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As
filed with the Securities and Exchange Commission on May 23,
2008
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Registration
No. 333-_______
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_________________
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________
DIGITALFX
INTERNATIONAL, INC.
(Exact
Name of Registrant as Specified in its Charter)
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Florida
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65-0358792
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(State
or Other Jurisdiction of
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(I.R.S
Employer
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Incorporation
or Organization)
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Identification
Number)
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3035
East Patrick Lane, Suite 9
Las
Vegas, Nevada 89120
(702)
938-9300
(Address,
Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s
Principal Executive Offices)
Mickey
Elfenbein, Chief Operating Officer
DigitalFX
International, Inc.
3035
East Patrick Lane, Suite 9
Las
Vegas, Nevada 89120
(702)
938-9300
Copy
to:
Gregory
Akselrud, Esq.
Stubbs
Alderton & Markiles, LLP
15260
Ventura Boulevard, 20
th
Floor
Sherman
Oaks, California 91403
(818)
444-4500
(Name,
Address, Including Zip Code, and Telephone Number, Including Area Code, of
Agent
for Service)
From
time to time after the effective date of this Registration
Statement.
(Approximate
Date of Commencement of Proposed Sale to the Public)
If
the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box:
o
If
any of
the securities being registered on this Form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box:
x
If
this
Form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
o
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering.
o
If
this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box.
o
If
this
Form is a post-effective amendment to a registration statement filed pursuant
to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box.
o
CALCULATION
OF REGISTRATION FEE
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Title
of each class of securities to be registered
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Proposed
maximum aggregate offering price (1)
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Amount
of registration fee (2)
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Common
Stock, par value $0.001 per share
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(3)
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Preferred
Stock, par value $0.001 per share
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(3)
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Debt
Securities
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(3)
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Total:
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$10,000,000.00
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$393.00
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(1)
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There
are being registered hereunder such indeterminate number of shares
of
common stock and preferred stock and such indeterminate principal
amount
of debt securities as may be sold by the registrant from time to
time,
which together shall have an aggregate initial offering price not
to
exceed $10,000,000. If any debt securities are issued at an original
issue
discount, then the offering price of such debt securities shall be
in such
greater principal amount at maturity as shall result in an aggregate
offering price not to exceed $10,000,000, less the aggregate dollar
amount
of all securities previously issued hereunder. Any securities registered
hereunder may be sold separately or as units with the other securities
registered hereunder. The proposed maximum offering price per class
of
security will be determined, from time to time, by the registrant
in
connection with the issuance by the registrant of the securities
registered hereunder. The securities registered hereunder also include
such indeterminate number of shares of common stock and preferred
stock
and amount of debt securities as may be issued upon conversion of
or
exchange for preferred stock or debt securities that provide for
conversion or exchange, upon exercise of warrants or pursuant to
the
anti-dilution provisions of any of such securities. In addition,
pursuant
to Rule 416 under the Securities Act, the shares being registered
hereunder include such indeterminate number of shares of common stock
and
preferred stock as may be issuable with respect to the shares being
registered hereunder as a result of stock splits, stock dividends
or
similar transactions
.
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(2)
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Calculated
pursuant to Rule 457(o) under the Securities Act of 1933, as
amended
.
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(3)
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The
proposed maximum aggregate offering price per class of security will
be
determined from time to time by the registrant in connection with
the
issuance by the registrant of the securities registered hereunder
and is
not specified as to each class of security pursuant to General Instruction
II.D. of Form S-3 under the Securities
Act.
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The
Registrant hereby amends this Registration Statement on such date or dates
as
may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933, as amended or until this Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
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
Securities
and Exchange Commission is effective. This prospectus is not an offer
to sell
these securities and is not soliciting an offer to buy these securities
in any
state where the offer or sale is not permitted.
Subject
to Completion, Dated May 23, 2008
DIGITALFX
INTERNATIONAL
,
INC.
$10,000,000
Common
Stock
Preferred
Stock
Debt
Securities
From
time
to time, we may offer up to $10,000,000 of any combination of the securities
described in this prospectus, common stock, preferred stock or debt securities.
We may also offer common stock or preferred stock upon conversion of debt
securities, common stock upon conversion of preferred stock, or common stock,
preferred stock or debt securities upon the exercise of warrants.
We
will
provide the specific terms of these offerings and securities in one or more
supplements to this prospectus. We may also authorize one or more free writing
prospectuses to be provided to you in connection with these offerings. The
prospectus supplement and any related free writing prospectus may also add,
update or change information contained in this prospectus. You should carefully
read this prospectus, the applicable prospectus supplement and any related
free
writing prospectus, as well as any documents incorporated by reference, before
buying any of the securities being offered.
Our
common stock is traded on the American Stock Exchange (“AMEX”) under the symbol
“DXN.” On May 22, 2008, the last reported sale price of our common stock on AMEX
was $0.50. The applicable prospectus supplement will contain information, where
applicable, as to any other listing, if any, on AMEX or any securities market
or
other exchange of the securities covered by the applicable prospectus
supplement.
Investing
in our securities involves a high degree of risk. You should review carefully
the risks and uncertainties described under the heading “Risk Factors” contained
in the applicable prospectus supplement and any related free writing prospectus,
and under similar headings in the other documents that are incorporated by
reference into this prospectus.
This
prospectus may not be used to offer or sell any securities unless accompanied
by
a prospectus supplement.
The
securities may be sold directly by us to investors, through agents designated
from time to time or to or through underwriters or dealers, on a continuous
or
delayed basis. For additional information on the methods of sale, you should
refer to the section entitled “Plan of Distribution” in this prospectus. If any
agents or underwriters are involved in the sale of any securities with respect
to which this prospectus is being delivered, the names of such agents or
underwriters and any applicable fees, commissions, discounts and over-allotment
options will be set forth in a prospectus supplement. The price to the public
of
such securities and the net proceeds that we expect to receive from such sale
will also be set forth in a prospectus supplement.
The
aggregate market value of our outstanding common stock held by non-affiliates
is
$8,723,862, based on 24,927,710 shares of outstanding common stock, of which
8,723,862 are held by non-affiliates, and a per share price of $1.00 based
on
the closing sale price of our common stock on March 24, 2008. As of the date
hereof we have not offered any securities pursuant to General Instruction I.B.6
of Form S-3 during the prior 12 calendar month period that ends on an includes
the date hereof.
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 ______________
TABLE
OF CONTENTS
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Page
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About
This Prospectus
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1
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DigitalFX
International, Inc.
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2
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Risk
Factors
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3
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Special
Note Regarding Forward-looking Statements
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3
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The
Securities We May Offer
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4
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Use
of Proceeds
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6
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Description
of Capital Stock
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6
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Description
of Debt Securities
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10
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Legal
Ownership of Securities
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16
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Plan
of Distribution
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17
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Disclosure
of Commission Position on Indemnification for Securities Act
Liabilities
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18
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Legal
Matters
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19
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Experts
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19
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Where
You Can Find More Information
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20
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You
should rely only on the information that we have provided or incorporated by
reference in this prospectus, any applicable prospectus supplement and any
related free writing prospectus that we may authorize to be provided to you.
We
have not authorized anyone to provide you with different information. No dealer,
salesperson or other person is authorized to give any information or to
represent anything not contained in this prospectus, any applicable prospectus
supplement or any related free writing prospectus that we may authorize to
be
provided to you. You must not rely on any unauthorized information or
representation. This prospectus is an offer to sell only the securities offered
hereby, but only under circumstances and in jurisdictions where it is lawful
to
do so. You should assume that the information in this prospectus, any applicable
prospectus supplement or any related free writing prospectus is accurate only
as
of the date on the front of the document and that any information we have
incorporated by reference is accurate only as of the date of the document
incorporated by reference, regardless of the time of delivery of this
prospectus, any applicable prospectus supplement or any related free writing
prospectus, or any sale of a security.
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 that we filed
with the Securities and Exchange Commission utilizing a “shelf” registration
process. Under this shelf registration process, we may offer shares of our
common stock and preferred stock and various series of debt securities in one
or
more offerings, up to a total dollar amount of $10,000,000. This prospectus
provides you with a general description of the securities we may offer. Each
time we offer a type or series of securities under this prospectus, we will
provide a prospectus supplement that will contain more specific information
about the terms of those securities. We may also authorize one or more free
writing prospectuses to be provided to you that may contain material information
relating to these offerings. We may also add, update or change in the prospectus
supplement (and in any related free writing prospectus that we may authorize
to
be provided to you) any of the information contained in this prospectus or
in
the documents that we have incorporated by reference into this prospectus.
We
urge you to carefully read this prospectus, any applicable prospectus supplement
and any related free writing prospectus, together with the information
incorporated herein by reference as described under the heading “Where You Can
Find More Information,” before buying any of the securities being offered.
THIS
PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES UNLESS IT IS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
This
prospectus contains summaries of certain provisions contained in some of the
documents described herein, but
reference
is made
to the actual documents for complete information. All of the summaries are
qualified in their entirety by the actual documents. Copies of some of the
documents referred to herein have been filed, will be filed or will be
incorporated by reference as exhibits to the registration statement of which
this prospectus is a part, and you may obtain copies of those documents as
described below under the heading “Where You Can Find More
Information.”
The
address of our principal executive office is 3035 East Patrick Lane, Suite
9,
Las Vegas, Nevada 89120, and our telephone number is (702)
938-9300.
Unless
the context otherwise requires, the terms “we,” “our,” “us,” “our company,” and
“DigitalFX” refer to DigitalFX International, Inc. and its
subsidiaries.
DIGITALFX
INTERNATIONAL, INC.
DigitalFX
International, Inc. is a digital communications and social networking company
that, through a multi-tiered affiliate program, offers a suite of proprietary
digital communication tools, including streaming video email, instant messaging,
live webcasting, podcasting, blogging, video VOIP and digital vault storage.
These tools help our customers create, manage and store their digital assets
with the objective of making their digital lives richer and simpler. All digital
assets stored on our servers can be shared among users and friends anywhere
in
the world. We differentiate ourselves by providing instant transcoding of video
content and the ability to publish video content into numerous formats
automatically.
Our
social networking website, www
.
helloworld.com,
operated by our wholly-owned subsidiary, DigitalFX Networks, LLC, a Nevada
limited liability company (“DigitalFX Networks”), targets users from ages 18 to
65. The site features a full suite of digital communication tools. Customers
pay
a monthly subscription fee to use the tools and to participate in the social
network.
DigitalFX
Networks also offers a video-enabled web platform to small and medium-sized
businesses (“FirstStream”) through www.firststream.com. This service allows
streaming video to be sent in any business email communication and also provides
the small business with live broadcasting, podcasting and blogging ability.
FirstStream allows the user to manage all incoming text or video emails and
reply with streaming video emails from existing company domains. The various
product offerings provide required media vault storage that allows small and
medium-sized businesses to safely store all their digital content. The live
broadcasting tools allow companies to communicate to employees, vendors or
customers instantly with uniformity of message.
Our
website, www.vmdirect.com, operated by our wholly-owned subsidiary VMdirect,
L.L.C., a Nevada limited liability company (“VMdirect”), offers affiliates
(“Affiliates”) the tools necessary to effectively market and distribute our
digital communication tools. VMdirect provides sales and marketing services
to
our other subsidiaries using a unique multi-tiered affiliate program made up
of
a developed network of over 11,000 independent Affiliates who market
subscription-based software products.
Our
multi-tiered affiliate program drives the growth of our business. Rather than
using traditional advertising and marketing methods, we chose to create a
multi-tiered affiliate program to develop new customers. Affiliates earn
commissions on a monthly residual basis by acquiring new Affiliates and retail
customers for us. Affiliates also earn commissions from the sales activities
of
other Affiliates who they personally enroll. These rewards are extended for
up
to eight generations of Affiliates, meaning that an Affiliate earns a commission
on the sales of the Affiliates they have personally enrolled as well as on
the
sales of second-, third-, and fourth-generation Affiliates, potentially eight
levels deep. Our affiliate compensation plan is structured on a 3x8 matrix,
meaning Affiliates can each enroll three Affiliates underneath themselves,
before they begin to build their next organizational level. The layers of three
continue down a total of eight levels.
Our
wholly-owned subsidiary, DigitalFX Solutions, LLC, a Nevada limited liability
company (“DigitalFX Solutions”), operates our website
www.digitalfxsolutions.com, which offers our video-enabled web platform to
enterprise-sized businesses. Development was completed on this website during
2007, and in 2008, we expect to actively pursue the marketing and sale of
enterprise related products. In addition, in the fourth quarter of 2007,
DigitalFX Solutions started its electronics division, DigitalFX Electronics.
The
purpose of the electronics division is to expand our current product offerings
to other electronic devices, supplies, software and components. To that end,
in
conjunction with RazorStream, LLC (“RazorStream”), a company controlled by VM
Investors, LLC, our majority shareholder, which is in turn managed by Craig
Ellins, our Chairman, Chief Executive Officer and President, and Richard Kall,
the Chairman of VMdirect, we are in the process of developing a unique internet
appliance (“Set Top Box”) which will allow users to access their DigitalFX
Studio product features, stream high resolution on-demand audio and video
content and participate in the social network, all from their
television.
We
were
incorporated in the State of Florida on January 23, 1991 under the name Speak
Up
America Association, Inc. We changed our name on December 23, 1995 to Golf
Ball
World, Inc. and again on May 4, 1999 to Qorus.com, Inc. Prior to November 2001,
we provided intelligent message communications services to enterprises in the
travel and hospitality sectors. In November 2001, we sold substantially all
of
our assets to Avery Communications, Inc. after which we continued without
material business assets, operations or revenues. On June 22, 2004, we
consummated the transactions contemplated by a Securities Purchase Agreement
dated June 10, 2004, by and among our company, Keating Reverse Merger Fund,
LLC
(“KRM Fund”), Thurston Interests, LLC and certain other shareholders of our
company. The transactions resulted in a change of control whereby KRM Fund
became our majority shareholder. From November 2001 through June 15, 2006,
we
were a public “shell” company with nominal assets.
On
May
23, 2006, we entered into an Exchange Agreement (the “Exchange Agreement”) with
VMdirect, the members of VMdirect holding a majority of its membership interests
(together with all of the members of VMdirect, the “VMdirect Members”), and KRM
Fund. The closing of the transactions contemplated by the Exchange Agreement
occurred on June 15, 2006. At the closing, we acquired all of the outstanding
membership interests of VMdirect (the “Interests”) from the VMdirect Members,
and the VMdirect Members contributed all of their Interests to us. In exchange,
we issued to the VMdirect Members 1,014,589 shares of our Series A Convertible
Preferred Stock, par value $0.01 per share (the “Preferred Shares”), which, as a
result of the approval by a substantial majority of our outstanding shareholders
entitled to vote and the approval by our board of directors on June 22, 2006,
of
amendments to our articles of incorporation that (i) changed our name to
DigitalFX International, Inc., (ii) increased our authorized number of shares
of
common stock to 100,000,000, and (iii) adopted a 1-for-50 reverse stock split,
on August 1, 2006 converted into approximately 21,150,959 shares of our common
stock.
At
the
closing, VMdirect became our wholly-owned subsidiary. The exchange transaction
was accounted for as a reverse merger (recapitalization) with VMdirect deemed
to
be the accounting acquirer, while we were deemed to be the legal acquirer.
As
such, our financial statements reflect the historical activity of VMdirect
since
its inception.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. You should carefully review
the risks and uncertainties described under the heading “Risk Factors” contained
in the applicable prospectus supplement and any related free writing prospectus,
and under similar headings in the other documents that are incorporated by
reference into this prospectus. Additional risks not presently known to us
or
that we currently believe are immaterial may also significantly impair our
business operations.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus, including the section entitled “Risk Factors,” contains
“forward-looking statements” that include information relating to future events,
future financial performance, strategies, expectations, competitive environment,
regulation and availability of resources. These forward-looking statements
include, without limitation: statements regarding proposed new services;
statements concerning litigation or other matters; statements concerning
projections, predictions, expectations, estimates or forecasts for our business,
financial and operating results and future economic performance; statements
of
management’s goals and objectives; and other similar expressions concerning
matters that are not historical facts. Words such as “may,” “will,” “should,”
“could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,”
“future,” “intends,” “plans,” “believes” and “estimates,” and similar
expressions, as well as statements in future tense, identify forward-looking
statements.
Forward-looking
statements should not be read as a guarantee of future performance or results,
and will not necessarily be accurate indications of the times at, or by which,
that performance or those results will be achieved. Forward-looking statements
are based on information available at the time they are made and/or management’s
good faith belief as of that time with respect to future events, and are subject
to risks and uncertainties that could cause actual performance or results to
differ materially from those expressed in or suggested by the forward-looking
statements. Important factors that could cause these differences include, but
are not limited to:
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our
failure to implement our business plan within the time period we
originally planned to accomplish;
and
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other
factors discussed under the headings “Risk
Factors.”
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Forward-looking
statements speak only as of the date they are made. You should not put undue
reliance on any forward-looking statements. We assume no obligation to update
forward-looking statements to reflect actual results, changes in assumptions
or
changes in other factors affecting forward-looking information, except to the
extent required by applicable securities laws. If we do update one or more
forward-looking statements, no inference should be drawn that we will make
additional updates with respect to those or other forward-looking
statements.
THE
SECURITIES WE MAY OFFER
We
may
offer shares of our common stock and preferred stock, and various series of
debt
securities, with a total value of up
to
$10,000,000 from time to time under this prospectus at prices and on terms
to be
determined by market conditions at the time of any offering. This prospectus
provides you with a general description of the securities we may offer. Each
time we offer a type or series of securities under this prospectus, we will
provide a prospectus supplement that will describe the specific amounts, prices
and other important terms of the securities, including, to the extent
applicable:
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designation
or classification;
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aggregate
principal amount or aggregate offering
price;
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maturity,
if applicable;
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original
issue discount, if any;
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rates
and times of payment of interest or dividends, if
any;
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redemption,
conversion, exercise, exchange or sinking fund terms, if
any;
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restrictive
covenants, if any;
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voting
or other rights, if any;
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conversion
prices, if any; and
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important
United States federal income tax
considerations.
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The
prospectus supplement and any related free writing prospectus that we may
authorize to be provided to you may also add, update or change information
contained in this prospectus or in documents we have incorporated by reference.
However, no prospectus supplement or free writing prospectus will offer a
security that is not registered and described in this prospectus at the time
of
the effectiveness of the registration statement of which this prospectus is
a
part.
THIS
PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES UNLESS IT IS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
We
may
sell the
securities
directly
to investors or to or through agents, underwriters or dealers. We, and our
agents or underwriters, reserve the right to accept or reject all or part of
any
proposed purchase of securities. If we do offer securities to or through agents
or underwriters, we will include in the applicable prospectus
supplement:
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the
names of those agents or
underwriters;
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applicable
fees, discounts and commissions to be paid to
them;
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details
regarding over-allotment options, if
any; and
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the
net proceeds to us.
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Common
Stock
.
We may
issue shares of our common stock from time to time. The holders of common stock
are entitled to one vote for each share held of record on all matters submitted
to a vote of shareholders and do not have cumulative voting rights. Subject
to
preferences that may be applicable to any outstanding shares
of
preferred stock, the holders of common stock are entitled to receive ratably
only those dividends as may be declared by our board of directors out of legally
available funds. Upon our liquidation, dissolution or winding up, holders of
our
common stock are entitled to share ratably in all assets remaining after payment
of liabilities and the liquidation preferences of any outstanding shares of
preferred stock.
Preferred
Stock
.
We may
issue shares of our preferred stock from time to time, in one or more series.
Our board of directors will determine the designations, powers, preferences
and
rights of the preferred stock, as well as the qualifications, limitations or
restrictions thereon, including dividend rights, conversion rights, preemptive
rights, voting rights, terms of redemption or repurchase, liquidation
preferences, sinking fund terms and the number of shares constituting any series
or the designation of any series. Convertible
preferred
stock
will be convertible into our common stock or exchangeable for our other
securities. Conversion may be mandatory or at your option and would be at
prescribed conversion rates. We will fix the designations, powers, preferences
and rights of the preferred stock of each series, as well as the qualifications,
limitations or restrictions thereon, in the articles of amendment relating
to
that series.
If
we
sell any series of preferred stock under this prospectus, we will fix the
designations, powers, preferences and rights of such series of preferred stock,
as well as the qualifications, limitations or restrictions thereon, in the
articles of amendment relating to that series. We will file as an exhibit to
the
registration statement of which
this
prospectus is a part, or will incorporate by reference from reports that we
file
with the SEC, the form of any articles of amendment that describes the terms
of
the series of preferred stock we are offering before the issuance of the related
series of preferred stock. We urge you to read the applicable prospectus
supplement (and any free writing prospectus that we may authorize to be provided
to you) related to the series of preferred stock being offered, as well as
the
complete articles of amendment that contains the terms of the applicable series
of preferred stock.
Debt
Securities.
We
may issue debt securities from time to time, in one or more series, as either
senior debt or as senior convertible
debt
.
The
senior debt securities will rank equally with any other unsecured and
unsubordinated debt. Convertible debt securities will be convertible into or
exchangeable for our common stock or our other securities. Conversion may be
mandatory or at your option and would be at prescribed conversion
rates.
In
this
prospectus, we have summarized certain general features of the debt securities.
We urge you, however, to read the applicable prospectus supplement (and any
free
writing prospectus that we may authorize to be provided to you) related to
the
series of debt securities being offered. We will file as exhibits to the
registration
statement
of which
this prospectus is a part, or will incorporate by reference from reports that
we
file with the SEC, the forms of debt securities containing the terms of the
debt
securities being offered.
Except
as
described in any prospectus supplement or in any related free writing prospectus
that we may authorize to be provided to you, we currently intend to use the
net
proceeds from the sale of the securities offered hereby for working capital,
capital expenditures and other general corporate purposes, and for product
development. We also may use a portion of the proceeds to finance potential
acquisitions and investments in companies or products that are complementary
to
our business if and when suitable opportunities arise; however, we currently
have no commitments or agreements with respect to any such transactions. Pending
these uses, we expect to invest the net proceeds in short-term, investment-grade
securities
.
DESCRIPTION
OF CAPITAL STOCK
As
of
May
22,
2008
,
our
authorized capital stock consisted of:
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·
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100,000,000
shares of common stock, par value $0.001 per share;
and
|
|
·
|
5,000,000
shares of preferred stock, par value $0.01 per share, 1,200,000 of
which
are designated as Series A Convertible Preferred
Stock.
|
As
of
May
22,
2008
,
there
were outstanding:
|
·
|
24,927,710
shares of common stock held by approximately 149 shareholders of
record;
|
|
·
|
options
to purchase 1,134,353 shares of common
stock;
|
|
·
|
warrants
to purchase 1,274,708 shares of common stock;
and
|
|
·
|
no
shares of Series A Convertible Preferred
Stock.
|
Common
Stock
Dividend
Rights
Subject
to preferences that may apply to shares of preferred stock outstanding at the
time, the holders of outstanding shares of our common stock are entitled to
receive dividends out of funds legally available at the times and in the amounts
that our board of directors may determine.
Voting
Rights
Each
holder of common stock is entitled to one vote for each share of common stock
held on all matters submitted to a vote of shareholders. Cumulative voting
for
the election of directors is not provided for in our articles of incorporation,
which means that the holders of a majority of the voting shares voted can elect
all of the directors then standing for election.
No
Preemptive or Similar Rights
Holders
of our common stock do not have preemptive rights, and our common stock is
not
convertible or redeemable.
Right
to Receive Liquidation Distributions
Upon
our
dissolution, liquidation or winding-up, the assets legally available for
distribution to our shareholders are distributable ratably among the holders
of
our common stock, subject to the preferential rights and payment of liquidation
preferences, if any, on any outstanding shares of convertible preferred
stock.
Series
A Convertible Preferred Stock
Dividend
Rights
Subject
to preferences that may apply to shares of preferred stock outstanding at the
time and ranking senior to the Series A Convertible Preferred Stock, the holders
of outstanding shares of Series A Convertible Preferred Stock are entitled
to
receive dividends out of funds legally available at the times and in the amounts
that our board of directors may determine.
Voting
Rights
The
Series A Convertible Preferred Stock is entitled to vote on all matters
submitted to a vote of shareholders. Each share of Series A Convertible
Preferred Stock will carry a number of votes equal to the number of shares
of
common stock issuable as if converted at the date of such vote.
No
Preemptive or Similar Rights
Holders
of Series A Convertible Preferred Stock do not have preemptive rights, and
the
Series A Convertible Preferred Stock is not redeemable.
Right
to Receive Liquidation Distributions
Upon
our
dissolution, liquidation or winding-up, subject to the preferential rights
and
payment of liquidation preferences, if any, on any outstanding shares of
preferred stock ranking senior to the Series A Convertible Preferred Stock,
the
assets legally available for distribution to our shareholders are distributable
ratably among the holders of our Series A Convertible Preferred Stock prior
to
any distribution to the holders of our common stock at amounts specified in
our
articles of incorporation.
Conversion
Rights
Our
articles of incorporation, as amended, provide for the mandatory conversion
of
Series A Convertible Preferred Stock upon our filing of an amendment to our
articles of incorporation increasing our authorized number of shares of common
stock and effecting a 1 for 50 reverse split of our outstanding common stock.
We
amended our articles of incorporation to increase our authorized number of
shares of common stock and to effectuate a 1 for 50 reverse split of our
outstanding common stock on August 1, 2006. As a result, all outstanding shares
of Series A Convertible Preferred Stock automatically converted into shares
of
our common stock. There are no optional conversion provisions for the Series
A
Convertible Preferred Stock.
Authorized
but Undesignated Preferred Stock
We
are
authorized, subject to limitations prescribed by Florida law, to issue preferred
stock in one or more series, to establish from time to time the number of shares
to be included in each series, to fix the designation, powers, preferences
and
rights of the shares of each series and any of its qualifications, limitations
or restrictions. Our board of directors can also increase or decrease the number
of shares of any series, but not below the number of shares of that series
then
outstanding, by the affirmative vote of the holders of a majority of our capital
stock entitled to vote, unless a vote of any other holders is required by the
articles of incorporation establishing the series or the Florida Business
Corporation Act. Our board of directors may authorize the issuance of preferred
stock with voting or conversion rights that could adversely affect the voting
power or other rights of the holders of the common stock. The issuance of
preferred stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes, could, among other things, have
the
effect of delaying, deferring or preventing a change in control of DigitalFX
and
may adversely affect the market price of our common stock and the voting and
other rights of the holders of common stock. We have no current plan to issue
any shares of preferred stock.
Warrants
and Options
At
May
22, 2008, there were outstanding warrants to purchase shares of common stock,
as
follows:
|
·
|
288,456
shares at an exercise price of $0.2617 per share, which will expire
on
December 31, 2010;
|
|
·
|
236,250
shares at an exercise price of $2.93 per share, which will expire
on
November 30, 2012; and
|
|
·
|
750,002
shares at an exercise price of $0.959 per share, which will expire
on
November 30, 2012.
|
At
May
22, 2008, there were outstanding options to purchase shares of common stock,
as
follows:
|
·
|
149,671
shares at an exercise price of $0.2617 per share, which will expire
on
December 31, 2015;
|
|
·
|
21,782
shares at an exercise price of $0.3331 per share, which will expire
on
January 3, 2016;
|
|
·
|
400
shares at an exercise price of $0.50 per share, without expiration;
|
|
·
|
175,000
shares at an exercise price of $0.55 per share, which will expire
on May
12, 2018, and
|
|
·
|
787,500
shares at an exercise price of $1.21 per share, which will expire
on May
12, 2018.
|
Anti-takeover
Provisions
Certain
provisions of our articles of incorporation and Florida law may have the effect
of delaying, deferring or discouraging another person from acquiring control
of
our company.
Charter
and Bylaw Provisions
Our
articles of incorporation, as amended, allow our board of directors to issue
5,000,000 shares of Preferred Stock, in one or more series and with such rights
and preferences including voting rights, without further shareholder approval.
In the event that our board of directors designates additional series of
preferred stock with rights and preferences, including super-majority voting
rights, and issues such preferred stock, the preferred stock could make our
acquisition by means of a tender offer, a proxy contest or otherwise, more
difficult, and could also make the removal of incumbent officers and directors
more difficult. As a result, these provisions may have an
anti-takeover
effect.
The preferred stock authorized in our articles of incorporation, as amended,
may
inhibit changes of control that are not approved by our board of directors.
These provisions could limit the price that future investors might be willing
to
pay in the future for our common stock. This could have the effect of delaying,
deferring or preventing a
change
in
control
.
The
issuance of preferred stock could also effectively limit or dilute the voting
power of our shareholders. Accordingly, such provisions of our articles of
incorporation, as amended, may discourage or prevent an acquisition or
disposition of our business that could otherwise be in the best interest of
our
shareholders.
Florida
Law
In
addition, Florida has enacted the following legislation that may deter or
frustrate takeovers of
Florida
corporations
:
The
Florida Business Corporation Act expressly permits our board of directors,
when
evaluating any proposed tender or exchange offer, any merger, consolidation
or
sale of substantially all of our assets, or any similar extraordinary
transaction, to consider all relevant factors including, without limitation,
the
social, legal, and economic effects on the employees, customers, suppliers,
and
other constituencies of the Company and its subsidiaries, and on the communities
and geographical areas in which they operate. Our board of directors may also
consider the amount of consideration being offered in relation to the then
current market price for our outstanding shares of common stock and our then
current value in a freely negotiated transaction. Our board of directors
believes such provisions are in our long-term best interests and the long-term
best interests of our shareholders.
We
are
subject to the Florida control share acquisitions statute. This statute is
designed to afford shareholders of public corporations in Florida protection
against acquisitions in which a person, entity or group seeks to gain voting
control. With enumerated exceptions, the statute provides that shares acquired
within certain specific ranges will not possess voting rights in the election
of
directors unless the voting rights are approved by a majority vote of the public
corporation’s disinterested shareholders. Disinterested shares are shares other
than those owned by the acquiring person or by a member of a group with respect
to a control share acquisition, or by any officer of the corporation or any
employee of the corporation who is also a director. The specific acquisition
ranges that trigger the statute are: acquisitions of shares possessing one-fifth
or more but less than one-third of all voting power; acquisitions of shares
possessing one-third or more but less than a majority of all voting power;
or
acquisitions of shares possessing a majority or more of all voting power. Under
certain circumstances, the statute permits the acquiring person to call a
special shareholders meeting for the purpose of considering the grant of voting
rights to the holder of the control shares. The statute also enables a
corporation to provide for the redemption of control shares with no voting
rights under certain circumstances.
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is Continental Stock Transfer
& Trust Company.
Listing
Our
common stock is quoted on AMEX under the trading symbol “DXN.”
DESCRIPTION
OF DEBT SECURITIES
We
may
issue debt securities, in one or more series, as either senior or as senior
or
convertible debt. While the terms we have summarized below will apply generally
to any debt securities that we may offer under this prospectus, we will describe
the particular terms of any debt securities that we may offer in more detail
in
the applicable prospectus supplement. The terms of any debt securities offered
under a prospectus supplement may
differ
from the
terms described below. We will file as exhibits to the registration statement
of
which this prospectus is a part, or will incorporate by reference from reports
that we file with the SEC, forms of debt securities and/or any indentures
containing the terms of the debt securities being offered.
The
documentation governing the debt securities may provide for an agent to act
for
and on behalf of the holders of the debt securities. We use the term
“noteholder’s agent” to refer to the agent under the senior debt securities. We
will
file
as
exhibits to the registration statement of which this prospectus is a part,
or
will incorporate by reference from reports that we file with the SEC,
supplemental forms of debt securities and/or indentures containing the terms
of
the debt securities being offered.
The
following summaries of material provisions of the senior debt securities are
subject to, and qualified in their entirety by
reference
to, all
of the provisions of the documentation applicable to a particular series of
debt
securities. We urge you to read the applicable prospectus supplements and any
related free writing prospectuses related to the debt securities that we may
offer under this prospectus.
General
We
will
describe in the applicable prospectus supplement the terms of the series of
debt
securities being offered, including:
|
·
|
the
principal amount being offered, and if a series, the total amount
authorized and the total amount
outstanding;
|
|
·
|
any
limit on the amount that may be
issued;
|
|
·
|
whether
or not we will issue the series of debt securities in global form,
the
terms and who the depositary will
be;
|
|
·
|
whether
and under what circumstances, if any, we will pay additional amounts
on
any debt securities held by a person who is not a United States person
for
tax purposes, and whether we can redeem the debt securities if we
have to
pay such additional amounts;
|
|
·
|
the
annual interest rate, which may be fixed or variable, or the method
for
determining the rate and the date interest will begin to accrue,
the dates
interest will be payable and the regular record dates for interest
payment
dates or the method for determining such
dates;
|
|
·
|
whether
or not the debt securities will be secured or unsecured, and the
terms of
any secured debt;
|
|
·
|
the
terms of the subordination of any series of subordinated
debt;
|
|
·
|
the
place where payments will be
payable;
|
|
·
|
restrictions
on transfer, sale or other assignment, if
any;
|
|
·
|
our
right, if any, to defer payment of interest and the maximum length
of any
such deferral period;
|
|
·
|
the
date, if any, after which, and the price at which, we may, at our
option,
redeem the series of debt securities pursuant to any optional or
provisional redemption provisions and the terms of those redemption
provisions;
|
|
·
|
the
date, if any, on which, and the price at which we are obligated,
pursuant
to any mandatory sinking fund or analogous fund provisions or otherwise,
to redeem, or at the holder’s option to purchase, the series of debt
securities and the currency or currency unit in which the debt securities
are payable;
|
|
·
|
whether
the debt securities will restrict our ability and/or the ability
of our
subsidiaries to:
|
|
·
|
incur
additional indebtedness;
|
|
·
|
issue
additional securities;
|
|
·
|
pay
dividends and make distributions in respect of our capital stock
and the
capital stock of our subsidiaries;
|
|
·
|
place
restrictions on our subsidiaries’ ability to pay dividends, make
distributions or transfer assets;
|
|
·
|
make
investments or other restricted
payments;
|
|
·
|
sell
or otherwise dispose of assets;
|
|
·
|
enter
into sale-leaseback transactions;
|
|
·
|
engage
in transactions with shareholders and
affiliates;
|
|
·
|
issue
or sell stock of our subsidiaries;
or
|
|
·
|
effect
a consolidation or merger;
|
|
·
|
whether
the debt securities will require us to maintain any interest coverage,
fixed charge, cash flow-based, asset-based or other financial
ratios;
|
|
·
|
a
discussion of any material United States federal income tax considerations
applicable to the debt securities;
|
|
·
|
information
describing any book-entry features;
|
|
·
|
provisions
for a sinking fund purchase or other analogous fund, if
any;
|
|
·
|
the
applicability of the provisions in the debt securities on
discharge;
|
|
·
|
whether
the debt securities are to be offered at a price such that they will
be
deemed to be offered at an “original issue discount” as defined in
paragraph (a) of Section 1273 of the Internal Revenue
Code;
|
|
·
|
the
denominations in which we will issue the series of debt securities,
if
other than denominations of $1,000 and any integral multiple
thereof;
|
|
·
|
the
currency of payment of debt securities if other than U.S. dollars
and the
manner of determining the equivalent amount in U.S. dollars;
and
|
|
·
|
any
other specific terms, preferences, rights or limitations of, or
restrictions on, the debt securities, including any additional events
of
default or covenants provided with respect to the debt securities,
and any
terms that may be required by us or advisable under applicable laws
or
regulations.
|
Conversion
or Exchange Rights
We
will
set forth in the prospectus supplement the terms on which a series of debt
securities may be convertible into or exchangeable for our common stock or
our
other securities. We will include provisions as to
whether
conversion or exchange is mandatory, at the option of the holder or at our
option. We may include provisions pursuant to which the number of shares of
our
common stock or our other securities that the holders of the series of debt
securities receive would be subject to adjustment.
Consolidation,
Merger or Sale
The
debt
securities will not contain any covenant that restricts our ability to merge
or
consolidate, or sell, convey, transfer or otherwise dispose of all or
substantially all of our assets. However, any successor to or acquirer of such
assets must assume all of our obligations under the debt securities, as
appropriate. If the debt securities are convertible into or exchangeable for
our
other securities or securities of other entities, the person with whom we
consolidate or merge or to whom we sell all of our property must make provisions
for the
conversion
of the
debt securities into securities that the holders of the debt securities would
have received if they had converted the debt securities before the
consolidation, merger or sale.
Events
of Default Under the Debt Securities
Unless
we
provide otherwise in the prospectus supplement applicable to a particular series
of debt securities, the following are events of default with respect to any
series of debt securities that we may issue:
|
·
|
if
we fail to pay interest when due and payable and our failure continues
for
90 days and the time for payment has not been extended or
deferred;
|
|
·
|
if
we fail to pay the principal, premium or sinking fund payment, if
any,
when due and payable and the time for payment has not been extended
or
delayed;
|
|
·
|
if
we fail to observe or perform any other covenant contained in the
debt
securities, other than a covenant specifically relating to another
series
of debt securities, and our failure continues for 90 days after we
receive
notice from the debt securities agent or holders of at least 25%
in
aggregate principal amount of the outstanding debt securities of
the
applicable series; and
|
|
·
|
if
specified events of bankruptcy, insolvency or reorganization
occur.
|
If
an
event of default with respect to debt securities of any series occurs and is
continuing, other than an event of default specified in the last bullet point
above, the debt securities agent or the holders of at least 25% in aggregate
principal amount of the outstanding debt securities of that series, by notice
to
us in writing, and to the
debt
securities agent if notice is given by such holders, may declare the unpaid
principal of, premium, if any and accrued interest, if any, due and payable
immediately. If an event of default specified in the last bullet point above
occurs with respect to us, the principal amount of and accrued interest, if
any,
of each issue of debt securities then outstanding shall be due and payable
without any notice or other action on the part of the debt securities agent
or
any holder.
The
holders of a majority in principal amount of the outstanding debt securities
of
an affected series may waive any default or event of default with respect to
the
series and its consequences, except defaults or events of default regarding
payment of principal, premium, if any, or interest, unless we have cured the
default or event of default in accordance with the form of senior debt security
and/or indenture. Any waiver shall cure the default or event of
default.
The
holders of a
majority
in
principal amount of the outstanding debt securities of any series will have
the
right to direct the time, method and place of conducting any proceeding for
any
remedy available to such holders with respect to the debt securities of that
series.
Subject
to the terms of the debt securities, if an event of default thereunder shall
occur and be continuing, the debt securities agent will be under no obligation
to exercise any of its rights or powers under such debt securities at the
request
or
direction of any of the holders of the applicable series of debt securities,
unless such holders have offered the debt securities agent reasonable indemnity.
The holders of a majority in principal amount of the outstanding debt securities
of any series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the debt securities agent,
or exercising any trust or power conferred on the debt securities agent, with
respect to the debt securities of that series, provided that:
|
·
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the
direction so given by the holder is not in conflict with any law
or the
applicable debt securities; and
|
|
·
|
the
debt securities agent need not take any action that might involve
it in
personal liability or might be unduly prejudicial to the holders
not
involved in the proceeding.
|
A
holder
of the debt securities of any series will have the right to institute a
proceeding under the debt securities or to appoint a receiver or trustee, or
to
seek other remedies only if:
|
·
|
the
holder has given written notice to the debt securities agent of a
continuing event of default with respect to that
series;
|
|
·
|
the
holders of at least 25% in aggregate principal amount of the outstanding
debt securities of that series have made written request, and such
holders
have offered reasonable indemnity to the debt securities agent to
institute the proceeding as trustee;
and
|
|
·
|
the
debt securities agent does not institute the proceeding, and does
not
receive from the holders of a majority in aggregate principal amount
of
the outstanding debt securities of that series other conflicting
directions within 90 days after the notice, request and
offer.
|
These
limitations do not apply to a suit instituted by a holder of debt securities
if
we default in the payment of the principal, premium, if any, or interest on,
the
debt securities.
We
will
periodically file statements with the debt securities agent regarding our
compliance with specified covenants in the documentation regarding such debt
securities.
Modification;
Waiver
We
and
the debt
securities
agent
may change the form of senior debt security and/or indenture without the consent
of any holders with respect to specific matters:
|
·
|
to
fix any ambiguity, defect or inconsistency in the documentation governing
the debt securities;
|
|
·
|
to
comply with the provisions described above under “Description of Debt
Securities — Consolidation, Merger or
Sale;”
|
|
·
|
to
add to, delete from or revise the conditions, limitations, and
restrictions on the authorized amount, terms, or purposes of issue,
authentication and delivery of debt securities, as set forth in the
documentation governing such debt
securities;
|
|
·
|
to
provide for the issuance of and establish the form and terms and
conditions of the debt securities of any series as provided under
“Description of Debt Securities — General” to establish the form of any
certifications required to be furnished pursuant to the terms of
any
series of debt securities, or to add to the rights of the holders
of any
series of debt securities;
|
|
·
|
to
evidence and provide for the acceptance of appointment thereunder
by a
successor debt securities agent;
|
|
·
|
to
provide for uncertificated debt securities in addition to or in place
of
certificated debt securities and to make all appropriate changes
for such
purpose;
|
|
·
|
to
add to our covenants such new covenants, restrictions, conditions
or
provisions for the protection of the holders, and to make the occurrence,
or the occurrence and the continuance, of a default in any such additional
covenants, restrictions, conditions or provisions an event of default;
or
|
|
·
|
to
change anything that does not materially adversely affect the interests
of
any holder of debt securities of any
series.
|
In
addition, the rights of holders of a series of debt securities may be changed
by
us and the debt securities agent with the written consent of the holders of
at
least a majority in aggregate principal amount of the outstanding debt
securities of each series that is affected. However, unless we provide otherwise
in the prospectus
supplement
applicable to a particular series of debt securities, we and the debt securities
agent may make the following changes only with the consent of each holder of
any
outstanding debt securities affected:
|
·
|
extending
the fixed maturity of the series of debt
securities;
|
|
·
|
reducing
the principal amount, reducing the rate of or extending the time
of
payment of interest, or reducing any premium payable upon the redemption
of any debt securities; or
|
|
·
|
reducing
the percentage of debt securities, the holders of which are required
to
consent to any amendment, supplement, modification or
waiver.
|
Discharge
The
documentation governing the debt securities provide that we can elect to be
discharged from our obligations with respect to one or more series of debt
securities, except for specified obligations, including obligations
to:
|
·
|
register
the transfer or exchange of debt securities of the
series;
|
|
·
|
replace
stolen, lost or mutilated debt securities of the
series;
|
|
·
|
maintain
paying agencies;
|
|
·
|
hold
monies for payment in trust;
|
|
·
|
recover
excess money held by the debt securities
agent;
|
|
·
|
indemnify
the debt securities agent; and
|
|
·
|
appoint
any successor debt securities
agent.
|
In
order
to exercise our rights to be discharged, we must deposit with the debt
securities agent money or government obligations sufficient to pay all the
principal of, any premium, if any, and interest on, the debt securities of
the
series on the dates payments are due.
Form,
Exchange and Transfer
We
will
issue the debt securities of each series only in fully registered form without
coupons and, unless we provide otherwise in the applicable prospectus
supplement, in denominations of $1,000 and any integral multiple
thereof
.
At
the
option of the holder, subject to the terms of the debt securities set forth
in
the applicable prospectus
supplement
,
the
holder of the debt securities of any series can exchange the debt securities
for
other debt securities of the same series, in any authorized denomination and
of
like tenor and aggregate principal amount.
Subject
to the
terms
of the
debt securities set forth in the applicable prospectus supplement, holders
of
the debt securities may present the debt securities for exchange or for
registration of transfer, duly endorsed or with the form of transfer endorsed
thereon duly executed if so required by us or the security registrar, at the
office of the security registrar or at the office of any transfer agent
designated by us for this purpose. Unless otherwise provided in the debt
securities that the holder presents for transfer or exchange, we will impose
no
service charge for any registration of transfer or exchange, but we may require
payment of any taxes or other governmental charges.
We
will
name in the applicable prospectus supplement the security registrar, and any
transfer agent in addition to the
security
registrar, that we initially designate for any debt securities. We may at any
time designate additional transfer agents or rescind the designation of any
transfer agent or approve a change in the office through which any transfer
agent acts, except that we will be required to maintain a transfer agent in
each
place of payment for the debt securities of each series.
If
we
elect to
redeem
the debt
securities of any series, we will not be required to:
|
·
|
issue,
register the transfer of, or exchange any debt securities of that
series
during a period beginning at the opening of business 15 days before
the
day of mailing of a notice of redemption of any debt securities that
may
be selected for redemption and ending at the close of business on
the day
of the mailing; or
|
|
·
|
register
the transfer of or exchange any debt securities so selected for
redemption, in whole or in part, except the unredeemed portion of
any debt
securities we are redeeming in
part.
|
Information
Concerning the Debt Securities Agent
The
debt
securities
agent,
other than during the occurrence and continuance of an event of default under
the debt securities, undertakes to perform only those duties as are specifically
set forth in the applicable documentation for such debt securities. Upon an
event of default under the debt securities, the debt securities agent must
use
the same degree of care as a prudent person would exercise or use in the conduct
of his or her own affairs. Subject to this provision, the debt securities agent
is under no obligation to exercise any of the powers given it by the debt
securities at the request of any holder of debt securities unless it is offered
reasonable security and indemnity against the costs, expenses and liabilities
that it might incur.
Payment
and Paying Agents
Unless
we
otherwise indicate in the applicable prospectus supplement, we will make payment
of the interest on any debt securities on any interest payment date to the
person in whose name the debt securities, or one or more predecessor securities,
are registered at the close of business on the regular record date for the
interest.
We
will
pay principal of and any premium and interest on the debt securities of a
particular series at the office of the
paying
agents
designated by us, except that unless we otherwise indicate in the applicable
prospectus supplement, we will make interest payments by check that we will
mail
to the holder or by wire transfer to certain holders. We will name in the
applicable prospectus supplement any paying agents that we initially designate
for the debt securities of a particular series.
All
money
we pay to a paying agent or the debt securities agent for the payment of the
principal of or any premium or interest on any debt securities that remains
unclaimed at the end of two years after such principal, premium or interest
has
become due and payable will be repaid to us, and the holder of the debt security
thereafter may look only to us for payment thereof.
Governing
Law
The
debt
securities
will
be
governed by and construed in accordance with the laws of the State of
Florida.
LEGAL
OWNERSHIP OF SECURITIES
We
can
issue securities in registered form. We refer to those persons who have
securities registered in their own names on the books that we or any applicable
trustee, depositary or warrant agent maintain for this purpose as the “holders”
of those securities. These persons are the legal holders of the securities.
We
refer to those persons who, indirectly through others, own beneficial interests
in securities that are not registered in their own names, as “indirect holders”
of those securities. As we discuss below, indirect holders are not legal
holders, and investors in securities issued in book-entry form or in street
name
will be indirect holders.
Legal
Holders
Our
obligations, as well as the obligations of any applicable debt securities agent
and of any third parties employed by us or a debt securities agent, run only
to
the legal holders of the securities. We do not have obligations to investors
who
hold beneficial interests by any indirect means.
For
example, once we make a payment or give a notice to the holder, we have no
further responsibility for the payment or notice even if that holder is
required, under agreements with depositary participants or customers or by
law,
to pass it along to the indirect holders but does not do so. Similarly, we
may
want to obtain the approval of the holders to amend debt securities, to relieve
us of the consequences of a default or of our obligation to comply with a
particular provision of such debt securities or for other purposes. In such
an
event, we would seek approval only from the holders, and not the indirect
holders, of the securities. Whether and how the holders contact the indirect
holders is up to the holders.
Special
Considerations f
or
Indirect Holders
If
you
hold securities through a bank, broker or other financial institution, either
in
book-entry form or in street name, you
should
check
with your own institution to find out:
|
·
|
how
it handles securities payments and
notices;
|
|
·
|
whether
it imposes fees or charges;
|
|
·
|
how
it would handle a request for the holders’ consent, if ever
required;
|
|
·
|
whether
and how you can instruct it to send you securities registered in
your own
name so you can be a holder, if that is permitted in the
future;
|
|
·
|
how
it would exercise rights under the securities if there were a default
or
other event triggering the need for holders to act to protect their
interests; and
|
|
·
|
if
the securities are in book-entry form, how the depositary’s rules and
procedures will affect these
matters.
|
PLAN
OF DISTRIBUTION
We
may
sell the securities from time to time pursuant to underwritten public offerings,
negotiated transactions, block trades or a combination of these methods. We
may
sell the securities to or through underwriters or dealers, through agents,
or
directly to one or more purchasers. We may distribute securities from time
to
time in one or more transactions:
|
·
|
at
a fixed price or prices, which may be
changed;
|
|
·
|
at
market prices prevailing at the time of
sale;
|
|
·
|
at
prices related to such prevailing market prices;
or
|
Only
underwriters
named
in the
prospectus supplement will be underwriters of the securities offered by the
prospectus supplement.
If
underwriters are used in the sale, they will acquire the securities for their
own account and may resell the securities from time to time in one or more
transactions at a fixed public offering price or at varying prices determined
at
the time of sale. The obligations of the underwriters to purchase the securities
will be subject to the conditions set forth in the applicable underwriting
agreement. We may offer the securities to the public through underwriting
syndicates represented by managing underwriters or by underwriters without
a
syndicate. Subject to certain conditions, the underwriters will be obligated
to
purchase all of the securities offered by the prospectus supplement, other
than
securities covered by any over-allotment option. Any public offering price
and
any discounts or concessions allowed or reallowed or paid to dealers may change
from time to time. We may use underwriters with whom we have a material
relationship. We will describe in the prospectus supplement, naming the
underwriter, the nature of any such relationship.
We
may
sell securities directly or through agents we designate from time to time.
We
will name any agent involved
in
the
offering and sale of securities and we will describe any commissions we will
pay
the agent in the prospectus supplement. Unless the prospectus supplement states
otherwise, our agent will act on a best-efforts basis for the period of its
appointment.
We
may
authorize agents or underwriters to solicit offers by certain types of
institutional investors to purchase
securities
from us
at the public offering price set forth in the prospectus supplement pursuant
to
delayed delivery contracts providing for payment and delivery on a specified
date in the future. We will describe the conditions to these contracts and
the
commissions we must pay for solicitation of these contracts in the prospectus
supplement.
We
may
provide agents and underwriters with indemnification against civil liabilities,
including liabilities under the Securities Act, or contribution with respect
to
payments that the agents or underwriters may make with respect to these
liabilities. Agents and underwriters may engage in transactions with, or
perform
services
for, us in the ordinary course of business.
All
securities we may offer, other than common stock, will be new issues of
securities with no established trading market. Any underwriters may make a
market in these securities, but will not be obligated to do so and may
discontinue any market making at any time without notice. We cannot guarantee
the liquidity of the trading markets for any securities.
Any
underwriter may engage in over-allotment, stabilizing transactions,
short-covering transactions and penalty bids in
accordance
with
Regulation M under the Exchange Act. Over-allotment involves sales in
excess of the offering size, which create a short position. Stabilizing
transactions permit bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum price. Syndicate-covering
or
other short-covering transactions involve purchases of the securities, either
through exercise of the over-allotment option or in the open market after the
distribution is completed, to cover short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a dealer when the securities
originally sold by the dealer are purchased in a stabilizing or covering
transaction to cover short positions. Those activities may cause the price
of
the securities to be higher than it would otherwise be. If commenced, the
underwriters may discontinue any of the activities at any time.
Any
underwriters
that are
qualified market makers on AMEX may engage in passive market making transactions
in the common stock on AMEX in accordance with Regulation M under the
Exchange Act, during the business day prior to the pricing of the offering,
before the commencement of offers or sales of the common stock. Passive market
makers must comply with applicable volume and price limitations and must be
identified as passive market makers. In general, a passive market maker must
display its bid at a price not in excess of the highest independent bid for
such
security; if all independent bids are lowered below the passive market maker’s
bid, however, the passive market maker’s bid must then be lowered when certain
purchase limits are exceeded. Passive market making may stabilize the market
price of the securities at a level above that which might otherwise prevail
in
the open market and, if commenced, may be discontinued at any time.
In
compliance
with
guidelines of the Financial Industry Regulatory Authority, or FINRA, the maximum
consideration or discount to be received by any FINRA member or independent
broker dealer may not exceed 8% of the aggregate amount of the securities
offered pursuant to this prospectus and any applicable prospectus
supplement.
DISCLOSURE
OF COMMISSION POSITION ON
INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The
Florida Business Corporation Act and certain provisions of our articles of
incorporation and bylaws under certain circumstances provide for indemnification
of our officers, directors and controlling persons against liabilities which
they may incur in such capacities.
In
general, any officer, director, employee or agent may be indemnified against
expenses, fines, settlements or judgments arising in connection with a legal
proceeding to which such person is a party, if that person’s actions were in
good faith, were believed to be in our best interest, and were not unlawful.
Unless such person is successful upon the merits in such an action,
indemnification may be awarded only after a determination by independent
decision of our board of directors, by legal counsel, or by a vote of the
shareholders, that the applicable standard of conduct was met by the person
to
be indemnified.
The
circumstances under which indemnification is granted in connection with an
action brought on our behalf is generally the same as those set forth above;
however, with respect to such actions, indemnification is granted only with
respect to expenses actually incurred in connection with the defense or
settlement of the action. In such actions, the person to be indemnified must
have acted in good faith and in a manner believed to have been in our best
interest, and have not been adjudged liable for negligence or
misconduct.
Indemnification
may also be granted pursuant to the terms of agreements which may be entered
in
the future or pursuant to a vote of shareholders or directors. The provision
cited above also grants us the power to purchase and maintain insurance which
protects our officers and directors against any liabilities incurred in
connection with their service in such a position, and such a policy may be
obtained by us.
We
do not
have any indemnification agreements with any of our directors or executive
officers.
A
shareholder’s investment may be adversely affected to the extent we pay the
costs of settlement and damage awards against directors and officers as required
by these indemnification provisions. At present, there is no pending litigation
or proceeding involving any of our directors, officers or employees regarding
which indemnification by us is sought, nor are we aware of any threatened
litigation that may result in claims for indemnification.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling us pursuant to the
foregoing provisions, we have been informed that, in the opinion of the SEC,
this indemnification is against public policy as expressed in the Securities
Act
and is therefore unenforceable.
LEGAL
MATTERS
Jackson
L. Morris, Esq., Tampa, Florida, will pass upon the validity of the securities
offered by this prospectus for us.
EXPERTS
The
consolidated financial statements of DigitalFX International, Inc. as of
December 31, 2007 and for the years ended December 31, 2007 and 2006
incorporated by reference into this prospectus have been so incorporated in
reliance on the report of Weinberg & Company, P.A., independent registered
public accountants, given on the authority of said firm as experts in auditing
and accounting.
WHERE
YOU CAN FIND MORE INFORMATION
We
file
annual, quarterly and current reports, proxy statements and other information
with the SEC. This prospectus, which constitutes part of the registration
statement, does not contain all the information set forth in the registration
statement or the exhibits and schedules which are part of the registration
statement, portions of which are omitted as permitted by the rules and
regulations of the SEC. Statements made in this prospectus regarding the
contents of any contract or other document are summaries of the material terms
of the contract or document. With respect to each contract or document filed
as
an exhibit to the registration statement, reference is made to the corresponding
exhibit. For further information pertaining to us and the securities offered
by
this prospectus, reference is made to the registration statement, including
the
exhibits and schedules thereto, copies of which may be inspected without charge
at the Public Reference Room of the SEC at 100 F Street, N.E., Washington,
D.C.
20549. Copies of all or any portion of the registration statement may be
obtained from the SEC at prescribed rates. Information on the Public Reference
Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the
SEC
maintains a web site that contains reports, proxy and information statements
and
other information that is filed through the SEC’s EDGAR System. The web site can
be accessed at
http://www.sec.gov
.
Our web
site can be accessed at
http://www.digitalfx.com
.
We
are
subject to the information and periodic reporting requirements of the Exchange
Act and, in accordance with those requirements, will continue to file periodic
reports, proxy statements and other information with the SEC. These periodic
reports, proxy statements and other information will be available for inspection
and copying at the SEC’s Public Reference Room and the SEC’s website referred to
above.
The
SEC
allows us to “incorporate by reference” the information we file with the SEC,
which means that we can disclose important information to you by referring
to
those documents. We incorporate by reference the documents listed below and
any
additional documents filed by us with the SEC under Section 13(a), 13(c), 14
or
15(d) of the Exchange Act until this offering of securities is terminated.
The
information we incorporate by reference is an important part of this prospectus,
and any information that we file later with the SEC will automatically update
and supersede this information.
The
documents we incorporate by reference are:
|
1.
|
Our
Annual Report on Form 10-KSB for the year ended December 31, 2007
as filed
on March 31, 2008 (File No.
001-33667);
|
|
2.
|
Our
Current Report on Form 8-K as filed on January 9, 2008 (File No.
001-33667);
|
|
3.
|
Our
Current Report on Form 8-K as filed on February 7, 2008 (File No.
001-33667);
|
|
4.
|
Our
Current Report on Form 8-K as filed on March 25, 2008 (File No.
001-33667);
|
|
5.
|
Our
Current Report on Form 8-K as filed on March 31, 2008 (File No.
001-33667);
|
|
6.
|
Our
Current Report on Form 8-K as filed on April 1, 2008 (File No.
001-33667);
|
|
7.
|
Our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2008
as
filed on May 15, 2008 (File No.
001-33667);
|
|
8.
|
The
description of our common stock of contained in the Post-Effective
Amendment No. 1 to the Registration Statement on Form SB-2 filed
with the
Securities and Exchange Commission on May 22, 2007 (File No. 333-136855),
including any amendment or report filed for the purpose of updating
such
description; and
|
|
9.
|
All
other reports filed by us pursuant to Section 13(a), 13(c), 14 or
15(d) of
the Exchange Act subsequent to May 23, 2008, including all such reports
filed after the date of the initial registration statement and prior
to
effectiveness of the registration
statement.
|
Any
information in any of the foregoing documents will automatically be deemed
to be
modified or superseded to the extent that
information
in this
prospectus or in a later filed document that is incorporated or deemed to be
incorporated herein by reference modifies or replaces such
information.
We
also
incorporate by reference any future filings (other than current reports
furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits
filed on such form that are related to such items) made with the SEC pursuant
to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, including all such
reports filed after the date of the initial registration statement and prior
to
effectiveness of the registration statement, until we file a post-effective
amendment that indicates the termination of the offering of the securities
made
by this prospectus. Information in such future filings updates and supplements
the information provided in this prospectus. Any statements in any such future
filings will automatically be deemed to modify and supersede any information
in
any document we previously filed with the SEC that is incorporated or deemed
to
be incorporated herein by reference to the extent that statements in the later
filed document modify or replace such earlier statements.
We
have
filed with the SEC a registration statement on Form S-3 under the
Securities Act with respect to the securities offered with this prospectus.
This
prospectus does not contain all of the information in the registration
statement, parts of which we have omitted, as allowed under the rules and
regulations of the SEC. You should refer to the registration statement for
further information with respect to us and our securities. Statements contained
in this prospectus as to the contents of any contract or other document are
not
necessarily complete and, in each instance, we refer you to the copy of each
contract or document filed as an exhibit to the registration statement. Copies
of the registration statement, including exhibits, may be obtained without
charge at the website maintained by the SEC at www.sec.gov, or may be inspected
without charge at the SEC’s principal office in Washington, D.C., and you may
obtain copies from that office upon payment of the fees prescribed by the
SEC.
We
will
furnish without charge to each person to whom a copy of this prospectus is
delivered, upon written or oral request, a copy of the documents that have
been
incorporated by reference into this prospectus, including exhibits to these
documents. You should direct any requests for copies to: DigitalFX
International, Inc., 3035 East Patrick Lane, Suite 9, Las Vegas, Nevada 89120,
(702) 938-9300, Attention: Chief Operating Officer.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
ITEM
14. Other Expenses of Issuance and Distribution.
The
following table sets forth the estimated costs and expenses, other than the
underwriting discounts and commissions payable by the Registrant in connection
with the offering of the securities being registered. All amounts are estimates,
except the SEC registration fee.
|
|
|
Amount
|
|
|
Registration
fee - Securities and Exchange Commission
|
|
$
|
393.00
|
|
|
Legal
fees and expenses
|
|
$
|
5,000.00
|
|
|
Accounting
fees and expenses
|
|
$
|
2,000.00
|
|
|
Miscellaneous
expenses
|
|
$
|
1,500.00
|
|
|
Total
|
|
$
|
8,893.00
|
|
ITEM
15. Indemnification of Directors and Officers.
The
Florida Business Corporation Act and certain provisions of our articles of
incorporation and bylaws under certain circumstances provide for indemnification
of our officers, directors and controlling persons against liabilities which
they may incur in such capacities.
In
general, any officer, director, employee or agent may be indemnified against
expenses, fines, settlements or judgments arising in connection with a legal
proceeding to which such person is a party, if that person’s actions were in
good faith, were believed to be in our best interest, and were not unlawful.
Unless such person is successful upon the merits in such an action,
indemnification may be awarded only after a determination by independent
decision of our board of directors, by legal counsel, or by a vote of the
shareholders, that the applicable standard of conduct was met by the person
to
be indemnified.
The
circumstances under which indemnification is granted in connection with an
action brought on our behalf is generally the same as those set forth above;
however, with respect to such actions, indemnification is granted only with
respect to expenses actually incurred in connection with the defense or
settlement of the action. In such actions, the person to be indemnified must
have acted in good faith and in a manner believed to have been in our best
interest, and have not been adjudged liable for negligence or
misconduct.
Indemnification
may also be granted pursuant to the terms of agreements which may be entered
in
the future or pursuant to a vote of shareholders or directors. The provision
cited above also grants us the power to purchase and maintain insurance which
protects our officers and directors against any liabilities incurred in
connection with their service in such a position, and such a policy may be
obtained by us.
We
do not
have any indemnification agreements with any of our directors or executive
officers.
A
shareholder’s investment may be adversely affected to the extent we pay the
costs of settlement and damage awards against directors and officers as required
by these indemnification provisions. At present, there is no pending litigation
or proceeding involving any of our directors, officers or employees regarding
which indemnification by us is sought, nor are we aware of any threatened
litigation that may result in claims for indemnification.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling us pursuant to the
foregoing provisions, we have been informed that, in the opinion of the SEC,
this indemnification is against public policy as expressed in the Securities
Act
and is therefore unenforceable.
Reference
is made to the following documents filed as exhibits to this Registration
Statement regarding relevant indemnification provisions described above and
elsewhere herein:
|
Exhibit
Document
|
|
Exhibit
Number
|
|
|
|
|
|
Articles
of Incorporation of Registrant, as amended
|
|
4.1
|
|
Bylaws
of Registrant
|
|
4.2
|
ITEM
16. Exhibits and Financial Statement Schedules.
|
|
(a)
|
The
following exhibits are filed herewith:
|
|
|
|
See
attached
Exhibit
Index.
|
ITEM
17. Undertakings.
We
hereby
undertake
:
(1) To
file,
during
any
period in which offers or sales are being made, a post-effective amendment
to
this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental
change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in the 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 the
Securities and Exchange Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 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;
provided,
however
,
that
paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the
information
required
to be included in a post-effective amendment by those paragraphs is contained
in
reports filed with or furnished to the
Commission
by us
pursuant to Section 13 and Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement,
or
is contained in a form of prospectus filed pursuant to Rule 424(b) that is
part of the registration statement.
(2) That,
for the
purpose
of
determining any liability under the Securities Act of 1933, each such
post-effective amendment
shall
be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be
the initial
bona
fide
offering
thereof.
(3) To
remove from
registration
by means
of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) That,
for the
purpose
of
determining liability under the Securities Act of 1933 to any purchaser:
(A) Each
prospectus
filed by
the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was deemed part
of
and included in the registration statement; and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7)
as
part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the
purpose
of
providing the information required by Section 10(a) of the Securities Act
of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of securities in the
offering described in the prospectus. As provided in Rule 430B, for
liability purposes of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial
bona
fide
offering
thereof.
Provided,
however
,
that no
statement made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of
the
registration statement will, as to a purchaser with a time of contract of sale
prior to such effective date, supersede or modify any statement that was made
in
the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective
date.
(5) That,
for the purpose of determining liability of the Registrant under the Securities
Act of 1933 to any purchaser in the
initial
distribution of the securities, the undersigned Registrant undertakes that
in a
primary offering of securities of the undersigned Registrant pursuant to this
registration statement, regardless of the underwriting method used to sell
the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
Registrant will be a seller to the purchaser and will be considered to offer
or
sell such securities to such purchaser:
(i) Any
preliminary
prospectus
or
prospectus of the undersigned Registrant relating to the offering required
to be
filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of
the
undersigned Registrant or used or referred to by the undersigned Registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the
undersigned
Registrant or its securities provided by or on behalf of the undersigned
Registrant; and
(iv) Any
other
communication
that is
an offer in the offering made by the undersigned Registrant to the purchaser.
(6) That,
for purposes of determining any liability under the Securities Act of 1933,
each
filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an
employee benefit plan’s annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of the securities
at that time shall be deemed to be the initial
bona
fide
offering
thereof.
(7) That,
for purposes of determining any liability under the Securities Act of 1933,
the
information omitted from the form
of
prospectus filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the Registrant
pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as of the time
it
was declared effective.
(8) That,
for the purpose of determining any liability under the Securities Act of 1933,
each post-effective amendment that contains a form of prospectus 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.
(9) To
file an application for the purpose of determining the eligibility of the
trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act in accordance with
the
rules
and regulations prescribed by the Commission under Section 305(b)(2) of the
Act.
Insofar
as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act
of 1933 and is, therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Exchange Act and will be governed by the final adjudication of such
issue.
Each
prospectus filed pursuant to Rule 424(b) as part of this Registration Statement,
shall be deemed to be part of and included in the Registration Statement as
of
the date it is first used after effectiveness. Provided, however, that no
statement made in the Registration Statement or prospectus that is part of
the
Registration Statement or made in a document incorporated or deemed incorporated
by reference into the Registration Statement or prospectus that is part of
the
Registration Statement will, as to a purchaser with a time of contract of sale
prior to such first use, supersede or modify any statement that was made in
the
Registration Statement or prospectus that was part of the Registration Statement
or made in any such document immediately prior to such date of first
use.
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 authorized this Registration Statement
to be signed on its behalf by the undersigned, in the City of Las Vegas, State
of Nevada, on May 23, 2008.
DIGITALFX
INTERNATIONAL, INC.
(Registrant)
|
By:
|
/s/
Craig
Ellins
|
|
By:
|
/s/
Tracy Sperry
|
|
|
Craig
Ellins
|
|
|
Tracy
Sperry
|
|
|
Chief
Executive Officer and President
|
|
|
Acting
Chief Financial Officer
|
|
|
(Principal
Executive Officer)
|
|
|
(Principal
Financial and Accounting Officer)
|
POWER
OF ATTORNEY
Each
person whose signature appears below constitutes and appoints each of Craig
Ellins and Tracy Sperry as his true and lawful attorney-in-fact and agent with
full power of substitution and resubstitution, for him and his name, place
and
stead, in any and all capacities, to sign any or all amendments (including
post-effective
amendments
)
to this
Registration Statement
and
to
sign any registration statement for the same offering covered by the
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) promulgated under the Securities Act, and all post-effective amendments
thereto, and to file the same, with all exhibits thereto and all 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 requisite and necessary to be done
in and about the premises, as fully to all intents and purposes 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 his, her or their substitute
or
substitutes, may lawfully do or cause to be done or by virtue hereof
.
Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by the following persons in the capacities
and
on the date indicated.
|
Signature
|
|
Title
|
Date
|
|
|
|
|
|
|
/s/
Craig
Ellins
|
|
Chairman,
Chief Executive Officer & President
|
May
23 , 2008
|
|
Craig
Ellins
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
|
|
/s/
Tracy Sperry
|
|
Acting
Chief Financial Officer
|
May
23, 2008
|
|
Tracy
Sperry
|
|
(Principal
Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
|
Director
|
May
23, 2008
|
|
Emanuel
Gerard
|
|
|
|
|
|
|
|
|
|
/s/
Jerry
Haleva
|
|
Director
|
May
23, 2008
|
|
Jerry
Haleva
|
|
|
|
|
|
|
|
|
|
/s/
Kevin
Keating
|
|
Director
|
May
23, 2008
|
|
Kevin
Keating
|
|
|
|
EXHIBIT
INDEX
|
Exhibit
Number
|
|
Exhibit
Title
|
|
|
|
|
|
1.1
|
|
Form
of Underwriting Agreement (1)
|
|
4.1
|
|
Articles
of Incorporation of the Registrant filed February 9, 2000
(2)
|
|
4.1.1
|
|
Articles
of Amendment of Articles of Incorporation of the Registrant effective
December 23, 1995 (2)
|
|
4.1.2
|
|
Articles
of Amendment of Articles of Incorporation of the Registrant effective
May
4, 1999 (2)
|
|
4.1.3
|
|
Articles
of Amendment of Articles of Incorporation of the Registrant effective
June
7, 2006. (3)
|
|
4.1.4
|
|
Articles
of Amendment of Articles of Incorporation of the Registrant effective
August 1, 2006 (4)
|
|
4.2
|
|
Bylaws
of the Registrant (5)
|
|
5.1
|
|
Opinion
of Jackson L. Morris, Esq.
|
|
23.1
|
|
Consent
of Weinberg & Company, P.A.
|
|
23.2
|
|
Consent
of Jackson L. Morris, Esq. (included in Exhibit 5.1).
|
|
24.1
|
|
Power
of Attorney (included as part of the Signature Page of this Registration
Statement).
|
|
25.1
|
|
Statement
of Eligibility of Trustee under the Senior Debt Indenture.
(1)
|
____________
|
(1)
|
To
be filed by amendment or by report filed under the Securities Exchange
Act
of 1934, as amended, and incorporated by reference, if
applicable.
|
|
(2)
|
Filed
previously as Exhibit 2.1 to the Registrant’s Form 10-SB Registration
Statement (File #: 000-27551), filed with the Securities and Exchange
Commission on October 5, 1999, and incorporated herein by this
reference.
|
|
(3)
|
Filed
previously as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K
(File #: 000-27551), filed with the Securities and Exchange Commission
on
June 19, 2006.
|
|
(4)
|
Filed
previously as Exhibit A to the Registrant’s Definitive Information
Statement on Schedule 14C (File #: 000-27551), filed with the Securities
and Exchange Commission on July 7, 2006, and incorporated herein
by this
reference.
|
|
(5)
|
Filed
previously as Exhibit 3.2 to the Registrant’s Quarterly Report on Form
10-QSB (File #: 001-33667), filed with the Securities and Exchange
Commission on November 14, 2007, and incorporated herein by this
reference.
|
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