Here is the S-3 Part 1: WARNING !!! IT'S LONG !!!
COUNTRY STAR RESTAURANTS INC S-3 ÿ ÿ ÿ Filing Index
ÿTYPE:ÿÿS-3
ÿSEQUENCE:ÿÿ1
ÿDESCRIPTION:ÿÿFORM S-3
As filed with the Securities and Exchange Commission on November __, 1997
Registration 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
COUNTRY STAR RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 62-1536550
(State or other juris- (I.R.S. Employer Identi-
diction of incorpora- fication number)
tion or organization)
4929 Wilshire Boulevard, Suite 428, Los Angeles, California 90010 213/634-5588
(Name, address, including zip code, and telephone number, including area code,
of registrant's principal executive office)
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DAN J. RUBIN, CHIEF EXECUTIVE OFFICER
COUNTRY STAR RESTAURANTS, INC.
4929 Wilshire Boulevard, Suite 428
Los Angeles, California 90010
213/634-5588
(Name, address, including zip code, and telephone number,
including area code, of agent for service
----------
COPIES TO:
ROBERT L. DAVIDSON, ESQ.
WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP
270 MADISON AVENUE
NEW YORK, NEW YORK 10016
Telephone No. 212/545-4600
Facsimile No. 212/686-0114
Approximate date of commencement of proposed sale to the public: As soon as
practicable after effective date of the registration statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
(continued overleaf)
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, check the following box [X]
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 future amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
CALCULATION OF REGISTRATION FEE
Proposed
Proposed Maximum
Title of each Amount Maximum Aggregate Amount of
class of securities to be Offering Price Offering Registration
to be registered Registered(1) Per Share(2) Price(3) Fee
---------------- -------------- -------------- -------- ------------
Common Stock
Par Value
$.001 Per Share -- $.11 $1,300,317 $394.04
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(1) Includes 10,457,430 shares of Common Stock owned by certain Selling
Shareholders and an indeterminate amount of shares issued upon the
conversion of up to $150,000 of outstanding principal amounts of certain
Convertible Notes held by certain Selling Shareholders.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c).
(3) Pursuant to Rule 457(o), the proposed maximum aggregate offering price of
all the securities being registered on this Registration Statement has been
estimated for purposes of calculating the registration fee by adding (i)
the outstanding principal amounts of certain Convertible Notes held by
certain Selling Stockholders and (ii) the product obtained by multiplying
the proposed maximum offering price per share, calculated pursuant to Rule
457(c), by the aggregate number of shares of common stock held by the
Selling Stockholders.
CROSS-REFERENCE SHEET
Pursuant to Item 501(b)
Item Number and Caption Location or Heading
in Form S-3 in Prospectus
----------------------- -------------------
1. Forepart of Registration Facing Page or Registra-
Statement and Outside Front tion Statement: Cover
Cover Page of Prospectus. Page of Prospectus.
2. Inside Front and Outside Inside Front and Outside
Back Cover Pages of Prospectus. Back Cover Pages of
Prospectus.
3. Summary Information, Risk Prospectus Summary; The
Factors and Ratio of Earnings Company; Risk Factors.
to Fixed Charges.
4. Use of Proceeds. Prospectus Summary.
5. Determination of Offering Price. *
6. Dilution. *
7. Selling Security Holders. Cover Page; Selling
Shareholders.
8. Plan of Distribution. Cover Page; Plan of
Distribution.
9. Description of Securities to Incorporation of Certain
be Registered. Documents by Reference.
10. Interests of Named Experts *
and Counsel.
11. Material Changes The Company; Risk Factors;
Description of Capital
Stock.
12. Incorporation of Certain Infor- Incorporation of Certain
mation by Reference. Documents by Reference.
13. Disclosure of Commission Position *
on Indemnification for Securities
Act Liabilities.
------------
* Omitted as not applicable.
DATED NOVEMBER __, 1997
PROSPECTUS
COUNTRY STAR RESTAURANTS, INC.
Shares of Common Stock
$.001 par value per share
This Prospectus relates to (i) 10,457,430 shares of common stock, $.001 par
value (the "Common Stock"), of Country Star Restaurants, Inc., a Delaware
corporation (the "Company"), held by, and which may be offered from time to time
by, a number of persons and entities (collectively, the "Selling Stockholders"),
and (ii) an indeterminate number of shares of Common Stock presently issuable
upon conversion of the outstanding principal amount of certain Convertible
Notes, plus accrued and unpaid interest (the "Conversion Shares"), held by
certain of the Selling Stockholders (the "Notes"). See "Selling Stockholders."
The shares of Common Stock and Conversion Shares registered hereunder are
sometimes referred to as the "Securities." All costs in connection with the
registration of the Securities are being borne by the Company. The Company will
not receive any of the proceeds from the sale of the Securities pursuant to this
Prospectus.
The Common Stock is quoted on the NASDAQ National Market under the symbol
"CAFE." The last reported bid and asked price of the Common Stock on NASDAQ on
November 3, 1997 were $3/32 and $1/8, per share, respectively.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE PURCHASED ONLY
BY THOSE PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. THE COMPANY HAS
INCURRED SUBSTANTIAL OPERATING LOSSES. SEE "RISK FACTORS" BEGINNING ON PAGE 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY
STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
The Selling Stockholders directly or through agents, dealers or
underwriters to be designated from time to time may sell the
-i-
Securities on terms to be determined at the time of sale. To the extent
required, the number of Securities to be sold, the respective purchase price and
public offering price, the name of any agent, dealer or underwriter and any
applicable commissions or discounts with respect to a particular offer will be
set forth in and accompanied by a Prospectus Supplement. See "Plan of
Distribution."
The Selling Stockholders and any agents, dealers or underwriters that
participate with the Selling Stockholders in the distribution of their shares
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), and any commissions received by them
and any profits on the resale of the Selling Stockholders' shares, may be deemed
to be underwriting commissions or discounts under the Securities Act. Under
applicable rules and regulations promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), any person engaged in a distribution
of securities may not simultaneously bid for or purchase securities of the same
class for a period of two (2) business days prior to the commencement of such
distribution. In addition, and without limiting the foregoing, the Selling
Stockholders will be subject to the applicable provisions of the Exchange Act
and the rules and regulations thereunder, including, without limitation, Rules
10b-2, 10b-5, 10b-6 and 10b-7, in connection with transactions in the Securities
during the effectiveness of the Registration Statement of which this Prospectus
forms a part. All of the foregoing may affect the marketability of the
Securities.
The date of this Prospectus is November __, 1997.
-ii-
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company in accordance with the Exchange Act
can be inspected and copies made at the public reference facilities maintained
by the Commission at Room 1204, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661 and 7 World Trade Center, New York, New York
10048. Copies of such material can be obtained at prescribed rates from the
public reference section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments thereto, the "Registration Statement"), with
respect to the Securities offered hereby. As permitted by the rules and
regulations of the Commission, this Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information about the Company and the Securities
offered hereby, reference is made to the Registration Statement and the exhibits
thereto, which may be examined without charge at the public reference facilities
maintained by the Commission at Room 1204, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies of which may be obtained from the
Commission upon payment of the prescribed fees.
No person has been authorized by the Company to give any information or to
make any representation other than as contained in this Prospectus and, if given
or made, such information or representation must not be relied upon as having
been authorized by the Company. Neither the delivery of this Prospectus nor any
distribution of the shares of the Common Stock issuable under the terms of this
Prospectus, under any circumstances, create any implication that there has been
no change in the affairs of the Company since the date hereof.
-1-
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference the following documents
heretofore filed with the Commission: the Annual Report of the Company on Form
10-KSB for the fiscal year ended December 31, 1996 and Amendment No. 1 to such
Report dated April 29, 1997; the Current Reports of the Company on Form 8-K
dated January 5, 1996 and March 18, 1996; the Current Reports of the Company on
Form 8-K dated January 16, 1997, February 12, 1997, March 29, 1997, April 21,
1997, May 7, 1997 and May 28, 1997; and the Quarterly Report of the Company on
Form 10-QSB for the periods ended March 31, 1997 and June 30, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering hereby 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. Any statement contained in a document incorporated herein by
reference shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein (or in any other
subsequently filed document which also is incorporated herein by reference)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed to constitute a part hereof except as so modified or
superseded.
The Company will provide, without charge to each person to whom a
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated herein by reference, other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into the information that is incorporated into the Prospectus. Such
written requests should be directed to the Secretary of the Company at 4929
Wilshire Boulevard, Suite 428, Los Angeles, California 90010, 213/634-5588.
-2-
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
descriptions and financial information and statements appearing elsewhere in
this Prospectus and the documents incorporated herein by reference.
The Company
The Company, Country Star Restaurants, Inc., develops, constructs, owns and
operates country music theme restaurants combining high quality, moderately
priced food with a casual, family oriented environment.
The Company's principal offices are located at 4929 Wilshire Boulevard,
Suite 428, Los Angeles, California 90010, telephone 212/634-5588.
The Offering
An indeterminate number of shares of Common Stock are being offered
pursuant to this Prospectus which may be offered from time to time by the
Selling Stockholders for their own account.
Plan of Distribution
The Selling Stockholders, directly or through agents or underwriters, may
offer and sell from time to time all or any part of the Securities held by them
in amounts and on terms to be determined or at quoted prices then prevailing on
the NASDAQ National Market. See "Plan of Distribution."
-3-
RISK FACTORS
Investment in the Company's securities involves a high degree of risk.
Investors should carefully consider the following factors, among others,
relating to the Company.
Continuing Losses; Going Concern Qualification; Inability to Pay Current
Trade Debt. The Company opened its first Country Star Restaurant in August, 1994
and two more restaurants in 1996. The Company has continued to incur operating
losses. For the fiscal year ended December 31, 1996, the Company had a net loss
of $16,780,000. The Company's independent certified public accountants have
rendered a going concern qualification to their opinion on the Company's 1996
financial statements and stated that the Company has experienced significant
losses in 1995 and 1996, and is experiencing cash flow shortages and that these
factors "raise substantial doubt about the Company's ability to continue as a
going concern." See Report of Independent Certified Public Accountants, dated
April 11, 1997 in the Company's Annual Report on Form 10-KSB to Stockholders for
1996. The Company has been unable to fully pay trade debt to its creditors and
has made a written offer to all creditors to settle outstanding claims on the
basis of $.40 for every dollar of debt. The Company's ability to generate
operating and net income in the future will depend on the success of its
operating restaurants, and the successful implementation of its expansion
strategy. There can be no assurance that the Company will be profitable in the
future.
Need for Additional Capital and Financing. During 1996 the Company
continued to fund its operations by the private sale of the Company's equity
securities and development financing arrangements relating to Country Star Las
Vegas. The Company anticipates that it will continue to have substantial capital
needs that cannot be funded completely from operations and will be required to
raise additional capital through equity or debt financings. Such sources of
financing, if available, may include bank financing, third party equity
investors, capital leases, private limited partnerships, joint venture financing
and sale leaseback arrangements.
The Company has entered into a definitive agreement with NevStar
Restaurants, LLC ("NevStar") that provides, among other things, for (i) $4.5
million of equity financing for Country Star Las Vegas, and (ii) the right to
provide up to an additional $12.5 million of equity financing for future Country
Star Restaurants (the "Development Financing Agreement"). In the event that
NevStar does not provide any additional financing to the Company other than with
respect to Country Star Las Vegas, and in the event that the Company were not
successful in securing any other sources of financing on terms and conditions
acceptable
-4-
to the Company, or at all, the Company's expansion strategy would be materially
adversely affected.
Control by and Dependence Upon Chief Executive Officer and a Principal
Lender. The Company's Chief Executive Officer and President, Dan Rubin, is also
a principal lender to the Company and has the right to appoint three members of
the Board of Directors. The Company is subject to the control of Mr. Rubin and
is dependent upon his services for the operation of the Company and its
business. The loans made to the Company by Mr. Rubin, an institutional investor
and certain other investors are secured by a lien on substantially all of the
assets of the Company. Under this secured financing arrangement Mr. Rubin made
available to the Company a $3,500,000 line of credit loan of which approximately
$900,000 has been lent and additional advances may be made in his discretion. |
