED STOCK
We have designated 800,000 shares of preferred stock as our series B
convertible preferred stock, of which 500,000 are issued and outstanding. Each
holder of series B convertible preferred stock is entitled to receive cumulative
cash dividends at the rate of 11% per annum, payable quarterly at the end of
each calendar quarter and prior to the payment of dividends to the holders of
our common stock. In the event of a liquidation, holders of series B convertible
preferred stock are entitled to receive a liquidation preference of $10.00 per
share plus accrued and unpaid dividends.
The shares of series B convertible preferred stock are convertible into
shares of our common stock at a rate of $4.0625 per share at any time after
January 4, 2001. We may require conversion of up to 25% of the series B
preferred stock during any ninety-day period at any time after we have filed a
registration statement with the Securities and Exchange Commission with respect
to the sale of shares of common stock issuable upon conversion of the series B
convertible preferred stock and such registration statement has been declared
effective if the closing bid price for our common stock on The Nasdaq National
Market equals or exceeds 150% of the conversion price for any ten consecutive
trading days. The conversion price is subject to adjustment in certain
circumstances. Sales of the underlying common stock are restricted to not more
than 25% of the total number of shares of common stock that could be issued upon
conversion per quarter. This amount increases if we demand conversion, which we
may do in certain cases. Holders of series B convertible preferred stock are not
entitled to vote on any matters and have no preemptive rights with respect to
any of the capital stock of the Company.
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SERIES C CONVERTIBLE PREFERRED STOCK
We have designated 300 shares of preferred stock as our series C
convertible preferred stock, of which 250 shares are issued and outstanding.
Each holder of series C convertible preferred stock is entitled to receive
cumulative dividends at the rate of 6% per annum on the date the shares of
series C preferred stock are converted and on each June 30 and December 31 so
long as the series C shares are outstanding. The dividends on the series C
preferred stock may be paid in cash or in shares of our common stock. In the
event of liquidation, dissolution or winding up, holders of series C shares are
entitled to receive $10,000 for each share of series C preferred stock
outstanding prior to any distribution to the holders of our common stock or the
holders of any securities ranking junior to the series C preferred stock.
The shares of series C preferred stock are convertible into shares of
our common stock at a rate of $4.50 per share at any time. We may require
conversion of the series C preferred stock if the average price of our common
stock for 20 consecutive trading days equals or exceeds $7.50 per share and if,
among other things, our common stock is trading on the Nasdaq National Market,
the New York Stock Exchange or the Nasdaq SmallCap Market. The conversion price
is subject to adjustment in certain circumstances. Except in certain instances,
all remaining shares of series C convertible preferred stock shall be
automatically converted into shares of our common stock on March 30, 2003.
Holders of series C preferred stock are not entitled to vote on any
matters and have no preemptive rights with respect to any of our capital stock.
The series C convertible preferred stock may not be converted if the resulting
number of shares of common stock would cause the holders (and their affiliates)
to beneficially own more than 4.999% of the common stock following conversion. A
holder may waive this limitation on 61 days' prior written notice to us.
In certain instances, we have the option to redeem all or any portion
of the series C convertible preferred stock commencing on December 30, 2000 at
$10,500 per share of series C preferred stock. In addition, commencing on April
30, 2001, the holders have the right, for a ninety-day period, to request us to
redeem all or a portion of the series C convertible preferred stock for $10,500
per share.
DIFFERENCES IN CORPORATE LAW
The Companies Act of Bermuda differs in certain respects from the laws
generally applicable to U.S. corporations and their stockholders. Below is a
summary of the significant provisions of the Companies Act, which differ from
certain provisions of the Delaware corporate law. We have used the corporate law
of Delaware only as a basis of comparison and it in no way means that the law of
Delaware is the same as that of other U.S. states. The following statements are
only summaries and do not purport to deal with all aspects of Bermuda law as may
be applicable to us, our directors, officers and stockholders.
INTERESTED DIRECTORS. Our bye-laws provide that transactions entered
into by us in which one of our directors has an interest are not voidable by us
nor is the director liable to us for any profits realized in connection with the
transaction, if the director disclosed the nature of his interest at the first
opportunity: (i) at a meeting of the directors or in writing to the directors;
and (ii) to our auditors, at their request. Under Delaware law transactions in
which our directors had an interest would not be voidable if (i) the material
facts about the interested director's relationship or interest are disclosed or
are known to the board of directors and the board in good faith authorizes the
transaction by an affirmative vote of a majority of the non-interested
directors; (ii) the material facts are disclosed or are known to the
stockholders entitled to vote on the transaction and the transaction is
specifically approved in good faith
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by the stockholders; or (iii) the transaction is fair as to the corporation at
the time it is authorized, approved or ratified.
LOANS TO DIRECTORS. The Companies Act generally forbids loans to
directors without the prior approval of 90% of the stockholders of the Company
at a general meeting of stockholders. Delaware does not contain a similar
provision.
MERGERS AND SIMILAR AGREEMENTS. We may acquire the business of another
Bermuda company exempt from Bermuda taxes or a company incorporated outside
Bermuda and carrying on such business if it is within the objects of our
memorandum of association. We may "amalgamate" (merge or consolidate) with
another Bermuda company or a foreign corporation if the amalgamation is approved
by the board of directors and the holders of a majority of our common stock at a
meeting where a quorum is present. While a dissenting stockholder may have the
right to express to a Bermuda court his view that the transaction sought to be
approved would not provide the stockholders with the fair value of their shares,
the court ordinarily would not disapprove the transaction on these grounds
absent evidence of fraud or bad faith. The Bermuda court would, however, assess
the fair value of the dissenting stockholder's common stock, and the dissenting
stockholder would be entitled to receive this amount, in cash, in lieu of the
consideration such dissenting stockholder would otherwise receive in the
transaction. Under Delaware law, with certain exceptions, any merger,
consolidation or sale of all or substantially all of the assets of a corporation
must be approved by the board of directors and a majority of the outstanding
shares entitled to vote. Under Delaware law, a stockholder of a corporation
participating in certain major corporate transactions may, under varying
circumstances, be entitled to appraisal rights pursuant to which the stockholder
may receive cash in the amount of the fair market value of the shares held by
such stockholder (as determined by a court or by agreement of the corporation
and the stockholder) in lieu of the consideration the stockholder would
otherwise receive in the transaction. Delaware law does not provide stockholders
of a corporation with voting or appraisal rights when the corporation acquires
another business through the issuance of its stock or other consideration (i) in
exchange for the assets of the business to be acquired; (ii) in exchange for the
outstanding stock of the corporation being acquired; or (iii) in a merger of the
corporation to be acquired with a subsidiary of the acquiring corporation.
TAKEOVERS. Bermuda law provides that where an offer is made for the
shares of a company and, within four months of the offer the holders of not less
than 90% of the shares that are the subject of the offer accept, the offeror may
by notice require the nontendering stockholders to transfer their shares on the
terms of the offer. Dissenting stockholders may apply to the court within one
month of the notice objecting to the transfer. The burden is on the dissenting
stockholders to show that the court should exercise its discretion to enjoin the
required transfer, which the court will be unlikely to do unless there is
evidence of fraud or bad faith or collusion between the offeror and the holders
of the shares who have accepted the offer as a means of unfairly forcing out a
minority stockholder. Delaware law provides that a parent corporation, by
resolution of its board of directors and without any stockholders vote, may
merge with any 90% or more owned subsidiary. Upon any such merger, dissenting
stockholders of the subsidiary would have appraisal rights.
ACQUISITION OF MINORITY SHARES. The holders of at least 95% of our
common stock may force the holders of 5% or less of our common stock to sell
their common stock to the holders of 95% of our common stock under Bermuda law.
If the remaining 5% stockholders are dissatisfied with the price offered by the
95% stockholders, they may apply to a Bermuda court for an appraisal of their
shares. The appraisal is binding on the stockholders.
STOCKHOLDER'S SUIT. Class action and derivative actions are generally
not available to stockholders under the laws of Bermuda. However, the Bermuda
courts ordinarily would be expected to follow English case law precedent, which
would permit a stockholder to commence an action in the name of a
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company to remedy a wrong done to the company where the act complained of is
alleged to be beyond the corporate power of the company or is illegal or would
result in the violation of the memorandum of association and bye-laws.
Furthermore, consideration would be given by the court to acts that are alleged
to constitute a fraud against the minority stockholders or where an act requires
the approval of a greater percentage of the company's stockholders than actually
approved it. The winning party in these actions generally would be able to
recover a portion of its attorney fees incurred in connection with the action.
Class actions and derivative actions are generally available to stockholders
under Delaware law for, among other things, breach of fiduciary duty, corporate
waste and actions not taken in accordance with applicable law. In such actions,
the court has discretion to permit the winning party to recover attorney fees
incurred in connection with the action.
INDEMNIFICATION OF DIRECTORS. We have agreed to indemnify our directors
and officers in their capacity as such in respect of any loss arising or
liability attaching to them by virtue of any rule of law in respect of any
negligence, default, breach of duty or breach of trust of which a director or
officer may be guilty in relation to the company other than in respect of his
own willful default, willful neglect, fraud or dishonesty. Under Delaware law, a
corporation may adopt a provision eliminating or limiting the personal liability
of a director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for breaches of the director's
duty of loyalty, for acts or omissions not in good faith or which involve
intentional misconduct or knowing violations of law, for improper payment of
dividends or for any transaction from which the director derived an improper
personal benefit. Delaware law has provisions and limitations similar to Bermuda
regarding indemnification by a corporation of its directors or officers, except
that under Delaware law the statutory rights to indemnification may not be as
limited. Both Bermuda and Delaware law allow a company to obtain directors and
officers liability insurance.
INSPECTION OF CORPORATE RECORDS. Members of the general public have the
right to inspect our public documents available at the office of the Registrar
of Companies in Bermuda, which will include the memorandum of association
(including its objects and powers) and any alteration to the memorandum of
association, and documents relating to an increase or reduction of authorized
capital. The stockholders have the additional right to inspect our bye-laws,
minutes of general meetings and audited financial statements, which must be
presented to the annual meeting of stockholders. Our register of stockholders is
also open to inspection by stockholders without charge, and to members of the
public for a fee. We are required to maintain our share register in Bermuda but
may establish a branch register outside of Bermuda. We are required to keep at
our registered office a register of our directors and officers, which is open
for inspection by members of the public without charge.
WARRANTS. Under the provisions of the Companies Act, it is unlawful for
any company to issue "bearer" shares of stock, which are defined as shares that
may be transferred by delivery of the warrant or certificates relating to these
shares. The term "warrant" is used in Bermuda law only in this bearer stock
context. Accordingly, under Bermuda law, any reference to "warrant" must be
construed as an option, which is an instrument entitling the holder to subscribe
to the common stock in accordance with the terms of the instrument. References
herein to our warrants should not be construed as enabling the underlying common
stock to be transferred upon delivery of the certificate representing the shares
of common stock alone.
ANTI-TAKEOVER PROVISIONS
Although the board of directors is not presently aware of any takeover
attempts, our bye-laws contain certain provisions which may be deemed to be
"anti-takeover" in nature in that the provisions may deter, discourage or make
more difficult the assumption of control by another corporation or person
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through a tender offer, merger, proxy contest or similar transaction or series
of transactions. These provisions were adopted unanimously by our board of
directors and approved by our stockholders.
AUTHORIZED BUT UNISSUED SHARES. We have authorized 100,000,000 shares
of common stock and 10,000,000 shares of preferred stock. These shares of common
stock were authorized for the purpose of providing our board of directors with
as much flexibility as possible to issue additional shares for proper corporate
purposes including equity financing, acquisitions, stock dividends, stock
splits, the 1999 stock plan, stock options (including our warrants), and other
purposes. We have no agreements, commitments or plans at this time for the sale
or use of the additional shares of common stock or preferred stock except for
potential conversion of our convertible preferred stock or debentures into
common stock and the exercise of warrants and options for common stock. The
issuance of shares of preferred stock may have an adverse effect on our
stockholders. Our stockholders do not have preemptive rights with respect to the
purchase of these shares. Therefore, these issuances could result in a dilution
of voting rights and book value per share as to our common stock.
NO CUMULATIVE VOTING. Our bye-laws do not contain any provisions for
cumulative voting. Cumulative voting entitles stockholders to as many votes as
equal the number of shares owned by such holder multiplied by the number of
directors to be elected. A stockholder may cast all these votes for one
candidate or distribute them among any two or more candidates. Thus, cumulative
voting for the election of directors allows a stockholder or group of
stockholders who hold less than 50% of the outstanding shares voting to elect
one or more members of a board of directors. Without cumulative voting for the
election of directors, the vote of holders of a plurality of the shares voting
is required to elect any member of a board of directors and would be significant
to elect all the members of the board being elected.
CLASSIFIED BOARD OF DIRECTORS. Our board of directors is divided into
three classes. One class holds office for a term expiring at the annual meeting
of stockholders to be held in 2001, a second class holds office for a term
expiring at the annual meeting of stockholders to be held in 2002, and a third
class holds office for a term expiring at the annual meeting of stockholders to
be held in 2003. Approximately one-third of the total number of directors serve
as members of each such class. As a result, it would take a person who wanted to
gain control of the company a minimum of two annual meetings of stockholders
before he could gain control of our board of directors.
STOCKHOLDER RIGHTS PLAN. Our board of directors adopted a stockholder
rights plan. This plan is commonly known as a poison pill, and is intended to
encourage potential acquirors of the Company to proceed on a friendly basis by
negotiating with management. We have issued a right to each stockholder of
record on November 2, 1998 and each stockholder that has purchased shares of our
common stock since such date. This right entitles the holder to purchase one
share of our common stock for $28.34. The rights become exercisable upon the
occurrence of certain hostile take-over attempts. Exercise of the rights by our
stockholders would result in significant dilution to the potential acquiror
since holders of the right would be entitled to receive a number of shares of
our common stock having a market value equal to two times the exercise price if
the right's exercisability was triggered. Stockholder approval was not required
to adopt the rights plan.
GENERAL EFFECT OF ANTI-TAKEOVER PROVISIONS. The overall effect of these
provisions may be to deter a future tender offer or other takeover attempt that
some stockholders might view to be in their best interest as the offer might
include a premium over the market price of our common stock at that time. In
addition, these provisions may have the effect of assisting our current
management in retaining its position and place it in a better position to resist
changes which some stockholders may want to make if dissatisfied with the
conduct of our business.
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CERTAIN FOREIGN ISSUER CONSIDERATIONS
We have been designated as a non-resident for exchange control purposes
by the Bermuda Monetary Authority, Foreign Exchange Control.
THE BERMUDA MONETARY AUTHORITY AND THE REGISTRAR OF COMPANIES IN
BERMUDA WILL ACCEPT NO RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF ANY SCHEMES
OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINIONS EXPRESSED WITH
REGARD TO THEM.
There are no limitations on the rights of non-Bermuda owners of our
common stock to hold or vote their voting shares. Because we have been
designated as a non-resident for Bermuda exchange control purposes, there are no
restrictions on our ability to transfer funds into and out of Bermuda or to pay
dividends to United States residents who are holders of our capital stock, other
than in respect of local Bermuda currency.
In accordance with Bermuda law, share certificates are only issued in
the names of corporations or individuals. In the case of an applicant acting in
a special capacity (for example, as an executor or trustee), certificates may,
at the request of the applicant, record the capacity in which the applicant is
acting. Notwithstanding the recording of any such special capacity, we are not
bound to investigate or incur any responsibility in respect of the proper
administration of any such estate or trust. We will take no notice of any trust
applicable to any of our securities whether or not we have notice of such trust.
As an "exempted company," we are exempt from Bermuda laws that restrict
the percentage of share capital that may be held by non-Bermudans, but as an
exempted company, we may not participate in certain business transactions,
including: (1) the acquisition or holding of land in Bermuda (except that
required for our business and held by way of lease or tenancy for terms of not
more than 21 years) without the express authorization of the Bermuda
legislature; (2) the taking of mortgages on land in Bermuda to secure an amount
in excess of $50,000 without the consent of the Minister of Finance of Bermuda;
(3) the acquisition of securities created or issued by, or any interest in, any
local company or business, other than certain types of Bermuda government
securities or securities of another "exempted company," partnership or other
corporation resident in Bermuda but incorporated abroad; or (4) the carrying on
of business of any kind in Bermuda, except in furtherance of our business
carried on outside Bermuda or under a license granted by the Minister of Finance
of Bermuda.
The Bermuda government actively encourages foreign investment in
"exempted" entities like the Company that are based in Bermuda, but do not
operate in competition with local business. In addition to having no
restrictions on the degree of foreign ownership, we are neither subject to taxes
on our income or dividends nor to any foreign exchange controls in Bermuda. In
addition, there is no capital gains tax in Bermuda, and we can accumulate
profits without limitation under Bermuda law.
We are required to pay certain annual government fees based upon our
assessable capital (i.e., its authorized share capital and share premium). The
fees are based upon a sliding scale. The maximum fee payable by an exempt
company is USD$25,000 based upon an assumed capital of USD$500,000,000 or more.
LEGAL OPINION
Cox Hallett Wilkinson, Milner House, 18 Parliament St., Hamilton,
Bermuda, is giving an opinion regarding the validity of the offered shares.
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EXPERTS
The financial statements incorporated by reference in this prospectus
from our annual report on Form 10-K for the year ended September 30, 1999 have
been audited by Grant Thornton LLP, independent auditors, as stated in their
report with respect thereto, and are incorporated herein by reference in
reliance upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any report or document we
file at the public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at the SEC's regional
offices located at Seven World Trade Center, Suite 1300, New York, New York
10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please
call the SEC at 1-800-SEC-0880 for more information about the public reference
rooms. Our SEC filings are also available from the SEC's website located at
HTTP://WWW.SEC.GOV.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this prospectus, and later
information that we file with the SEC will automatically update and supersede
this information.
We incorporate by reference the following filings and any future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act:
(a) our Annual Report on Form 10-K for the year ended September 30,
1999;
(b) our Proxy Statement with respect to our 2000 Annual Meeting of
Stockholders;
(c) our Quarterly Report on Form 10-Q for the quarter ended December
31, 2000;
(d) our Current Report on Form 8-K dated January 28, 2000; and
(e) our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000.
We have filed with the SEC a registration statement on Form S-3 under
the Securities Act with respect to the common stock covered by this prospectus.
This prospectus, which is a part of the registration statement, does not contain
all the information set forth in, or annexed as exhibits to, the registration
statement, as permitted by the SEC's rules and regulations. For further
information with respect to us and the shares of common stock offered under this
prospectus, please refer to the registration statement, including the exhibits.
Copies of the registration statement, including the exhibits, may be obtained
from the SEC's public reference facilities listed above upon payment of the fees
prescribed by the SEC, or may be examined without charge at these facilities.
Statements concerning any document filed as an exhibit are not necessarily
complete and, in each instance, we refer you to the copy of the document filed
as an exhibit to the registration statement.
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You may request, at no charge, a copy of any or all of the information
incorporated by reference by writing or telephoning us at:
Commodore Holdings Limited
4000 Hollywood Boulevard
Suite 385-S
Hollywood, Florida 33021
Attention: Chief Financial Officer
Telephone number: (954) 967-2100
Exhibits to any of the documents, however, will not be provided unless
such exhibits are specifically incorporated by reference into such documents.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company estimates its expenses in connection with this registration
statement will be as follows:
Securities and Exchange Commission registration fee................$ 980.88
Accounting fees and expenses*...................................... 7,500.00
Legal fees and expenses*........................................... 5,000.00
Blue Sky fees and expenses*........................................ 2,500.00
Miscellaneous*..................................................... 2,500.00
--------
TOTAL............................................................$ 38,480.88
=========
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* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 98 of the Bermuda's Companies Act of 1981, as amended (the
"Act"), provides generally that a Bermuda company may indemnify its directors,
officers and auditors against any liability, which by virtue of Bermuda law
otherwise would be imposed on them, except in cases where such liability arises
from the willful negligence, willful default, fraud or dishonesty of which such
officer, director, or auditor may be guilty in relation to the company. Section
98 further provides that a Bermuda company may indemnify its directors, officers
and auditors against any liability incurred by them in defending any
proceedings, whether civil or criminal, which judgment is awarded in their favor
or they are acquitted or in which they are acquitted or granted relief by the
Supreme Court of Bermuda in certain proceedings arising under Section 281 of the
Act.
The Company has adopted provisions in its Bye-laws that provide that
the Company shall indemnify its officers and directors to the maximum extent
permitted under the Act. The Company has also entered into indemnification
agreements with certain of its officers and directors. Such agreements provide
that each director shall be indemnified to the maximum extent permitted by law.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER
DESCRIPTION OF EXHIBIT
4.1 Form of Common Stock Certificate (1)
4.2 Form of Public Warrant Certificate (2)
4.3 Form of Public Warrant Agent Agreement (2)
4.4 Form of Underwriter's Warrant Agreement (2)
4.5 Stockholder Rights Plan (3)
4.6 Assignment and Assumption of Underwriter's Warrant Agreement (4)
5.1 Opinion of Cox Hallett Wilkinson*
23.1 Consent of Grant Thornton LLP*
23.2 Consent of Cox Hallett Wilkinson*
24 Power of Attorney (included on signature page)
- ------------------------------------
* To be filed by amendment.
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(1) Incorporated by reference from Amendment No. 2 to the Company's
Registration Statement on Form S-1 (No. 333-01270) filed on June 18, 1996.
(2) Incorporated by reference from Amendment No. 1 to the Company's
Registration Statement on Form S-1 (No. 333-01270) filed on May 28, 1996.
(3) Incorporated by reference from the Company's Current Report on Form 8-K
filed on October 29, 1998.
(4) Incorporated by reference from the Company's Annual Report on Form 10-K for
the year ended September 30, 1998.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which it 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 in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with this
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volumes and price represent no more than a 20%
change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement; and
(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.
(2) That, for determining any liability under the Securities Act, each
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities which remain unsold at the termination of the
offering.
(4) That, for the purpose of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act that is incorporated by reference in
the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act that is incorporated by reference in
the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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, thereto
duly authorized, in the City of Hollywood, State of Florida, on
May 15, 2000.
COMMODORE HOLDINGS LIMITED
By: /s/ Jeffrey I. Binder
----------------------------------------
Jeffrey I. Binder, Chairman of the Board
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Jeffrey I. Binder and Frederick A. Mayer or any one of them, as his or her true
and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution for him or her and in his or her name, place and stead in any and
all capacities to execute in the name of each such person who is then an officer
or director of the registrant any and all amendments (including post-effective
amendments) to this registration statement, and any registration statement
relating to the offering hereunder pursuant to Rule 462 under the Securities Act
of 1933, as amended, and to file the same with all exhibits thereto and other
documents in connection therewith with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents and each of them full power and
authority to do and perform each and every act and thing required or necessary
to be done in and about the premises as fully as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C>
/s/ Jeffrey I. Binder Chairman of the Board May 15, 2000
- -----------------------------------
Jeffrey I. Binder
/s/ Frederick A. Mayer Chief Executive Officer (Principal Executive May 15, 2000
- ----------------------------------- Officer) and Director
Frederick A. Mayer
/s/ Alan Pritzker Chief Financial Officer and Vice President - May 15, 2000
- ----------------------------------- Finance (Principal Financial and Accounting Officer)
Alan Pritzker
/s/ Ralph V. De Martino Director May 15, 2000
- --------------------------------------
Ralph V. De Martino
/s/ Mark J. Maged Director May 15, 2000
- --------------------------------------
Mark J. Maged
/s/ Jeffrey B. Rabin Director May 15, 2000
- -----------------------------------
Jeffrey B. Rabin
</TABLE>
II-3
