BIGE is a stock I discovered when doing my turn at the SEC Search
Club a week ago.
(For those who don't know, the club is a dozen or so of us who take
turns looking at the S-3 filings each day to detect discounted
convertible financings. We do all our correspondence by email. It
takes anywhere from 10 minutes to an hour or so of effort per turn.
We are always looking for new members, especially those who like to
research and shorting stocks. New members receive instructions on
how to do their search efficiently, using free web sites.)
Now that a decent amount of time has passed to allow search club
members to make a trade, if they want to, I'll post my report here on
this thread. I'm short the stock, FWIW.
Here's the report:
===============================================================
As usual, I eliminated large stocks, financial companies, profitable
companies, stocks < $5. After doing this, I was left with a handful
that included one discounted convert:
BIGE
Actually the number of shares associated
with the discounted convert is not very big, but the filing also
registers a much larger number of shares that are coming out of a 6-
month lockup, after a private placement of common stock.
Especially based on the lockup expiration, this is promising as short:
************************************
BIGE "Big Entertainment Inc."
Despite the co.'s name, this is a small unprofitable company with
tiny revenues. It owns rights to certain entertainment characters &
concepts, such as comic book characters. It recently gave up
publishing its unprofitable comic books, which suggests the
characters it owns aren'tworth much. It is now shifting focus to its
retail stores in malls, which sell paraphenalia associated with
blockbuster movies and TV shows.
Market cap $39 M, volume 10 k daily, 3.2 M float
Did a 1 M share private placement of common stock (not convertibles)
back in July, which will add 30% to float, which is enough to be
interesting. Also did a discounted convertible debenture, although
this is smaller, at $650 k, representing only 2% of market cap.
This % of market cap would ordinarily be so small that I wouldn't
want to pay attention to the discounted convert. It's mainly the
large number of shares being registered simultaneously associated
with the private placement of common stock and a host of other
small sellers. Also the volume is quite
low at 10 k per day, and the float is small at 3.2 M, so the selling
from the discounted convert might have a measurable effect after all..
The private placement of common stock is the main thing here. It is
one million shares, and it has a six month lockup that is set to
expire any day now. Watch for selling when the registration (this S-
3) is deemed effective. Since this is an amendement to an S-3, it is
possible this could be within days.
In July 1997, the Company sold 1,000,002 shares of its common stock
through a private placement for $3,500,000. The proceeds to the
Company from the issuance of these shares amounted to $3,069,996, net
of expenses. The shares issued through this private placement are
restricted from resale for six months from the date of issuance
unless prior approval from the Company is granted;
accordingly the shares were sold at a 20% discount to the then current
market price of the common stock reflecting the restrictions on
resale. In conjunction
with this offering, the placement agent received warrants to purchase
100,000 shares of common stock. The warrants expire five years from
the date of issuance and have an exercise price of $5.00 per share.
The discounted convert can convert in tranches:
*************************************************************
conversion details from the 10Q (they weren't in the S-3a):
In August 1997, the Company issued a $650,000 convertible debenture
to a single institutional investor. The debenture accrues interest at
4% per annum, which is payable in arrears on August 31, 1999, the
maturity date of the debenture. The debenture is convertible by the
holder to shares of the Company's common stock at a conversion price
equal to 80% of the average closing bid price for the ten trading
days immediately preceding the date of conversion.
conversion schedule from the S-3a:
The Convertible Debenture is convertible as follows: (i) up to 25% of
the principal amount is convertible after the effective date (the
"Effective Date") of this registration statement;
(ii) up to 50% of the principal amount is convertible after 30 days
from the Effective Date; (iii) up to 75% of the principal amount is
convertible after 60 days from the Effective Date; and (iv) up to
100% of the principal amoun is convertible after 90 days from the
Effective Date.
*************************************************************
float and volume are small enough that this might be a little
difficult to trade. On the other hand, this will make the selling
have a more profound effect. There is a very long list of selling
shareholders, most of them with a small number of shares, and two
that are selling shares associated with the private placement.
short interest is only 67 k shares, or 3 days to cover, so that is
good.
*************************************************************
Market Guide Quick Facts Report
Big Entertainment, Inc. SYMBOL: BIGE EXCHANGE: NASD
PRICING DATA (AS OF) 01/16/98 RATIOS & STATISTICS
Price 5.63 Price/Revenue (TTM) 3.43
52 Week High 7.63 P/E (TTM) NM
52 Week Low 4.44 Price/Book (MRQ) 90.11
Beta -0.42 Price/Cash Flow (TTM) -9.06
Avg Daily Vol (10 Day) 0.01 Mil ROA (TTM) -60.49%
Avg Daily Vol (3 Month) 0.01 Mil ROE (TTM) -1,385.72%
Current Ratio (MRQ) 1.59
DIVIDEND INFORMATION Total Debt/Equity (MRQ) 0.37
Indicated Annual ($) 0.00
Yield 0.00% NOTE: TTM = trailing twelve months
MRQ = most recent quarter
SHARE RELATED INFORMATION SHORT INTEREST INFORMATION
Market Cap. ($) 38.745 Mil Current Month 0.067 Mil
Shares Out. 6.888 Mil Previous Month 0.063 Mil
Float 3.200 Mil Short Interest Ratio 3.0 Day
INSTITUTIONAL & INSIDER OWNERSHIP
PURCHASES SALES NET PURCH %OWNED
Institutions (3 Months) 0.154 Mil 0.000 Mil 0.154 Mil 12.2%
Insiders (6 Months) 0.002 Mil 0.000 Mil 0.002 Mil 53.5%
BUSINESS SUMMARY
BIGE is an entertainment company that has the
exclusive rights to original characters & concepts and has
publishing, licensing, packaging and entertainment retail
divisions. For the nine months ended 9/30/97, revenues rose
46% to $7.4M. Net loss fell 31% to $3.2M. Revenues reflect
increases in book licensing and packaging and entertainment
retail sales. Lower loss was partially offset by higher
salaries and benefits in the entertainment retail division.
REVENUES (Thousands of U.S. Dollars)
QUARTERS 1994 1995 1996 1997
MAR 0 1,634 1,536 1,707
JUN 0 1,806 1,888 3,730
SEP 0 1,194 1,669 2,012
DEC 1,473 1,668 2,518
TOTAL 1,473 6,302 7,611
EARNINGS PER SHARE
MAR -0.113 -0.490 -0.350 -0.260
JUN -0.223 -0.450 -0.240 0.030
SEP -0.433 -0.420 -0.300 -0.290
DEC -0.730 -0.590 -0.350
TOTAL -1.499 -1.950 -1.240
6/97, private placement of 1M Common shares. FY'93 is an 11
mos. number and 3/93 is a 2 mos. number due to inception.
*************************************************************
What they said about liquidity in the S-3:
AVAILABILITY OF CASH AND WORKING CAPITAL. The Company's cash
and cash equivalents at December 31, 1996 and September 30, 1997
totaled $1,675,852 and $1,569,375, respectively. The Company had
working capital of $1,285,093 and $1,852,786 at December 31, 1996 and
September 30, 1997, respectively. During the
year ended December 31, 1996, the Company used $6,133,454 of cash to
fund its operating activities and incurred a net loss of $6,655,609
during such period. During the nine months ended September 30, 1997,
the Company used $4,616,337 of
cash to fund its operating activities and incurred a net loss of
$3,249,323 during such period. The long-term financial success of the
Company is dependent upon the Company's ability to generate adequate
revenue to offset operating expenses. Although the Company received
net proceeds of approximately $4,000,000 in the July 1997 Private
Placement and the offering of the Convertible Debenture, the Company
continues to seek additional financing to fund its growth plan and
for working capital. Any such additional financing may result in
dilution to the Company's shareholders.
*****************************************
list of selling shareholders, from the S-3/a
Note the footnotes, which tell you which sellers are associated with what shares.
SELLING SHAREHOLDERS
The Company has been advised by the Selling Shareholders
that none of the Selling Shareholders has or had a position, office
or other material relationship with the Company or any of its
affiliates within the past three years. Unless otherwise indicated,
the following table sets forth certain information with respect to
the ownership of the Company's Common Stock by each Selling
Shareholder as of the date of this Prospectus.
OWNERSHIP OF SHARES
NUMBER OF OWNERSHIP OF SHARES
NAME AND ADDRESS OF SELLING OF COMMON STOCK
SHARES OF COMMON STOCK
SHAREHOLDER PRIOR TO OFFERING OFFERED
HEREBY AFTER OFFERING(1)
------------------------------------ -----------------------
-------------- ---------------------
SHARES PERCENTAGE
SHARES PERCENTAGE
------- ----------
------- ----------
Leonard Adams....................... 28,571 *
28,571 0 *
3050 Champion Boulevard
Boca Raton, FL 33496
Paul R. Alter....................... 21,429 *
21,429 0 *
1111 Park Avenue
New York, NY 10128
David Babiarz....................... 28,571 *
28,571 0 *
1035 Glencrest
Inverness, IL 60010
Marvin Barish....................... 14,286 *
14,286 0 *
5227 Dumfries
Houston, TX 77096-5104
Baron Associates.................... 14,286 *
14,286 0 *
Barry Levites
341 East 149 Street
Bronx, NY 10451
Barington Capital Group, L.P........ 100,000(2) 1.45%
100,000(2) 0 *
888 Seventh Avenue
New York, NY 10019
James Beldner....................... 14,286 *
14,286 0 *
3091 Riverside Drive
Wantagh, NY 11793
Efraim Bodek........................ 7,143 *
7,143 0 *
1024 Virginia Street
Far Rockaway, NY 11691
CLFS Equities....................... 28,571 *
28,571 0 *
410 17th Street
Suite 1705
Denver, CO 80202
-15-
OWNERSHIP OF SHARES
NUMBER OF OWNERSHIP OF SHARES
NAME AND ADDRESS OF SELLING OF COMMON STOCK
SHARES OF COMMON STOCK
SHAREHOLDER PRIOR TO OFFERING OFFERED
HEREBY AFTER OFFERING(1)
------------------------------------ -----------------------
-------------- ---------------------
SHARES PERCENTAGE
SHARES PERCENTAGE
------- ----------
------- ----------
W. Paul Craig & .................... 7,143 *
7,143 0 *
Imogean Craig, Community Property
5901 Camray Circle
Carmichael, CA 95608-1733
D. Stake Mill, Inc.................. 14,286 *
14,286 0 *
Douglas Lundmark - V.P. Finance
P.O. Box 1124
McMinnville, OR 97128
Jay Dalgetty........................ 28,571 *
28,571 0 *
2111 Fairway Green Drive
Kingwood, TX 77339
Dennis J. Drebsky................... 14,286 *
14,286 0 *
7 Glen Hill Court
Dix Hills, NY 11746
Explorer Partners, LLC.............. 130,323(3) 1.89%
130,323(3) 0 *
444 N. Michigan Avenue
Suite 2910
Chicago, IL 60611
David Fried......................... 7,143 *
7,143 0 *
43 Patton Drive
E. Brunswick, NJ 08816
John Friedler....................... 7,143 *
7,143 0 *
P.O. Box 566
Bedford, NY 10506
Richard Gilbert..................... 14,286 *
14,286 0 *
10351 Ardis Road
Roscoe, IL 61073
Doug Gill........................... 14,286 *
14,286 0 *
Lower Rannieshill Farm
Newmakhar Aderdeen
Scotland, AB21 OUF
United Kingdom
Stuart W. Gold...................... 28,571 *
28,571 0 *
335 Greenwich Street
New York, NY 10013
Jimmy Hanks......................... 7,143 *
7,143 0 *
4124 Deer Point Lake Drive
Panama City, FL 32409
Richard H. Hantke................... 14,286 *
14,286 0 *
-16-
OWNERSHIP OF SHARES
NUMBER OF OWNERSHIP OF SHARES
NAME AND ADDRESS OF SELLING OF COMMON STOCK
SHARES OF COMMON STOCK
SHAREHOLDER PRIOR TO OFFERING OFFERED
HEREBY AFTER OFFERING(1)
------------------------------------ -----------------------
-------------- ---------------------
SHARES PERCENTAGE
SHARES PERCENTAGE
------- ----------
------- ----------
5451 River Park Drive
Libertyville, IL 60048
Terence Leslie Hudson............... 135,714 1.97%
135,714 0 *
330 Sandbanks Road
Evening Hill
Poole Dorset
England, BH14 8HY
Steven Israel....................... 14,286 *
14,286 0 *
35 Henry Drive
Glen Cove, NY 11542
Robert A. Jacobs.................... 14,286 *
14,286 0 *
40 Fifth Avenue
New York, NY 10011
Frank Juranich...................... 7,143 *
7,143 0 *
5790 Broadway
Bronx, NY 10463
Dr. Harvey Kaplan................... 7,143 *
7,143 0 *
14333 Laurel Bowie Road
Suite 205
Laurel, MD 20708
Gilman R. King...................... 7,143 *
7,143 0 *
646 Golf Lane
LK Barrington, IL 60010
David Kohane, D.M.D................ 21,429 *
21,429 0 *
333 West 86th Street
Apt. 902B
New York, NY 10024
Richard S. Koreyva.................. 14,286 *
14,286 0 *
141 Glenview Drive
Lawrenceville, NJ 08648
Leckson Unlimited................... 71,429 1.04%
71,429 0 *
101 High Street Earith
Huntington Cambs
PE173PN, England
-17-
OWNERSHIP OF SHARES
NUMBER OF OWNERSHIP OF SHARES
NAME AND ADDRESS OF SELLING OF COMMON STOCK
SHARES OF COMMON STOCK
SHAREHOLDER PRIOR TO OFFERING OFFERED
HEREBY AFTER OFFERING(1)
------------------------------------ -----------------------
-------------- ---------------------
SHARES PERCENTAGE
SHARES PERCENTAGE
------- ----------
------- ----------
John Lilley......................... 7,143 *
7,143 0 *
Heath House
Lynn Road
Hillington
Kings Lynn Norfolk
England PE316B2
Paul Matusow........................ 14,286 *
14,286 0 *
20191 East Country Club Drive
Aventura, FL 33180
Guy Montanari....................... 7,143 *
7,143 0 *
82 Payne Road
Danbury, CT 06810
Steven M. Ostner.................... 28,571 *
28,571 0 *
420 West End Avenue # 7B
New York, NY 10024
Gary and Rebecca Perrine............ 28,571 *
28,571 0 *
2470 Tarpon Road
Naples, FL 34102
Michael Pizitz...................... 14,286 *
14,286 0 *
1901 Hidden Dunes
9815 Hway 98 West
Destin, FL 32541
Malladi and Pravina Reddy........... 42,857 *
42,857 0 *
2012 Haggin Oaks Drive
Bakersfield, CA 93311
Myron H. Reinhart................... 14,286 *
14,286 0 *
8900 Brennan Road
Richmond, VA 23229
Ronold Roth......................... 28,571 *
28,571 0 *
516 West Main Street
Cold Spring Harbor, NY 11724
Alan J. Rubin....................... 28,571 *
28,571 0 *
17231 Coral Cove Way
Boca Raton, FL 33496
Joseph Russoniello.................. 14,286 *
14,286 0 *
14025 Osprey Links Road
Condo # 372
Orlando, FL 32837
-18-
OWNERSHIP OF SHARES
NUMBER OF OWNERSHIP OF SHARES
NAME AND ADDRESS OF SELLING OF COMMON STOCK
SHARES OF COMMON STOCK
SHAREHOLDER PRIOR TO OFFERING OFFERED
HEREBY AFTER OFFERING(1)
------------------------------------ -----------------------
-------------- ---------------------
SHARES PERCENTAGE
SHARES PERCENTAGE
------- ----------
------- ----------
Wayne Saker......................... 28,571 *
28,571 0 *
6860 Gulfport Boulevard S.
# 318
St. Petersburg, FL 33701
Michael Schwartzbard................ 7,143 *
7,143 0 *
133 Eileen Drive
Cedar Grove, NJ 07009
Mark Scioscia....................... 7,143 *
7,143 0 *
330 Shields Lane
Sewickley, PA 15143
Stan F. Sech........................ 28,571 *
28,571 0 *
2 Brentside Executive Centre
Great West Road
Brentford
Middlesex
TW8 9DA, England
Floyd M. and Ilyse Smith............ 7,143 *
7,143 0 *
191 Carlough Place
Mahwah, NJ 07430
Robert Damon Spitzer................ 14,286 *
14,286 0 *
264 Village Boulevard
Building # 2
Incline Village, NV 89451
Gershon A. Stern.................... 28,571 *
28,571 0 *
1171 East Landis Avenue
Vineland, NJ 08360
Ramie Tritt......................... 7,143 *
7,143 0 *
5362 Hallford Drive
Dunwoody, GA 30338
W. Ed and Vickie S. Tyler........... 28,571 *
28,571 0 *
631 North Lincoln Street
Hinsdale, IL 60521
Stella and Cynthia Zimmer........... 7,143 *
7,143 0 *
1315 East 102 Street
Brooklyn, NY 11236
-------------------------
* Less than 1%.
-19-
(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
Shareholders prior to the termination of this offering. Because the
Selling Shareholders 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 Shareholder will own upon completion of this
offering.
(2) Includes the Shares of Common Stock issuable upon exercise of the
Placement Agent's Warrants.
(3) Shares of Common Stock issuable upon conversion of the Convertible
Debenture and the shares of Common Stock issuable upon exercise of
the
Debenture Warrants. Additional shares were registered in the
Registration
Statement of which this Prospectus forms a part with respect to
additional shares of Common Stock that may be issued upon conversion
of
the Convertible Debenture pursuant to the terms thereof. |
