As filed with the Securities and Exchange Commission on July 8, 2003
Registration No. _________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FIRST CASH FINANCIAL SERVICES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 5932 75-2237318
-------- ---- ----------
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification Number)
incorporation or Code Number)
organization)
690 E. Lamar Blvd., Suite 400 Copy to: Phillip E. Powell
Arlington, Texas 76011 Thomas C. Pritchard, Esq. 690 E. Lamar Blvd.
(817) 460-3947 Brewer & Pritchard, P.C. Suite 400
(Address, including zip 1111 Bagby, 24th Floor Arlington, Texas 76011
code, and telephone number, Houston, Texas 77002 (Name, address, including
including area code, Phone (713) 209-2950 zip code, phone number,
of registrant's Fax (713) 209-2921 including area code,
principal executive offices) of agent for service)
Approximate date of commencement of proposed sale to the public: As
soon as practicable 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, 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, check the following box
and list the Securities Act registration statement number of 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 this form is a post-effective amendment filed pursuant to Rule
462(d) 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 Each Class Proposed Proposed Maximum
of Securities Amount Maximum Aggregate Amount of
To Be Being Offering Price Offering Registration
Registered Registered Per Share(1) Price(1) Fee
- --------------------------------------------------------------------------------
Resale of Common Stock
Underlying Warrants 815,000 $14.45 $11,776,750 $953
- --------------------------------------------------------------------------------
TOTAL $11,776,750 $953
================================================================================
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based on the average of the high and low sales
prices for the common stock, as reported by the Nasdaq Stock Market on July
3, 2003, or $14.45 per share.
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 on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
Subject to completion, dated July 8, 2003
PROSPECTUS
FIRST CASH FINANCIAL SERVICES, INC.
815,000 SHARES OF COMMON STOCK
This prospectus relates to the resale of up to 815,000 shares of common
stock of First Cash Financial Services, Inc., underlying currently
exercisable stock purchase warrants.
The selling stockholders may offer their shares through public or
private transactions, at prevailing market prices, or at privately
negotiated prices. See "Plan of Distribution". We will not receive any
proceeds from the sale of common stock by the selling stockholders, but may
receive up to $7,300,625 upon the exercise of the warrants.
Our common stock is traded on the Nasdaq National Market under the
symbol "FCFS." On July 3, 2003, the last sale price of our common stock was
$14.65 per share.
Investing in our common stock involves risks. You should carefully
consider the risks we have described under the caption "Risk Factors"
beginning on page 2 before deciding whether to invest in our common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary
in a criminal offense.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.
The date of this prospectus is _______, 2003
TABLE OF CONTENTS
Company ....................................... 1
Risk Factors................................... 2
Use of Proceeds................................ 6
Description of Securities...................... 7
Plan of Distribution and Selling Stockholders.. 9
Incorporation of Certain Documents By Reference 11
Available Information.......................... 12
SEC's Position on Indemnification.............. 12
Legal Matters.................................. 12
Experts........................................ 12
THE COMPANY
-----------
First Cash Financial Services, Inc. is a leading provider of specialty
consumer finance products. The Company currently owns and operates 211
pawnshops and check cashing/short-term loan stores in eleven U.S. states and
Mexico.
The Company is the third largest publicly traded pawnshop operator in
the United States and currently has 145 pawn stores in Texas, Oklahoma,
South Carolina, Washington, D.C., Maryland, Missouri, Virginia and Mexico.
The Company's pawnshops engage in both consumer finance and retail sales
activities. They provide a convenient source for consumer loans, lending
money against pledged tangible personal property such as jewelry, electronic
equipment, tools, firearms, sporting goods and musical equipment. These
pawn stores also function as retailers of previously-owned merchandise
acquired in forfeited pawn transactions and over-the-counter purchases from
customers. The pawnshops in certain markets also offer short-term advances
as an additional loan product.
The Company also currently owns 66 check cashing/short-term advance
stores in Texas, California, the District of Columbia, Illinois, Oregon,
South Carolina and Washington. These stores provide a broad range of
consumer financial services, including check cashing, short-term advances,
money order sales, wire transfers and bill payment services. In addition,
the Company is a 50% partner in Cash & Go, Ltd., a Texas limited
partnership, that currently owns and operates 41 financial services kiosks
located inside convenience stores in the Texas market.
The pawnshop industry, while mature, remains highly fragmented with
approximately 15,000 stores in the United States. According to the
investment banking firm Stephens, Inc. the three largest publicly traded
pawnshop companies operate approximately 6% of the total pawnshops in
the United States. Management believes significant economies of scale,
increased operating efficiencies, and revenue growth are achievable by
increasing the number of stores under operation and utilizing modern
merchandising techniques, point of-sale systems, improved inventory
management and store remodeling.
The short-term advance industry is less fragmented than the pawnshop
industry, but growing at a faster rate. Stephens, Inc. reports that the
three largest operators control approximately one-quarter of the short-term
advance market. At the same, according to Stephens, Inc., the number of
short-term advance transactions is estimated to be growing nationwide at a
rate of 15% to 20% per year. Despite concentration of major competitors in
the short-term advance market, management believes that there are
significant opportunities for growth, especially in certain states with
large, underserved populations.
The Company's objectives are to increase consumer pawn loans, short-
term advance loans and retail sales through new store openings in
strategically selected regions and to continue to enhance operating
efficiencies and productivity in its existing stores. During fiscal 2001 and
2002, the Company opened 18 and 38 stores, respectively. The Company closed
a total of 14 stores during fiscal 2001 and 2002. During fiscal 2002, the
Company's revenues were derived 48% from retail merchandise sales, 49% from
lending activities and 3% from other sources, primarily check-cashing fees.
The Company was formed as a Texas corporation in July 1988 and in
April 1991 the Company reincorporated as a Delaware corporation. Except
as otherwise indicated, the term "Company" includes its wholly-owned
subsidiaries, American Loan & Jewelry, Inc., WR Financial, Inc., Famous
Pawn, Inc., JB Pawn, Inc., Cash & Go, Inc., Capital Pawnbrokers, Inc.,
Silver Hill Pawn, Inc., One Iron Ventures, Inc., Elegant Floors, Inc., First
Cash S.A. de C.V., American Loan Employee Services, S.A. de C.V., First
Cash, Ltd., First Cash Corp, First Cash Management, LLC, and First Cash,
Inc. In addition, the Company owns 50% Cash & Go, Ltd, a Texas limited
partnership, which it accounts for using the equity method. The Company is
evaluating the applicability of FASB Interpretation No. 46, Consolidation of
Variable Interest Entities _ An Interpretation of ARB No. 51, which is a
recent accounting pronouncement that addresses consolidation by business
enterprises of certain variable interest entities. If required, the
potential consolidation of Cash & Go, Ltd., of which the Company owns a 50%
interest, would become effective during the fiscal quarter ending September
30, 2003.
The Company's principal executive offices are located at 690 East Lamar
Blvd., Suite 400, Arlington, Texas 76011, and its telephone number is (817)
460-3947.
RISK FACTORS
------------
You should carefully consider the risks described below before making
an investment decision. The risks described below are not the only ones
facing the Company. Additional risks not presently known to us, or that we
currently deem immaterial, may also impair our business operations.
Our business, financial condition or results of operations could be
materially adversely affected by any of these risks. The trading price of
the common stock could decline due to any of these risks, and you may lose
all or part of your investment.
This prospectus also contains forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including the risks faced by us described below and elsewhere in
this prospectus.
Management of Growth
--------------------
The success of the Company's growth strategy is dependent, in part,
upon the ability to select advantageous locations, negotiate favorable
leases, maintain adequate financial controls and reporting systems, to
manage a larger operation and to obtain additional capital upon favorable
terms. On average, a new store becomes profitable approximately six to
twelve months after establishment. There can be no assurance that the
Company will be able to successfully establish profitable new locations or
manage a larger operation.
Access to Credit
----------------
The Company maintains a long-term line of credit with a group of
commercial lenders. The current credit facility provides a $30 million
long-term line of credit that matures on August 9, 2005 and bears interest
at the prevailing LIBOR rate plus an applicable margin based upon a defined
leverage ratio for the Company. Under the terms of the current credit
facility, the Company is required to maintain certain financial ratios and
comply with certain covenants. The purpose of the credit facility is to
provide the working capital necessary to support the Company's lending and
retail activities. Failure of the Company to maintain or renew the current
credit facility upon its maturity at comparable terms and rates may
adversely affect the Company's revenues, profitability and its ability to
expand.
Statutory Restrictions on Opening New Stores
--------------------------------------------
The Company's ability to open new pawn stores in Texas counties having
a population of more than 250,000 may be adversely affected by a law which
requires minimum distances between new or relocated pawn licenses. In
addition, some counties in Maryland in which the Company currently operates
have enacted moratoriums on new pawn licenses, which may adversely affect
the Company's ability to expand its operations in those counties. Also, the
present statutory and regulatory environment of some states for both
pawnshops and check cashers renders expansion into those states impractical.
For example, certain states require public sale of forfeited collateral or
do not permit service charges sufficient to make pawnshop operations
profitable.
Availability of Qualified Store Management Personnel
----------------------------------------------------
The Company's ability to expand may also be limited by the availability
of qualified store management personnel. While the Company seeks to train
existing qualified personnel for management positions and to create
attractive compensation packages to retain existing management personnel,
there can be no assurance that sufficient qualified personnel will be
available to satisfy the Company's needs with respect to its planned
expansion.
Dependence on Key Personnel
---------------------------
The success of the Company is dependent upon, among other things, the
services of Phillip E. Powell, chairman of the board and chief executive
officer, Rick L. Wessel, president, and Alan Barron, chief operating
officer. The Company has entered into employment agreements with Messrs.
Powell, Wessel and Barron. The loss of the services of any of these three
officers could have a material adverse effect on the Company.
Governmental Regulation
-----------------------
General
The Company is subject to extensive regulation in most jurisdictions in
which it operates, including jurisdictions that regulate pawn lending,
short-term advance fees and check cashing fees. The Company's pawnshop and
short-term advance operations in the United States are subject to, and must
comply with, extensive regulation, supervision and licensing from various
federal, state and local statutes, ordinances and regulations. These
statutes prescribe, among other things, service charges and interest rates
that may be charged. These regulatory agencies have broad discretionary
authority. The Company is also subject to federal and state regulation
relating to the reporting and recording of certain currency transactions.
The Company's pawnshop operations in Mexico are also subject to, and must
comply with, general business, tax and consumer protection regulations from
various federal, state and local governmental agencies in Mexico. There can
be no assurance that additional state or federal statutes or regulations in
either the United States or Mexico will not be enacted or that existing laws
and regulations will not be amended at some future date which could inhibit
the ability of the Company to expand, significantly decrease the service
charges for lending money, or prohibit or more stringently regulate the sale
of certain goods, any of which could cause a significant adverse effect on
the Company's future prospects.
State Regulations
The Company operates in seven states that have licensing and/or fee
regulations on pawns, including Texas, Oklahoma, Maryland, Virginia, South
Carolina, Washington, D.C., and Missouri. The Company is licensed in each
of the states in which a license is currently required for it to operate as
a pawnbroker. The Company's fee structures are at or below the applicable
rate ceilings adopted by each of these states. In addition, the Company is
in compliance with the net asset requirements in states where it is required
to maintain certain levels of liquid assets for each pawn store it operates
in the applicable state.
The Company also operates in states that have licensing, and/or fee
regulations on check cashing and short-term advances, including California,
Washington, Missouri, South Carolina, Oregon, Illinois and Washington, D.C.
The Company is licensed in each of the states in which a license is
currently required for it to operate as a check casher and/or short-term
lender. In addition, in some jurisdictions, check cashing companies or
money transmission agents are required to meet minimum bonding or capital
requirements and are subject to record-keeping requirements.
In Texas, which does not have favorable short-term lending laws, the
Company has entered into an agreement with County Bank of Rehoboth Beach,
Delaware, a federally insured state of Delaware chartered financial
institution, to act as a loan servicer within the state of Texas for County
Bank. As compensation for the Company acting as County Bank's loan
servicer, the Company is entitled to purchase a participation in the loans
made by County Bank. The Company's ability to continue to maintain its
current relationship with County Bank and to continue to service County Bank
loans within the state of Texas is subject to County Bank's ability to
continue to export its loan product to the state of Texas. There can be no
assurance that County Bank will be able to continue to export its loan
product to the state of Texas and the bank's failure to do so could have a
materially adverse impact on the Company's operations and financial
condition.
Federal Regulations
The U.S. Office of Comptroller of the Currency has recently initiated
enforcement actions to restrict the ability of nationally chartered banks to
establish or maintain relationships with loan servicers in order to make
out-of-state short-term advance loans. The Company does not currently
maintain nor intend in the future to establish loan-servicing relationships
with nationally chartered banks. The Federal Deposit Insurance Corporation
("FDIC"), which regulates the ability of state chartered banks to enter into
relationships with loan servicers, has recently issued examiner guidelines
under which such arrangements are permitted. Texas is the only state in
which the Company functions as loan servicer through a relationship with a
state chartered bank, County Bank of Rehoboth Beach, Delaware, that is
subject to the FDIC examiner guidelines. The effect of the new guidelines
on the Company's ability to offer short-term advances in Texas under its
current loan servicing arrangement with County Bank is unknown at this time.
If the FDIC's new guidelines ultimately restrict the ability of state banks
to maintain relationships with loans servicers, it could have a materially
adverse impact on the Company's operations and financial condition.
Under the Bank Secrecy Act regulations of the U.S. Department of the
Treasury (the "Treasury Department"), transactions involving currency in an
amount greater than $10,000 or the purchase of monetary instruments for cash
in amounts from $3,000 to $10,000 must be recorded. In general, every
financial institution, including the Company, must report each deposit,
withdrawal, exchange of currency or other payment or transfer, whether by,
through or to the financial institution, that involves currency in an amount
greater than $10,000. In addition, multiple currency transactions must be
treated as single transactions if the financial institution has knowledge
that the transactions are by, or on behalf of, any person and result in
either cash in or cash out totaling more than $10,000 during any one
business day.
The Money Laundering Suppression Act of 1994 added a section to the
Bank Secrecy Act requiring the registration of "money services businesses,"
like the Company, that engage in check-cashing, currency exchange, money
transmission, or the issuance or redemption of money orders, traveler's
checks, and similar instruments. The purpose of the registration is to
enable governmental authorities to better enforce laws prohibiting money
laundering and other illegal activities. The regulations require money
services businesses to register with the Treasury Department, by filing a
form to be adopted by the Financial Crimes Enforcement Network of the
Treasury Department ("FinCEN"), by December 31, 2001 and to re-register at
least every two years thereafter. The regulations also require that a money
services business maintain a list of names and addresses of, and other
information about, its agents and that the list be made available to any
requesting law enforcement agency (through FinCEN). That agent list must be
updated at least annually.
In March 2000, FinCEN adopted additional regulations, implementing the
Bank Secrecy Act that is also addressed to money services businesses. In
pertinent part, those regulations will require money services businesses
like the Company to report suspicious transactions involving at least $2,000
to FinCEN. The regulations generally describe three classes of reportable
suspicious transactions _ one or more related transactions that the money
services business knows, suspects, or has reason to suspect (1) involve
funds derived from illegal activity or are intended to hide or disguise such
funds, (2) are designed to evade the requirements of the Bank Secrecy Act,
or (3) appear to serve no business or lawful purpose.
Under the USA PATRIOT Act passed by Congress in 2001, the Company is
required to maintain an anti-money laundering compliance program. The
program must include (1) the development of internal policies, procedures
and controls; (2) the designation of a compliance officer; (3) an ongoing
employee training program; and (4) an independent audit function to test the
program. The United States Department of Treasury is expected to issue
regulations specifying the appropriate features and elements of the anti-
money laundering compliance programs for the pawnbrokering and short-term
advance industries.
The Gramm-Leach-Bliley Act and its implementing federal regulations
require the Company to generally protect the confidentiality of its
customers' nonpublic personal information and to disclose to its customers
its privacy policy and practices, including those regarding sharing
the customers' nonpublic personal information with third parties. Such
disclosure must be made to customers at the time the customer relationship
is established, at least annually thereafter, and if there is a change in
the Company's privacy policy.
With respect to firearms sales, the Company must comply with the
regulations promulgated by the Department of the Treasury-Bureau of Alcohol,
Tobacco and Firearms, which requires firearms dealers to maintain a
permanent written record of all firearms that it receives or sells. The
Company does not currently sell handguns to the public.
Proposed Regulations
Governmental action to prohibit or restrict short-term advances has
been advocated over the past few years by consumer advocacy groups and by
media reports and stories. The consumer groups and media stories typically
focus on the cost to a consumer for that type of short-term advance, which
is higher than the interest typically charged by credit-card issuers to a
more creditworthy consumer. The consumer groups and media stories typically
characterize short-term advance activities as abusive toward consumers.
During the last few years, legislation has been introduced in the United
States Congress and in certain state legislatures, and regulatory
authorities have proposed or publicly addressed the possibility of proposing
regulations, that would prohibit or restrict short-term advances.
Legislation and regulatory action at the state level that affects
consumer lending has recently become effective in a few states and may be
taken in other states. The Company intends to continue, with others in the
short-term advance industry, to oppose legislative or regulatory action that
would prohibit or restrict short-term advances. But if legislative or
regulatory action with that effect were taken on the federal level or in
states such as Texas, in which the Company has a significant number of
stores, that action could have a material adverse effect on the Company's
short-term advance-related activities and revenues. There can be no
assurance that additional local, state, or federal legislation will not be
enacted or that existing laws and regulations will not be amended, which
would materially, adversely impact the Company's operations and financial
condition..
Competition
-----------
The Company encounters significant competition in connection with the
operation of both its pawnshop and check cashing/short-term advance
businesses. In connection with lending operations, the Company competes with
other pawnshops (owned by individuals and by large operators) and certain
financial institutions, such as consumer finance companies, which generally
lend on an unsecured as well as on a secured basis. The Company's
competitors in connection with its retail sales include numerous retail and
discount stores. In connection with its check cashing/short-term advance
operations, the Company competes with large payday advance operators, banks,
grocery stores, and other check cashing companies. Many competitors have
greater financial resources than the Company. These competitive conditions
may adversely affect the Company's revenues, profitability and ability to
expand.
Risks Related to Rightful Owner Claims
--------------------------------------
In connection with pawnshops operated by the Company, there is the risk
that acquired merchandise may be subject to claims of rightful owners.
Historically, the Company has not found these claims to have a material
adverse effect on results of operations, and, accordingly, the Company does
not maintain insurance to cover the costs of returning merchandise to its
rightful owners. The Company requires each customer obtaining a loan to
provide appropriate identification. Under some municipal ordinances, pawn
stores must provide the police department having jurisdiction copies of all
daily transactions involving pawns and over-the-counter purchases. These
daily transaction reports are designed to provide the local police with a
detailed description of the goods involved including serial numbers, if any,
and the name and address of the owner obtained from a valid identification
card. If these ordinances are applicable, a copy of the transaction ticket
is provided to local law enforcement agencies for processing by the National
Crime Investigative Computer to determine rightful ownership. Goods held to
secure pawns or goods purchased which are determined to belong to an owner
other than the borrower or seller are subject to recovery by the rightful
owners.
Market Risks
------------
Market risks relating to the Company's operations result primarily from
changes in interest rates, foreign exchange rates, and gold prices. The
Company does not engage in speculative or leveraged transactions, nor does
it hold or issue financial instruments for trading purposes.
Interest Rate Risk
The Company is exposed to market risk in the form of interest rate
risk. At December 31, 2002, the Company had $28 million outstanding under
its revolving line of credit. This revolving line is priced with a variable
rate based on LIBOR or a base rate, plus an applicable margin based on a
defined leverage ratio for the Company. Based on the average outstanding
indebtedness during the year ended December 31, 2002, a 10% increase in
interest rates would have increased the Company's interest expense by
approximately $2,692,000 for the year ended December 31, 2002. At March
31, 2003, the Company had $17 million outstanding under its revolving line
of credit.
Foreign Currency Risk
Most of the Company's pawn loans in Mexico are contracted and valued in
U.S. dollars and therefore the Company bears limited exchange risk from its
operations in Mexico. The Company maintained certain peso denominated bank
balances at March 31, 2003, which converted to a US dollar equivalent of
$35,000.
Gold Price Risk
A significant and sustained decline in the price of gold would
negatively impact the value of jewelry inventories held by the Company and
the value of jewelry pledged as collateral by pawn customers. As a result,
the Company's profit margins on existing jewelry inventories would be
negatively impacted, as would be the potential profit margins on jewelry
currently pledged as collateral by pawn customers in the event it is
forfeited by the pawn customer. In addition, a decline in gold prices could
result in a lower balance of pawn loans outstanding for the Company as
customers would receive lower loan amounts for individual pieces of jewelry.
The Company believes that many customers would be willing to add additional
items of value to their pledge in order to obtain the desired loan amount,
thus mitigating a portion of this risk.
FORWARD-LOOKING STATEMENTS
--------------------------
This prospectus contains certain statements that are "forward-looking
statements" within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act. Forward-looking statements can be
identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "projects," "estimates," "will," "should," "plans," or
"anticipates" or the negative thereof, or other variations thereon, or
comparable terminology, or by discussions of strategy. Such statements
include, but are not limited to, the discussions of the Company's
operations, liquidity, and capital resources. Forward-looking statements are
included in the "Risk Factors" section of this prospectus, as well as in the
Company's filings with the Securities and Exchange Commission pursuant to
the Exchange Act, some of which are incorporated by reference herein.
Although the Company believes that the expectations reflected in forward-
looking statements are reasonable, there can be no assurances that such
expectations will prove to be accurate. Generally, these statements relate
to business plans, strategies, anticipated strategies, levels of capital
expenditures, liquidity and anticipated capital funding needed to effect the
business plan. All phases of the Company's operations are subject to a
number of uncertainties, risks and other influences, many of which are
outside the control of the Company and cannot be predicted with any degree
of accuracy. Factors such as changes in regional or national economic
conditions, changes in governmental regulations, unforeseen litigation, the
ability to maintain favorable third-party bank relationships as it relates
to providing short-term lending products in certain markets, changes in
interest rates or tax rates, significant changes in the prevailing market
price of gold, future business decisions and other uncertainties may cause
results to differ materially from those anticipated by some of the
statements made in this prospectus. In light of the significant
uncertainties inherent in forward looking statements, the inclusion of such
statements should not be regarded as a representation by the Company or any
other person that the objectives and plans of the Company will be achieved.
Security holders are cautioned that such forward-looking statements involve
risks and uncertainties. The forward-looking statements contained this
prospectus speak only as of the date of this prospectus and the Company
expressly disclaims any obligation or undertaking to release any updates or
revisions to any such statement to reflect any change in the Company's
expectations or any change in events, conditions or circumstance on which
any such statement is based.
USE OF PROCEEDS
---------------
We will not receive any proceeds from the sale of the common stock by
the selling stockholders under this prospectus, although the sale of shares
issuable upon a cash exercise of the warrants will be preceded by the
payment to us of the warrant exercise price. The maximum gross proceeds
that we might receive upon exercise of the warrants is approximately
$7,300,625. We intend to use any such proceeds for general working capital.
There can be no assurance, however, that the warrants will be exercised for
cash, or at all.
DESCRIPTION OF SECURITIES
-------------------------
Common Stock
The Company is authorized to issue 20,000,000 shares of Common Stock,
par value $.0l per share. As of July 3, 2003, there were 8,959,187 shares
of Common Stock issued and outstanding that were held of record by
approximately 67 shareholders. We have reserved for issuance an aggregate
of 4,087,848 shares of Common Stock underlying the Company's stock option
plans and currently outstanding stock purchase warrants.
Holders of Common Stock are entitled, among other things, to one vote
per share on each matter submitted to a vote of stockholders and, in the
event of liquidation, to share ratably in the distribution of assets
remaining after payment of liabilities. Holders of Common Stock have no
cumulative voting rights, and, accordingly, the holders of a majority of the
outstanding shares have the ability to elect all of the directors. Holders
of Common Stock have no preemptive or other rights to subscribe for shares.
Holders of Common Stock are entitled to such dividends as may be declared by
the Board of Directors out of funds legally available therefor.
Preferred Stock
The Company is authorized to issue 10,000,000 shares of preferred
stock, from time to time, in series and with respect to each series to
determine (i) the number of shares constituting such series, (ii) the
dividend rate on the shares of each series, (iii) whether such dividends
shall be cumulative and the relation of such dividends payable on any other
class or series of stock, (iv) whether the shares of each series shall be
redeemable and the terms thereof, (v) whether the shares shall be
convertible into Common Stock and the terms thereof, (vi) the amount per
share payable on each series or other rights of holders of such shares on
liquidation or dissolution of the Company, (vii) the voting rights, if any,
of shares of each series and (viii) generally, any other designations,
powers, preferences, rights and privileges consistent with the certificate
of incorporation for each series and any qualifications, limitations or
restrictions.
It is not possible to state the actual effect of the issuance of
preferred stock upon the rights of holders of Common Stock until the Board
of Directors determines the specific rights of the holders of a series of
preferred stock.
However, such effects might include, among other things, restricting
dividends on Common Stock, diluting the voting power of Common Stock,
impairing the liquidation rights of Common Stock and delaying or preventing
a change in control of the Company without further action by the
stockholders.
Options and Warrants
As of July 7, 2003, the Company has issued options to purchase an
aggregate of 1,097,750 shares of Common Stock at exercise prices ranging
from $2.00 to $10.00 per share, expiring between April 2005 and January
2013. As of July 7, 2003, the Company has issued warrants to purchase an
aggregate of 1,634,661 shares of Common Stock at exercise prices ranging
from $2.00 to $13.00 per share, expiring between April 2005 and June 2013.
Transfer Agent
The transfer agent and registrar for the Common Stock is Registrar and
Transfer Company, Cranford, New Jersey.
Delaware Anti-Takeover Law
The Company is subject to Section 203 of the Delaware General
Corporation Law ("Section 203"), which, subject to certain exceptions,
prohibits a Delaware corporation from engaging in any business combinations
with any interested stockholder for a period of three years following the
date that such stockholder became an interested stockholder, unless (i)
before such date the board of directors of the corporation approved either
the business combination or the transaction that resulted in the stockholder
becoming an interested stockholder, (ii) upon consummation of the
transaction that resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction commenced,
excluding for purposes of determining the number of shares outstanding those
shares owned (x) by persons who are directors and also officers and (y) by
employee stock plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer, or (iii) on or after such date the
business combination is approved by the board of directors and authorized at
an annual or special meeting of stockholders, and not by written consent, by
the affirmative vote of at least 66 2/3% of the outstanding voting stock
which is not owned by the interested stockholder.
Section 203 defines business combination to include (i) any merger or
consolidation involving the corporation and the interested stockholder, (ii)
any sale, lease, exchange, mortgage, transfer, pledge or other disposition
involving the interested stockholder of 10% or more of assets of the
corporation, (iii) subject to certain exceptions, any transaction that
results in the issuance or transfer by the corporation of any stock of the
corporation to the interested stockholder, (iv) any transaction involving
the corporation that has the effect of increasing the proportionate share of
the stock of any class or series of the corporation beneficially owned by
the interested stockholder or (v) the receipt by the interested stockholder
of the benefit of any loans, advances, guarantees, pledges or other
financial benefits provided by or through the corporation. In general,
Section 203 defines an interested stockholder as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such an entity or person.
PLAN OF DISTRIBUTION AND SELLING STOCKHOLDERS
---------------------------------------------
This prospectus relates to the resale from time to time of up to a
total of 815,000 shares of Company common stock by the selling stockholders,
which shares are comprised of currently exercisable common stock purchase
warrants. The following table sets forth certain information with respect to
the registration of shares of common stock. The Company might receive up to
$7,300,625 upon exercise of the warrants. We have prepared the table based
on information given to us by the selling stockholders on or before June 24,
2003, and assuming that such shares, the resale of which is being registered
hereby, are sold.
Shares of Common
Shares Stock Beneficially
Beneficially Owned After the Offering
Owned ------------------------
Before Resale Amount Offered Number Percentage
------------- -------------- ------- ----------
Alan Barron 273,886 65,000 208,886 2.29%
Joe Love 441,500 75,000 366,500 3.96%
Christopher J. Lee 54,837 20,000 34,837 0.39%
Clarence L. Woodcock 10,000 10,000 0 0.00%
Cynthia White 10,343 10,000 343 0.00%
Dennis Norris 2,276 2,000 276 0.00%
James Don Dougan 18,502 2,000 16,502 0.18%
Jan A. Hartz 16,917 15,000 1,917 0.02%
Jeffrey Angelcyk 10,863 10,000 863 0.01%
Jimmy Seale 25,000 15,000 10,000 0.11%
John Powell 10,000 10,000 0 0.00%
Jose A. Ramirez 6,898 2,000 4,898 0.05%
Michael McCollum 8,603 2,000 6,603 0.07%
Miguel J. Trevino 2,382 2,000 382 0.00%
Nancy Talley 12,141 12,000 141 0.00%
Peter McDonald 27,854 13,000 14,854 0.17%
Raul Ramos 35,000 20,000 15,000 0.17%
Richard Burke 1,588,000 25,000 1,563,000 17.10%
Rick Powell 1,151,537 300,000 851,537 8.48%
Rick Wessel 535,378 180,000 355,378 3.78%
Tara Schuchmann 101,000 25,000 76,000 0.84%
Richard Burke, Joe Love and Tara Schuchmann are directors of the
Company. The warrants referenced in the table above for Mr. Burke and Ms.
Schuchmann are exercisable at $4.00 per share. Of the warrants referenced
above for Mr. Love, 25,000 are exercisable at $4.625 per share and 50,000
are exercisable at $8.00 per share.
Phillip E. Powell is the chairman of the board and chief executive
officer of the Company. Of the warrants referenced in the table above for
Mr. Powell, 150,000 are exercisable at $8.00 per share, 100,000 are
exercisable at $10.10 per share and 50,000 are exercisable at $11.50 per
share. Rick Wessel is the president of the Company. Of the warrants
referenced in the table above for Mr. Wessel, 100,000 are exercisable at
$8.00 per share and 80,000 are exercisable at $11.50 per share. Alan Barron
is the chief operating officer of the Company. Of the warrants referenced
in the table above for Mr. Barron, 25,000 are exercisable at $8.00 per share
and 40,000 are exercisable at $13.00 per share.
All other warrants referenced in the table above are exercisable at
$8.00 per share.
The selling stockholders (or, subject to applicable law, their pledges,
donees, distributes, transferees, or successors-in-interest) are offering
shares of our common stock that will be acquired from us upon exercise of
common stock purchase warrants issued by us to the selling stockholders.
This prospectus covers the selling stockholders' resale of up to 815,000
shares of common stock underlying currently exercisable stock purchase
warrants.
In connection with our issuance to the selling stockholders of the
Company common stock, we are filing a Registration Statement on Form S-3
with the Securities and Exchange Commission. The registration statement
covers the resale of the Company common stock from time-to-time as indicated
in this prospectus. This prospectus forms a part of that registration
statement. We have also agreed to prepare and file any amendments and
supplements to the registration statement as may be necessary to keep it
effective so long as the warrants are outstanding and to indemnify and hold
the selling stockholders harmless against certain liabilities under the
Securities Act of 1933 that could arise in connection with the selling
stockholders' sale of the shares covered by this prospectus. We have agreed
to pay all reasonable fees and expenses incident to the filing of the
registration statement, but the selling stockholders will pay any brokerage
commissions, discounts or other expenses relating to the sale of the common
stock.
The selling stockholders may sell the shares of Company common stock
described in this prospectus directly or through underwriters, broker-
dealers or agents. The selling stockholders may also transfer, devise or
gift these shares by other means not described in this prospectus. As a
result, pledges, donees, transferees or other successors-in-interest that
receive such shares as a gift, dividend distribution or other non-sale
related transfer may offer shares of Company common stock covered by this
prospectus. In addition, if any shares covered by this prospectus qualify
for sale pursuant to Rule 144 under the Securities Act of 1933, the selling
stockholders may sell such shares under Rule 144 rather than pursuant to
this prospectus.
The selling stockholders may sell shares of Company common stock from
time-to-time in one or more transactions:
* at fixed prices that may be changed;
* at market prices prevailing at the time of sale; or
* at prices related to such prevailing market prices or at negotiated
prices.
The selling stockholders may offer their shares of common stock in one
or more of the following transactions:
* on any national securities exchange or quotation service on which the
common stock may be listed or quoted at the time of sale, including
the Nasdaq National Market;
* in the over-the-counter market;
* in privately negotiated transactions;
* through options;
* by pledge to secure debts and other obligations;
* by a combination of the above methods of sale; or
* to cover short sales made pursuant to this prospectus.
In effecting sales, brokers or dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate in the
resales. The selling stockholders may enter into hedging transactions with
broker-dealers, and in connection with those transactions, broker-dealers
may engage in short sales of the shares. The selling stockholders also may
sell shares short and deliver the shares to close out such short positions,
provided that the short sale is made after the registration statement has
been declared effective and a copy of this prospectus is delivered in
connection with the short sale. The selling stockholders also may enter into
option or other transactions with broker-dealers that require the delivery
to the broker-dealer of the shares, which the broker-dealer may resell
pursuant to this prospectus. The selling shareholders also may pledge the
shares to a broker or dealer, and upon a default, the broker or dealer may
effect sales of the pledge shares pursuant to this prospectus.
The Commission may deem the selling stockholders and any underwriters,
broker-dealers or agents that participate in the distribution of the shares
of common stock to be "underwriters" within the meaning of the Securities
Act. The Commission may deem any profits on the resale of the shares of
common stock and any compensation received by any underwriter, broker-dealer
or agent to be underwriting discounts and commissions under the Securities
Act. Each selling stockholder has purchased the common stock in the ordinary
course of its business, and at the time the selling stockholder purchased
the common stock it was not a party to any agreement or other understanding
to distribute the securities, directly or indirectly.
Under the Exchange Act, any person engaged in the distribution of the
shares of common stock may not simultaneously engage in market-making
activities with respect to the common stock for five business days prior to
the start of the distribution. In addition, each selling shareholder and any
other person participating in a distribution will be subject to the Exchange
Act, which may limit the timing of purchases and sales of common stock by
the selling shareholder or any such other person.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
-----------------------------------------------
The following documents filed by the Company with the Commission are
incorporated in this prospectus by reference:
a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2002, filed on March 27, 2003.
b) The Company's definitive proxy statement for the July 10, 2003
annual meeting, filed on April 30, 2003.
c) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2003, filed on May 8, 2003.
d) The Company's current reports filed on Form 8-K, filed on April 8,
2003, April 25, 2003 and May 14, 2003.
All financial statements included in the above-referenced filings
should be read in conjunction with the Risk Factors section of this
prospectus.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this prospectus and before
the termination of the offering covered hereby will be deemed to be
incorporated by reference in this prospectus and to be a part hereof from
the date of filing such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this prospectus
shall be deemed to be modified or superseded for purposes of this prospectus
to the extent that a statement contained in this prospectus or any
subsequently filed document that also is or is deemed to be incorporated by
reference modifies or replaces such statement.
The Company will provide, without charge upon oral or written request,
to each person to whom this prospectus is delivered, a copy of any or all of
the documents incorporated by reference, other than exhibits to such
documents not specifically incorporated by reference above. In addition, a
copy of the Company's most recent annual report to stockholders will be
promptly furnished, without charge and on oral or written request, to such
persons. Requests for such documents should be directed to the Company, 690
East Lamar, Suite 400, Arlington, Texas 76011, attention: Rick Wessel.
Any statements contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this prospectus.
AVAILABLE INFORMATION
---------------------
The Company files annual, quarterly and current reports, proxy
statements and other information with the SEC. You can inspect, read and
copy these reports, proxy statements and other information at the public
reference facilities the SEC maintains at Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549.
You can also obtain copies of these materials at prescribed rates by
writing to the Public Reference Section of the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549. You can obtain information on the operation of
the public reference facilities by calling the SEC at 1-800-SEC-0330. The
SEC also maintains a web site http://www.sec.gov that makes available
reports, proxy statements and other information regarding issuers that file
electronically with it.
This prospectus is part of a registration statement on Form S-3 that
the Company has filed with the SEC relating to the common stock underlying
currently exercisable stock purchase warrants. This prospectus does not
contain all of the information we have included in the registration
statement and the accompanying exhibits and schedules as permitted by the
rules and regulations of the SEC. The registration statement, exhibits and
schedules are available at the SEC's public reference room or through its
website.
SEC'S POSITION ON INDEMNIFICATION
---------------------------------
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling
the registrant pursuant to the foregoing provisions, the Company 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
and is therefore unenforceable.
LEGAL MATTERS
-------------
Certain matters in connection with the resale of the shares by the
selling stockholders will be passed upon by Brewer & Pritchard, P.C.,
Houston, Texas.
EXPERTS
-------
The financial statements incorporated in this prospectus by reference
from the Company's Annual Report on Form 10-K for the year ended December
31, 2002 have been audited by Deloitte & Touche LLP, independent auditors,
as stated in their report, which is incorporated herein by reference, and
have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses to be incurred in
connection with the distribution of the securities being registered. The
expenses shall be paid by the Company.
Filing Fee for Registration Statement............. $ 952.74
NASD Filing Fee ............................... $ 0.00
Printing, Engraving and Mailing Fees.............. $ 500.00
Legal Fees and Expenses........................... $ 3,000.00
Accounting Fees and Expenses...................... $ 2,500.00
Blue Sky Fees and Expenses .................... $ 0.00
Transfer Agent Fees ........................... $ 0.00
Miscellaneous ................................. $ 0.00
------------
Total ......................................... $ 6,952.74
============
Item 15. Indemnification of Directors and Officers
Article X of the Certificate of Incorporation of the Company provides
for indemnification of officers, directors, agents and employees of the
Company as follows:
(a) Each person who was or is made a party or is threatened to be made
a party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the
legal representative, is or was a director or officer of the Corporation or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the law, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than said law permitted the Corporation to provide prior to such amendment),
against all expense liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement) reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure
to the benefit of his or her heirs, executors and administrators: provided,
however, that, except as provided in paragraph (b) hereof, the Corporation
shall indemnify and such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such
proceeding (or part thereof) was authorized by the Board of Directors of the
Corporation. The right to indemnification conferred in this Article shall be
a contract right and shall include the right to be paid by the Corporation
the expenses incurred in defending any such proceeding in advance of its
final disposition: provided, however, that, if the law requires, the payment
of such expenses incurred by a director or officer in his or her capacity as
a director or officer (and not in any other capacity in which service was or
is rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts so advanced if it shall ultimately be determined that
such director or officer is not entitled to be indemnified under this
Article or otherwise. The Corporation may, by action of its Board of
Directors, provide indemnification to employees and agents of the
Corporation with the same scope and effect as the foregoing indemnification
of directors and officers.
(b) If a claim under paragraph (a) of this Article is not paid in full
by the Corporation within thirty days after a written claim has been
received by the Corporation, the claimant may, at any time thereafter, bring
suit against the Corporation to recover the unpaid amount of the claim and,
if successful in whole or in part, the claimant shall be entitled to be paid
also the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition
where the required standards of conduct which make it permissible under law
for the Corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) to have made a determination prior to
the commencement of such action that indemnification of the claimant is
proper in the circumstances because he or she has met the applicable
standard of conduct set forth in the law, nor an actual determination by the
Corporation (including its Boards of Directors, independent legal counsel,
or its stockholders) that the claimant has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that
the claimant has not met the applicable standard of conduct.
(c) The right to indemnification and the payment of expenses incurred
in defending a proceeding in advance of its final disposition conferred in
this Article shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, bylaw, agreement, vote of stockholders or disinterested
directors or otherwise.
(d) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense,
liability or loss under the law.
The foregoing discussion of the Company's Certificate of Incorporation,
and of the Delaware General Corporation Law is not intended to be exhaustive
and is qualified in its entirety by such Certificate of Incorporation and
Statutes, respectively.
Item 16. Exhibits
5.1(1) Opinion of Brewer and Pritchard, PC
23.1(1) Consent of Deloitte & Touche LLP, independent public accountants.
23.2(1) Consent of Brewer and Pritchard PC (contained in Exhibit 5.1)
(1) Filed herein.
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;
ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in 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 and 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 20 percent
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 nor previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
provided, however, that paragraphs (a) (1) (I) and (a) (1) (II) do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-
3, and the information required in a post effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by the reference in the Registration
Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13 (a) or 15 (d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15 (d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment
by the Company of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
SIGNATURES
----------
Pursuant to the requirements of the Securities Act, 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 Arlington, Texas, on July 7, 2003.
FIRST CASH FINANCIAL SERVICES, INC.
By: /s/ Phillip E. Powell
------------------------------------------
Phillip E. Powell, Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1933,
this Registration Statement has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates
indicated.
Signature Position Date
By: /s/ Phillip E. Powell Chairman of the Board and July 7, 2003
Phillip E. Powell Chief Executive Officer
By: /s/ Rick L. Wessel President, Secretary, Treasurer July 7, 2003
Rick L. Wessel and Director
By: /s/ Joe R. Love Director July 7, 2003
Joe R. Love
By: /s/ Richard T. Burke Director July 7, 2003
Richard T. Burke
By: /s/ R. Douglas Orr Chief Financial Officer July 7, 2003
R. Douglas Orr
EXHIBIT 5.1
[BREWER & PRITCHARD LETTERHEAD APPEARS HERE]
July 7, 2003
First Cash Financial Services, Inc.
690 E. Lamar Blvd., Suite 400
Arlington, Texas 76011
Re: First Cash Financial Services, Inc.
Registration Statement on Form S-3
Gentlemen:
We have represented First Cash Financial Services, Inc., a Delaware
corporation ("Company"), in connection with the preparation of a
registration statement filed with the Securities and Exchange Commission on
Form S-3 ("Registration Statement") relating to 815,000 shares ("Shares") of
the Company's common stock, par value $.01 per share ("Common Stock"), which
may be issued upon the exercise of currently exercisable stock purchase
warrants ("Warrants").
In this connection, we have examined originals or copies identified to
our satisfaction of such documents, corporate and other records,
certificates, and other papers as we deemed necessary to examine for
purposes of this opinion, including but not limited to the Certificate of
Incorporation of the Company, the Bylaws of the Company, and resolutions of
the Board of Directors of the Company.
In connection with this opinion, we have assumed the legal capacity of
all natural persons, accuracy and completeness of all documents and records
that we have reviewed, the genuineness of all signatures, the authenticity
of the documents submitted to us as originals and the conformity to
authentic original documents of all documents submitted to us as certified,
conformed or reproduced copies.
Based upon and subject to the foregoing, we are of the opinion that the
815,000 Shares issuable upon the exercise of the Warrants, when issued and
delivered by the Company in accordance with the terms of the Warrants, will
be validly issued, fully paid and nonassessable securities of the Company.
Our opinion expressed above is limited to the corporate law of the
State of Delaware, and we do not express any opinion herein concerning any
other laws. This opinion is given as of the date hereof and we assume no
obligation to advise you of changes that may hereafter be brought to our
attention. In connection therewith, we hereby consent to the use of this
opinion for filing as Exhibit 5.1 to the Registration Statement.
Very truly yours,
/s/ BREWER & PRITCHARD
------------------------
BREWER & PRITCHARD, P.C.
EXHIBIT 23.1
Consent of Deloitte & Touche LLP, Independent Auditors
We consent to the incorporation by reference in this Registration Statement
of our report dated March 24, 2003, appearing in the Annual Report on Form
10-K of First Cash Financial Services, Inc. for the year ended December 31,
2002.
/s/ Deloitte & Touche LLP
-------------------------
Fort Worth, Texas
July 7, 2003