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Prospectus Summary	1
Risk Factors	4
Cautionary Note Regarding Forward-Looking Statements	11
Use of Proceeds	12
Dividend Policy	12
Market for Our Common Stock	12
Dilution	13
Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Our Business	21
Management	25
Executive Compensation	28
Corporate Governance	33
Certain Relationships and Related Transactions	36
Change of Fiscal Year	39
Selling Stockholders	39
Security Ownership of Certain Beneficial Owners and Management	41
Description of Capital Stock	43
Shares Eligible for Future Sale	45
Plan of Distribution	45
Legal Matters	47
Experts	47
Where You Can Find More Information	47
Index to Financial Statements	F-1

 

 

 

 

 

 

 

 

 

·	Increased competition;

 

·	Highly competitive industry;

 

·	Potential loss of key members of our senior management; and

 

·	Ability to obtain and enforce proprietary rights.

 

 

 

 

Summary of the Offering
Common stock offered by selling stockholders	An aggregate of 14,522,597 shares of our common stock, par value $0.001 per share, consisting of 14,522,597 shares of our common stock owned by the selling stockholders. This number represents in the aggregate approximately 9.7% of the outstanding shares of our common stock as of the date of this prospectus. (1)   None of the selling stockholders named in this prospectus are members of management or employees of the Company.
Common stock to be outstanding immediately after this offering	149,142,024 shares
Proceeds to us	We will not receive any of the proceeds from the sale of shares of our common stock by the selling stockholders.

 

(1) Based on 149,142,024 shares of common stock outstanding as of December 29, 2011.

 

 

 

 

 

 

 

If we are unable to successfully develop and market our products or our products do not perform as expected, our business and financial condition will be adversely affected.

 

With the release of any new product release, we are subject to the risks generally associated with new product introductions and applications, including lack of market acceptance, delays in development and implementation, and failure of products to perform as expected. In order to introduce and market new or enhanced products successfully with minimal disruption in customer purchasing patterns, we must manage the transition from existing products in the market. There can be no assurance that we will be successful in developing and marketing, on a timely basis, product enhancements or products that respond to technological advances by others, that our new products will adequately address the changing needs of the market or that we will successfully manage product transitions. Further, failure to generate sufficient cash from operations or financing activities to develop or obtain improved products and technologies could have a material adverse effect on our results of operations and financial condition.

 

 

 

 

 

·	announcements of developments related to our business;

 

·	developments in our strategic relationships with companies;

 

·	our ability to enter into or extend investigation phase, development phase, commercialization phase and other agreements with new and/or existing partners;

 

·	announcements regarding the status of any or all of our collaborations or products;

 

·	market perception and/or investor sentiment regarding our products and services;

 

·	announcements regarding developments in the digital and mobile technology and the broadcast and entertainment industries in general;

 

·	the issuance of competitive patents or disallowance or loss of our patent or trademark rights; and

 

·	quarterly variations in our operating results.

 

 

 

 

 

 

 

 

As of   December 29,  2011, approximately 114,844,000 shares of our common stock, not including currently exercisable warrants, are owned by Sillerman and current affiliates and insiders representing control of approximately 77% of the total voting power, with Sillerman, together with Robert F.X. Sillerman personally, directly or indirectly beneficially owning more than a majority of the outstanding shares of common stock.  As a result, Sillerman essentially has the ability to elect all of our directors and to approve any action requiring stockholder action, without the vote of any other stockholders.  It is possible that the interests of Sillerman could conflict in certain circumstances with those of other stockholders.  Such concentrated ownership may also make it difficult for our shareholders to receive a premium for their shares of our common stock in the event we merge with a third party or enter into other transactions that require shareholder approval.  These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	Applications promoting social TV experiences and discussions; and

 

·	White label providers of social media and media-specific applications.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Under a regulation of the SEC known as “Rule 144,” a person who has beneficially owned restricted securities of an issuer and who is not an affiliate of that issuer may sell them without registration under the Securities Act provided that certain conditions have been met. One of these conditions is that such person has held the restricted securities for a prescribed period, which will be 6 months or 1 year, depending on various factors. The holding period for our common stock would be 1 year if our common stock could be sold under Rule 144. However, Rule 144 is unavailable for the resale of securities issued by an issuer that is a shell company (other than a business combination related shell company) or that has been at any time previously a shell company. The SEC defines a shell company as a company that has (a) no or nominal operations and (b) either (i) no or nominal assets, (ii) assets consisting solely of cash and cash equivalents; or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets. Until the Recapitalization, we were a shell company.

 

The SEC has provided an exception to this unavailability if and for as long as the following conditions are met:

 

●

The issuer of the securities that was formerly a shell company has ceased to be a shell company,

 

●

The issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act,

 

●

The issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and

 

●

At least one year has elapsed from the time that the issuer filed current comprehensive disclosure with the SEC reflecting its status as an entity that is not a shell company known as “Form 10 Information.”

 

As a result, although the registration statement of which this Prospectus forms a part is intended to provide “Form 10 Information,” stockholders who receive our restricted securities will not be able to sell them pursuant to Rule 144 without registration until we have met the other requirements of this exception and then for only as long as we continue to meet those requirements and are not a shell company. No assurance can be given that we will meet these requirements or that, if we have met them, we will continue to do so, or that we will not again be a shell company.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2009
First quarter		$	No trades		$	No trades
Second quarter		$	0.100		$	0.060
Third quarter		$	0.060		$	0.050
Fourth quarter		$	0.050		$	0.020
2010
First quarter		$	0.035		$	0.020
Second quarter		$	0.035		$	0.005
Third quarter		$	0.010		$	0.008
Fourth quarter		$	0.030		$	0.009
2011
First quarter(1)		$	26.00		$	0.01
Second quarter		$	12.50		$	8.30
Third quarter		$	10.70		$	4.75

 

(1)	On February 16, 2011, the Company effectuated a 1 for 10 reverse split of its issued and outstanding common stock.

 

 

 

Our net tangible book value as of June 30, 2011 was $0.03 per share of common stock. Net tangible book value is determined by dividing our tangible book value (total assets less intangible assets including know-how, trademarks and patents and less total liabilities) by the number of outstanding shares of our common stock. Since this offering is being made solely by the selling stockholders and none of the proceeds will be paid to us, our net tangible book value will be unaffected by this offering.

 

 

In February 2011, Function (X) Inc. completed a Recapitalization with Sillerman and EMH Howard.  The newly recapitalized company changed its name to Function (X) Inc. effective as of the date of the Recapitalization and changed its name to Function(x) Inc. on June 22, 2011 and now conducts its business under the name Function(x) Inc., with the ticker symbol FNCX.  We have two wholly owned subsidiaries, Project Oda, Inc. and Viggle, Inc.   Upon completion of the Recapitalization, the Company changed course after being inactive from October 2010.  The Recapitalization and the resulting change in management were the initial steps in the Company developing a new operating business. Its new direction is intended to provide a platform for investments in media and entertainment, with a particular emphasis on digital and mobile technology.

 

 

We plan to generate revenue from advertising sales. Because the application is not yet available to the public, we have not yet generated any revenues. Advertising will be sold primarily to brand marketers and television networks by our dedicated sales team.  Our focus is on brand marketers that are most relevant to our target demographic of consumers between the ages of 18-49, and are active in television, digital and retail marketing. Our sales team is also briefing large advertising and media agencies on our capabilities so that they might recommend integration of our application into their client proposals.  Regarding television marketers, we are focusing on TV networks and producers based on their relevance to our target audience, their reach and popularity. We are prioritizing networks and shows that we know to be actively engaged in digital extensions, such as Social TV or second screen technology.  Additionally, we expect to gain revenue from the sale of television show related merchandise such as show music, DVDs and apparel, all of which is featured within the application and sold through online retail partners such as iTunes and Amazon.

 

Initially, we anticipate revenues to be generated substantially in the United States.

 

 

		Three Months Ended September 30, 2011				Three Months Ended September 30, 2010				Variance
Revenues		$	---			$	---			$	---
General and administrative expenses			33,930,000				2,000				33,928,000
Operating loss		$	(33,930,000	)		$	(2,000	)			(33,928,000	)
Other income:
Interest income, net			40,000				---				40,000
Total other income			40,000				---				40,000
Net loss before income taxes		$	(33,890,000	)		$	(2,000	)			(33,888,000	)
Income taxes			---				---				---
Net loss		$	(33,890,000	)		$	(2,000	)			(33,888,000	)

 

There was no operating revenue for the three months ended September 30, 2011 or September 30, 2010. 

 General and Administrative Expenses

General and administrative expenses increased in the three months ended September 30, 2011 by $33,928,000 (including $29,764,000 of non-cash compensation charges), primarily due to personnel costs ($30,087,000, including $28,247,000 of employee non-cash stock-based compensation), Board of Director fees of $1,624,000 (including $1,517,000 of director non-cash compensation charges in connection with issuance of stock options), developing a new product ($651,000), and the other costs associated with a startup company ($1,265,000).  General and administrative expenses in 2010 were nominal.

 Interest Income, Net

 We had net interest income of $40,000 in the three months ended September 30, 2011 versus $0 in the three months ended September 30, 2010.

 Income Taxes

 The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes.  Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse.  A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized.  We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date.  For those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy will be to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.  For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements.

 

 

 

		Year Ended June 30, 2011				Year Ended June 30, 2010				Variance
Revenues		$	---			$	---			$	---
General and Administrative Expenses			19,970,000				9,000				19,961,000
Operating Loss			19,970,000	)			(9,000	)			(19,961,000	)
Other Income
Interest income, net			62,000				---				62,000
Total Other Income			62,000				---				62,000
Net Loss Before Income Taxes			19,908,000	)			(9,000	)			(19,899,000	)
Income Taxes			---				---				---
Net Loss		$	19,908,000	)		$	(9,000	)		$	(19,899,000	)

There were no revenues in the prior year.  The Company has yet to generate revenue since changing its line of business in 2011.

Operating expenses increased $19,961,000 in 2011 as compared to 2010 primarily due to personnel costs ($12,325,000, including $10,772,000 in non-cash stock based compensation), developing a new product (2,150,000), and the other costs associated with a startup company ($5,482,000).  Operating expenses in 2010 were nominal.

Interest Income, Net

Net interest income increased $62,000 in 2011 as compared to 2010 primarily due to notes receivable issued for common stock as part of the Recapitalization.  There was no interest income in 2010.

Liquidity and Capital Resources

Cash

At June 30, 2011 and 2010, we had cash balances of $3,794,000 and $0, respectively. From 2007 until the Recapitalization, J. Howard, Inc., an affiliate of Jack L. Howard, a director and officer of the Company prior to the Recapitalization, advanced funds to the Company to support our daily operations.

 

Pursuant to the Recapitalization, Sillerman, together with other investors approved by Sillerman, invested in the Company by acquiring 120,000,000 newly issued shares of common stock of the Company in a private placement transaction, in which we raised $3,600,000 ($220,000 in cash and $3,380,000 in five-year promissory notes with interest accruing at 4.15% per annum).

 

As a result of the private placements to Adage and KPLB both, selling stockholders in the Form S-1 filed with the Securities and Exchange Commission (the “SEC”) on May 25, 2011, we have raised $10,500,000.

 

On August 25, 2011, the Company completed the placement of 14,000,000 units (the “Units”), each Unit consisting of (i) one (1) share of common stock, $0.001 par value per share of the Company and (ii) one (1) detachable three (3) year warrant to purchase one (1) share of common stock of the Company with an exercise price of $4.00 per warrant share, at a purchase price of $2.50 per Unit, for an aggregate purchase price of $35,000,000 to accredited and institutional investors.  The proceeds of the offering, less expenses, are to be used for general corporate purposes, including marketing and product development.

 

Operating Activities

 Cash used in operating activities of $5,645,000 for the year ended June 30, 2011 consisted primarily of salaries and other expenses for operating the Company.

 

Cash used in investing activities of $1,330,000 for the year ended June 30, 2011 primarily reflects $695,000 for the letter of credit lease deposit, $317,000 for capitalized software costs, and $235,000 for purchase of an interest in a G-IV jet (see Note 11 to the Consolidated Financial Statements), and investment in Company product.

 

Cash provided by financing activities of $10,769,000 for the year ended June 30, 2011 reflects proceeds from the issuance of common stock as part of the Recapitalization.

 

We have no intention of paying any cash dividends on our common stock for the foreseeable future. The terms of any future debt agreements we may enter into are likely to prohibit or restrict, the payment of cash dividends on our common stock.

Commitments and Contingencies

There are no lawsuits and claims pending against us.

 
 Impairment of Long-Lived Assets.

The Company capitalizes costs related to the development of internal use software in accordance with ASC 350-40.  When capitalized, the Company will amortize the costs of computer software developed for internal use on a straight-line basis or appropriate usage basis over the estimated useful life of the software.  Currently, the Company is in the application development stage of its computer software development and, appropriately, certain costs have been capitalized in the amounts of $317,000 and $0 as of June 30, 2011 and June 30, 2010, respectively.

 

 

 

 

We are creating a product that encourages consumer participation and active engagement through incentives, and brand and network-sponsored content.  We intend to market our product through various channels, including online advertising, broad-based media (such as television and radio), as well as various strategic partnerships.  We intend to utilize co-location facilities and the services of third-party cloud computing providers, more specifically, Amazon Web Services, to help us efficiently manage and operate certain aspects of our platform.

 

Revenue

Initially, we anticipate revenues to be generated substantially in the United States.

 

Seasonality

 

The market for digital and social media applications is intensely competitive and subject to rapid change.  New competitors may be able to launch new businesses at relatively low cost.  Many consumers maintain simultaneous relationships with multiple digital brands and products and can easily shift consumption from one provider to another. Additionally, the “Social TV” category is nascent and has yet to attract the attention of the mainstream consumer and marketers.

 

While there are a variety of companies currently in the market that offer either manual check-in or audio verification, we believe our application differs significantly because (a) we offer users real, as opposed to virtual, rewards such as movie tickets, music and gift cards (b) other companies do not currently position themselves as a loyalty program for television and (c) we offer a comprehensive range of features and functionality, such as automatic check-ins using audio verification, in-app digital advertising engagements (such as games or videos, real-time polls and quizzes) and full social media integration. Such integration makes it easy for users to share what they are doing within the application with their social network and to follow show-specific commentary on Twitter and Facebook. We also offer the user a listing of current or upcoming shows for which they can set reminders, learn more information and indicate their support of the show by “liking” it.

 

 

The foregoing description of the asset purchase agreement is not complete and is qualified in its entirety by reference to the full text of the agreement, a copy of which is filed as Exhibits 10.1 to the Company’s Form 8-K filed with the SEC on October 3, 2011 and incorporated herein by reference.

 

 

 

 

 

 

Name		Age		Position
Robert F.X. Sillerman		63		Director*
Janet Scardino		52		Director*
Mitchell J. Nelson		63		Director*
Benjamin Chen		46		Director
Peter Horan		56		Director
John D. Miller		66		Director
Joseph F. Rascoff		66		Director
Harriet Seitler		55		Director

 

Robert F.X. Sillerman			63		Executive Chairman**
Janet Scardino			52		Chief Executive Officer**
Mitchell J. Nelson			63		Executive Vice President, General Counsel, Secretary**
Chris Stephenson			46		Chief Marketing Officer
William B. Manning			55		Principal Financial Officer

 

 

 

 

 

 

On February 15, 2011 we entered into an employment agreement with Janet Scardino for her services as Chief Executive Officer.  The term of the agreement is for three years, with automatic renewal for one additional three-year term, unless either party provides written notice of intention not to renew or unless sooner terminated.  Ms. Scardino’s base salary is $500,000 (payable in cash or shares of common stock) to be increased by at least five percent annually.  She is to receive additional compensation at the sole discretion of the board of directors in the form of additional cash bonus and/or grant of restricted stock, stock options or other equity award.   Ms. Scardino will receive the following minimum grants of restricted stock:  (i) 750,000 shares (subject to adjustment for stock dividends, subdivisions, reclassifications, recapitalizations and other similar events) of the Company’s common stock at the beginning of the first year of employment and (ii) 250,000 shares (subject to adjustment for stock dividends, subdivisions, reclassifications, recapitalizations and other similar events) of common stock at the beginning of each employment year of the initial term.

 

 

On February 16, 2011 we entered into an employment agreement with Robert F.X. Sillerman for his services as Executive Chairman of the board of directors and Director.  The term of the agreement is for five years.  Mr. Sillerman’s base salary is $1,000,000 (payable in cash or shares of common stock) to be increased annually by the greater of:  (i) five percent or (ii) the current base salary multiplied by the percentage increase in the Consumer Price Index published by the Federal Bureau of Labor Statistics for the New York, New York metropolitan area during the previous twelve calendar months.  He is to receive additional compensation at the sole discretion of the board of directors in the form of additional cash bonus and/or grant of restricted stock, stock options or other equity award.   Mr. Sillerman will receive a minimum grant of restricted stock in the amount of 5,000,000 shares (subject to adjustment for stock dividends, subdivisions, reclassifications, recapitalizations and other similar events) of the Company’s common stock at the beginning of the first year of employment.

 

The Company entered into an employment agreement with Chris Stephenson, pursuant to which Mr. Stephenson shall serve as Chief Marketing Officer of the Company. The initial term of Mr. Stephenson’s employment is three years. The agreement requires that Mr. Stephenson devote his full working time to the Company. During the term of the agreement, the Company shall pay Mr. Stephenson an initial annualized base salary equal to $400,000.  Mr. Stephenson shall be entitled to a restricted share grant of 250,000 shares of the Company’s common stock at the beginning the first employment year, 1/3 of which will vest at the end of each employment year (assuming Mr. Stephenson is still employed by the Company) and 100,000 shares of the Company’s common stock at the beginning of each year of Mr. Stephenson’s employment term, 1/3 of which vest at the end of each employment year (assuming Mr. Stephenson is still employed by the Company).

           The foregoing descriptions of the employment agreements with Ms. Scardino and Messrs. Sillerman and Stephenson are not complete and are qualified in their entireties by reference to the complete text of the Agreements.  Copies of the employment agreements with Ms. Scardino and Mr. Sillerman are filed as Exhibits 10.3 and 10.4 to the Company’s Form 8-K filed with the SEC on February 16, 2011, and a copy of the employment agreement with Mr. Stephenson is filed as Exhibit 13.1 to the Company’s quarterly report on Form 10-Q filed with the SEC on May 12, 2011, each of which is incorporated herein by reference.

 

 

The table below summarizes the compensation earned for services rendered to the Company for the fiscal years ended June 30, 2011 and June 30, 2010 by our Chief Executive Officer and the two other most highly compensated executive officers of the Company (the “named executive officers”) who served in such capacities at the end of the fiscal year ended June 30, 2011. Except as provided below, none of our named executive officers received any other compensation required to be disclosed by law or in excess of $10,000 annually.

Name and Principal Position	Fiscal Year		Salary ($)				Bonus ($)				Stock Awards ($)(1)				Option Awards ($)				All Other Compensation ($)				Total ($)
Robert F.X. Sillerman	2011			379,000								85,000,000								650				85,380,000	(2)
Executive Chairman	2010			--				--				--				--				--				--
Janet Scardino	2011			189,000								38,250,000								2,000				38,441,000	(2)
Chief Executive Officer	2010			--				--				--				--				--				--
Christopher Stephenson	2011			67,000								3,588,000								300				3,655,000
Chief Marketing Officer	--			--				--				--				--				--				--

 

 

 

 

In the future, the Compensation Committee  will award restricted stock grants based on benchmarking against comparable companies.  In addition, each year, the Compensation Committee will exercise in its sole discretion its compensation policy consistently with all of  our executives.

Outstanding Equity Awards at June 30, 2011
 

Option Awards																		Stock Awards
Name		Number of Securities Underlying Unexercised Options (#)				Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)				Option Exercise Price ($)				Option Expiration Date				Number of Shares or Units of Stock that Have Not Vested (#)				Market Value of Shares or Units of Stock that Have Not Vested ($)				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)
Robert F.X. Sillerman (1)			--				--				--				--				5,000,000				45,250,000				--				--
			--				--				--				--				--				--				--				--
Janet Scardino (1) (2)			--				--				--				--				1,500,000				13,575,000				--				--
			--				--				--				--				--				--				--				--
Christopher Stephenson (1) (3)			--				--				--				--				550,000				4,977,500				--				--

(1)	No options have been granted.  For information regarding restricted stock units, see also Note 9 to our audited Consolidated Financial Statements, Share-Based Payments.
(2)	Includes 1,000,000 shares which will vest over a three-year period starting on the last day of the first employment year, 250,000 shares which will vest over a three-year period starting at the commencement of the second employment year, and 250,000 shares which will vest over a three-year period starting at the commencement of the third employment year. All shares were deemed granted on the date of execution of the employment agreement.
(3)	Includes 350,000 shares which will vest at the commencement of the first employment year, 100,000 shares at the commencement of the second employment year, and 100,000 shares at the commencement of the third employment year. All shares were deemed granted on the date of execution of the employment agreement.

 

 

 

 

 

 

 
 Employee directors do not receive any separate compensation for their board service. Non-employee directors receive the compensation described below.

 

 

 

Name		Fees Earned or Paid in Cash ($)				Stock Awards ($)				Option Awards ($)				All Other Compensation ($)				Total ($)
Benjamin Chen  (1)			30,000				---				---				---				30,000
Peter Horan			32,000				---				---				---				32,000
John D. Miller			35,000				---				---				---				35,000
Joseph Rascoff			36,000				---				---				---				36,000
Harriet Seitler			30,000				---				---				---				30,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.

To oversee the accounting and financial reporting processes of the Company and audits of the financial statements of the Company, in consultation with the Chief Accounting Officer and senior accounting staff of the Company.

 

2.

To provide assistance to the Board of Directors with respect to its oversight of:

 

(a)

The integrity of the Company’s financial statements;

 

(b)

The Company’s compliance with legal and regulatory requirements, including an evaluation of the performance and competence of the Company’s legal personnel as they relate to the audit function and general maintenance of corporate financial standards;

 

 

(c)

The independent auditor’s qualifications and independence;

 

(d)

The performance of the Company’s internal audit function and independent auditors; and

 

(e)

An evaluation of the performance and competence of the Company’s senior financial employees, including the Chief Accounting Officer.

 

 

 

 

1.

To discharge the responsibilities of the Board of Directors relating to the Company’s compensation programs and compensation of the Company’s executives; and

 
 

2.

To produce an annual report on executive compensation for inclusion in the Company’s annual proxy statement, if and when required, in accordance with applicable rules and regulations of the NASDAQ Stock Market, SEC, and other regulatory bodies.

 

 

 

1.

To identify individuals qualified to become Board members and to select, or to recommend that the Board of Directors select, the director nominees for the next annual meeting of stockholders;

 

2.

To develop and recommend to the Board of Directors a set of corporate governance principles applicable to the Company; and

 

3.

To oversee the selection and composition of committees of the Board of Directors and, as applicable, oversee management continuity planning processes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of Beneficial Owner		Shares Beneficially Owned Before the Offering				Maximum Number of Shares to be Sold				Beneficial Shares After the Offering (1)				Percentage of Common Stock Owned After Offering (1)
Adage Capital Partners L.P. (2)			13,232,597				13,232,597				0				*
Lisbeth R. Barron(3)			658,000				658,000				0				*
David Bailin			282,000				282,000				0				*
Berenson Investments LLC(4)			100,000				100,000				0				*
Walter P. Carucci			95,060				50,000				45,060				*
Ronald W. Hayes			54,834				50,000				4,834				*
J. Howard, Inc. (5)			75,000				75,000				0				*
EMH Howard LLC (6)			270,501				75,000				195,501				*

 

 

 

 

 

 

 

 

 

 

Plan Category		(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights				(b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (1)(2)				(c) Number of Securities Remaining Available for Future Issuance Under  Equity Compensation Plans (Excluding Securities Reflected in Column (a))
			(#)			($)					(#)
Equity compensation plans approved by security holders			13,626,875				3.32			$	16,373,125
Equity compensation plans not approved by security holders			-				-				-

 

 

 

 

●	each person or entity known by us to beneficially own more than 5% of the outstanding shares of our common stock,
●	each of our named executive officers;
●	each of our directors; and
●	all of our directors and executive officers, named as a group.

 

 

Name and Address of Beneficial Owner(1)		Shares Beneficially Owned				Percentage of Common Stock
Beneficial Owners of 5% or More
Robert F.X. Sillerman (2)			113,494,000				75.6	%
Adage Capital Management, L.P. (3)			13,232,597				8.9	%
Directors and Named Executive Officers (not otherwise included above):
Janet Scardino (4)			2,733,333				1.8	%
Benjamin Chen (5)			62,500				*
Peter C. Horan (6)			62,500				*
John D. Miller (7)			1,262,500				*
Mitchell J. Nelson (8)			374,000				*
Joseph Rascoff (9)			62,500				*
Chris Stephenson (10)			0				*
Harriet Seitler (11)			62,500				*
All directors and named executive officers as a group (9 people)			118,113,833				78.3	%

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·	ordinary brokerage transactions and transactions in which the broker dealer solicits purchasers;

·	block trades in which the broker dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

·	purchases by a broker dealer as principal and resale by the broker dealer for its account;

·	an exchange distribution in accordance with the rules of the applicable exchange;

·	privately negotiated transactions;

 

 

·	settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;

·	in transactions through broker dealers that agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

·	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

·	a combination of any such methods of sale; or

·	any other method permitted pursuant to applicable law.