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File No. 333-
As filed with the Securities and Exchange Commission on November 15, 2000.
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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)
Delaware 13-3402432
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
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 Financial 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:
HERBERT F. KOZLOV, ESQ.
PARKER DURYEE ROSOFF & HAFT, P.C.
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. [ ]
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
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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.[ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed
Proposed maximum
Title of securities Amount to maximum offering aggregate Amount of
to be registered be registered price Per Share offering price registration fee
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<S> <C> <C> <C> <C>
Common Stock, 700,000 $2.50(1) $1,750,000.00(1) $462.00
$0.01 par value
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee,
as determined in accordance with Rules 457(c) and 457(h), using the
average of the high and low sales prices per share of HMG's common
stock as reported on the NASDAQ Small Cap Market on November 10, 2000.
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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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PROSPECTUS
SUBJECT TO COMPLETION, NOVEMBER 15, 2000
700,000 SHARES
HMG WORLDWIDE CORPORATION
COMMON STOCK, PAR VALUE $.01 PER SHARE
This prospectus relates to 700,000 shares of the common stock, par
value $.01 per share, of HMG Worldwide Corporation ("HMG" or "we"). The shares
of common stock being offered by the selling stockholder are currently owned by
the selling stockholder. HMG will not receive any proceeds from the sale of
shares of common stock by the selling stockholder.
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THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The shares of common stock being offered by the selling stockholder
have not been registered for sale under the securities laws of any state or
jurisdiction as of the date of this prospectus.
HMG's common stock is listed for trading on The NASDAQ SmallCap Market
under the symbol "HMGC." On November 10, 2000, the closing bid price of HMG's
common stock, as reported by The NASDAQ SmallCap Market, was $2.50 per share.
HMG's executive offices are located at 475 Tenth Avenue, New York, New
York 10018. Its telephone number is 212-736-2300.
The date of this prospectus is November 15, 2000.
[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 HMG 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
RISK FACTORS...............................................................3
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS.....................8
USE OF PROCEEDS............................................................8
SELLING STOCKHOLDER........................................................9
PLAN OF DISTRIBUTION......................................................10
LEGAL MATTERS.............................................................12
EXPERTS...................................................................12
ADDITIONAL INFORMATION ABOUT HMG..........................................12
DOCUMENTS INCORPORATED BY REFERENCE.......................................13
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this prospectus or
incorporated by reference to this prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by HMG. This prospectus does not constitute an offer to sell, or a solicitation
of an offer to buy, the securities offered by this prospectus in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. The delivery of this prospectus at any time
does not imply that the information contained in this prospectus is correct as
of any time subsequent to its date.
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RISK FACTORS
This offering involves a high degree of risk. You should carefully
consider the risks described below and the other information included in this
prospectus, including the financial statements and related notes, before you
decide whether to buy our common stock. If any of the following risks were to
occur, our business, financial condition or results of operations would be
likely to materially suffer and would raise doubt whether we could proceed with
our current business plan. In that event, you could lose all or a part of your
investment.
It is especially important to keep these risk factors in mind when you
read forward-looking statements of the type described below in the section
entitled "Cautionary Notice Regarding Forward-Looking Statements."
WE LOST MONEY IN THE LAST FISCAL YEAR AND COULD LOSE MONEY IN THE FUTURE.
We lost $31,000 during the 1999 fiscal year. Management believes that
this loss was due to a number of unique factors that are not expected to recur.
For example, our selling, general and administrative expenses have increased as
a result of the consolidation of our manufacturing facilities and costs
associated with the integration of our most recent acquisitions. Nevertheless,
we cannot assure you that we will be profitable in 2000.
WE ARE INTEGRATING A SIGNIFICANT NEW STRATEGIC COMPONENT INTO OUR BUSINESS PLAN.
We plan to expand our business by integrating an Internet services
strategy. Our new strategy is intended to leverage our significant experience in
point-of-sale marketing by using the Internet as a new medium to help our
clients reach their customers with marketing and branding messages. However, our
senior management has almost no operating history in an Internet or
web-consulting business. We can offer you no assurance that we will be able to
effectuate our new business plan successfully, that revenue growth will occur
once the plan is enacted, that any of our Internet subsidiaries will be
profitable at any time in the future or that, once they have achieved
profitability, they will be able to sustain it.
IF WE FAIL TO MEET OUR CLIENTS' EXPECTATIONS FOR ON-LINE SERVICES, WE COULD
DAMAGE OUR OVERALL REPUTATION.
Our senior management has almost no experience in delivering
web-consulting services. As we begin to provide Internet-based services for our
existing clients, we might not be able to provide the same quality of results
that we have delivered to our clients within our in-store marketing and
merchandising business. Accordingly, these clients may perceive any shortcoming
in our Internet businesses as an overall deterioration in the quality of our
other services. If this happens, we could damage our relationship with that
client and possibly lose business.
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IF WE LOSE THE SERVICES OF OUR CHAIRMAN, MICHAEL WAHL, OUR CHIEF EXECUTIVE
OFFICER, ANDREW WAHL, OR OTHER KEY PERSONNEL, OUR BUSINESS AND STOCK PRICE COULD
SUFFER.
Our future success depends in large part on the continued services of a
number of our key personnel, including our chairman, Michael Wahl and our chief
executive officer, Andrew Wahl. Decision-making personnel at many of our clients
have established personal relationships with Michael Wahl, who has been with HMG
for over 25 years and Andrew Wahl who has been a part of HMG for almost 20
years. Michael Wahl relinquished the title of chief executive officer to Andrew
Wahl in February 2000. We expect that Michael Wahl will help Andrew Wahl in
continuing these relationships. Although Michael Wahl has an employment
agreement with us, we currently have no employment contract with Andrew Wahl or
any of our other key personnel. We also have no key-man insurance on any of our
personnel. The loss of the services of Michael Wahl, Andrew Wahl or any of our
other key personnel could have a material adverse effect on our business,
financial condition and results of operations. All of our key personnel are
covered by non-competition clauses in various agreements they have entered into
with us, but there can be no assurance that these clauses would be enforceable.
If one or more of our key personnel resigned and were not prevented from joining
a competitor or forming a competing company, we might lose existing or potential
clients.
FUTURE ACQUISITIONS OR INVESTMENTS COULD DISRUPT OUR ONGOING BUSINESS, DISTRACT
OUR MANAGEMENT AND EMPLOYEES, INCREASE OUR EXPENSES AND ADVERSELY AFFECT OUR
RESULTS OF OPERATIONS.
We have made three acquisitions since August 1998. Management's
attention may be diverted from operations towards identifying potential
acquisitions and negotiating and consummating them. Any acquisitions or
investments we make in the future will involve risks. We may not be able to make
acquisitions or investments on commercially acceptable terms. If we do acquire a
company, we could have difficulty retaining and assimilating that company's
personnel. In addition, we could have difficulty assimilating acquired products,
services or technologies into our operations. These difficulties could disrupt
our ongoing business, distract our management and employees, increase our
expenses and materially and adversely affect our results of operations.
Furthermore, we may incur debt or issue equity securities to pay for any future
acquisitions. If we issue equity securities, your ownership share in HMG could
be reduced.
THE MARKET PRICE OF OUR STOCK MAY FLUCTUATE WIDELY.
The market price of our common stock ranged between $2.28 and $9.13
since January 1, 2000. It could also fluctuate substantially due to
- future announcements concerning us or our competitors;
- quarterly fluctuations in our operating results;
- announcements of acquisitions or technological innovations; or
- changes in earnings estimates or recommendations by analysts.
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In addition, as our Internet-related business becomes more important as a
percentage of revenues, we may be perceived as a technology-oriented company.
The stock prices of many technology companies fluctuate widely for reasons that
may be unrelated to their operating results. Also, the stock prices of
technology companies have been more volatile than the stock prices of companies
in other industries, particularly in 2000. If investors begin to perceive our
stock more as an "emerging growth" stock than as a "value" stock, you should
expect increased volatility as a result. Fluctuations in our common stock's
market price may affect our ability to raise capital.
STOCK OWNERSHIP OF OUR OFFICERS AND DIRECTORS UPON COMPLETION OF THIS OFFERING
COULD DELAY OR PREVENT STOCKHOLDER ACTIONS.
Our officers, directors and other principal stockholders beneficially
own 30.9% of our outstanding common stock. While no individual will be a
beneficial owner of a majority of the outstanding shares of our common stock,
these stockholders, if they act together, may be able to control decisions on
corporate matters, including election of directors, increases in our authorized
capital stock, dissolution and merger or sale of assets, and they will be able
generally to direct our affairs. This concentration of ownership may also have
the effect of delaying, deferring or preventing a change in control of HMG and
make transactions that could give our stockholders the opportunity to realize a
premium over the then-prevailing market price for shares of common stock more
difficult or impossible.
WE MAY NOT BE ABLE TO HIRE, TRAIN, MOTIVATE, RETAIN AND MANAGE PROFESSIONAL
STAFF.
To succeed, we must hire, train, motivate, retain and manage
highly-skilled employees. Competition for skilled employees who can perform the
services we offer is intense. We might not be able to hire enough of them or to
train, motivate, retain and manage the employees we do hire. This could hinder
our ability to complete existing projects and bid for new projects. Hiring,
training, motivating, retaining and managing employees with the skills we need
is time-consuming and expensive.
MOST OF OUR CUSTOMERS ARE IN THE RETAIL OR CONSUMER-PRODUCTS BUSINESSES AND MAY
BE AFFECTED SIMULTANEOUSLY BY THE SAME ECONOMIC FACTORS.
In the past, spending by any single customer has not had a significant
effect on our results of operations in any year. This diversification has
helped, to a significant extent, insulate our results from fluctuations in the
performance of individual clients. However, this diversity does not protect us
from fluctuations in the overall economy, because most of our clients are in the
retail and consumer-products businesses. These companies tend to all be
influenced at the same time by similar economic factors, for example, consumer
spending. In the event of a decline or projected decline in consumer spending,
the management of our clients may choose to cut back on spending for our
products. It is reasonable to expect that, if one customer reduces its spending
in response to a major economic factor, other customers will also decide to
reduce their spending at approximately the same time.
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OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE, SO THE RESULTS OF ONE QUARTER ARE
NOT NECESSARILY INDICATIVE OF RESULTS IN THE SUCCEEDING QUARTER.
Because most of our customers are in the retail or consumer-products
businesses and can be affected simultaneously by the same economic factors, our
operating results can vary significantly from one quarter to the next. Our
customers' spending tends to cluster in some periods, although these periods are
not the same in each year. Therefore you should not expect that our results for
any one quarter can be predictive of our performance in the next succeeding
quarter. Likewise, you should not use the results for any particular quarter to
predict our performance in the similar period in any future year.
OUR HMGE SUBSIDIARY FACES INTENSE COMPETITION AND MAY BE UNABLE TO COMPETE
SUCCESSFULLY.
The market for Internet professional services is intensely competitive,
evolving and subject to rapid technological change. We expect the intensity of
competition to increase in the future. We believe that we must move quickly to
integrate HMGe and its current components, Ego Media, Zeffstyle and Zeff
Consulting, with our traditional core business. If we fail to do so, competitors
may copy our business strategy or take other steps to prevent us from achieving
our goals.
Many of our competitors in the Internet professional-services market
have longer operating histories, significantly greater financial, technical,
marketing and other resources, significantly greater name recognition, and a
larger installed base of Internet customers than we have. We believe, given our
well-established relationships with our current and potential customers and
extensive knowledge of our core industry, we are capable of offering consistent
in-store and online services that are beyond the scope of our current
competitors. However, it is possible that competitors of our core in-store
business may someday form alliances with competitors of our Internet
professional-services business or otherwise acquire or develop capabilities to
offer services that resemble ours. If that happens, the joint competitor may be
able to respond more quickly to new or emerging technologies or devote greater
resources to the development, promotion and sale of their services in the areas
where we hope to expand and our business may not grow as we expect.
HMG EXPERIENCES TEMPORARY LIQUIDITY PROBLEMS FROM TIME TO TIME, WHICH MAY CAUSE
REVENUES AND PROFITS TO BE LOWER DURING THOSE PERIODS.
Our working capital needs continue to expand as a result of increases
in our sales directly to retailers. To sell to retailers, we must maintain a
substantial investment in inventory to manage new merchandising programs and to
support existing merchandising programs, new store openings and remodeling
activities engaged by the retailer. From time to time, we have experienced
temporary liquidity problems due to the timing of cash flows while we are in
production and building inventory. Additionally, working capital was used to
achieve our recently completed capital expenditure program. Furthermore, as we
expand HMGe, our Internet and e-commerce subsidiary, we will have to
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support its cash flows through our existing credit facilities and other
potential resources. When these liquidity problems occur, we may have to
postpone undertaking profitable projects for our customers or delay delivery of
projects that have not been completed. Because we get paid by our customers upon
delivery of products, it may take longer for us to realize revenues during those
periods.
FUTURE SALES OF OUR COMMON STOCK IN THE PUBLIC MARKET COULD LOWER OUR STOCK
PRICE AND IMPAIR OUR ABILITY TO RAISE FUNDS IN NEW STOCK OFFERINGS.
HMG grants options to motivate its employees and the cash we receive
from the exercise of these options provides funding for our future growth. On
the date of this prospectus, HMG had outstanding options and warrants
exercisable for approximately 6,311,577 shares of common stock. Likewise, on the
date of this prospectus, HMG had outstanding debentures and notes convertible
into up to 1,949,175 shares of common stock. This includes the maximum number of
shares that may be issued and sold upon the conversion of the convertible notes.
If the holders of a large number of these securities elect to exercise them for
or convert them into common stock and then sell the shares of common stock they
acquire, the market price of our common stock could decline. Sales by existing
stockholders of a large number of shares at any one time could adversely affect
the market price of our common stock and could impair our ability to raise funds
in additional stock offerings. Moreover, the mere possibility that these sales
could be made in the future may result in the same effect even if these sales
are not actually made.
THE RIGHT OF THE HOLDER OF CONVERTIBLE NOTES TO CONVERT THEM INTO SHARES OF OUR
COMMON STOCK ACCORDING TO A FORMULA MAY REDUCE THE MARKET PRICE OF OUR COMMON
STOCK AND DILUTE YOUR OWNERSHIP INTEREST IN HMG.
Under the terms of HMG's convertible notes, the noteholder has the
right to convert its convertible notes into shares of our common stock at a
price determined by a formula that fluctuates based on the market price of the
common stock. The conversion ratio may provide the noteholder the ability to
receive shares at a discount to the prevailing market price. We cannot predict
whether there will be any effect on the market price of our common stock as a
result of the conversion of the convertible notes at a discount to that market
price. Moreover, the actual number of shares the noteholder may acquire will
depend upon the market price of the common stock at the time of conversion. As
the market price decreases, the number of shares the noteholder may obtain upon
conversion increases. The sale of these shares by the noteholder may cause the
market price to fall further, which may, in turn, enable the noteholder to
acquire an even greater number of shares upon subsequent conversions. This may
result in a dilution of your ownership interest in HMG.
IF OUR COMMON STOCK IS DE-LISTED FROM NASDAQ, IT MAY BE CONSIDERED A "PENNY
STOCK".
SEC regulations impose additional requirements on broker-dealers when
selling penny stocks to persons other than established customers and accredited
investors. In general, an accredited investor is a person with assets in excess
of $1,000,000 or annual income exceeding
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$200,000 individually or $300,000 together with his or her spouse. The relevant
SEC regulations generally define "penny stocks" to include any non-Nasdaq equity
security with a market price (as defined in the regulations) of less than $5 per
share. Under the penny stock regulations, a broker-dealer must make a special
suitability determination as to the purchaser and must have the purchaser's
prior written consent to the transaction. Prior to any transaction in a penny
stock covered by these rules, a broker-dealer must deliver a disclosure schedule
about the penny stock market prepared by the SEC. Broker-dealers must also make
disclosure concerning commissions payable to both the broker-dealer and any
registered representative and provide current quotations for the securities.
Finally, broker-dealers are required to send monthly statements disclosing
recent price information for the penny stock held in an account and information
on the limited market in penny stocks.
If our common stock were to be classified as a "penny stock," these
rules may discourage broker-dealers from effecting transactions in our common
stock or affect their ability to sell our securities. As a result, purchasers
and current holders of HMG's securities could find it more difficult to sell
their securities.
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus contains forward-looking
statements within the meaning of the federal securities laws. These statements
are not historical facts, but rather are based on our current expectations,
assumptions, estimates and projections about us and our industry, and other
beliefs and assumptions using information currently available to us.
Forward-looking statements 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 our client base and/or (vi) the loss
of, or reduction in spending of existing clients.
Generally, words including "may," "could," "would," "should," "will,"
"anticipates," "expects," "intends," "plans," "projects," "believes," "seeks,"
"estimates," "contemplates," and similar expressions are intended to identify
forward-looking statements. These statements are not guarantees of future
performance and are subject to risks, uncertainties and other factors, some of
which are beyond our control, are difficult to predict and could cause actual
results to differ materially from those expressed or forecasted in the
forward-looking statements. These risks and uncertainties are described in "Risk
Factors" and elsewhere in this prospectus. We caution you not to place undue
reliance on these forward-looking statements, which reflect our management's
view only as of the date of this prospectus. We do not have any obligation to
inform you if forward-looking statements or the circumstances on which they are
based change.
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USE OF PROCEEDS
The shares of common stock being offered are for the account of the
selling stockholder. Accordingly, HMG will not receive any of the proceeds from
the sale of shares of common stock by the selling stockholder.
SELLING STOCKHOLDER
All of the shares of common stock being offered subject to this
prospectus are being offered by the selling stockholder named in the table
below. The selling stockholder will determine the actual number of shares of
common stock that it will offer to sell, which may depend upon a number of
factors, including the market price of the common stock at the time of sale.
All of the shares of common stock being offered subject to this
prospectus were acquired from HMG by the selling stockholder in a private
transaction in July 2000.
The table below contains information furnished by the selling
stockholder concerning the beneficial ownership of common stock of the selling
stockholder as of the date of this prospectus.
SHARES OF
SHARES OF COMMON STOCK OWNED
COMMON STOCK SHARES OF AFTER OFFERING
OWNED COMMON STOCK ------------------
BEFORE OFFERING OFFERED NUMBER PERCENT
--------------- ------------ ------ -------
Source Information
Management Company -0- 700,000 -0- *
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* Less than one percent
Under an agreement between HMG and the selling stockholder, HMG has
agreed (i) to file the registration statement of which this prospectus is a part
for the purpose of registering the potential resale of the shares issuable upon
conversion of the convertible notes, (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 stockholder against some
liabilities.
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PLAN OF DISTRIBUTION
The selling stockholder or its pledgees, assignees, transferees or
other successors in interest may offer and sell the shares from time to time
under this prospectus. The selling stockholder will act independently of us in
making decisions with respect to the timing, manner and size of each sale. To
the extent required, we may amend and supplement this prospectus to describe a
specific plan of distribution.
The selling stockholder may sell the shares covered by this prospectus
by several possible means. These include, but are not limited to, one or any
combination of the types of transactions described in the following list and
paragraphs:
o on the Nasdaq SmallCap Market or any other market where our
common stock may trade, at the then-prevailing prices and
terms or at prices related to the then-current market price or
at negotiated prices;
o a block trade in which a broker-dealer will attempt to sell
shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by that
broker-dealer for its own account under this prospectus;
o an over-the-counter distribution under the rules of the Nasdaq
SmallCap Market;
o ordinary brokerage transactions and transactions in which a
broker solicits purchasers; or
o in privately negotiated transactions.
In addition to the list above, the selling stockholder may also enter
into hedging transactions with broker-dealers or other financial institutions.
In connection with these transactions, broker-dealers or other financial
institutions may engage in short sales of our common stock in the course of
hedging the positions they assume with that selling stockholder. The selling
stockholder may also sell our common stock short and redeliver the shares to
close out short positions.
The selling stockholder may enter into option or other transactions
with broker-dealers or other financial institutions that require that selling
stockholder to deliver the shares offered in this prospectus, and, in turn, the
broker-dealer or other financial institution may resell those shares under this
prospectus, as supplemented or amended to reflect the applicable transaction.
The selling stockholder may pledge shares of common stock to a
broker-dealer or other financial institution, and, upon a default, that
broker-dealer or other financial institution may sell the pledged shares of
common stock under this prospectus, as supplemented or amended to reflect the
applicable transaction. In addition, any shares of common stock that qualify for
sale under Rule 144 under the Securities Act may be sold under Rule 144 rather
than under this prospectus.
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The selling stockholder may sell shares of common stock directly to
market makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers. These broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the selling stockholder
or the purchasers of shares of common stock for whom those broker-dealers may
act as agent or to whom they sell as principal or both. This compensation might
be in excess of customary commissions. Market makers and block purchasers that
purchase the shares of common stock will do so for their own account and at
their own risk. It is possible that the selling stockholder will attempt to sell
shares of common stock in block transactions to market makers or other
purchasers at a price per share that may be below the then-current market price.
We cannot make assurances that all or any of the shares of common stock will be
issued to, or sold by, the selling stockholder. The selling stockholder and any
brokers, dealers or agents, upon effecting the sale of any of the shares of
common stock offered by this prospectus, may be deemed "underwriters" as that
term is defined under the Securities Act or the Securities Exchange Act, or the
rules and regulations these acts.
The selling stockholder may sell all or any part of the shares of
common stock through an underwriter. HMG is not aware of any agreement the
selling stockholder may have entered into with a prospective underwriter and
there is no assurance that the selling stockholder will enter into any agreement
with a prospective underwriter. If the selling stockholder enters into an
agreement or agreements with a prospective underwriter, the relevant details
will be set forth in a supplement or revisions to this prospectus.
To comply with the securities laws of some states, the shares of common
stock must be sold in some jurisdictions only through registered or licensed
brokers or dealers. Also, in some states the shares of common stock may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and there has been compliance with that requirement.
We have advised the selling stockholder that the anti-manipulation
rules of Regulation M under the Securities Exchange Act may apply to sales of
shares of common stock in the market and to the activities of the selling
stockholder and their affiliates. In addition, we will make copies of this
prospectus available to the selling stockholder and we informed them of the need
for delivery of copies of this prospectus to purchasers at or prior to the time
of any sale of the shares of common stock offered under this prospectus.
At the time a particular offer of shares of common stock is made, if
required, a prospectus supplement will be distributed that will set forth the
number of shares of common stock being offered and the terms of the offering,
including the name of any underwriter, dealer or agent, the purchase price paid
by any underwriter, any discount, commission and other item constituting
compensation, any discount, commission or concession allowed or reallowed or
paid to any dealer, and the proposed selling price to the public.
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HMG anticipates that the selling stockholder will offer for sale all of
the shares being registered, to the extent that those shares are issued to the
selling stockholder upon conversion of its convertible notes. Further, because
it is possible that a significant number of shares could be sold at the same
time under this prospectus, any sales, or the possibility of sales, may depress
the market price of the common stock.
HMG will bear all costs and expenses of the registration of the selling
shareholder's shares under the Securities Act and state securities laws.
However, the selling shareholder will bear all underwriting and brokerage
commissions and underwriting expenses, if any, attributable to the sale of its
shares.
We have indemnified the selling stockholder 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 stockholder, other than any
underwriting discounts and selling commissions.
LEGAL MATTERS
Certain legal matters in connection with the shares of common stock
being offered by this prospectus will be passed upon for HMG by Parker Duryee
Rosoff & Haft, a Professional Corporation, New York, New York. Parker Duryee
Rosoff & Haft owns 50,000 shares of HMG's common stock. Herbert F. Kozlov, a
director of HMG, is a member of this firm. Mr. Kozlov beneficially owns 515,476
shares of common stock as of November 10, 2000.
EXPERTS
The consolidated financial statements included in HMG's annual report
on Form 10-K for the year ended December 31, 1999, which are incorporated in
this prospectus by reference, have been audited by Friedman Alpren & Green LLP,
independent certified public accountants, as indicated in their report. The
consolidated financial statements are incorporated in this prospectus by
reference in reliance on the report of Friedman Alpren & Green LLP, given on the
authority of that firm as experts in accounting and auditing.
ADDITIONAL INFORMATION ABOUT HMG
HMG files 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 at 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 website at http://www.sec.gov.
HMG has filed with the SEC a registration statement on Form S-3 with
respect to the common stock that may be sold under this
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prospectus. This prospectus does not contain all of the information set forth in
that registration statement, certain parts of which are not included in
accordance with the rules and regulations of the SEC. Copies of that
registration statement can be obtained from the Public Reference Section of the
SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows a company to "incorporate by reference" information it
files with the SEC, which means that HMG 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 HMG
files later with the SEC will automatically update and supersede this
information. HMG incorporates by reference the documents listed below and any
future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, until all of the shares offered under this
prospectus are sold.
(a) HMG's annual report on Form 10-K for the fiscal year ended
December 31, 1999;
(b) HMG's quarterly reports on Form 10-Q for the fiscal quarters
ended March 31, 2000, June 30, 2000; and September 30, 2000
(c) HMG's current reports on Form 8-K, filed on June 22, 2000 and
June 28, 2000; and
(d) HMG's Registration Statement on Form 8-A (with respect to the
description of the common stock).
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this prospectus shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or in any other subsequently filed document that
also is or is deemed to be incorporated by reference in this prospectus 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 HMG will send to you, without charge, copies of
documents that are incorporated by reference in this prospectus but that are not
delivered to you (other than exhibits to such documents that are not
specifically incorporated by reference). You may request these copies by writing
or telephoning HMG at: HMG Worldwide Corporation, 475 Tenth Avenue, New York,
New York 10017, attention: Robert V. Cuddihy, telephone number (212) 736-2300.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth HMG's estimates of the expenses to be
incurred by it in connection with the registration and sale of the common stock
being offered hereby:
SEC Registration Fee ......................................... $ 462
Printing registration statement and other documents........... $1,500*
Legal fees and expenses....................................... $1,500*
Accounting fees and expenses.................................. $1,000*
Miscellaneous expenses........................................ $ 500*
------
Total: $4,962
======
----------
*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.
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
4.01 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)
----------
* Filed with the Company's Registration Statement on Form S-2 (File No.
33-26153), and incorporated herein by reference.
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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 HMG'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
bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of HMG
pursuant to Item 15 of Part II of the Registration Statement, or otherwise,
HMG 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 HMG of expenses incurred or paid by a director, officer or controlling
person of HMG 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, HMG 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.
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SIGNATURES
In accordance with 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 of filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on November 15, 2000.
HMG WORLDWIDE CORPORATION
By: /s/ Robert V. Cuddihy, Jr.
--------------------------------
ROBERT V. CUDDIHY, JR.
CHIEF FINANCIAL OFFICER
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Andrew 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 without the other, 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.
Signature Title Date
--------- ----- ----
/s/ Michael Wahl
---------------------------- Chairman of the Board, November 15, 2000
MICHAEL WAHL and Director
/s/ Andrew Wahl
---------------------------- Chief Executive Officer November 15, 2000
ANDREW WAHL and Director
/s/ Robert V. Cuddihy, Jr.,
---------------------------- Executive Vice President, November 15, 2000
ROBERT V. CUDDIHY, JR. Principal Accounting and
Chief Financial Officer
and Chief Information
Officer and Director
/s/ L. Randy Riley
---------------------------- President, Chief Operating November 15, 2000
L. RANDY RILEY Officer and Director
/s/ Herbert F. Kozlov
---------------------------- Director November 15, 2000
HERBERT F. KOZLOV
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