As filed with the Securities and Exchange Commission on April 15, 2003
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________
Alpha Hospitality Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3714474
(State or Other (I.R.S. Employer
Jurisdiction of Identification
Incorporation or Number)
Organization)
707 Skokie Boulevard, Suite 600
Northbrook, Illinois 60062
(847) 418-3804
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive
Offices)
Scott A. Kaniewski
Chief Financial Officer
Alpha Hospitality Corporation
707 Skokie Boulevard, Suite 600
Northbrook, Illinois 60062
(847) 418-3804
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service of Process)
___________________________________
Copies to:
Robert H. Friedman, Esq.
Olshan Grundman Frome Rosenzweig & Wolosky LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
________________________________________
Approximate date of commencement of proposed sale to the
public: From time to time after this Registration Statement
becomes effective.
________________________________________
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box.
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest
reinvestment plans, please 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.
If this Form is a post-effective amendment filed pursuant
to Rule 462(c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box.
CALCULATION OF REGISTRATION FEE
Title of Shares to Amount to Proposed Proposed Amount of
be Registered be Maximum Maximum Registration
Registered Offering Aggregate Fee
(1) Price Per Offering
Share(2) Price
Common Stock, $.01 223,611 $8.86 $1,981,195 $195.37
par value per share
(1) In the event of a stock split, stock dividend and similar
transactions involving the Registrant's Common Stock, $.01 par
value, the shares registered hereby shall automatically be
increased or decreased pursuant to Rule 416 of the Securities Act
of 1933, as amended.
(2) Estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457(c) of the Securities
Act, based on the average of the high and low prices of the
Registrant's Common Stock on the Nasdaq SmallCap Market on April
14, 2003.
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may
determine.
SUBJECT TO COMPLETION, DATED APRIL 15, 2003
PROSPECTUS
223,611 SHARES OF COMMON STOCK
Alpha Hospitality Corporation
This prospectus relates to the offer and sale by the selling
stockholders identified in this prospectus of up to an aggregate
223,611 shares of our common stock. We will not receive any
proceeds from the sale of our common stock under this prospectus.
Our common stock is listed on the Nasdaq SmallCap Market and
Boston Stock Exchange under the symbol "ALHY." The last reported
sale price for our common stock on April 14, 2003 was $10.71 per
share.
Our principal executive offices are located at 707 Skokie
Boulevard, Suite 600, Northbrook, Illinois 60062. Our telephone
number is (847) 418-3804.
This investment involves a high degree of risk. See "Risk
Factors" beginning on page 3.
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 April 15, 2003.
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 it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
TABLE OF CONTENTS
Prospectus Summary 1
The Company 1
The Offering 2
Risk Factors 3
Where You Can Find More Information 10
Special Note Regarding Forward-Looking Statements 10
Incorporation By Reference 10
Use of Proceeds 11
Selling Stockholders 12
Plan of Distribution 12
Legal Matters 14
Experts 14
You should rely only on the information contained in this
prospectus or any accompanying supplemental prospectus and the
information specifically incorporated by reference. We have not
authorized anyone to provide you with different information or
make any additional representations. This is not an offer of
these securities in any state or other jurisdiction where the
offer is not permitted. You should not assume that the
information contained in or incorporated by reference into this
prospectus or any prospectus supplement is accurate as of any
date other than the date on the front of each of such documents.
PROSPECTUS SUMMARY
This summary represents a summary of all material terms of
the offering and only highlights the more detailed information
that appears elsewhere, or incorporated by reference, in this
prospectus. This prospectus may not contain all the information
important to you as an investor. Accordingly, you should
carefully read this entire prospectus before deciding whether to
invest in our common stock.
Unless the context otherwise requires, all references to
"we," "us," or "Alpha" in this prospectus refer collectively to
Alpha Hospitality Corporation, a Delaware corporation, and its
subsidiaries.
THE COMPANY
General
While initially formed as a holding company for a diverse
portfolio of gaming related investments, over the past eighteen
months we have concentrated primarily on the development of
gaming operations in the Catskills region of upstate New York. To
that end, we have liquidated nearly all of our holdings unrelated
to this endeavor and increased our minority interest in Catskill
Development, L.L.C. ("Catskill"), the owner and operator of
Monticello Raceway, a harness horse racing facility located in
Monticello, New York. In addition, on February 4, 2003, we
entered into a non-binding letter of intent with Catskill
Development, L.L.C and certain of its affiliates, pursuant to
which we agreed, subject to the negotiation and execution of
definitive agreements and certain other conditions, to enter into
a 48 year ground lease for 229 acres of land encompassing
Monticello Raceway and its surrounding area, and to acquire all
of the outstanding capital stock of both Catskill and Monticello
Raceway Development Company, L.L.C. in exchange for 80.25% of our
common stock, on a post-transaction, fully diluted basis.
Following this transaction, we intend to (i) consolidate our
operations with Catskill, (ii) operate Monticello Raceway, (iii)
develop a video lottery terminal program at Monticello Raceway,
and (iv) in conjunction with the Cayuga Nation of New York,
develop a resort-style tribal gaming facility.
We were incorporated in Delaware in 1993 and our common
stock is traded on the Nasdaq SmallCap Market under the symbol
"ALHY" and the Boston Stock Exchange under the symbol "ALH".
Recent Developments
On April 3, 2003, we, the Cayuga Nation of New York, the
Cayuga Catskill Gaming Authority, Catskill, Monticello Raceway
Development Company, L.L.C. and Monticello Casino Management,
L.L.C., the latter of which is jointly owned by us and Catskill,
entered into a series of agreements that provide for the joint
development of a resort-style tribal gaming facility on land
adjacent to Monticello Raceway. The principal agreements include:
(i) a Land Purchase Agreement, (ii) a Gaming Facility Management
Agreement, (iii) a Gaming Facility Development and Construction
Agreement and (iv) a Special Letter Agreement.
Under the Land Purchase Agreement, Catskill has agreed to
convey fee simple title to approximately 30 acres of land
adjacent to Monticello Raceway to the United States, in trust,
for the benefit of the Cayuga Nation of New York, in exchange for
$10,000,000 to be paid by the Cayuga Catskill Gaming Authority.
Under the Gaming Facility Management Agreement, the Cayuga
Catskill Gaming Authority has agreed to retain Monticello Casino
Management L.L.C. to manage the development of the proposed
tribal gaming facility for a monthly management fee of 35% of the
facility's net revenues, as determined in accordance with the
rules prescribed by the National Indian Gaming Commission.
Under the Gaming Facility Development and Construction
Agreement, the Cayuga Catskill Gaming Authority has agreed to
appoint Monticello Raceway Development Company, L.L.C. as its
agent with the exclusive right to design, engineer, develop,
construct, and furnish the proposed tribal gaming facility until
the expiration or termination of the Gaming Facility Management
Agreement. For these services, Monticello Raceway Development
Company, L.L.C. is to be paid a fee equal to 5% of the total
project costs, which costs may not exceed $505,000,000.
Under the Special Letter Agreement, we, Catskill, and the
Cayuga Nation of New York have agreed to work exclusively with
each other to develop the proposed tribal gaming facility and to
issue to the Cayuga Nation of New York 300,000 shares of our
common stock, vesting over a twelve month period, as
consideration for this exclusive arrangement. This letter
agreement also provides for Catskill to fund the Cayuga Nation of
New York's development costs with respect to the proposed tribal
gaming facility and for the Cayuga Nation of New York to
participate with Catskill and/or us and our affiliates in the
ownership of a to-be-developed hotel that will be designated as
the gaming facility's preferred provider. The letter agreement
further provides for a reciprocal ten-year option to acquire up
to a 33.33% ownership interest in other lodging, entertainment,
sports and/or retail facilities which may be developed or
operated within a 15 mile radius of the gaming facility.
Each of the above agreements is subject to the review and
approval by the National Indian Gaming Commission and the
Secretary of the Interior prior to becoming effective.
THE OFFERING
This prospectus relates to the offer and sale, from time to
time, of up to 223,611 shares of our common stock by the selling
stockholders listed below. The shares of common stock being
offered under this prospectus were acquired from us by the
selling stockholders pursuant to private placements in which we
agreed to register the resale of such common stock with the
Securities and Exchange Commission.
Our registration of the resale of our common stock does not
necessarily mean that all or any portion of such common stock
will be offered for resale by the selling stockholders. While we
will not receive any proceeds from the sale of our common stock
under this prospectus, we have agreed to bear the expenses of
registering the shares under all federal and state securities
laws.
RISK FACTORS
An investment in our common stock involves a high degree of
risk. The risk factors listed below are those that we consider to
be material to an investment in our common stock and those which,
if realized, could have material adverse effects on our business,
financial condition or results of operations as specifically
discussed below. In such an event, the trading price of our
common stock could decline, and you could lose all or part of
your investment. Before you invest in our common stock, you
should be aware of various risks, including those described
below. You should carefully consider these risk factors, together
with all of the other information included or incorporated by
reference in this prospectus, before you decide whether to
purchase our common stock. This section includes or refers to
certain forward-looking statements. You should refer to the
explanation of the qualifications and limitations on such forward-
looking statements discussed on page 10.
We currently face a liquidity shortfall.
We had no revenue in 2002, and our current liabilities
exceed currents assets by $7.6 million. Moreover, under an
outstanding promissory note, we have a $1,350,000 principal
payment maturing on June 15, 2003, (in addition, one of our
subsidiaries has a $2.2 million principal obligation due in April
2003 and in default under a $650,000 mortgage). We need to raise
additional funds in order to meet the June 15 obligation and fund
our current operating expenses either through the sale of equity,
liquidation of investments, or by incurring of additional debt,
which could be restricted by lender covenants. We do not believe
that debt financing is currently available to us on reasonable
terms and have been adversely affected in our efforts to
liquidate our investments in Casino Ventures, LLC, the owner of a
dormant dockside casino, due to certain damages suffered by the
casino vessel during a recent storm. As a result, our ability to
continue to meet our near term obligations and pursue our near
term strategic objectives depend entirely on our ability to
secure additional equity investments. Although we believe that
we can obtain such investments on reasonable terms, any such
investment will result in dilution of the equity position of our
common shareholders and no assurance can be given that such
investments can be secured at prices that reflect the market
price of our common shares at the time that the investments are
obtained.
We have received an opinion from our auditors that expresses
doubt about our ability to continue as a going concern.
The opinion of Friedman Alpren & Green LLP, our independent
auditors with respect to our financial statements as of December
31, 2001 and 2002, contains an explanatory paragraph that
expresses substantial doubt as to our ability to continue as a
going concern. This opinion indicates that substantial doubt
exists regarding our ability to continue to remain in business as
currently structured. Such an opinion may adversely affect our
ability to obtain new financing on reasonable terms or at all.
We are not actively involved in any operating business and
serve as a holding company that is entirely dependent on the
operations of companies in which we hold non-controlling
interests, and their ability and willingness to make dividends or
distributions to us, in order to provide us with internal cash
flow.
Under our existing structure we are entirely reliant on
dividends or distributions from Catskill or Casino Ventures, LLC
in order to generate internal cash flow. Casino Ventures, L.L.C.,
however, is currently dormant and Catskill Development, LLC must
first satisfy numerous senior obligations before it can make any
significant distributions to us, as discussed below. Unless we
are able to successfully complete our efforts to restructure and
recapitalize the Company, our ability to satisfy our ongoing
operating expenses will be very difficult, since it is unlikely
that we will receive distributions from our subsidiaries in the
near future. As a result, we could be forced to liquidate
substantially all of our assets and terminate our operations as a
going concern or seek bankruptcy court protection. If we continue
to have no active business activities, it is possible that we
could be considered to be engaged solely in the business of
investing or trading in securities, which is subject to
regulation under the Investment Company Act of 1940. In such
event, we would be required to register as an investment company
and could be expected to incur significant registration and
compliance costs. It is not our intention to operate as such a
holding company. Accordingly, management has obtained no formal
determination from the Securities and Exchange Commission as to
our status under the Investment Company Act of 1940, and
consequently, any violation of such law could subject us to
materially adverse consequences.
Certain creditors and members of Catskill need to be paid off
before we can receive any substantial return on our principal
asset.
Members of Catskill have contributed funds to finance the
purchase of Monticello Raceway and its ongoing efforts to develop
a resort-style Native American casino. These contributions and a
mortgage on the property (together with cumulative interest
thereon compounded at 10% per annum) must be repaid before any
net earnings from Catskill Development's operations will be
available for distribution to us. As of February 14, 2003, the
aggregate amount needed to satisfy payment of both said
contributions and mortgage (with interest) was approximately
$44,078,000. As a result, unless we complete our planned
consolidation with Catskill, we will only receive a return of the
funds we contributed (and the cumulative interest thereon), until
distributions from operating income and/or proceeds from the sale
of the assets exceed the amount necessary to meet these
obligations.
The success of our efforts to consolidate our operations with
Catskill is subject to the execution of definitive agreements and
certain approvals and conditions.
Our current business plan calls for us to dispose of our
interest in Casino Ventures and consolidate our interests with
Catskill under the Letter of Intent entered into on February 4,
2003. This consolidation will result in the issuance of
additional common stock to acquire the additional interests for
an amount equal to 80.25% of the Company's equity and will result
in a change of control of the Company. This change of control
will require approval by our current shareholders. In addition,
the parties must execute definitive agreements and obtain tax
opinions and fairness opinions in order for the consolidation to
proceed as agreed to in the letter of intent. Until these
definitive agreements and other conditions are achieved, any of
the parties is free to elect not to proceed with the
consolidation. We believe that the consolidation is necessary in
order for the partners in Catskill to better achieve their
strategic objectives and to provide the Company with longer term
financial stability through the acquisition of an operating
business. If consummated, this transaction will eliminate the
mortgage on Monticello Raceway and the need for capital account
requirements to be met before we have access to the revenues from
raceway operations. Failure to complete the transaction would
therefore seriously impair our ability to obtain new financing on
reasonable terms and our long-term viability.
Our proposed consolidation with Catskill may limit our ability to
use our current net operating loss carryforwards, potentially
increasing our future tax liability.
As of December 31, 2002, we had net operating loss carryforwards
of approximately $66,500,000 set to expire between 2008 and 2022.
Use of these net operating loss carryforwards to offset our
future income (if we were to earn a profit in the future) could
result in substantial reduction to our future tax liability. The
consolidation of our operations with Catskill, however, may
trigger certain provisions of the Internal Revenue Code that
would limit the future utilization of our net operating loss
carryforwards. Generally speaking, if these rules are
applicable, we will only be permitted to utilize that portion of
our net operating loss carryforwards per year equal to the fair
market value of our stock on the effective date of the proposed
consolidation with Catskill, multiplied by the federal long-term
tax exempt rate on such date (currently 4.58% for the month of
April). Furthermore, even if our proposed consolidation with
Catksill Development, L.L.C. is never consummated, our ability to
use these net operating loss carryforwards may otherwise be
limited should we exercise our option to redeem Bryanston Group,
Inc.'s holdings in us.
General economic conditions may adversely affect our results.
The business operations of Catskill are affected by economic
conditions. Since our principal investment is our interest in
Catskill, a deepening recession or downturn in the general
economy, or in the Catskill's region, could result in fewer
customers visiting Monticello Raceway or wagering on its races at
an off-track location, which would consequently adversely affect
our results as well.
The continuing decline in the popularity of horse racing and
increasing competition in simulcasting could adversely impact
Catskill Development's business.
There has been a general decline in the number of people
attending and wagering at live horse races at North American
racetracks due to a number of factors, including increased
competition from other forms of gaming, unwillingness of
customers to travel a significant distance to racetracks and the
increasing availability of off-track wagering. The declining
attendance at live horse racing events has prompted racetracks to
rely increasingly on revenues from inter-track, off-track and
account wagering markets. The industry-wide focus on inter-track,
off-track and account wagering markets has increased competition
among racetracks for outlets to simulcast their live races. A
continued decrease in attendance at live events and in on-track
wagering, as well as increased competition in the inter-track,
off-track and account wagering markets, could lead to a decrease
in the amount wagered at Monticello Raceway. Catskill
Development's business plan anticipates the possibility of
Monticello Raceway attracting new customers to its racetrack
wagering operations through potential casino development or video
lottery operations in order to offset the general decline in
raceway attendance. However, even if the numerous arrangements,
approvals and legislative changes necessary for casino
development or video lottery operations occur, Monticello Raceway
may not be able to maintain profitable operations. Public tastes
are unpredictable and subject to change. Any decline in interest
in horse racing or any change in public tastes may adversely
affect Monticello Raceway's revenues and, therefore, limit its
ability to make a positive contribution to our results.
Gaming activities are dependent on governmental regulation and
approvals. Changes in such regulation or the failure to obtain or
maintain such approvals could adversely affect us.
The current or future gaming operations of Catskill and
Casino Ventures, LLC are contingent upon continued governmental
approval of these operations as forms of legalized gaming. Their
current or future gaming operations are subject to extensive
governmental regulation and could be subjected at any time to
additional or more restrictive regulation, or banned entirely.
They may be unable to obtain, maintain or renew all governmental
licenses, registrations, permits and approvals necessary for the
operation of their pari-mutuel wagering and other gaming
facilities. Licenses to conduct live horse racing and simulcast
wagering by Catskill must be obtained annually from New York
State's regulatory authority. A significant change to current
racing law, or the loss, or non-renewal, of licenses,
registrations, permits or approvals may materially impact on our
revenue share allocations, limit the number of races it can
conduct or the form or types of pari-mutuel wagering it offers,
and could have a material adverse effect on its business. In
addition, Catskill currently devotes significant financial and
management resources to complying with the various governmental
regulations to which its operations are subject. Any significant
increase in governmental regulation would increase the amount of
its resources devoted to governmental compliance, could
substantially restrict its business, and could consequently
materially adversely affect our results.
The gaming industry in the northeastern United States is highly
competitive, with many of our competitors better known and
financed than us.
The gaming industry in the Northeastern United Stated is
highly competitive and increasingly run by multinational
corporations that enjoy widespread name recognition, established
brand loyalty, decades of casino operation experience and a
diverse portfolio of gaming assets. This is particularly true in
Atlantic City. In contrast, Catskill has limited financial
resources and is currently limited to the operation of a harness
horse racetrack in Monticello, New York. Moreover, even if
Catskill is successful in installing video lottery terminals at
Monticello Raceway and/or developing a tribal casino on its
property it would still face competitive disadvantages if Park
Place Entertainment Corporation, the world's largest gaming
conglomerate, and/or Trading Cove Associates, the developers of
the hugely successful Mohegan Sun casino in Connecticut, are
successful on building a Native American casino on neighboring
properties
We, and certain of our affiliates, are required to be approved by
various governmental agencies in order to own an interest, or
participate in, gaming activities.
As part of gaming regulation, we and our affiliates are
generally required to be licensed or otherwise approved in each
jurisdiction, which generally involves a determination of
suitability with respect to us and our affiliates, and our and
their officers, directors and significant investors. For
example, the New York Racing & Wagering Board upon a
determination that it is inconsistent with the public interest,
convenience or necessity or with the best interests or racing
generally that any person continue to be a shareholder (of record
or beneficially) in any entity that is licensed to engage in
racing activities or that owns 25% or more of such licensed
entity, may direct such shareholder to dispose of its interest in
such entity.
Several of our former officers and directors were indicted and
our suitability to participate in gaming activities is subject to
ongoing review of our managers and owners by gaming regulators.
During 2002, six former officers or directors of the
Company were charged in indictments alleging certain criminal
activities. These included: Monty Hundley, who resigned in March
1995, Howard Zukerman who resigned in April 1997, Sanford
Freedman who resigned in March 1998, Stanley Tollman who resigned
as Chairman, President and Chief Operating Officer in February
2002, James Cutler who resigned in February 2002 and Brett
Tollman (son of Stanley Tollman) who resigned in June 2002. None
of the acts these individuals are charged with relate to their
roles or activities with us and we are not charged with any
wrongdoing. However, ownership of Bryanston Group, Inc., our
principal shareholder can be associated with Monty Hundley and/or
Stanley Tollman through their relationships with its beneficial
owners and was managed by Brett Tollman. In December, we entered
into to an agreement with Bryanston Group, Inc. and with certain
of these officers and other related parties in an effort to
remove them from a position to control the Company or to
participate in the results of any gaming activities. Such
arrangements, and the status of our current officers, directors
and other investors, are subject to ongoing review and evaluation
by various governmental agencies that regulate and license gaming
activities. In the event that any of our officers, directors or
investors was found to be unsuitable, current or future licenses
or other approvals could be revoked or denied or conditioned upon
the divestiture or termination of such individual or investor's
interests.
Our business plan contemplates entering into an agreement with a
Native American tribe for the purpose of jointly developing a
casino in Monticello, New York. The enforcement of contractual
rights against Native American tribes, however, is difficult.
Federally recognized Native American tribes are independent
governments, subordinate to the United States, with sovereign
powers, except as those powers may have been limited by treaty or
the United States Congress. Such tribes maintain their own
governmental systems and often their own judicial systems and
have the right to tax, and to require licenses and to impose
other forms of regulation and regulatory fees, on persons and
businesses operating on their lands. As sovereign nations,
federally recognized Native American tribes are generally subject
only to federal regulation. States do not have the authority to
regulate them, unless such authority has been specifically
granted by Congress, and state laws generally do not directly
apply to them and to activities taking place on their lands,
unless they have a specific agreement or compact with the state
or federal government allowing for the application of state law.
Any contract we enter into with a federally recognized Native
American tribe or nation to jointly develop a casino will likely
provide that the law of the State of New York will be the
governing law of such contract. We cannot assure you, however,
that these choice of law clauses would be enforceable, leading to
uncertain interpretation of our rights and remedies under such
contracts.
Federally recognized Native American tribes also generally
enjoy sovereign immunity from lawsuit similar to that of the
states and the United States federal government. In order to sue
a Native American tribe (or an agency or instrumentality of a
Native American tribe), the Native American tribe must have
effectively waived its sovereign immunity with respect to the
matter in dispute. There can be no assurance that any Native
American tribe we jointly develop a casino with will be willing
to waive its rights to sovereign immunity, thus undermining our
ability to enforce our rights under any contract with such tribe.
Moreover, even if a Native American tribe effectively waives its
sovereign immunity, there exists an issue as to the forum in
which a lawsuit can be brought against the tribe. Federal courts
are courts of limited jurisdiction and generally do not have
jurisdiction to hear civil cases relating to matters concerning
Native American lands or the internal affairs of Native American
governments. Federal courts may have jurisdiction if a federal
question is raised by the lawsuit, but that is unlikely in a
typical contract dispute. Diversity of citizenship, another
common basis for federal court jurisdiction, is not generally
present in a suit against a tribe because a Native American tribe
is not considered a citizen of any state. Accordingly, in most
commercial disputes with tribes, the jurisdiction of the federal
courts, may be difficult or impossible to obtain.
We depend on our key personnel and the loss of their services
would adversely affect our operations.
If we are unable to maintain our key personnel and attract
new employees, the execution of our business strategy may be
hindered and our growth limited. We believe that our success is
largely dependent on the continued employment of our senior
management and other key personnel. If one or more of these
individuals were unable or unwilling to continue in their present
positions, our business could be seriously harmed.
Future sales of our common stock may adversely affect its price.
If our stockholders sell substantial amounts of their common
stock holdings, including shares issued upon the exercise of
outstanding options and warrants and shares issued upon
conversion of preferred stock, in the public market, the market
price of our common stock could fall. These sales might also make
it more difficult for us to sell equity or equity-related
securities in the future at a time and price that we deem
appropriate. We have outstanding options to purchase an aggregate
of 839,303 shares of common stock at an average exercise price of
$2.12 per share and outstanding warrants to purchase an aggregate
of 2,500 shares of common stock at an average exercise price of
$.01 per share. In addition, we also have outstanding Series B
preferred stock that is convertible into 35,406 shares of common
stock.
The market price of our common stock is volatile, leading to the
possibility of its value being depressed at a time when
stockholders want to sell their holdings.
The market price of our common stock has in the past been,
and may in the future continue to be, volatile. For instance,
between January 1, 2001 and December 31, 2002, the closing price
of our common stock has ranged between $.95 and $25.00. A
variety of events may cause the market price of our common stock
to fluctuate significantly, including but not necessarily limited
to:
quarter to quarter variations in operating results;
adverse news announcements; and
market conditions for the gaming industry.
In addition, the stock market in recent years has
experienced significant price and volume fluctuations for reasons
unrelated to operating performance. These market fluctuations may
adversely affect the price of our common stock at a time when an
investor wants to sell its interest in us.
We have entered into commitments to issue a substantial amount of
common stock within the next twelve months.
Pursuant to our agreements with Catskill Development L.L.C.
and the Cayuga Nation of New York, we have committed to the
possible issuance of significant amounts of our common stock
within the next twelve months. Should the parties to these
agreements, or persons to whom they distribute our stock, elect
to sell significant portions of these shares, it may adversely
affect the market price of our common stock.
Our large amount of unissued preferred stock may deter potential
acquirers.
Our Board of Directors has the authority, without further
action by the stockholders, to issue up to 3,269,304 shares of
preferred stock on such terms and with such rights, preferences
and designations, including, without limitation restricting
dividends on our common stock, dilution of the common stock's
voting power and impairing the liquidation rights of the holders
of our common stock, as the Board may determine without any vote
of the stockholders. Issuance of such preferred stock, depending
upon the rights, preferences and designations thereof may have
the effect of delaying, deterring or preventing a change in
control. In addition, certain "anti-takeover" provisions of the
Delaware General Corporation Law, among other things, may
restrict the ability of stockholders to authorize a merger,
business combination or change of control. Failure to consummate
such a proposed merger, business combination or change in control
could result in investors missing an opportunity to sell their
interests in us at a significant premium over the market price.
Our officers and directors can control the outcome of all matters
requiring stockholder approval.
Our executive officers, directors and entities affiliated
with them beneficially own, in the aggregate, approximately 58%
of our outstanding common stock. These stockholders, when acting
together, are therefore able to determine the outcome of all
matters requiring stockholder approval, including the election of
directors and the approval of significant corporate transactions,
such as mergers or other business combinations. This
concentration of ownership may lead to actions being taken by us
that are inconsistent with the best interests of all stockholders
such as lax corporate governance by the Board or resistance to
acquisition offers.
Our proposed consolidation with Catskill may limit our ability to
use our current net operating loss carryforwards, potentially
increasing our future tax liability.
As of December 31, 2002, we had net operating loss
carryforwards of approximately $66,500,000 set to expire between
2008 and 2022. As the Internal Revenue Code allows us to offset
future income against these net operating loss carryforwards,
should we earn a profit in the near future our tax liability
would be greatly reduced, if not eliminated. The consolidation of
our operations with Catskill, however, may trigger certain
provisions of the Internal Revenue Code that would limit the
future utilization of our net operating loss carryforwards.
Generally speaking, if these rules are applicable, we will only
be permitted to utilize that portion of our net operating loss
carryforwards per year equal to the fair market value of our
stock on the effective date of the proposed consolidation with
Catskill, multiplied by the federal long-term tax exempt rate on
such date (currently 4.58% for the month of April). Furthermore,
even if our proposed consolidation with Catskill is never
consummated, our ability to use these net operating loss
carryforwards might otherwise be restricted should we exercise
our option to redeem Bryanston Group, Inc.'s holdings in us, as
its shares currently represent approximately 45% of our voting
equity.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 with the
Securities and Exchange Commission for the resale of the common
stock being offered under this prospectus. This prospectus does
not contain all the information set forth in the registration
statement. You should refer to the registration statement and its
exhibits for additional information. Whenever we make references
in this prospectus to any of our contracts, agreements or other
documents, the references are not necessarily complete and you
should refer to the exhibits attached to the registration
statement for the copies of the actual contract, agreement or
other document.
You should rely only on the information and representations
provided or incorporated by reference in this prospectus or any
related supplement. We have not authorized anyone else to provide
you with different information. The selling stockholders will not
make an offer to sell these shares in any state where the offer
is not permitted. You should not assume that the information in
this prospectus or any supplement is accurate as of any date
other than the date on the front of each such document.
The Securities and Exchange Commission maintains an Internet
site at http://www.sec.gov, which contains reports, proxy and
information statements, and other information regarding us. You
may also read and copy any document we file with the Securities
and Exchange Commission at its Public Reference Room, 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the Securities
and Exchange Commission at 1-800-SEC-0330 for further information
on the operation of the Public Reference Room.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and documents incorporated by reference into
this prospectus contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as
amended, that are not historical facts but rather are based on
current expectations, estimates and projections about our
business and industry, our beliefs and assumptions. Words such
as "anticipates", "expects", "intends", "plans", "believes",
"seeks", "estimates" and variations of these words and similar
expressions are intended to identify forward-looking statements.
These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and other factors, some
of which are beyond our control, are difficult to predict and
could cause actual results to differ materially from those
expressed or forecasted in the forward-looking statements. These
risks and uncertainties include those described in "Risk Factors"
beginning on page 3 and elsewhere in this prospectus and
documents incorporated by reference into this prospectus. You
are cautioned not to place undue reliance on these forward-
looking statements, which reflect our management's view only as
of the date of this prospectus or as of the date of any document
incorporated by reference into this prospectus. We undertake no
obligation to update these statements or publicly release the
results of any revisions to the forward-looking statements that
we may make to reflect events or circumstances after the date of
this prospectus or the date of any document incorporated into
this prospectus or to reflect the occurrence of unanticipated
events.
INCORPORATION BY REFERENCE
The Securities and Exchange Commission allows us to
"incorporate by reference" the information we file with them,
which means that we can disclose important information to you by
referring to those documents. The information we incorporate by
reference is considered to be a part of this prospectus and
information that we file later with the SEC will automatically
update and replace this information. We incorporate by reference
the documents listed below and any future filings we make with
the Securities and Exchange Commission under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended prior to the termination of this offering:
(1)Our Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2002;
(2)Our Current Report on Form 8-K dated April 14, 2003;
(3)Our Current Report on Form 8-K dated April 11, 2003;
(4)Our Current Report on Form 8-K dated April 7, 2003;
(5)Our Current Report on Form 8-K dated March 24, 2003;
(6)Our Current Report on Form 8-K dated March 18, 2003;
(7)Our Current Report on Form 8-K/A dated February 21, 2003;
(8)Our Current Report on Form 8-K dated February 21, 2003;
(9)Our Current Report on Form 8-K dated February 13, 2003;
(10) Our Current Report on Form 8-K dated February 4, 2003;
(11) Our Current Report on Form 8-K dated January 16, 2003;
and
(12) The description of our common stock contained in our
Registration Statement on
Form 8-A12B, as filed with the Securities and Exchange
Commission on June 20, 2001.
You may request a copy of these filings (excluding the
exhibits to such filings which we have not specifically
incorporated by reference in such filings) at no cost, by writing
or telephoning us at:
Alpha Hospitality Corporation
707 Skokie Boulevard, Suite 600
Northbrook, Illinois 60062
Attention: Secretary
(847) 418-3804
USE OF PROCEEDS
The selling stockholders will receive all the proceeds from
the sale of our common stock under this prospectus.
SELLING STOCKHOLDERS
The following table sets forth the name of each of the
selling stockholders, the number of shares beneficially owned by
each of the selling stockholders, the number of shares that may
be offered under this prospectus and the number of shares of
common stock owned by each of the selling stockholders after the
offering is completed. Except as provided in the "Company"
section above, none of the selling stockholders has been an
officer, director or had any material relationship with us within
the past three years.
Name Number of Number of Number of
Common Common Shares Common
Shares to be Offered Shares/Percent
Owned Prior age of Class
to the to Be Owned
Offering After
Completion of
the Offering
Cayuga Nation of New 100,000 100,000 --
York
Hyenat LLC 45,000 45,000 --
Stanley Silverstein 15,000 15,000 --
Flori Silverstein 2,500 2,500 --
Nina Miner 3,500 (1) 2,500 1,000 (1)
Renee Dabah 2,500 2,500 --
Ami Reines 2,700 (2) 2,500 200 (2)
Thomas Horvath 20,000 20,000 --
Society Generale 33,611 33,611 --
(1) Includes 1,000 shares held by George Miner, Nina Miner's
husband.
(2) Includes 200 shares held by Ami Reines as adult custodian
for her children.
Our registration of the shares included in this prospectus
does not necessarily mean that each of the selling stockholders
will opt to sell any of the shares offered hereby. The shares
covered by this prospectus may be sold from time to time by the
selling stockholders so long as this prospectus remains in
effect.
PLAN OF DISTRIBUTION
We are registering the shares on behalf of the selling
stockholders, as well as on behalf of their donees, pledgees,
transferees or other successors-in-interest, if any, who may sell
shares received as gifts, pledges, distributions or other non-
sale related transfers. Neither we, nor the selling stockholders,
have employed an underwriter for the sale of common stock by the
selling stockholders. The selling stockholders have advised us
that they have not entered into any agreements, understandings or
arrangements with any underwriters or broker-dealers regarding
the sale of their securities, not is there an underwriter or
coordinating broker acing in connection with the proposed sale of
the shares by the selling stockholders. We will bear all expenses
in connection with the preparation of this prospectus and
registration of the shares. The selling stockholders will bear
brokerage commissions and similar selling expenses associated
with the sale of their common stock.
The selling stockholders may offer their shares of common
stock from time to time directly or through pledgees, donees,
transferees or other successors in interest in one or more of the
following transactions (which may include block transactions):
On the Nasdaq Small Cap Market or any stock exchange or
automated quotation system on which the shares of common stock
may be listed at the time of sale
In negotiated transactions
In the over-the-counter market
Put or call option transactions relating to the shares
Short sales relating to the shares
In a combination of any of the above transactions
The selling stockholders may offer their shares of common
stock at any of the following prices, which may reflect discounts
from the prevailing market prices at the time of sale:
Fixed prices that may be changed
Market prices prevailing at the time of sale
Prices related to such prevailing market prices
At negotiated prices
Varying prices determined at the time of sale
The selling stockholders may effect such transactions by
selling shares directly to purchasers or to or through broker-
dealers, which may act as agents or principals. Such broker-
dealers may receive compensation in the form of discounts,
concessions, or commissions from the selling stockholders and/or
the purchasers of shares of common stock for whom such broker-
dealers may act as agents or to whom they sell as principals, or
both (which compensation as to a particular broker-dealer might
be in excess of customary commissions).
Any broker-dealer acquiring common stock from the selling
stockholders may sell the shares either directly, in its normal
market-making activities, through or to other brokers on a
principal or agency basis or to its customers. Any such sales
may be at prices then prevailing on the Nasdaq SmallCap Market or
at prices related to such prevailing market prices or at
negotiated prices to its customers or a combination of such
methods. The selling stockholders and any broker-dealers that act
in connection with the sale of the common stock hereunder might
be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act of 1933, as amended; any commissions
received by such broker-dealers and any profit on the resale of
shares sold by them as principals might be deemed to be
underwriting discounts and commissions under the Securities Act
of 1933, as amended. We have agreed to indemnify certain of the
selling stockholders against certain liabilities, including
liabilities arising under the Securities Act of 1933, as amended.
The selling stockholders may agree to dealer or broker-dealer
that participates in transactions. involving sales of the shares
against certain liabilities, including liabilities arising under
the Securities Act of 1933, as amended.
Because selling stockholders may be deemed to be
"underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933, as amended, the selling stockholders will
be subject to the prospectus delivery requirements of such Act.
We have informed the selling stockholders the anti-manipulative
provisions of Regulation M promulgated under the Securities and
Exchange Act of 1934 may apply to their sales in the market.
The selling stockholders also may resell all or a portion of
the shares in open market transactions in reliance upon Rule 144
under the Securities Act of 1933, as amended, provided they meet
the criteria and conform to the requirements of such Rule.
If we are notified by a selling stockholder that any
material arrangement has been entered into with a broker-dealer
for the sale of the shares through a block trade, special
offering, exchange distribution or secondary distribution or a
purchase by a broker or dealer, we will, if required, file a
supplement to this prospectus or a post-effective amendment to
the registration statement of which this prospectus is a part
under the Securities Act of 1933, as amended, disclosing:
the name of each such selling stockholder and of the
participating broker-dealer(s);
the number of shares involved;
the price at which such shares were sold;
the commissions paid or discounts or concessions allowed to
such broker-dealer(s), where applicable;
that such broker-dealer(s) did not conduct any investigation
to verify the information set out or incorporated by reference in
this prospectus; and
other facts material to the transaction.
In addition, if we are notified by a selling stockholder
that a donee, pledgee, transferee or other successor-in-interest
intends to sell more than 500 shares, we will file an appropriate
supplement to this prospectus.
There can be no assurance that the selling stockholders will
sell any or all of the shares offered by them under this
prospectus.
LEGAL MATTERS
The validity of the shares of common stock offered hereby
have been passed upon by Olshan Grundman Frome Rosenzweig &
Wolosky LLP, 505 Park Avenue, New York, New York 10022.
EXPERTS
The consolidated financial statements of Alpha Hospitality
Corporation incorporated in this prospectus by reference to our
Annual Report on Form 10-KSB for the fiscal year ended December
31, 2002 have been so incorporated in reliance on the report of
Friedman Alpren & Green LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses which
will be paid by us in connection with the securities being
registered. With the exception of the Securities and Exchange
Commission registration fee, all amounts shown are estimates.
SEC registration fee........................ $ 195.37
Legal fees and expenses (including Blue Sky fees) ......$ 5,000.00
Accounting Fees and Expenses..................... $ 5,000.00
Miscellaneous ........................... $ 4,804.63
Total ........................... $15,000.00
ITEM 15. Indemnification of Directors and Officers.
As permitted by the Delaware General Corporation Law
("DGCL"), Alpha Hospitality Corporation's Certificate of
Incorporation, as amended, limits the personal liability of a
director or officer to Alpha Hospitality Corporation for monetary
damages for breach of fiduciary duty of care as a director.
Liability is not eliminated for (i) any breach of the director's
duty of loyalty to Alpha Hospitality Corporation or its
stockholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law,
(iii) unlawful payment of dividends or stock purchases or
redemptions pursuant to Section 174 of the DGCL, or (iv) any
transaction from which the director derived an improper personal
benefit.
Alpha Hospitality Corporation's by-laws provide that Alpha
Hospitality Corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding by reason of the
fact that he is or was a director, officer, employee or an agent
of Alpha Hospitality Corporation or is or was serving at the
request of Alpha Hospitality Corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against all expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection
with the defense or settlement of such action, suit or
proceeding, to the fullest extent and in the manner set forth in
and permitted by the DGCL, as from time to time in effect, and
any other applicable law, as from time to time in effect. Such
right of indemnification is not be deemed exclusive of any other
rights to which such director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and
administrators of each such person.
Alpha Hospitality Corporation has also obtained a directors'
and officers' insurance and company reimbursement policy in the
amount of $5,000,000. The policy insures directors and officers
against unindemnified loss arising from certain wrongful acts in
their capacities and would reimburse Alpha Hospitality
Corporation for any losses incurred due to Alpha Hospitality
Corporation's lawful indemnification of its directors and
officers.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to
directors, officers, or persons controlling us pursuant to the
foregoing provisions, Alpha Hospitality Corporation has been
informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended, and is
therefore unenforceable.
ITEM 16. Exhibits.
Exhibit No.
4.1 Specimen Certificate of the Registrant's Common Stock
(incorporated by reference to the Registrant's registration
statement on Form SB-2 dated November 5, 1993)
5.1 Legality Opinion
23.1 Consent of Friedman Alpren & Green LLP,
independent public accountants
23.2 Consent of Olshan Grundman Frome Rosenzweig &
Wolosky LLP, included in Exhibit No. 5.1
24.1 Power of Attorney, included on the signature page to this
Registration Statement
ITEM 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(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 which, individually or together, represent a fundamental
change in the information in the registration statement.
Notwithstanding the foregoing,, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining liability
under the Securities Act, treat each post-effective amendment as
a new registration statement of the securities offered, and the
offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end
of the offering.
(b) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the small business issuer pursuant to
the foregoing provisions, or otherwise, the small business issuer
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, State of New York on the 15th day of April,
2003.
Alpha Hospitality Corporation
(Registrant)
By:_/s/Robert A. Berman____
Robert A. Berman
Chairman and Chief Executive Officer
POWER OF ATTORNEY
Know all men by these presents, that each person whose
signature appears below hereby constitutes and appoints Robert A.
Berman and Scott A. Kaniewski his true and lawful attorney-in-
fact and agent, with full power of substitution and
resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments to this Form
10-KSB and to file the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every
act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent
or either of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Company and in the capacities and on the
date indicated.
Signature Title Date
Chairman of the April 15, 2003
/s/ Robert A. Board, Chief
Berman Executive Officer and
Robert A. Berman Director
/s/ Scott A. Chief Financial April 15, 2003
Kaniewski Officer and Director
Scott A. Kaniewski
/s/ Thomas W. Aro Vice President, April 15, 2003
Secretary and
Thomas W. Aro Director
/s/ Paul deBary Director April 15, 2003
Paul deBary
/s/ William W. Director April 15, 2003
Hopson
William W. Hopson
/s/ Thomas P. Director April 15, 2003
Puccio
Thomas P. Puccio
/s/ Jay A. Holt Director April 15, 2003
Jay A. Holt
/s/ Morad Tahbaz Director April 15, 2003
Morad Tahbaz
EXHIBIT INDEX
Exhibit No.
4.1 Specimen Certificate of the Registrant's Common Stock
(incorporated by reference to the Registrant's registration
statement on Form SB-2 dated November 5, 1993)
5.1 Legality Opinion
23.1 Consent of Friedman Alpren & Green LLP,
independent public accountants
23.2 Consent of Olshan Grundman Frome Rosenzweig &
Wolosky LLP, included in Exhibit No. 5.1
24.1 Power of Attorney, included on the signature page to this
Registration Statement
EXHIBIT 5.1
April 15, 2003
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Alpha Hospitality Corporation
Ladies and Gentlemen:
We have acted as counsel to Alpha Hospitality Corporation, a
Delaware corporation (the "Company"), in connection with the
filing of its registration statement on Form S-3 (the
"Registration Statement") relating to 223,611 shares (the
"Shares") of its common stock, $.01 par value per share (the
"Common Stock"), as more particularly described in the
Registration Statement.
We advise you that we have examined originals or copies
certified or otherwise identified to our satisfaction of the
Registration Statement, the Prospectus forming a part thereof
(the "Prospectus"), the Certificate of Incorporation, By-laws and
corporate proceedings of the Company, and such other documents,
instruments and certificates of officers and representatives of
the Company and of public officials, and we have made such
examination of law, as we have deemed appropriate as the basis
for the opinion hereinafter expressed. In making such
examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals,
and the conformity to original documents of documents submitted
to us as certified or photostatic copies.
On the basis of the foregoing, we are of the opinion that
the Shares will be, when sold as contemplated by the Registration
Statement, duly and validly issued, fully paid and non-
assessable.
We express no opinion as to any laws other than the laws of
the State of New York, the General Corporation Law of the State
of Delaware and the federal laws of the United States of America.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the reference to
this firm under the caption "Legal Matters" in the Prospectus.
Very truly yours,
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the
Registration Statement on Form S-3 of our audit report dated
February 14, 2003 relating to the 2002 consolidated financial
statements of Alpha Hospitality Corporation, which appears in the
Company's annual report on Form 10-K SB for the year ended
December 31, 2002, as filed with the Securities and Exchange
Commission on February 19, 2003, and to the reference to our firm
under the caption "Experts" in this registration statement.
/s/ Friedman Alpren & Green
LLP
New York, New York
April 2, 2003