<PAGE>
As filed with the Securities and Exchange Commission on July 12, 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)
<TABLE>
<S> <C>
DELAWARE 13-3402432
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
</TABLE>
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. [ ]
<PAGE>
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
<TABLE>
<CAPTION>
================================================================================================
TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
================================================================================================
<S> <C> <C> <C> <C>
Common Stock 1,789,252 $ 4.9375 8,834,432 $ 2,457.00
================================================================================================
</TABLE>
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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 July 8, 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.
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION July 12, 1999
PROSPECTUS
1,789,252 Shares
HMG WORLDWIDE CORPORATION
Common Stock
This is an offering of the 1,789,252 shares of common stock, par value
$.01 per share, of HMG Worldwide Corporation by certain selling stockholders. Of
the shares of common stock being offered by the selling stockholders 274,252
shares are currently owned by the selling stockholders and 1,515,000 shares may
be acquired by the selling stockholders upon exercise of certain options and
warrants issued by the Company to the selling stockholders. 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 July 8, 1999, the closing bid price of the common
stock as reported by The Nasdaq SmallCap Market was $4.9375 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.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Where You Can Obtain Additional Information About the Company................................2
Risk Factors.................................................................................3
Use of Proceeds..............................................................................4
Selling Stockholders.........................................................................5
Plan of Distribution.........................................................................6
Legal Matters................................................................................7
Experts......................................................................................7
</TABLE>
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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;
(b) The Company's Quarterly Report on Form 10-Q for its fiscal quarter
ended March 31, 1999; and
(c) 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
<PAGE>
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
<PAGE>
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 June 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 June 1, 1999, the Company had outstanding 11,111,605 shares of
common stock. An aggregate of 5,168,428 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 June 1, 1999. No prediction can be
made as to the effect, if any, that sales of shares of common stock 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. Moreover, a total of 1,515,000 of such shares which are
issuable upon the exercise of the stock options and warrants are being
registered for resale pursuant to the Registration Statement.
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 proceeds of up to $2,913,125 upon the exercise of the
options and warrants held by the selling stockholders if such selling
stockholders decide to exercise them. The proceeds from the exercise of the
options and warrants would be used for working capital. See "Selling
Stockholders."
4
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to
selling stockholders. The number of shares of common stock that may actually be
sold by the selling stockholders will be determined by such 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 including those of the
Company directors and officers. All information concerning beneficial ownership
has been furnished by the selling stockholders.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK SHARES OF SHARES OF COMMON STOCK
OWNED COMMON OWNED
BEFORE OFFERING STOCK OFFERED AFTER OFFERING(3)
--------------- ------------- --------------
NUMBER(1) PERCENT(2) NUMBER NUMBER(3) PERCENT(3)
------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
Michael Wahl(4) 1,376,725(5) 12.5 90,000
Andrew Wahl(6) 957,803(7) 8.6 90,000
Robert V. Cuddihy, Jr.(8) 459,408(9) 4.2 90,000
Herbert F. Kozlov(10) 305,476(11) 2.8 90,000
L. Randy Riley(12) 429,194(13) 3.9 90,000
Lawrence J. Twill, Sr.(14) 186,150(15) 1.7 90,000
Ivan Berkowitz(16) 234,250(17) 2.1 151,250
Louis Perlman(18) 113,000(19) 1.0 30,000
BNY Capital Markets(20) 218,750(21) 2.0 218,750
The Yitz Grossman Charitable Trust 50,000(22) * 50,000
Steven Markowitz 50,000(22) * 50,000
Joseph Sorbara 50,000(22) * 50,000
Robert Merkel(24) 50,000(25) * 50,000
Stephen Dopp(24) 100,000(25) * 100,000
Parker Duryee Rosoff & Haft 50,000(26) * 50,000
Marc Roberts(27) 25,000(23) * 25,000
HMG Capital Accumulation Plan 74,252 * 74,252
Dogwood Associates 200,000(22) 1.8 200,000
Joseph Stevens & Company 100,000(22) * 100,000
Gennadiy Rodionoy 100,000(22) * 100,000
</TABLE>
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* less than 1%
5
<PAGE>
(1) Represents those shares of Common Stock held by the Selling Stockholders
together with those shares that such Selling Stockholder has the right to
acquire within 60 days from the date of this Prospectus including, without
limitation, shares issuable upon exercise of the options and warrants.
(2) The percentages indicated assume that all options and warrants were
exercised and the Shares purchased thereunder were issued immediately prior
to the date of this Prospectus.
(3) Because the Selling Stockholders may sell all, some or none of the Shares
that he, she or it holds, and because the offering contemplated by this
Prospectus is not a "firm commitment" underwritten offering, no estimate
can be given as to the number of Shares that will be held by any of the
Selling Stockholders upon or prior to termination of this offering. See
"Plan of Distribution."
(4) Mr. Wahl is Chairman of the Board, Chief Executive Officer and a Director
of the Company.
(5) Includes 694,828 shares issuable upon exercise of options.
(6) Mr. Wahl is the President and a Director of the Company.
(7) Includes 611,750 shares issuable upon exercise of options.
(8) Mr. Cuddihy is the Chief Operating Officer, Chief Financial Officer and a
Director of the Company.
(9) Includes 318,850 shares issuable upon exercise of options.
(10) Mr. Kozlov is a Director of the Company.
(11) Includes 287,600 shares issuable upon exercise of options.
(12) Mr. Riley is the Executive Vice President and a Director of the Company.
(13) Includes 318,850 shares issuable upon exercise of options.
(14) Mr. Twill is a Director of the Company.
(15) Includes 175,400 shares issuable upon exercise of options.
(16) Mr. Berkowitz is the President of Great Court Analysis LLC which
beneficially owned 640,000 shares.
(17) Includes 203,000 shares issuable upon exercise of options and warrants.
(18) Mr. Perlman was a director of the Company from January 1998 until his
resignation on May 13, 1998.
(19) Represents shares issuable upon exercise of options.
(20) BNY Capital Markets serves as a consultant to the Company.
(21) Represents shares issuable upon exercise of warrants.
(22) Represents shares issued pursuant to a December 1998 private placement,
all of which are being offered hereunder.
(23) Represents shares issuable upon exercise of warrants, all of which are
being offered hereunder.
(24) Selling Stockholder is an employee of the Company.
(25) Represents shares issuable upon exercise of the options.
(26) Does not include 305,476 shares of Common Stock beneficially owned by
Herbert Kozlov, a member of Parker Duryee Rosoff & Haft, P.C., and a
Director of the Company and 6,000 shares of Common Stock beneficially
owned by two other members of Parker Duryee Rosoff & Haft, P.C.
(27) Mr. Roberts is a consultant to the Company.
Pursuant to certain agreements 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; and (ii) to bear all expenses of the registration and sale
of the shares (other than any underwriting discounts and conversions).
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.
6
<PAGE>
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.
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 which may be offered by such firm pursuant to this Prospectus.
In addition, members of Parker Duryee Rosoff & Haft beneficially own an
aggregate of 311,476 shares of common stock as of June 1, 1999, including
305,476 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.
7
<PAGE>
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:
<TABLE>
<S> <C>
SEC Registration Fee..............................................$ 2,457.00
Printing registration statement and other documents...............$ 500.00
Legal fees and expenses...........................................$ 5,000.00*
Accounting fees and expenses......................................$ 1,000.00
Miscellaneous expenses............................................$ 43.00
------------
$ 9,000.00
</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
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<S> <C>
4.01(1) Specimen Certificate representing the Common Stock
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>
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(1) Filed with the Company's Registration Statement on Form S-2 (File No.
33-26153), and hereby incorporated by reference.
II-1
<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 a new 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>
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 July 12, 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, Chief July 12, 1999
- ---------------------------- Executive Officer and Director
MICHAEL WAHL (Principal Executive Officer)
/s/ Andrew Wahl President and Director July 12, 1999
- ----------------------------
ANDREW WAHL
/s/ Robert V. Cuddihy, Jr. Chief Operating Officer, Chief July 12, 1999
- ---------------------------- Financial Officer and Director
ROBERT V. CUDDIHY, JR. (Principal Financial and
Accounting Officer)
/s/ L. Randy Riley Executive Vice President and July 12, 1999
- ---------------------------- Director
L. RANDY RILEY
/s/ Herbert F. Kozlov Director July 12, 1999
- ----------------------------
HERBERT F. KOZLOV
</TABLE>
<PAGE>
EXHIBIT 5.01
July 12, 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 1,789,252 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 are comprised of 274,252 shares which have been issued to
the Selling Stockholders ("Issued Stock"), 675,000 shares which are are issuable
upon exercise of certain warrants (the "Warrants") and 840,000 shares which are
issuable upon exercise of certain options (the "Options"), each issued to the
Selling Stockholders by the Company.
In that connection, we have examined 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
Options, Warrants and the Issued Shares.
<PAGE>
HMG Worldwide Corporation
July 12, 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 Issued Shares have been duly and validly authorized and issued
and are fully paid and non-assessable. The Warrant Shares, when duly issued upon
exercise of the Warrants and the Option Shares, when duly issued upon exercise
of the Options, 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
<PAGE>
Exhibit 23.01
Friedman Alpren & Green LLP
CONSENT OF INDEPENDENT AUDITORS
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, 1998 and to the reference to our firm under the
caption "Experts" in the Prospectus.
Friedman Alpren & Green LLP
New York, New York
July 12, 1999
