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As filed with the Securities and Exchange Commission on May 4, 1999
File No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HMG WORLDWIDE CORPORATION
(Exact name of Registrant as specified in its charter)
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<S> <C>
DELAWARE 13-3402432
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
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475 TENTH AVENUE
NEW YORK, NEW YORK 10018
(212) 736-2300
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
ROBERT V. CUDDIHY, JR.
CHIEF OPERATING OFFICER
475 TENTH AVENUE
NEW YORK, NEW YORK 10018
(212) 736-2300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
CRAIG S. LIBSON, ESQ.
PARKER DURYEE ROSOFF & HAFT
529 FIFTH AVENUE
NEW YORK, NEW YORK 10017
(212) 599-0500
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: From time to time after
the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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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, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF AMOUNT TO BE PROPOSED PROPOSED AMOUNT OF
EACH CLASS REGISTERED MAXIMUM MAXIMUM REGISTRATION
OF SECURITIES TO BE OFFERING PRICE AGGREGATE FEE
REGISTERED PER SHARE(1) OFFERING PRICE(1)
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<S> <C> <C> <C> <C>
Common Stock 2,160,000 $3.875 $8,370,000 $2,326.86
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the closing price of the Common Stock
on the Nasdaq SmallCap Market on April 27, 1999.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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SUBJECT TO COMPLETION MAY 4, 1999
PROSPECTUS
2,160,000 Shares
HMG WORLDWIDE CORPORATION
Common Stock
This is an offering of the 2,160,000 shares of common stock, par value $.01
per share, of HMG Worldwide Corporation by certain selling stockholders. The
shares of common stock being offered by the selling stockholders may be acquired
by the selling stockholders upon conversion of certain convertible notes of the
Company held by them. The Company will not receive any proceeds from the sale of
shares of common stock by the selling stockholders.
The selling stockholders may offer and sell the shares of common stock from
time to time, directly or through underwriters, on The Nasdaq SmallCap Market or
in the over the counter market, in negotiated transactions or otherwise, at
market prices prevailing at the time of sale, at prices related to prevailing
market prices or at negotiated prices. See "Plan of Distribution" for a
discussion of the methods of sale which the selling stockholders or their
pledgees, donees or transferees may use to offer and sell the shares.
We have indemnified the selling stockholders against certain liabilities,
including liabilities under the Securities Act of 1933. We will bear all
expenses in connection with the registration and sales of the shares of common
stock being offered by the selling stockholders, other than any underwriting
discounts and selling commissions.
----------------------
See "Risk Factors" beginning on page 3 for a discussion of certain factors
that you should consider before you invest in the common stock being sold by
means of this prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------------
The shares of common stock being offered hereby by the selling stockholders
have not been registered for sale under the securities laws of any state or
jurisdiction as of the date of this Prospectus.
The common stock is listed for trading on The Nasdaq SmallCap Market under
the symbol "HMGC." On April __, 1999, the closing bid price of the common stock
as reported by The Nasdaq SmallCap Market was $____ per share.
The date of this Prospectus is __________, 1999.
[The following language is located on the left margin of the first page of
preliminary prospectus.]
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
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TABLE OF CONTENTS
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PAGE
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Where You Can Obtain Additional Information About the Company. . . . 2
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . 6
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . 7
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION ABOUT THE COMPANY
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission ("SEC"). You may read
and copy any of the information on file with the SEC and the SEC's public
reference rooms in Washington, D.C., New York, New York, and Chicago, Illinois.
Copies of the filed documents can be obtained by mail from the Public Reference
Section of the SEC at Room 1024, 450 Fifth Street, N.W. Washington, D.C. 20549
at prescribed rates. You may call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Filed documents are also available to
the public at the SEC's Web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until all of the shares offered are sold.
(a) The Company's Annual Report on Form 10-K for its fiscal year ended
December 31, 1998; and
(b) The Company's Registration Statement on Form 8-A for a description
of the Common Stock.
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 that statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
You can request, and we will send to you, without charge, copies of
documents that are incorporated by reference in this prospectus but which are
not delivered to you (other than exhibits to such documents which are not
specifically incorporated by reference). You may request these copies by writing
or telephoning the Company at: HMG Worldwide Corporation, 475 Tenth Avenue, New
York, New York 10018, attention: Robert V. Cuddihy, Jr., telephone number (212)
736-2300.
You should rely on the information incorporated by reference or provided in
this prospectus or any prospectus supplement. We have not authorized anyone else
to provide you with different information.
2
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RISK FACTORS
Before you invest in the common stock, you should be aware that there are
various risks, including those described below. You should carefully consider
these risks as well as the more detailed information contained in this
prospectus and in the documents incorporated in this prospectus by reference,
before making a decision to invest in the common stock offered hereby.
THIS PROSPECTUS CONTAINS FORWARD LOOKING STATEMENTS
Certain statements contained in this prospectus and the documents
incorporated by reference are based on current expectations. Such statements are
forward looking statements that involve a number of risks and uncertainties.
Factors that could cause actual results to differ materially include the
following: (i) general economic conditions at retail, (ii) competitive market
influences, (iii) client budgetary restrictions (iv) delays in shipment of
scheduled programs to clients (v) delay in or inability to expand the Company's
client base and/or (vi) the loss of, or reduction in spending of, existing
clients.
A SIGNIFICANT PORTION OF OUR NET REVENUES ARE DERIVED FROM A FEW MAJOR CUSTOMERS
For the year ended December 31, 1998, Procter & Gamble and CVS/Pharmacy
accounted for approximately 12% and 11%, respectively, of the Company's net
revenue. For the year ended December 31, 1997, Bristol Meyers Squibb, Procter &
Gamble and Wal*Mart accounted for approximately 12%, 12% and 11%, respectively,
of the Company's net revenues. For the year ended December 31, 1996, Procter &
Gamble, Sara Lee International and Wal*Mart accounted for approximately 17%,
12%, and 11%, respectively, of the Company's net revenues. Although the
Company's relationship with many of its larger accounts spans several years,
none of these accounts is contractually bound to purchase the Company's products
or services. The loss of any one of such client would reduce the Company's
revenues and have a material adverse effect on the Company.
The Company may experience changes in quarter-to-quarter net revenues due
to the timing of shipments to its clients, the effect of which may be
significant depending upon the concentration of the Company's revenues with such
clients.
OUR SUCCESS IS DEPENDENT UPON THE SERVICES OF KEY OFFICERS
The Company's success depends, in part, upon the continued services of
Michael Wahl, Chairman of the Board and Chief Executive Officer, and certain
other key personnel. The loss of the services of any one of them could have a
material adverse effect on the Company. Although Michael Wahl is employed by the
Company pursuant to an employment agreement expiring in 2002, the Company does
not have an employment contract with any other member of senior management and
has not obtained "key-man" life insurance on the life of any member of senior
management.
WE HAVE SIGNIFICANT OUTSTANDING INDEBTEDNESS;
OUR AGREEMENTS WITH OUR LENDERS RESTRICT OUR OPERATING FLEXIBILITY
The Company has entered into a loan and security agreement with a financial
institution whereby the Company obtained a secured $17 million revolving line of
credit and term loan facility. On December 31, 1998 approximately $15,300,000
was outstanding under this facility. This facility, which expires in November
1999, bears interest at the lending institution's prime rate plus 1% per annum
and is secured by the Company's cash, cash equivalents, marketable securities,
accounts receivable inventory, equipment and all other tangible and intangible
assets and a pledge of all the common stock of the Company's wholly-owned
subsidiaries. Additionally, the facility contains certain affirmative and
negative covenants which require the Company to maintain a certain net worth,
and, among other things, restrict (i) the declaration or payment of dividends,
(ii) the incurrence of additional indebtedness and (iii) the sale of certain
assets. There can be no assurance that the Company will be able to remain in
compliance with such covenants in the future. The Company is currently in
compliance with all restrictive covenants and other material provisions of the
facility.
3
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WE COMPETE IN A HIGHLY COMPETITIVE INDUSTRY
The custom display segment of the in-store marketing industry in which the
Company primarily competes is highly competitive. Certain of the Company's
competitors, including several diversified companies, not only design and
assemble merchandising systems for their own products, but also provide these
systems and services to unaffiliated concerns. Our competitors may have greater
financial and other resources than the Company which may provide our competitors
with certain advantages, including the ability to spend greater resources for
research and development, marketing and other purposes. In addition, although
the Company believes that it has certain creative, design, technological,
managerial and other advantages over certain of its competitors, there can be no
assurance that the Company will maintain such advantages.
THE MARKET PRICE OF OUR COMMON STOCK CAN BE HIGHLY VOLATILE
The average daily trading volume of our common stock has generally been
low, which the Company believes has had a significant effect on the historical
market price of our common stock. As a result, such market price has been highly
volatile and may not be indicative of the market price in a more liquid market.
The market price of our common stock could be subject to significant
fluctuations in response to a number of factors, including the depth and
liquidity of the market for the common stock, public announcements by the
Company, its clients and its competitors, investor perception of the Company and
general economic and other conditions, which may or may not relate to the
Company's performance.
CERTAIN OFFICERS AND DIRECTORS OWN A SUBSTANTIAL PORTION OF OUR COMMON STOCK
As of April 1, 1999, the Company's executive officers and directors
beneficially owned approximately 37.55% of our common stock. Consequently, the
Company's executive officers and directors will have substantial influence on
the outcome of any matters submitted to the Company's stockholders for approval,
including the election of directors. Such concentration of ownership may also
have the effect of preventing a change in control of the Company. In addition,
the interests of management may not always be identical to the interests of the
non-management stockholders.
WE ARE UNLIKELY TO PAY DIVIDENDS FOR THE FORSEEABLE FUTURE
The Company has not paid dividends on the common stock since its inception.
The Company intends to reinvest any earnings in its business to finance future
growth. Accordingly, the Board of Directors does not anticipate declaring any
cash dividends in the foreseeable future. In addition, under the terms of our
financing facility, the Company is prohibited from paying cash dividends.
POTENTIAL DILUTIVE EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE
As of April 1, 1999, the Company had outstanding 11,083,210 shares of
common stock. An aggregate of 4,558,428 shares of common stock will become
outstanding upon the exercise or conversion, as the case may be, of all of the
stock options and warrants outstanding at April 1, 1999. In addition, up to
2,160,000 shares, which are being offered hereby, may be issued and sold upon
the conversion of the convertible notes held by the selling stockholders. The
actual number of shares will depend upon the market price of the common stock at
the time of conversion. The conversion ratio may provide the selling
stockholders the ability to receive shares at a discount to the prevailing
market price. No prediction can be made as to the effect, if any, that sales of
shares of common stock or the issuance of shares on the conversion of the
convertible notes at a discount to the market price will have on the market
price of the Company's securities prevailing from time to time. The possibility
that substantial amounts of common stock may be sold under Rule 144 into the
public market may adversely affect the prevailing market price for the common
stock and could impair the Company's ability to raise capital in the future
through the sale of equity securities.
4
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RISKS RELATING TO PENNY STOCKS
If our common stock were to become delisted from trading on the Nasdaq
SmallCap Market and the trading price of the common stock were below $5.00 per
share, trading in the common stock would be subject to the requirements of
certain rules promulgated under the Securities Exchange Act of 1934, which
require additional disclosure by broker-dealers in connection with any trades
involving a stock defined as a penny stock (generally, any non-Nasdaq equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions). Such rules require the delivery, prior to any penny stock
transaction, of a disclosure schedule explaining the penny stock market and the
risks associated therewith and impose various sales requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors (generally defined as an investor with a net worth in
excess of $1,000,000 or annual income exceeding $200,000 individually or
$300,000 together with a spouse). For these types of transactions, the
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
the sale. The broker-dealer also must disclose the commissions payable to the
broker-dealer, current bid and offer quotation for the penny stock and, if the
broker-dealer is the sole market-maker, the broker-dealer must disclose this
fact and the broker-dealer's presumed control over the market. This information
must be provided to the customer orally or in writing before or with the written
confirmation of trade sent to the customer. Monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. The additional burdens
imposed upon broker-dealers by such requirements could, in the event the common
stock were deemed to be a penny stock, discourage broker-dealers from effecting
transactions in the common stock which could severely limit the market liquidity
of the common stock.
USE OF PROCEEDS
The shares of common stock being offered hereby are for the account of the
selling stockholders. Accordingly, the Company will not receive any of the
proceeds from the sale of shares of common stock by the selling stockholders.
The Company will receive no proceeds upon the conversion of the convertible
notes, but this conversion, if in full, would result in the reduction of the
Company's indebtedness by $5,000,000. See "Selling Stockholders."
5
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SELLING STOCKHOLDERS
The following table sets forth certain information with respect to selling
stockholders. The shares set forth in the table represents the maximum number of
shares which may be acquired by the selling stockholders upon conversion of the
convertible notes. As described in the footnote to the table, the actual number
of shares of common stock which may be acquired upon such conversion may be
less than the maximum amount. In addition, the number of shares of common stock
that may actually be sold by the selling stockholders will be determined by the
selling stockholders, and may depend upon a number of factors, including, among
other things, the market price of the Common Stock. The table below sets forth
information as of the date of this prospectus, concerning the beneficial
ownership of Common Stock of the selling stockholders. All information
concerning beneficial ownership has been furnished by the selling stockholders.
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SHARES OF
COMMON STOCK SHARES OF SHARES OF COMMON STOCK OWNED
PRINCIPAL OWNED COMMON AFTER OFFERING(1)
AMOUNT OF NOTES ------------------ ---------------- -----------------
HELD BEFORE OFFERING(2) STOCK OFFERED(2) NUMBER PERCENT
---- ------------------ ---------------- ------ -------
<S> <C> <C> <C> <C> <C>
Societe Generale $4,000,000 1,728,000 1,728,000 0 0%
Overseas Capital
Management S.A.L. $1,000,000 432,000 432,000 0 0%
</TABLE>
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(1) Assumes all shares offered by the selling stockholders are sold.
(2) Represents the maximum aggregate number of shares of common stock issuable
upon conversion of the convertible notes, all of which are being offered
hereunder. As of the date of this Prospectus, no portion of the convertible
notes has been converted into Shares. The convertible notes may be
converted at a price equal to the lesser of (i) $4.00 and (ii) the average
of the two lowest last reported bid prices for the common stock on Nasdaq
SmallCap Market during the 30 trading days preceding (but excluding) the
date of conversion, subject to a maximum number of 2,160,000 shares of
common stock, in the aggregate, issuable upon conversion (including any
shares of common stock issued, at the Company's option, in payment of
interest on the convertible notes). In addition, the convertible notes
provide that they are not convertible to the extent that, upon any
conversion, the shares of common stock to be received upon such conversion,
together with shares of common stock then beneficially owned by the holder
and its affiliates, exceeds 4.9% of the outstanding shares of common stock
of the Company. This 4.9% ceiling on the number of shares which may be
beneficially owned by the holder and its affiliates may not be waived by
the Company. The principal amount of the convertible notes which may be
converted into shares is limited to 25% during the first 75 days following
issuance of the convertible notes, an aggregate of 50% of the principal
through the 150th day, an aggregate of 75% of the principal through the
225th day, and up to 100% of the principal amount of the convertible notes
thereafter. The result of converting convertible notes based upon a
floating price based on this formula is that the number of shares of common
stock issuable upon conversion of the convertible notes increases as the
market price of the common stock decreases. Also, as a result of this
formula, the conversion price of the convertible notes could be
substantially below the market price of the common stock on the date of
conversion. To the extent that any portion of the convertible notes are
converted and the resulting common stock is sold, the market price of the
common stock could decrease due to the additional shares in the market,
leading, in turn, to a proportionate greater amount of common stock
issuable upon subsequent conversion of the convertible notes which could
result in substantial dilution to the interests of other holders of common
stock, whether or not the shares of common stock issued
6
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upon conversion are sold following conversion. If the maximum number of
2,160,000 shares issuable upon conversion of the convertible notes
(including any shares of common stock issued, at the Company's option, in
payment of interest on the convertible notes) were to be issued and
thereafter there were any remaining unconverted principal amount of the
convertible notes, the interest rate on such remaining principal amount
would be increased to 15% per annum and would be payable in cash.
Pursuant to an agreement between the Company and the selling stockholders,
the Company has agreed (i) to file the registration statement of which this
prospectus forms a part for the purpose of registering the potential resale of
the shares, (ii) to bear all expenses of the registration and sale of the shares
(other than any underwriting discounts and conversions) and (iii) to indemnify
the selling stockholders against certain liabilities.
The selling stockholders do not have, and within the past three years have
not had, any position, office or other material relationship with the Company or
any of its predecessors or affiliates.
PLAN OF DISTRIBUTION
Sales of the shares may be made from time to time by the selling
stockholders, or, subject to applicable law, by pledges, donees, distributees,
transferees or other successors in interest. Such sales may be made on The
Nasdaq SmallCap Market, in another over-the-counter market, on a national
securities exchange (any of which may involve crosses and block transactions),
in privately negotiated transactions or otherwise or in a combination of such
transactions at prices and at terms then prevailing or at prices related to the
then current market price, or at privately negotiated prices. In addition, any
shares covered by this Prospectus which qualify for sale pursuant to Section
4(1) of the Securities Act of 1933 or Rule 144 promulgated thereunder may be
sold under such provisions rather than pursuant to this prospectus. Without
limiting the generality of the foregoing, the shares may be sold in one or more
of the following types of transactions: (a) a block trade in which the
broker-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; (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) face-to-face transactions between sellers and purchasers without a
broker-dealer. In effecting sales, brokers or dealers engaged by the selling
stockholder may arrange for other brokers or dealers to participate in the
resales.
In connection with distributions of the shares or otherwise, the selling
stockholders may enter into hedging transactions. In connection with hedging
transactions, participants may engage in short sales of the shares registered
hereunder in the course of hedging the positions they assume with the selling
stockholders. The selling stockholders may also sell shares short and deliver
the shares to close out such short positions. The selling stockholders may also
enter into option or other transactions. The selling stockholders may also
pledge the shares registered hereunder to a broker or dealer and upon a default,
the pledgor may effect sales of the pledged shares pursuant to this prospectus.
Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling stockholder in amounts to be
negotiated in connection with 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 of 1933 in connection with sales and any
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act of 1933.
Information as to whether underwriters who may be selected by the selling
stockholders, or any other broker-dealer, is acting as principal or agent for
the selling stockholder, the compensation to be received by underwriters who may
be selected by the selling stockholders, or any broker-dealer, acting as
principal or agent for the selling stockholders and the compensation to be
received by other broker-dealers, in the event the compensation of such other
broker-dealers is in excess of usual and customary commissions, will, to the
extent required, be set forth in a supplement to this prospectus. Any dealer or
broker participating in any distribution of the shares may be required to
deliver a copy of this prospectus, including the prospectus supplement, if any,
to any person who purchases any of the shares from or through such dealer or
broker.
7
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The Company has advised the selling stockholders that during such time as
they may be engaged in a distribution of the shares included herein they are
required to comply with Regulation M promulgated under the Exchange Act of 1934.
In general, Regulation M precludes the selling shareholders, any affiliated
purchasers and any broker-dealer or other person who participates in such
distribution from bidding for or purchasing, or attempting to induce any person
to bid for or purchase any security which is the subject of the distribution
until the entire distribution is complete. A "distribution" is defined in the
rules as an offering of securities that is distinguished from ordinary trading
activities and depends on the "magnitude of the offering and the presence of
special selling efforts and selling methods." Regulation M also prohibits any
bids or purchases made in order to stabilize the price of a security in
connection with the distribution of that security.
It is anticipated that the selling stockholders will offer all of the
shares for sale. Further, because it is possible that a significant number of
shares could be sold at the same time hereunder, any sales, or the possibility
thereof, may depress the market price of the common stock.
LEGAL MATTERS
Certain legal matters in connection with the shares of common stock being
offered hereby will be passed upon for the Company by Parker Duryee Rosoff &
Haft, New York, New York 10017. Parker Duryee Rosoff & Haft owns 50,000 shares
of common stock. In addition, members of Parker Duryee Rosoff & Haft
beneficially own an aggregate of 251,476 shares of common stock as of April 1,
1999, including 245,476 shares that are beneficially owned by Herbert F. Kozlov,
a member of such Firm and a director of the Company.
EXPERTS
The consolidated financial statements of the Company included in the
Company's annual report on Form 10-K for the year ended December 31, 1998
incorporated herein by reference have been audited by Friedman Alpren & Green
LLP, independent certified public accountants, as indicated in their report with
respect thereto, and are incorporated herein by reference in reliance upon the
report of said firm given upon their authority as experts in accounting and
auditing.
8
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the Company's estimates of the expenses to
be incurred by it in connection with the Common Stock being offered hereby:
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<S> <C>
SEC Registration Fee........................................ $ 2,345.63
Printing registration statement and other documents......... - 0 -
Legal fees and expenses..................................... 13,000.00*
Accounting fees and expenses................................ - 0 -
Miscellaneous expenses...................................... 3,000.00*
----------
$18,343.63
</TABLE>
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*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Articles 8 and 9 of the Certificate of Incorporation of HMG Worldwide
Corporation ("Registrant") provide that Registrant shall, to the full extent
permitted by Section 145 of the Delaware General Corporation Law, indemnify all
persons whom it may indemnify pursuant thereto. Pursuant to Section 145 of the
Delaware General Corporation Law, Registrant has the power, under certain
circumstances, to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or contemplated action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director, officer, employee or agent of
Registrant, or is or was serving at the request of Registrant as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses, including attorneys' fees, and
judgments against, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding. The Company
has purchased a policy of insurance for benefit of itself and its directors and
officers against liability incurred by them in the performance of their duties
as directors or officers of Registrant. The approximate amount of the annual
premium charged in respect of this policy on account of directors' and officers'
liability is approximately $75,000. The premiums are paid by Registrant. The
aggregate amount of coverage under the policy is $2,000,000.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<S> <C>
4.01(1) Specimen Certificate representing the Common Stock
4.02(2) Form of Convertible Note
4.03(2) Form of Securities Purchase Agreement
4.04(2) Form of Registration Rights Agreement
5.01 Opinion of Parker Duryee Rosoff & Haft
23.01 Consent of Friedman Alpren & Green LLP
23.02 Consent of Parker Duryee Rosoff & Haft (included in Exhibit 5.01 hereof)
24.01 Power of attorney (included in the signature page of Part II of this
Registration Statement)
</TABLE>
- -----------------------
(1) Filed with the Company's Registration Statement on Form S-2 (File No.
33-26153), and hereby incorporated by reference.
(2) Filed with the Company's Current Report, on Form 8-K filed March 22, 1999.
II-1
<PAGE>
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, as amended (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.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Company's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, that is incorporated
by reference in the Registration Statement, shall be deemed to be anew
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial
bonafide offering thereof. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers, and
controlling persons of the Company pursuant to Item 15 of Part II of the
Registration Statement, or otherwise, the Company has been advised 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. 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 Company in the successful
defense of any action suitor 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 and will be governed by the final adjudication
of such issue.
II-2
<PAGE>
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
State of New York, on May 4, 1999.
HMG WORLDWIDE CORPORATION
By: /s/ Robert V. Cuddihy, Jr.
-------------------------------------
ROBERT V. CUDDIHY, JR.
CHIEF OPERATING OFFICER
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Michael Wahl and Robert V. Cuddihy, Jr., and each
of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and the 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
and about the premises, as fully 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.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Michael Wahl
- ---------------------------- Chairman of the Board, May 4, 1999
MICHAEL WAHL Chief Executive
Officer and Director
(Principal Executive
Officer)
/s/ Andrew Wahl
- ---------------------------- Vice President and Director May 4, 1999
ANDREW WAHL
/s/ Robert V. Cuddihy, Jr.
- ---------------------------- Chief Operating May 4, 1999
ROBERT V. CUDDIHY, JR. Officer, Chief Financial
Officer and Director
(Principal Financial
and Accounting Officer)
/s/ L. Randy Riley
- ---------------------------- Executive Vice May 4, 1999
L. RANDY RILEY President and Director
/s/ Herbert F. Kozlov
- ---------------------------- Director May 4, 1999
HERBERT F. KOZLOV
</TABLE>
11
<PAGE>
<PAGE>
EXHIBIT 5.01
May 4, 1999
HMG Worldwide Corporation
475 Tenth Avenue
New York, New York 10018
Re: Registration Statement on Form S-3 under the Securities Act of 1933
Ladies and Gentlemen:
In our capacity as counsel to HMG Worldwide Corporation, a Delaware
corporation (the "Company"), we have been asked to render this opinion in
connection with a Registration Statement on Form S-3, being filed
contemporaneously herewith by the Company with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Registration
Statement"), covering an aggregate of 2,160,000 shares of Common Stock, $0.01
par value (the "Common Stock"), which have been included in the Registration
Statement for the account of certain persons identified in the Registration
Statement as Selling Stockholders.
The Shares represent shares of Common Stock which are issuable upon
conversion of certain convertible notes (the "Notes"), each issued to the
Selling Stockholders by the Company.
In that connection, we have examined the Notes, the Certificate of
Incorporation and the By-Laws of the Company, both as amended to date, the
Registration Statement, corporate proceedings of the Company relating to the
issuance of the Common Stock and such other instruments and documents as we have
deemed relevant under the circumstances.
In making the aforesaid examinations, we have assumed the genuineness of
all signatures and the conformity to original documents of all copies furnished
us as original or photostatic copies. We have also assumed that the corporate
records furnished to us by the Company include all corporate proceedings taken
by the Company to date in connection with the issuance of the Notes and the
Shares.
<PAGE>
<PAGE>
HMG Worldwide Corporation
May 4, 1999
Page 2
Based upon and subject to the foregoing, we are of the opinion that:
(1) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(2) The Shares, when duly issued upon conversion of the Notes, will be
duly and validly authorized and fully paid and non-assessable.
We hereby consent to the use of our opinion as herein set forth as an
exhibit to the Registration Statement and to the use of our name under the
caption "Legal Matters" in the prospectus forming a part of the Registration
Statement.
Very truly yours,
PARKER DURYEE ROSOFF & HAFT
By: /s/ Craig S. Libson
--------------------------------------
A Member of the Firm
:edr
<PAGE>
<PAGE>
Exhibit 23.01
Friedman Alpren & Green LLP
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated March 24, 1999 which appears in
the annual report on Form 10-K of HMG Worldwide Corporation and Subsidiaries for
the year ended December 31, 1997 and to the reference to our firm under the
caption"Experts" in the Prospectus.
Friedman Alpren & Green LLP
New York, New York
April 9, 1999
