SWDocIDNYC 212430v3

NYC 212430v3

    As filed with the Securities and Exchange Commission on December 28, 2001

                                                              REGISTRATION NO.
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ------------------

                                    FORM S-8
                             REGISTRATION STATEMENT
                                    under the
                             SECURITIES ACT OF 1933

                               ------------------

                             MDI ENTERTAINMENT, INC.
             (Exact name of Registrant as specified in its charter)

         Delaware                                               73-1515699
(State or other jurisdiction                                 (I.R.S. Employer
of incorporation or organization)                            Identification No.)

                                 201 Ann Street
                           Hartford, Connecticut 06103
                                 (860) 527-5359

                    (Address of Principal Executive Offices)

      MDI Entertainment, Inc. 1998 Stock Option and Award Plan, as amended
                       Individual Stock Option Agreements

                           (Full titles of the plans)

                          Steven M. Saferin, President
                                 201 Ann Street
                           Hartford, Connecticut 06103
                                 (860) 527-5359
    (Name, address, including zip code, and telephone number, including area
                           code, of agent for service)

                                 with a copy to:
                              Kenneth R. Koch, Esq.
                 Mintz Levin Cohn Ferris Glovsky and Popeo, P.C.
                                666 Third Avenue
                            New York, New York 10017
                                 (212) 935-3000

                               ------------------



                                CALCULATION OF REGISTRATION FEE
=============================== ================ =============== ================= =================

                                                   Proposed         Proposed
          Title of                Amount to be      maximum          maximum
 securities to be registered      registered(1)  offering price     aggregate          Amount of
                                                  per share(2)   offering price(2) registration fee
------------------------------- ---------------- --------------- ----------------- -----------------
                                                                           
Common Stock, $.001 par value      607,499 (3)       $ .33           $200,475           $50.12
                                   795,000 (3)       $1.32         $1,049,400          $262.35
------------------------------- ---------------- --------------- -----------------  ----------------
Common Stock, $.001 par value      191,404 (4)       $1.30           $248,825           $62.21
------------------------------- ---------------- --------------- -----------------  ----------------
Common Stock, $.001 par value      300,000 (5)       $1.30           $390,000           $97.50
------------------------------- ---------------- --------------- -----------------  ----------------
Common Stock, $.001 par value       17,500 (6)       $1.38            $24,150            $6.04

                                                                         Total:        $478.22
=============================== ================ =============== =================  ================




(1)         The maximum  number of shares of common  stock,  par value $.001 per
share  ("Common  Stock"),  which may be granted as  restricted  stock  awards or
issued upon the exercise of options  granted under the MDI 1998 Stock Option and
Award Plan (the "1998 Plan") and certain Stock Option Agreements  (together with
the 1998 Plan,  the  "Plans")  granting  options  to  directors  are  subject to
adjustment in accordance with certain anti-dilution and other provisions of said
Plans.  Accordingly,  pursuant to Rule 416 under the  Securities Act of 1933, as
amended (the "Securities Act"), this Registration  Statement covers, in addition
to the number of shares stated above,  an  indeterminate  number of shares which
may be subject to grant or otherwise  issuable  after the  operation of any such
anti-dilution and other provisions.

(2)         This  calculation is made solely for the purpose of determining  the
registration  fee pursuant to the provisions of Rule 457(h) under the Securities
Act as follows: (i) in the case of shares of Common Stock which may be purchased
upon exercise of outstanding  options, the fee is calculated on the basis of the
price at which the options may be  exercised;  (ii) in the case of (A) shares of
Common Stock available for grant as restricted stock awards or for which options
have not yet been granted and the option  price of which is  therefore  unknown,
and (B) the shares of Common Stock previously issued pursuant to the exercise of
options  granted  under the  Plans,  the fee is  calculated  on the basis of the
average of the high and low sale  prices  per share of the  Common  Stock on the
Over-The-Counter Bulletin Board as of December 27, 2001.

(3)         Represents the number of shares of Common Stock which are issuable
upon the exercise of options previously granted under the 1998 Plan.

(4)         Represents  the  number of shares of Common  Stock (i) from  options
already  exercised and (ii) which are available under the 1998 Plan for grant as
restricted  stock  awards or  issuable  upon the  exercise  of  options  not yet
granted.

(5)         Represents  the   number of shares of Common  Stock  which that were
issued upon the exercise of options granted pursuant to a Stock Option Agreement
with a director outside of the 1998 Plan.

(6)         Represents the  number of shares of  Common Stock which are issuable
upon the  exercise of options  previously  granted  pursuant  to a Stock  Option
Agreement with a director outside of the 1998 Plan.

================================================================================


                                EXPLANATORY NOTE


        This  Registration  Statement  relates,  in part, to the registration of
1,441,266   shares  of  common  stock,   par  value  $.001  per  share,  of  MDI
Entertainment,  Inc.  authorized  for  issuance  under the 1998 Stock Option and
Award Plan and individual Stock Option Agreements  (collectively,  the "Plans"),
and the filing of a resale prospectus with respect to such shares. In accordance
with  the  instructional  Note  to  Part I of  Form  S-8 as  promulgated  by the
Securities and Exchange Commission,  the information specified by Part I of Form
S-8 has been omitted from this Registration  Statement on Form S-8 for offers of
Common  Stock  pursuant  to the  Plans.  The  prospectus  filed  as part of this
Registration  Statement has been prepared in accordance with the requirements of
Form S-3 and may be used for  reofferings  and resales of  registered  shares of
common stock which have been and/or may hereafter be issued upon the exercise of
options which have been and/or may hereafter be granted under any of the Plans.






                                   PROSPECTUS

                             MDI Entertainment, Inc.

                        1,911,403 Shares of Common Stock
                            Par Value $.001 Per Share
                         issued or issuable pursuant to
      MDI Entertainment, Inc. 1998 Stock Option and Award Plan, as amended
                       Individual Stock Option Agreements

                             -----------------------

        The shares of common stock,  par value $.001 per share,  offered  hereby
are shares  which have been or may in the future be issued upon the  exercise of
stock  options  which have been or may in the  future be granted  under our 1998
Stock Option and Award Plan or individual Stock Option Agreements, to be sold by
our  stockholders  identified  herein.  These  persons  are  referred to in this
prospectus  as  the  "Selling  Stockholders."  See  "Selling  Stockholders"  for
information about these persons.

        Some or all of the shares  offered under this  prospectus may be offered
for sale from time to time by the Selling  Stockholders or by pledgees,  donees,
transferees,  or other successors in interest. These sales may be made on one or
more exchanges,  in the over-the-counter  market, or otherwise, at prices and on
terms then prevailing, or at prices related to the then-current market price, or
in negotiated  transactions  or  otherwise,  or by  underwriters  pursuant to an
underwriting  agreement  in  customary  form,  or in a  combination  of any such
methods of sale.  The Selling  Stockholders  and any  broker-dealers  (including
underwriters)  who may  participate  in a sale of the shares may be deemed to be
statutory  underwriters  within the meaning of the  Securities  Act of 1933,  as
amended,  and the commissions paid or discounts or concessions allowed to any of
such  broker-dealers  (including  underwriters)  by any  person,  as well as any
profits  received  on the  resale of the  Shares  if any of such  broker-dealers
(including  underwriters)  should  purchase  any shares as a  principal,  may be
deemed to be underwriting  discounts and  commissions  under the Securities Act.
All discounts,  commissions or fees incurred in connection  with the sale of the
shares  offered  hereby  will  be  paid by the  Selling  Stockholders  or by the
purchasers of the shares, except that the expenses of registering the shares and
preparing  and  filing  this   Prospectus   with  the  Securities  and  Exchange
Commission,  and of registering or qualifying the shares under the blue sky laws
of any  jurisdiction  necessary to permit the  distribution as described in this
prospectus,  will be paid by us. See "Plan of Distribution" for more information
about the sale of the shares offered by this prospectus. We will not receive any
of the proceeds from the sale of the shares by the Selling Stockholders.

        Our common stock is traded on the Over-The-Counter  Bulletin Board under
the symbol LTRY:OB.

        On December 27,  2001,  the closing bid price for our common  stock,  as
reported by the OTC BB, was $1.30.


         The Common Stock Offered Hereby Involves a High Degree of Risk.
        Prospective Investors Should Consider Carefully the Risk Factors
                   Indicated under "Risk Factors" on page 4.


These  Securities  Have Not Been Approved or  Disapproved  by the Securities and
Exchange Commission or any State Securities  Authority nor Has The Commission or
Any State  Securities  Authority  Passed  Upon the  Accuracy or Adequacy of This
Prospectus. Any Representation to the Contrary is a Criminal Offense.


                The date of this Prospectus is December 28, 2001.





                             ----------------------

        NO PERSON HAS BEEN  AUTHORIZED  IN  CONNECTION  WITH ANY  OFFERING  MADE
HEREBY TO GIVE ANY  INFORMATION OR TO MAKE ANY  REPRESENTATION  NOT CONTAINED IN
THIS PROSPECTUS,  AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN  AUTHORIZED BY US OR ANY SELLING  STOCKHOLDER.
THIS  PROSPECTUS  DOES NOT CONSTITUTE  AN OFFER TO SELL OR A  SOLICITATION OF AN
OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OFFERED BY THIS PROSPECTUS,  NOR
DOES IT  CONSTITUTE  AN OFFER TO SELL OR A  SOLICITATION  OF AN OFFER TO BUY ANY
SHARES OF COMMON STOCK OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION WHERE IT
IS UNLAWFUL  TO MAKE SUCH OFFER OR  SOLICITATION.  NEITHER THE  DELIVERY OF THIS
PROSPECTUS NOR ANY SALE HEREUNDER  SHALL,  UNDER ANY  CIRCUMSTANCES,  CREATE ANY
IMPLICATION  THAT  INFORMATION  CONTAINED  HEREIN  IS  CORRECT  AS OF  ANY  TIME
SUBSEQUENT TO THE DATE HEREOF.

                             ----------------------

                       WHERE YOU CAN FIND MORE INFORMATION

        We are subject to certain  informational  reporting  requirements of the
Securities  Exchange Act of 1934 and, in accordance  with the Exchange Act, file
reports, proxy statements and other information with the Securities and Exchange
Commission.  Such  reports,  proxy  statements  and  other  information  can  be
inspected and copied at the public reference facilities maintained by the SEC at
450 Fifth Street,  N.W.,  Judiciary  Plaza,  Washington,  D.C.  20549 and at the
Chicago Regional Office,  Citicorp Center, 500 West Madison Street,  Suite 1400,
Chicago, IL 60661-2511.  Copies of such material can be obtained from the Public
Reference  Section  of  the  SEC,  450  Fifth  Street,  N.W.,  Judiciary  Plaza,
Washington,  D.C. 20549 at prescribed  rates.  The SEC maintains a Web site that
contains  reports,  proxy  and  information  statements  and  other  information
regarding  registrants that file electronically with the SEC. The address of the
SEC's Web site is http://www.sec.gov.

        We will  provide  without  charge to each person,  including  beneficial
owners,  to whom this prospectus is delivered,  upon the written or oral request
of such person,  a copy of any and all of the documents that have been or may be
incorporated  by  reference  in this  prospectus,  other than  exhibits  to such
documents unless such exhibits are  specifically  incorporated by reference into
such   documents.   Requests   for  such  copies   should  be  directed  to  MDI
Entertainment,  Inc., 201 Ann Street,  Hartford,  Connecticut 06103,  Attention:
Kenneth M. Przysiecki. Our telephone number is (860) 527-5359.

                             -----------------------






                                       2




                                TABLE OF CONTENTS

PROSPECTUS...................................................................1

RISK FACTORS.................................................................4

THE COMPANY................................................................. 9

SELLING STOCKHOLDERS........................................................12

PLAN OF DISTRIBUTION........................................................15

LEGAL MATTERS...............................................................15

EXPERTS.....................................................................15

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.............................16




                                       3




                                  RISK FACTORS

        AN INVESTMENT IN THE SHARES BEING OFFERED BY THIS PROSPECTUS  INVOLVES A
HIGH DEGREE OF RISK. IN ADDITION TO THE OTHER  INFORMATION IN THIS PROSPECTUS OR
INCORPORATED  HEREIN BY REFERENCE,  THE FOLLOWING  FACTORS  SHOULD BE CONSIDERED
CAREFULLY IN  EVALUATING  AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED BY
THIS  PROSPECTUS.   THIS  PROSPECTUS  CONTAINS  AND  INCORPORATES  BY  REFERENCE
FORWARD-LOOKING  STATEMENTS  WITHIN THE "SAFE HARBOR"  PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. REFERENCE IS MADE IN PARTICULAR TO THE
DISCUSSION  SET FORTH UNDER  "MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" IN OUR TRANSITION REPORT ON FORM 10-KSB FOR
THE SEVEN  MONTHS  ENDED  DECEMBER  31, 2000 AND OUR  QUARTERLY  REPORTS ON FORM
10-QSB FOR THE QUARTERS  ENDED MARCH 31, 2001,  June 30, 2001 AND  September 30,
2001 AND UNDER "BUSINESS" IN THE FORM 10-KSB, INCORPORATED IN THIS PROSPECTUS BY
REFERENCE.  SUCH  STATEMENTS  ARE BASED ON CURRENT  EXPECTATIONS  THAT INVOLVE A
NUMBER OF  UNCERTAINTIES  INCLUDING  THOSE SET FORTH IN THE RISK FACTORS  BELOW.
ACTUAL   RESULTS   COULD  DIFFER   MATERIALLY   FROM  THOSE   PROJECTED  IN  THE
FORWARD-LOOKING  STATEMENTS. MDI IS ALSO SUBJECT TO MORE GENERAL RISKS DESCRIBED
IN THE SECTION "SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS"  BEGINNING ON
PAGE 17.


We have had losses.
------------------

        Although  we had net  income of  $1,729,165  for the nine  months  ended
September 30, 2001, we incurred net losses of $(2,211,051)  and $(1,985,105) for
the seven month  transition  period ended  December 31, 2000 and the fiscal year
ended May 31,  2000,  respectively.  We cannot  assure you that we will  operate
profitably in the near future.

We have had a negative net worth.
---------------------------------

        Although we had a positive  net worth of $762,933  as of  September  30,
2001,  we had a negative net worth of  $(1,483,635)  as of December 31, 2000. We
cannot assure you that we will be able to continue  operating  profitably in the
future or at all.

We may continue to need financing or additional equity to meet our future
-------------------------------------------------------------------------
   capital requirements.
   ---------------------

        As of September 30, 2001, our current liabilities  (including  "billings
in excess of costs and estimated  earnings on  uncompleted  contracts"  totaling
$2,510,757) exceeded our current assets by $960,106.

        We raised  $1,750,000  on August 4, 1999,  through  the sale of Series A
Convertible  Preferred  Stock in a  private  sale to an  investor.  We raised an
additional $750,000 from the issuance of a convertible subordinated debenture in
September of 1999.  In September,  2000 we raised an additional  $520,000 in the
form of two short-term  loans  originally  maturing on January 31, 2001 from our
President and Chief Executive  Officer,  and from an unrelated  individual.  The
loan to the unrelated individual of $260,000 was subsequently extended until May
15, 2001.

                                       4


        In  November  and  December  2000,  we  raised  $200,000  in the form of
short-term loans that matured on May 15, 2001 from unaffiliated parties.

        However, we may require additional  financing to meet our needs. We have
not  determined  the  amount we may seek to raise or the form of this  financing
(i.e.  debt or  equity).  We cannot  assure you that we will  obtain  additional
financing for future operations or capital needs on favorable terms if at all.

The Lottery Channel is claiming that we bear all costs and expenses in
----------------------------------------------------------------------
connection with the termination of our merger transaction with them.
--------------------------------------------------------------------

        On  November  7,  2000,  we were  notified  that we had been  named as a
defendant in a complaint filed by The Lottery Channel,  Inc. on November 2, 2000
in the Hamilton County, Common Pleas Civil Division,  Cincinnati,  Ohio, arising
from our  decision to  terminate  our merger  agreement  with  Lottery  Channel.
Lottery  Channel  is seeking to  recover  $1,763,343.29  in costs and  expenses,
damages in excess of $25,000,  attorney's  fees and cost incurred in prosecuting
the action, punitive damages and any other relief to which it is entitled.

        We  believe  that the  lawsuit is  without  merit and we are  vigorously
defending our position,  as well as asserting a variety of counterclaims against
Lottery  Channel,  including a demand that Lottery Channel pay certain  expenses
under the termination provisions of our merger agreement.

        Notwithstanding the merits of the action, we may incur substantial costs
defending the action and there can be no assurance as to the outcome of any such
litigation.

We may be unable to maintain or renew all our current licenses.
---------------------------------------------------------------

        Our success will be dependent upon  maintaining our current licenses for
the rights to use names and well-known  logo bearing  merchandise.  The terms of
the current  licenses are  generally  for 1.5 to 3 years,  although  they may be
terminated  sooner under  certain  circumstances.  We cannot assure you that the
current licenses will be renewed once they expire.

We may be unable to provide merchandise to the lotteries when needed.
---------------------------------------------------------------------

        We supply the  lotteries  with logo bearing  merchandise  related to our
contracts  with  them.  We obtain  approximately  95% of this  merchandise  from
authorized  representatives of the licensor.  We cannot assure you that the logo
bearing merchandise will be available from such authorized  representatives when
needed by us to satisfy our obligations to the lotteries.

We may be unable to acquire new licenses.
-----------------------------------------

        Our success is  dependent  on our  ability to obtain  rights to use well
known  entertainment and other similar properties for use on lottery tickets and
related  merchandise.  We cannot assure you that we will continue to obtain such
licenses on favorable terms or at all.

We depend on customer relationships with North American lotteries.
------------------------------------------------------------------

        Many of our licensing rights are, by design, currently limited to United
States,  North  American or worldwide  lotteries.  There are currently 40 United
States lotteries and five additional Canadian  lotteries.  The extremely limited
potential  customer base means that if any target lottery  refuses to purchase a
particular promotion from us or if it only uses a promotion once, there may be a
significant  negative  impact  on our  revenue  and  earnings.  The  four  state
lotteries that purchased promotions accounting for the highest percentage of our
revenues  during the nine  months  ended  September  30,  2001 were New  Jersey,
California,  Pennsylvania,  and  Florida,  with  18%,  12.7%,  10.7%  and  8.7%,
respectively.  We cannot assure you that these  lotteries will maintain the same
level of promotions or that other  lotteries  will  increase  promotions  beyond
current levels, or enter into contracts with us at all.

                                       5


We have no on-going sources of revenue.
---------------------------------------

        Our  revenues  are  derived on a  contract-by-contract  basis from state
lotteries.  There are no regular on-going sources of revenue at the present time
and we  must  continually  create  and  market  new  promotions  to our  lottery
customers.  Lotteries frequently move start dates for promotions thereby causing
gaps in our cash  flow.  Moreover,  the useful  life of a license  is  generally
relatively  short as the novelty of the game or the  popularity  of the licensed
material  wanes over time. We may depend on a particular  promotion in any given
year,  and a decrease in sales of the  promotion  or the loss of the  underlying
license would seriously impact our revenues and earnings.

We may be adversely affected by government regulation of lotteries and gambling.
--------------------------------------------------------------------------------

        Since most  lotteries are  government  agencies with lottery  executives
appointed by the state's governor or other high ranking official,  opportunities
or  projects  in  progress  can be slowed  after an  election  if the  incumbent
governor is not reelected.

        There is a growing  concern in the United  States about the explosion of
gaming.  The creation of The National  Gambling Impact Study  Commission and its
released  report,  may  negatively  impact  state  lotteries  and  other  gaming
activities  and hence our business.  We cannot assure you that there will not be
an  adverse  change  in the  lottery  laws of any  jurisdiction  in  which we do
business. In addition, we cannot predict the nature of the regulatory process in
any  jurisdiction  that may authorize the use of instant  tickets in the future.
Any such  regulatory  process may be burdensome to us and our customers or their
key personnel and could include requirements that we would be unable to satisfy.

Existing stockholders are able to exercise control over us.
-----------------------------------------------------------

        Our officers and directors  beneficially  own  approximately  45% of our
outstanding  common  stock and Steven M.  Saferin  owns  approximately  34%. Our
Certificate  of  Incorporation  does not provide for  cumulative  voting for the
Board  of  Directors.  As a  result,  Steven  M.  Saferin  and  management  have
substantial  influence  over the election of a majority of our directors and the
outcome of issues submitted to a vote of our stockholders.

The loss of the services of Steven M. Saferin could harm our business.
----------------------------------------------------------------------

        Our  success  depends to a  significant  extent on the  performance  and
continued  service  of  Steven M.  Saferin,  an  officer  and  director.  We are
negotiating the extension of our employment  agreement with Mr.  Saferin,  which
expired on August 8, 2001. We do not carry key man insurance.

Intense competition could reduce our market share.
--------------------------------------------------

        We have traditionally acquired exclusive rights to license entertainment
and other  properties  to the U.S.  lottery  industry.  We have  faced  only one
situation in which there was  substantial  competition  in acquiring such rights
and we were the successful bidder for these rights.  However,  there are several
organizations that also design and promote lottery games and promotions based on
licensed  brands.  One of these companies is pursuing the types of entertainment
properties  we  have  targeted.  In  addition,  it is  possible  that  potential
licensors may design their own lottery games and seek to market them directly to
the lotteries, thus bypassing us. Other potential sources of competition are the
printers of instant  tickets  who, to improve  their own  competitive  standing,
might  attempt  to acquire  licensing  rights for  various  properties  to offer
exclusively to their lottery customers and enhance their competitive bidding for
lottery printing contracts.

                                       6


We do not anticipate paying any dividends.
------------------------------------------

        We have never paid any cash or other  dividends on our common stock.  At
present,  we do not  anticipate  paying  dividends  on our  common  stock in the
foreseeable  future and intend to devote any earnings to the  development of our
business.  Investors who  anticipate  the need for  immediate  income from their
investment should refrain from purchasing our common stock.

Our Common Stock lacks liquidity.
--------------------------------

        Our Common  Stock is not traded on the Nasdaq  Stock Market or any stock
exchange.  We cannot assure you that a stockholder  would be able to buy or sell
shares when desired.

We indemnify our directors and officers against certain expenses
----------------------------------------------------------------
   and liabilities.
   ----------------

        So far as  permitted  by  the  Delaware  General  Corporation  Law,  our
Certificate  of  Incorporation  and By-Laws  provide that we will  indemnify our
directors and officers  against  expenses and liabilities  they incur to defend,
settle or satisfy any civil or criminal  action brought  against them on account
of their being or having been directors or officers unless,  in any such action,
they are  adjudged  to have acted with gross  negligence  or to have  engaged in
willful misconduct.  As a result of such provisions,  stockholders may be unable
to recover  damages against our directors and officers for actions taken by them
which constitute  negligence or a violation of their fiduciary duties, which may
reduce the likelihood of stockholders  instituting derivative litigation against
directors and officers and may discourage or deter  stockholders  from suing our
directors,  officers,  employees  and agents for breaches of their duty of care,
even though such  action,  if  successful,  might  otherwise  benefit us and our
stockholders.

Future sales of common stock by our existing stockholders could adversely affect
--------------------------------------------------------------------------------
our stock price.
----------------

        The market price of our common stock could  decline as a result of sales
of a  substantial  number of shares of our common  stock in the  market,  or the
perception  that such  sales  could  occur.  Such  sales also might make it more
difficult  for us to sell  equity  securities  in the  future at a time and at a
price that we deem  appropriate.  As of December  28,  2001,  we had  11,617,925
outstanding shares of common stock. Of these shares,  6,046,972 shares of common
stock are freely  tradable,  not  including an  aggregate  of  8,088,617  shares
(including shares underlying  certain options,  warrants and notes) which may be
sold pursuant to an effective registration statement.

        In  March  2001,  Scientific  Games,  Inc.  converted  its  subordinated
convertible  debenture into $375,000 shares of common stock at a conversion rate
of $2.00 per share.

        In November  2001, 444 shares of Series B convertible  preferred  stock,
held by eLot, Inc., were converted into 444,444 shares of common stock

        As of December 28, 2001 options to purchase a total of 1,434,166  shares
of our common  stock are  outstanding.  Of such  options,  options  to  purchase
639,166 shares are currently  exercisable.  In addition,  warrants to purchase a
total of 2,383,656  shares of our common stock are  outstanding  and all of such
warrants are  exercisable.  Shares  issued upon the exercise of such options and
warrants will be eligible for resale in the public market from time to time.

        We  have  filed  a  registration  statement  covering  an  aggregate  of
2,373,621  shares including shares of our common stock issued upon conversion of
our Series A Preferred Stock and subordinated  convertible  debenture and shares
issuable  upon  exercise  of  certain  warrants.  All  shares  covered  by  that
registration statement are freely tradable. If a large number of such shares are
sold in the public market, the price of our common stock may fall.

                                       7


There are certain anti-takeover effects associated with the issuance of "Blank
------------------------------------------------------------------------------
   Check" preferred stock.
   -----------------------

        Our  Certificate of  Incorporation  authorizes our Board of Directors to
issue up to 5,000,000  shares of "blank check"  preferred  stock, of which 2,027
shares  has been  designated  Series A  Preferred  Stock,  444  shares  has been
designated  Series B Preferred Stock and 2,100 shares has been designated Series
C Preferred  Stock. All of the Series A and B Preferred Stock has been converted
into common stock. The securities representing the Series C Preferred Stock were
to be returned to us in an exchange of stock in connection with our transactions
with Oxford  International,  Inc. Oxford has refused to honor our exchange right
and we filed a Motion For Temporary Restraining Order and Preliminary Injunction
and a Verified  Complaint in the United States District Court of the District of
Maryland against Oxford and its principal, Gregory C. Dutcher.

        The Board of Directors,  without stockholder  approval,  may fix all the
rights of the  preferred  stock.  The issuance of such stock could,  among other
results, negatively affect the voting power of the holders of common stock.

        Under certain  circumstances,  the issuance of the preferred stock would
make it more difficult for a third party to gain control of us,  discourage bids
for the common  stock at a premium,  or  otherwise  adversely  affect the market
price of our common stock.  Such  provisions may discourage  attempts to acquire
us.

        We have no arrangement,  commitment or understanding with respect to the
issuance  of our  preferred  stock,  other  than with  respect  to the  Series A
Preferred  Stock,  Series B  Preferred  Stock and Series C Preferred  Stock.  We
cannot assure you,  however,  that we will not, in the future,  issue additional
shares of preferred stock.

We may be subject to certain risks by doing business internationally.
---------------------------------------------------------------------

        As we begin to market our  properties  to  international  lotteries  and
explore international lottery opportunities,  we may be subject to certain risks
associated with doing business  over-seas,  including the necessity of complying
with local laws and regulations and political, economic and other uncertainties.

        In addition, because some of our existing and prospective customers deal
predominantly  in non-U.S.  currencies,  we are exposed to exchange  rate risks,
which may cause our financial  results to suffer.  The  obligations of customers
with substantial revenues in non-U.S. currencies may be subject to unpredictable
and indeterminate increases in the event those currencies lose value against the
U.S. dollar. As a result of the risks in currency exchange, some of our revenues
may  decrease.  Although  we expect to  invoice  our sales of  services  in U.S.
dollars, our prospective customers may derive their revenues in currencies other
than U.S.  dollars.  These customers may also become subject to exchange control
restrictions  limiting  their ability to convert their revenue  currencies  into
U.S. dollars, in which case they may not be able to pay us in U.S. dollars.

                                       8


        To date, our non-U.S.  business is principally  done with Canada and for
which we have  experienced  stable  exchange  rates  during the time we have had
ongoing  contracts.  We currently have no hedging  contracts or other  financial
instruments   outstanding   which  would  mitigate  the  effect  of  a  currency
translation loss.

                                   THE COMPANY


        We are a Delaware  corporation  originally  incorporated on December 29,
1994  under  the  name  Puff   Process,   Inc.  Our  name  was  changed  to  MDI
Entertainment,  Inc.  and a one share for one  hundred  reverse  stock split was
effected in connection with the purchase,  in August 1997, of both Media Drop-In
Productions Inc., a Delaware  corporation,  and  MDI-Missouri,  Inc., a Missouri
corporation,  in exchange for 4,800,000 shares of our common stock, and notes in
the aggregate principal amount of $300,000. The acquisition was effected through
reverse mergers with two of our wholly-owned  subsidiaries.  These  transactions
resulted in a change in control,  with Steven M. Saferin  holding  approximately
56% of the outstanding  shares of our common stock.  Pre-merger  holders of Puff
Process, Inc. held approximately 32.1% of the outstanding shares of common stock
immediately after the merger.

        We    specialize    in    creating,     marketing    and    implementing
entertainment-based  promotions  to  North  American  lotteries.  Our  principal
business has been the scratch ticket segment of the government lottery industry,
although we have run  on-line  entertainment-based  promotions  with a lotto and
daily numbers type games  featuring our licensed  Harley-Davidson(R)  logo.  Our
lottery promotions  feature well-known brand names and entertainment  properties
licensed to us and designed to attract new lottery players while providing a new
experience for existing lottery players.  Our current  promotions feature a wide
variety of such brand names and entertainment properties including:

o        Wheel of Fortune(R)
o        Jeopardy(TM)
o        Harley-Davidson(R)
o        Twilight Zone(TM)
o        Betty Boop(TM)
o        Louisville Slugger(R)
o        Dick Clark's American Bandstand(R)
o        The Nashville Network(R)/TNN
o        Country Music Television(R)/CMT
o        Heroes of Space(TM)
o        The Pink Panther(TM)
o        The Outer Limits(TM)
o        Dale Earnhardt(R)
o        Dale Earnhardt, Jr.(R)
o        Jeff Burton(R)
o        Mark Martin(R)
o        Bill Elliott(R)
o        Matt Kenseth(R)
o        Let's Get Ready To Rumble(R)
o        Sports Legends(R)
o        Ray Charles(R)
o        SPAM(R)
o        CowParade(R)
o        Hollywood Sign(TM)and Hollywood Walk of Fame(TM)
o        Elvis Presley(R)
o        Emmett Kelly, Jr.(R)
o        Hollywood Squares(R)
o        Tabasco(R)
o        Miss Cleo(R)
o        Lionel(TM)
o        World Cup Soccer(R)
o        Elliott Saddler(TM)
o        Ken Schrader(TM)
o        Magic 8 Ball(R)
o        Universal Studios(R)Monsters

                                       9



        We developed our strategy of identifying  such properties in early 1996.
Prior to that  time,  we had  developed  a series of  promotions  that  utilized
popular  videotapes,  compact discs and  audiocassettes as second chance lottery
prizes.  Those  promotions  enabled us to develop an  expertise  in sourcing and
distributing  products as second chance lottery prizes.  They also enabled us to
develop a reputation with lottery personnel as a reliable  organization  attuned
to the special needs of lotteries and their players.

        We derive over ninety-five  percent (95%) of our revenues from lotteries
in two distinct  ways.  First,  we will  usually  charge a lottery a license and
royalty fee to utilize a particular licensed property as a lottery game. License
fees are a fixed  assessment,  while  royalties are a percentage of the printing
cost of the tickets.  Contracts  for licensed  properties  typically  include an
up-front license fee and a royalty based on the  manufacturing  cost of tickets.
Manufacturing  costs of tickets usually range from $10.00 per thousand to $30.00
per  thousand.  Actual  costs  depend on the size of the ticket and the quantity
printed. Ticket quantities range from about one million to as many as 60 million
with an average quantity of about five million.

        Our  second  source  of  lottery  revenue  is the  sale of logo  bearing
merchandise to the lottery as second-chance prizes. In merchandise-based lottery
games,  between 5% to 10% of a lottery's  prize fund is  typically  used for the
purchase  of  merchandise  related to the  property  the  lottery is  utilizing.
Typically,  we purchase  merchandise  from other  licensees  of the property and
resell the  merchandise  to the  lottery at a price that is  designed to include
overhead  costs,  profit,  shipping and handling  and any  marketing  support we
provide the lottery such as brochures,  posters or other advertising  assistance
for which there are no separate charges.



                                       10





                              SELLING STOCKHOLDERS

        The Selling  Stockholders  are offering hereby shares which have been or
may hereafter be acquired by them upon the exercise of options granted under the
1998 Stock Option and Award Plan and  individual  Stock Option  Agreements.  The
names of additional Selling Stockholders and the number of shares offered hereby
by them may be added to this  prospectus  from  time to time by an  addendum  or
supplement to this prospectus. Other persons who acquire shares from the Selling
Stockholders  may also be  identified  as  Selling  Stockholders  by means of an
addendum or supplement to this prospectus.

        Steven M.  Saferin  is our  President,  Chief  Executive  Officer  and a
director.

        On January 19, 2000, Mr. Saferin  exchanged a portion of his stock for a
note  held by a  third  party  and  made by us  with a  remaining  principal  of
$316,038.  The note  bears  interest  at 8% per annum and is  payable in monthly
installments of $14,300 with a final payment date of December 1, 2001.

        On May 31, 2000, Mr.  Saferin  loaned the President and Chief  Executive
Officer of The Lottery  Channel,  Inc.  $108,000  personally for the operational
needs of The Lottery  Channel and to facilitate  the then proposed  merger.  Mr.
Saferin received a promissory note bearing interest of 11% per annum.

        On September 1, 2000, Mr. Saferin loaned us $260,000 and received a note
payable on demand,  bearing interest at a rate of 10% per annum. On September 8,
2000, as part of a loan  transaction,  the note was replaced with a note secured
by  substantially  all of our assets,  payable on January 31, 2001,  which bears
interest at a rate of 10% per annum. This note was extended to May 15, 2001.

        On March 20, 2001 Mr. Saferin  guaranteed our $742,800  performance bond
provided to the California lottery.

        Mr.  Saferin  is  entitled  to a  commission  equal  to 2% of our  gross
revenue,  pursuant to his employment agreement.  Mr. Saferin waived the right to
approximately  $57,534 and $67,964 of  commissions  for the seven  months  ended
December 31, 2000 and 1999, respectively.

        Todd  P.  Leavitt  is one of our  directors.  Tulip  Media  Ltd.,  a Los
Angeles, CA entertainment company that Mr. Leavitt is associated with, from time
to time does work in the entertainment field for us.

        S.  David  Fineman  is one of our  directors.  Fineman & Bach,  P.C.,  a
Philadelphia PA law firm that Mr. Fineman is associated  with, from time to time
does legal work for us.

        William G. Malloy is one of our  directors.  In October 1999, Mr. Malloy
was invited to join our Board of  Directors.  Mr. Malloy was President and Chief
Executive Officer of Scientific Games, Inc. which executed a strategic  alliance
with us. In connection with such alliance, Scientific Games purchased a $750,000
convertible subordinated debenture from us. In addition,  Steven M. Saferin sold
333,333 shares of common stock held by him to Scientific Games. Scientific Games
was  acquired  by Autotote  Corporation  on  September  7, 2000.  Mr.  Malloy is
currently a consultant to Autotote Corporation.

        Robert Wussler is one of our directors.

        Kenneth  M.   Przysiecki  is  our  Vice   President  of  Accounting  and
Administration and a director.

        Robert R. Kowalczyk is our Vice President and General Manager.

        Charles W. Kline is our Vice President of Sales and Marketing.

                                       11



        The following table sets forth certain  information  with respect to the
Selling Stockholders as of December 28, 2001.



                         Number of
                         Shares                            Number of          Percentage of
                         Beneficially                      Shares to be       Class to be
                         Owned             Number of       Beneficially       Beneficially
                         Prior to          Shares Being    Owned After        Owned After
Name                     Offering(1)       Offered(2)      Offering(3)        Offering

------------------------------------------------------------------------------------------
                                                                     
Steven M. Saferin        4,020,169(4)       250,000        3,795,169             34%

Todd P. Leavitt            155,100(5)       250,000            5,100              *

S. David Fineman           160,200(6)       250,000           10,200              *

William G. Malloy          162,750(7)       250,000           12,750              *

Robert Wussler             307,650(8)       400,000            7,650              *

Kenneth M. Przysiecki      250,600(9)        80,000          220,600             2.2%

Robert R. Kowalczyk         30,000(10)       60,000                0              *

Charles W. Kline            21,725(11)       50,000            1,725              *

Evelyn Yenson               10,000(12)       25,000           10,000              *

Debbie Amundson             10,848(13)       37,948                0              *

Marcia Firsick              12,948(14)       37,948                0              *

Mariann Rodriguez            7,299(15)       22,299                0              *

Patricia McGuiness           4,450(16)       14,450                0              *

John Monaco                  3,825(17)       15,000                0              *

Brenda Torres                  766              766                0              *

Shares reserved for
  future grants under
  Plan                           0           19,167                0              *
                          --------------   ------------    ------------


* Less than 1% of the outstanding Common Stock.


                                       12


(1)     Includes all shares of Common Stock owned by the Selling Stockholder and
        Shares of Common  Stock which the Selling  Stockholder  has the right to
        acquire,  through the exercise of options  including those granted under
        the Plans, within 60 days after the date hereof.

(2)     Includes  certain  shares  of  Common  Stock  acquired  by  the  Selling
        Stockholder  pursuant to the exercise of options granted under the Plans
        and all shares of Common  Stock  which the Selling  Stockholder  has the
        right to acquire,  through the  exercise  of options  granted  under the
        Plans,  whether  or not such right has yet  become  exercisable  or will
        become exercisable within 60 days after the date hereof.

(3)     Includes  shares of Common  Stock owned by the Selling  Stockholder  and
        Shares of Common  Stock which the Selling  Stockholder  has the right to
        acquire, through the exercise of options, other than those granted under
        the Plans,  within 60 days  after the date  hereof.  Assumes  all shares
        registered  pursuant  hereto  will be  sold,  although  there  can be no
        assurance  that any of the Selling  Stockholders  will offer for sale or
        sell any or all of the Common  Stock  offered by them  pursuant  to this
        Prospectus.   Also   assumes  that  no  other  shares  are  acquired  or
        transferred by the Selling Stockholder.

(4)     Includes  225,000 shares which Mr. Saferin has the right to acquire upon
        the exercise of options. Excludes 25,000 shares underlying options which
        will not become exercisable within 60 days of the date hereof.

(5)     Includes  50,000 shares of Common Stock  beneficially  owned directly by
        the Leavitt  Family Trust and 100,000  shares which Mr.  Leavitt has the
        right to acquire upon the exercise of options.  Excludes  100,000 shares
        underlying  options which will not become  exercisable within 60 days of
        the date hereof.

(6)     Includes  100,000 shares which Mr. Fineman has the right to acquire upon
        the exercise of options.  Excludes  100,000  shares  underlying  options
        which will not become exercisable within 60 days of the date hereof.

(7)     Includes  150,000  shares which Mr. Malloy has the right to acquire upon
        the exercise of options.  Excludes  100,000  shares  underlying  options
        which will not become exercisable within 60 days of the date hereof.

(8)     Excludes  100,000  shares  underlying  options  which  will  not  become
        exercisable within 60 days of the date hereof.

(9)     Includes  10,000  shares which Mr.  Przysiecki  has the right to acquire
        upon the exercise of options.  Excludes 50,000 shares underlying options
        which will not become exercisable within 60 days of the date hereof.

(10)    Includes 10,000 shares which Mr. Kowalczyk has the right to acquire upon
        the exercise of options. Excludes 30,000 shares underlying options which
        will not become exercisable within 60 days of the date hereof.

(11)    Includes 13,333 shares which Mr. Kline has the right to acquire upon the
        exercise of options.  Excludes  30,000 shares  underlying  options which
        will not become exercisable within 60 days of the date hereof.

                                       13


(12)    Excludes  25,000  shares  underlying   options  which  will  not  become
        exercisable within 60 days of the date hereof.

(13)    Includes  5,000 shares which Ms.  Amundson has the right to acquire upon
        the exercise of options. Excludes 25,000 shares underlying options which
        will not become exercisable within 60 days of the date hereof.

(14)    Includes  5,000 shares  which Ms.  Firsick has the right to acquire upon
        the exercise of options. Excludes 25,000 shares underlying options which
        will not become exercisable within 60 days of the date hereof.

(15)    Includes 5,000 shares which Ms.  Rodriguez has the right to acquire upon
        the exercise of options. Excludes 15,000 shares underlying options which
        will not become exercisable within 60 days of the date hereof.

(16)    Includes 1,666 shares which Ms.  McGuiness has the right to acquire upon
        the exercise of options. Excludes 10,000 shares underlying options which
        will not become exercisable within 60 days of the date hereof.

(17)    Excludes  15,000  shares  underlying   options  which  will  not  become
        exercisable within 60 days of the date hereof.


                                 USE OF PROCEEDS

        We are unable to predict the time, if ever, when options and awards will
be granted under the Plans and, in the case of options, exercised. Therefore, we
are unable to estimate the net proceeds from the grants and exercises. Moreover,
the Plans permit certain methods of exercising options which would not result in
us receiving  any cash  proceeds.  Accordingly,  the proceeds  from the grant of
restricted  stock  awards,  if any,  and from the sale of shares to the  Selling
Stockholders  upon the exercise of options,  if any, have not been allocated for
any  particular  purpose.  We will not receive any proceeds from the  subsequent
sale of shares by the Selling Stockholders.

                                       14


                              PLAN OF DISTRIBUTION

        The  shares  may be  offered  and sold from time to time by the  Selling
Stockholders,  or by  pledgees,  donees,  transferees  or  other  successors  in
interest.  Such  offers  and  sales may be made from time to time on one or more
exchanges or in the  over-the-counter  market,  or  otherwise,  at prices and on
terms then prevailing or at prices related to the then-current  market price, or
in  negotiated  transactions.  The  shares  may be  sold  by one or  more of the
following:  (a) a block  trade in which the  broker or  dealer so  engaged  will
attempt to sell the Shares as agent but may position and resell a portion of the
block as principal to facilitate the  transaction;  (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account;  (c) an
exchange  distribution  in  accordance  with  the  rules of such  exchange;  (d)
ordinary  brokerage  transactions  and transactions in which the broker solicits
purchasers;  and (e) a  combination  of any such  methods of sale.  In effecting
sales,  brokers or dealers engaged by the Selling  Stockholders  may arrange for
other  brokers or  dealers  to  participate.  Brokers  or  dealers  may  receive
commissions or discounts from Selling Stockholders or from purchasers in amounts
to be negotiated  immediately prior to the sale. Such brokers or dealers and any
other participating brokers or dealers may be deemed to be "underwriters" within
the meaning of the Securities Act in connection with such sales.

        In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 or Rule 701  promulgated  under the Securities Act may
be sold under Rule 144 or Rule 701 rather than pursuant to this Prospectus.

        We may enter into  customary  agreements  with the Selling  Stockholders
concerning  indemnification  and the provision of information in connection with
the sale of the shares.

        There is no assurance  that any of the Selling  Stockholders  will offer
for sale or sell any or all the common stock covered by this prospectus.

        The  stockholders  listed above under  "Selling  Stockholders,"  and any
other  person with whom such  Selling  Stockholder  is acting in concert for the
purpose of selling  securities  of MDI, may not sell by means of the  prospectus
more than the amount of securities,  during any three-month period, specified in
Rule 144(e) promulgated under the Securities Act.


                                  LEGAL MATTERS

        The validity of the  issuance of the shares of Common Stock  offered has
been passed upon for us by Mintz,  Levin, Cohn, Ferris,  Glovsky and Popeo, P.C.
of New York, New York.  Mintz Levin  beneficially  owns [175,000]  shares of MDI
common stock.

                                     EXPERTS

        The financial statements  incorporated by reference in this registration
statement  have  been  audited  by  Arthur  Andersen  LLP,   independent  public
accountants,  as  indicated  in  their  report  with  respect  thereto,  and are
incorporated  herein in reliance  upon the  authority of said firm as experts in
giving said report.

                                       15


                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

        The  following  documents  that we filed  with the SEC are  incorporated
herein by reference:

(a)     Transition Report on Form 10-KSB and 10-KSB/A for the seven months ended
        December 31, 2001.

(b)     Quarterly Report on Form 10-QSB for the quarter ended March 31, 2001.

(c)     Quarterly Report on Form 10-QSB for the quarter ended June 30, 2001.

(d)     Quarterly  Report on Form 10-QSB for the  quarter  ended  September  30,
        2001.

(e)     Current Report on Form 8-K filed May 1, 2001.

(f)     Current Report on Form 8-K filed May 2, 2001.

(g)     Current Report on Form 8-K filed July 16, 2001.

(h)     Current Report on Form 8-K filed July 24, 2001.

(i)     Current Report on Form 8-K filed July 31, 2001.

(j)     Current Report on Form 8-K filed on August 8, 2001.

(k)     Current Report on Form 8-K filed on August 23, 2001.

(l)     The description of Common Stock contained in the Company's  Registration
        Statement  on Form  10-SB  (File No.  000-24919)  filed  with the SEC on
        September 28, 1998, as amended on February 1, 1999.

        All  documents  subsequently  filed by the Company  pursuant to Sections
13(a),  13(c),  14 or 15(d) of the Securities  Exchange Act of 1934, as amended,
after the date of this  prospectus and prior to the  termination of the offering
of the shares shall be deemed to be incorporated by reference in this Prospectus
and to be deemed a part  hereof from the date of filing of such  documents.  Any
statement  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 or is 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.

                SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

        Certain  statements  included or  incorporated  by  reference  into this
prospectus  constitute  "forward-looking  statements"  within the meaning of the
Private Securities Litigation Reform Act of 1995, and include statements made in
press releases and oral statements made by our officers,  directors or employees
acting on our behalf.  All such  forward-looking  statements  involve  known and
unknown  risks,  uncertainties  and other  factors  which  may cause our  actual
results,  performance or  achievements,  or industry  results,  to be materially
different from any future results,  performance,  or  achievements  expressed or
implied by such forward-looking  statements. Such factors include, among others,
market  demand for our  products,  successful  implementation  of our  products,
competitive  factors,  the ability to manage our growth,  the ability to recruit
additional  personnel and other factors referenced in this prospectus and in our
filings with the Securities and Exchange  Commission.  In addition to statements
which  explicitly  describe  such  risks  and  uncertainties,  you are  urged to
consider  statements  labeled with the terms  "believes,"  "belief,"  "expects,"
"plans," "anticipates" or "intends," to be uncertain and forward-looking.



                                       16




                                    PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


Item 3.  Incorporation of Certain Documents by Reference.
--------------------------------------------------------

        The following  documents filed by the Registrant with the Commission are
incorporated herein by reference:

        (a)     Transition  Report on Form  10-KSB  and  10-KSB/A  for the seven
                months ended December 31, 2001.

        (b)     Quarterly  Report on Form 10-QSB for the quarter ended March 31,
                2001.

        (c)     Quarterly  Report on Form 10-QSB for the quarter  ended June 30,
                2001.

        (d)     Quarterly  Report on Form 10-QSB for the quarter ended September
                30, 2001.

        (e)     Current Report on Form 8-K filed May 1, 2001.

        (f)     Current Report on Form 8-K filed May 2, 2001.

        (g)     Current Report on Form 8-K filed July 16, 2001.

        (h)     Current Report on Form 8-K filed July 24, 2001.

        (i)     Current Report on Form 8-K filed July 31, 2001.

        (j)     Current Report on Form 8-K filed on August 8, 2001.

        (k)     Current Report on Form 8-K filed on August 23, 2001.

        (l)     The  description  of Common  Stock  contained  in the  Company's
                Registration  Statement on Form 10-SB (File No. 000-24919) filed
                with the SEC on September  28,  1998,  as amended on February 1,
                1999.

        All reports and other documents  filed by the Registrant  after the date
hereof  pursuant  to  Sections  13(a),  13(c),  14 and  15(d) of the  Securities
Exchange  Act of 1934 prior to the filing of a  post-effective  amendment  which
indicates that all securities offered hereby have been sold or which deregisters
all securities  then remaining  unsold,  shall be deemed to be  incorporated  by
reference  herein and to be part hereof from the date of filing of such  reports
and documents.

                                      II-1


Item 4.  Description of Securities.
----------------------------------

        Not applicable.

Item 5.  Interests of Named Experts and Counsel.
-----------------------------------------------

        Not applicable.

Item 6.  Indemnification of Directors and Officers.
--------------------------------------------------

        Delaware  General   Corporation  Law,  Section   102(b)(7),   enables  a
corporation  in its  original  certificate  of  incorporation,  or an  amendment
thereto  validly  approved  by  stockholders,  to  eliminate  or limit  personal
liability of members of its Board of Directors  for  violations  of a director's
fiduciary duty of care.  However,  the elimination or limitation shall not apply
where  there has been a breach of the duty of  loyalty,  failure  to act in good
faith,  intentional misconduct or a knowing violation of a law, the payment of a
dividend  or  approval  of a stock  repurchase  which is  deemed  illegal  or an
improper personal benefit is obtained. Delaware General Corporation Law, Section
145, permits a corporation  organized under Delaware law to indemnify  directors
and officers  with respect to any matter in which a director or officer acted in
good faith and in a manner  reasonably  believed  to be not  opposed to the best
interests of the  corporation,  and,  with respect to any criminal  action,  had
reasonable cause to believe the conduct was lawful.

        Our Certificate of Incorporation includes the following language:

             SEVENTH:

             Directors  of the  corporation  shall not be  liable to either  the
             corporation or its  stockholders  for monetary damages for a breach
             of fiduciary  duties unless the breach  involves:  (1) a director's
             duty of loyalty to the corporation or its stockholders; (2) acts or
             omissions not in good faith or which involve intentional misconduct
             or a knowing  violation of law; (3) liability for unlawful  payment
             of  dividends or unlawful  stock  purchases  or  redemption  by the
             corporation;  or (4) a transaction  from which the director derived
             an improper personal benefit.

             EIGHTH:

             1. To the extent  permitted  by  Delaware  law from time to time in
             effect  and  subject to the  provisions  of  paragraph  (2) of this
             Article, the Corporation shall indemnify any person who was or is a
             party  or is  threatened  to be  made a  party  to any  threatened,
             pending or completed  action,  suit or  proceeding,  whether civil,
             criminal,  administrative or investigation (other than an action by
             or in the right of the  Corporation)  by reason of the fact that he
             is  or  was  a  director,   officer,   employee  or  agent  of  the
             Corporation, or is or was serving at the request of the Corporation
             as a director,  officer,  employee or agent of another corporation,
             partnership,  joint  venture,  trust or other  enterprise,  against
             expenses (including attorneys' fees), judgments,  fines and amounts
             paid in  settlement  actually  and  reasonably  incurred  by him in
             connection with such action, suit or proceeding if he acted in good
             faith  and  in a  manner  he  reasonably  believed  to be in or not
             opposed to the best interests of the Corporation, and, with respect
             to any criminal  action or proceeding,  had no reasonable  cause to
             believe his conduct was unlawful.  The  termination  of any action,
             suit or proceeding by judgment,  order, settlement,  conviction, or
             upon a plea of nolo  contendere  or its  equivalent,  shall not, of
             itself,  create a  presumption  that the person did not act in good
             faith and in a manner which he reasonably  believed to be in or not
             opposed to the best interests of the Corporation, and, with respect
             to any  criminal  action or  proceeding,  had  reasonable  cause to
             believe that his conduct was unlawful.

                                      II-2


             2. The Corporation shall indemnify any person who was or is a party
             or is threatened to be made a party to any  threatened,  pending or
             completed  action or suit by or in the right of the  Corporation to
             procure a judgment in its favor by reason of the fact that he is or
             was a director,  officer, employee or agent of the Corporation,  or
             is or was serving at the request of the  Corporation as a director,
             officer,  employee  or agent of another  corporation,  partnership,
             joint  venture,   trust  or  other  enterprise,   against  expenses
             (including attorneys' fees) actually and reasonably incurred by him
             in connection with the defense or settlement of such action or suit
             if he acted in good faith and in a manner he reasonably believed to
             be in or not opposed to the best interests of the  Corporation  and
             except  that no  indemnification  shall be made in  respect  of any
             claim,  issue or matter as to which  such  person  shall  have been
             adjudged  to be liable to the  corporation  unless  and only to the
             extent  that the court in which  such  action  or suit was  brought
             shall determine upon application that,  despite the adjudication of
             liability but in view of all the  circumstances  of the case,  such
             person is fairly and  reasonably  entitled  to  indemnity  for such
             expenses which such court shall deem proper.

             3. To the extent that a present  and former  director or officer of
             the  Corporation  has been successful on the merits or otherwise in
             defense of any action, suit or proceeding referred to in paragraphs
             (1) and (2) of this Article,  or in defense of any claim,  issue or
             matter therein, he shall be indemnified against expenses (including
             attorneys'  fees)  actually  and  reasonably  incurred  by  him  in
             connection therewith.

             4. Any indemnification under paragraphs (1) and (2) of this Article
             (unless ordered by a court) shall be made by the  Corporation  only
             as  authorized  in the  specific  case  upon a  determination  that
             indemnification  of  the  present  or  former  director,   officer,
             employee or agent is proper in the circumstances because he has met
             the applicable standard of conduct set forth in said paragraphs (1)
             and (2). Such determination shall be made, with respect to a person
             who is a director or officer at the time of such determination, (i)
             by a majority  vote of the  directors  who are not  parties to such
             action, suit or proceeding, even though less than a quorum, or (ii)
             by a committee of such  directors  designated  by majority  vote of
             such directors,  even though less than a quorum,  or (iii) if there
             are  no  such  directors,  or  if  such  directors  so  direct,  by
             independent  legal  counsel  in a written  opinion,  or (iv) by the
             stockholders.

             5. Expenses  (including  attorneys' fees) incurred by an officer or
             director  in  defending  a  civil,   criminal,   administrative  or
             investigative  action,  suit  or  proceeding  shall  be paid by the
             Corporation  in advance of the final  disposition  of such  action,
             suit or proceeding  upon receipt of an  undertaking by or on behalf
             of such  director  or  officer  to repay  such  amount  if it shall
             ultimately be determined  that he is not entitled to be indemnified
             by the  Corporation  as authorized  in this Article.  Such expenses
             (including  attorneys'  fees)  incurred  by  former  directors  and
             officers or other  employees  and agents shall be so paid upon such
             terms and conditions, if any, as the Corporation deems appropriate.

             6. The  indemnification and advancement of expenses provided by, or
             granted pursuant to, the other paragraphs of this Article shall not
             be deemed  exclusive  of any other  rights to which  those  seeking
             indemnification  or advancement of expenses shall be entitled under
             any by-law,  agreement,  vote of the  stockholders or disinterested
             directors or otherwise,  both as to action in his official capacity
             and as to action in another capacity while holding such office.

                                      II-3


             7. The Corporation may purchase and maintain insurance on behalf of
             any person who is or was a director,  officer, employee or agent of
             the  Corporation,  or is or  was  serving  at  the  request  of the
             Corporation  as a director,  officer,  employee or agent of another
             corporation, partnership, joint venture, trust or other enterprise,
             against any liability  asserted  against him and incurred by him in
             any such capacity, or arising out of his status as such, whether or
             not the  Corporation  would have the power to indemnify him against
             such  liability  under  the  provisions  of  the  Delaware  General
             Corporation Law.

             8. The  indemnification and advancement of expenses provided by, or
             granted pursuant to, this Article shall,  unless otherwise provided
             when authorized or ratified, continue as to a person who has ceased
             to be a director, officer, employee or agent and shall inure to the
             benefit  of the  heirs,  executors  and  administrators  of  such a
             person.

             9. Each person who serves as a director, officer, employee or agent
             of the Corporation or was serving at the request of the Corporation
             as a director,  officer,  employee or agent of another corporation,
             partnership,  joint venture,  trust or other  enterprise while this
             Article  EIGHTH  is in  effect  shall be  deemed  to be doing so in
             reliance on the provisions of this Article EIGHTH,  and neither the
             amendment or repeal of this Article EIGHTH, nor the adoption of any
             provision of this  Certificate of Incorporation  inconsistent  with
             this  Article  EIGHTH,  shall  apply to or have any  effect  on the
             indemnification  of  such  director,  officer,  employee  or  agent
             occurring  prior  to such  amendment,  repeal,  or  adoption  of an
             inconsistent provision.

MDI has a liability insurance policy in effect for officers and directors.  Such
insurance,  in certain  instances,  insures our directors  and officers  against
liabilities arising under the Securities Act, including  liabilities arising out
of the offering made by this registration statement.


Item 7.  Exemption from Registration Claimed.
--------------------------------------------

        The previously issued securities being registered for reoffer and resale
pursuant to the  prospectus  filed as part of this  Registration  Statement were
issued by the  registrant  without  registration  in reliance upon the exemption
provided by Section 4(2) of the Securities Act of 1933, since no public offering
was  involved.   No  underwriters  were  involved  in  the  foregoing  sales  of
securities.  In addition,  each of the recipients of such restricted  securities
has represented  that he or she understands  that such shares may not be sold or
otherwise  transferred absent a registration  statement under the Securities Act
of 1933 or an exemption therefrom, and each certificate representing such shares
of the registrant's common stock bears a restrictive legend to such effect.

Item 8.  Exhibits.
-----------------

        (4.1)   Certificate of Incorporation of MDI  Entertainment,  Inc. (f/k/a
                Puff Process, Inc.) dated December 29, 1994, as amended. (1)

        (4.2)   Certificate of Amendment to the Certificate of  Incorporation of
                MDI Entertainment, Inc. dated February 28, 1999. (2)

        (4.3)   Amended and Restated By-Laws of MDI  Entertainment,  Inc., dated
                April 27, 1999 (3)

        (4.4)   MDI  Entertainment,  Inc.  1998 Stock Option and Award Plan,  as
                amended. (4)

        (5)     Opinion of Mintz,  Levin, Cohn, Ferris,  Glovsky and Popeo, P.C.
                as to the legality of shares being registered. (5)

                                      II-4


        (23.1)  Consent of Mintz,  Levin, Cohn, Ferris,  Glovsky and Popeo, P.C.
                (included in opinion of counsel filed as Exhibit 5).

        (23.2)  Consent of Arthur Andersen LLP (5)

        (24.1)  Power of Attorney to file  future  amendments  (set forth on the
                signature    page    of    this     Registration     Statement.)

                          -------------------------------------------

        (1)     Incorporated  by reference  from MDI's  Amendment  No. 1 to Form
                10-SB filed February 1, 1999.

        (2)     Incorporated  by reference from MDI's Form 10-QSB for the period
                ended February 28, 1999 (filed April 14, 1999).

        (3)     Incorporated  by reference from MDI's Form 10-KSB for the period
                ended May 31, 1999 (filed August 27, 1999).

        (4)     Incorporated by reference from MDI's Form 10-SB, filed September
                28, 1998, and as amended by MDI's  Definitive Proxy Statement on
                Schedule 14A filed May 1, 2001.

        (5)     Filed herewith.

Item 9.  Undertakings.
---------------------

(a)     The undersigned Registrant hereby undertakes:

        (1)     To file,  during any  period in which  offers or sales are being
                made, a post-effective amendment to this Registration Statement:

                (i)     To include any prospectus  required by Section  10(a)(3)
                        of the Securities Act of 1933;

                (ii)    To reflect in the prospectus any facts or events arising
                        after the effective date of the  Registration  Statement
                        (or the most recent  post-effective  amendment  thereof)
                        which,  individually  or in the aggregate,  represents a
                        fundamental  change in the  information set forth in the
                        Registration Statement.

                (iii)   To include any material  information with respect to the
                        plan of  distribution  not  previously  disclosed in the
                        Registration  Statement or any  material  change to such
                        information in the Registration Statement;

                                      II-5


                PROVIDED,  HOWEVER,  that paragraphs (a)(1)(i) and (a)(1)(ii) do
        not apply if the Registration  Statement is on Form S-3 or Form S-8, and
        the information required to be included in a post-effective amendment by
        those   paragraphs  is  contained  in  periodic  reports  filed  by  the
        Registrant  pursuant  to Section 13 or Section  15(d) of the  Securities
        Exchange  Act of  1934  that  are  incorporated  by  reference  in  this
        Registration Statement.

        (2)     That,  for the purpose of  determining  any liability  under the
                Securities Act of 1933, each such post-effective amendment shall
                be deemed to be a new  registration  statement  relating  to the
                securities offered therein,  and the offering of such securities
                at that  time  shall  be  deemed  to be the  initial  bona  fide
                offering thereof.

        (3)     To  remove  from  registration  by  means  of  a  post-effective
                amendment any of the securities  being  registered  which remain
                unsold at the termination of the offering.

(b)     The  undersigned  Registrant  hereby  undertakes  that,  for purposes of
        determining  any liability under the Securities Act of 1933, each filing
        of the  Registrant's  annual report pursuant to Section 13(a) or Section
        15(d) of the  Securities  Exchange Act of 1934 that is  incorporated  by
        reference  in this  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  Registrant  pursuant  to the  foregoing  provisions,  or
        otherwise,  the  Registrant  has been advised that in the opinion of the
        Securities  and  Exchange  Commission  such  indemnification  is against
        public policy as expressed in the Act and is, therefore,  unenforceable.
        In the event that a claim for  indemnification  against such liabilities
        (other than the payment by the  Registrant of expenses  incurred or paid
        by a director,  officer or  controlling  person of the Registrant in the
        successful  defense of any action,  suit or  proceeding)  is asserted by
        such  director,  officer or  controlling  person in connection  with the
        securities being registered,  the Registrant will, unless in the opinion
        of its counsel  the matter has been  settled by  controlling  precedent,
        submit to a court of appropriate  jurisdiction the question whether such
        indemnification  by it is against  public policy as expressed in the Act
        and will be governed by the final adjudication of such issue.



                                      II-6




                                   SIGNATURES

        Pursuant  to  the  requirements  of the  Securities  Act  of  1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in Hartford, Connecticut on December 28, 2001.


                                           MDI ENTERTAINMENT, INC.



                                           By   /s/ Steven M. Saferin
                                             -----------------------------------
                                           Steven M. Saferin
                                           President and Chief Executive Officer


                                POWER OF ATTORNEY

        Each person  whose  signature  appears  below  constitutes  and appoints
Steven M.  Saferin and Kenneth M.  Przysiecki,  or either of them,  his true and
lawful  attorneys-in-fact  and  agents,  with  full  power of  substitution  and
resubstitution in each of them, for him and in his name, place and stead, and in
any and all capacities, to sign any and all amendments (including post-effective
amendments)  to this  Registration  Statement on Form S-8 of MDI  Entertainment,
Inc.,  and to file the same,  with all exhibits  thereto and other  documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
or about the premises,  as full to all intents and purposes as he might or could
do in person,  hereby  ratifying and confirming all that said  attorneys-in-fact
and agents or any of them or their or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.

        Pursuant  to the  requirements  of the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated.



Signature                                     Title                              Date
---------                                     -----                              ----

                                                                      

/s/ Steven M. Saferin        President and Chief Executive Officer          October 24, 2001
---------------------------  (principal executive officer and Director)
Steven M. Saferin


/s/ Kenneth M. Przysiecki    Senior Vice President of Accounting            October 24, 2001
---------------------------  and Administration
Kenneth M. Przysiecki        (principal financial and accounting officer and Director)


/s/ Robert J. Wussler        Director                                       October 24, 2001
---------------------------
Robert J. Wussler

/s/ S. David Fineman         Director                                       October 29, 2001
---------------------------
S. David Fineman

/s/ Todd Leavitt             Director                                       October 25, 2001
---------------------------
Todd Leavitt

/s/ William G. Malloy        Director                                        October 31, 2001
---------------------------
William G. Malloy







                             MDI ENTERTAINMENT, INC.

                          INDEX TO EXHIBITS FILED WITH
                         FORM S-8 REGISTRATION STATEMENT

 Exhibit No.                                                    Exhibit

(4.1)   Certificate of  Incorporation  of MDI  Entertainment,  Inc.  (f/k/a Puff
        Process, Inc.) dated December 29, 1994, as amended. (1)

(4.2)   Certificate  of Amendment to the  Certificate  of  Incorporation  of MDI
        Entertainment, Inc. dated February 28, 1999. (2)

(4.3)   Amended and Restated By-Laws of MDI Entertainment, Inc., dated April 27,
        1999 (3)

(4.4)   MDI Entertainment, Inc. 1998 Stock Option and Award Plan, as amended.(4)

(5)     Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. as to the
        legality of shares being registered. (5)

(23.1)  Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (included
        in opinion of counsel filed as Exhibit 5).

(23.2)  Consent of Arthur Andersen LLP (5)

(24.1)  Power of Attorney to file future  amendments (set forth on the signature
        page of this Registration Statement.)

                    -------------------------------------------

(1)     Incorporated by reference from MDI's Amendment No. 1 to Form 10-SB filed
        February 1, 1999.

(2)     Incorporated  by  reference  from MDI's Form 10-QSB for the period ended
        February 28, 1999 (filed April 14, 1999).

(3)     Incorporated  by  reference  from MDI's Form 10-KSB for the period ended
        May 31, 1999 (filed August 27, 1999).

(4)     Incorporated  by reference  from MDI's Form 10-SB,  filed  September 28,
        1998, and as amended by MDI's Definitive Proxy Statement on Schedule 14A
        filed May 1, 2001.

(5)     Filed herewith.