Nelvana has filed a preliminary short-form prospectus to the Ontario Securities Commission with respect to a proposed offering of 3,750,000 subordinate voting shares, the proceeds of which will be used to repay the debt the toonco will incur in buying u.s. children’s book publisher Klutz.

The company is selling 3,684,032 shares and two shareholders are selling an aggregate of 65,968 shares, all of which Nelvana intends to list in the u.s.

A registration statement relating to these securities has been filed with the u.s. Securities and Exchange Commission but has not yet become effective.

Bear, Stearns & Company is the lead underwriter for the offering and the co-managers are SG Cowen Securities and RBC Dominion Securities.

Nelvana’s subordinate voting shares are traded on the tse and the company recently applied to have them quoted on the Nasdaq National Market.

For the first quarter ended March 31, Nelvana reports a 31% increase in total revenue to $15 million.

The increase reflects a 58% growth to $10.2 million in production and distribution revenue for the period, offset by a 4% decline in revenue from its branded consumer products division.

Current production revenue increased 87% for the period to $5.8 million compared to $3.1 million in the same period last year.

Revenue from the products division, which totaled $4.8 million compared to $5.1 million in the same period last year, experienced 38% growth from the company’s merchandising operations which were offset by a 24% decline in publishing revenue. Samantha Yaffe