<PAGE>
As filed with the Securities and Exchange Commission on October 23, 1995
Registration No. 33-93842
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO.1
TO
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
PC ETCETERA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3260705
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
462 SEVENTH AVENUE
NEW YORK, NEW YORK 10018
(212) 736-5870
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
TERRY I. STEINBERG
PRESIDENT
PC ETCETERA, INC.
462 SEVENTH AVENUE
NEW YORK, NEW YORK 10018
(212) 736-5870
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------
Copies of all communications and notices to:
FRED S. SKOLNIK, ESQ.
CERTILMAN BALIN ADLER & HYMAN, LLP
90 MERRICK AVENUE
EAST MEADOW, NEW YORK 11554
(516) 296-7000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.
(Cover continued on following page)
<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 of the Securities Act of 1933,
check the following box. [x]
If the registrant elects to deliver its latest annual report to security-
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this form, check the following box. [ ]
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 this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
--------------------------
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED , 1995
PROSPECTUS
2,400,000 COMMON SHARES
---------------
PC ETCETERA, INC.
This Prospectus relates to 2,400,000 shares of Common Stock (the
"Shares") of PC Etcetera, Inc. (the "Company"), which are being offered by
various selling stockholders (the "Selling Stockholders"). The Company will not
receive any proceeds from the sale of the Shares by the Selling Stockholders.
See "Principal and Selling Stockholders".
---------------
SEE "RISK FACTORS" (PAGE 4) FOR INFORMATION THAT SHOULD
BE CONSIDERED BY PROSPECTIVE PURCHASERS.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS ANY SUCH COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
The Company is not aware of any underwriting arrangements with respect
to the sale of the Shares by the Selling Stockholders. The Company believes
that such securities will be sold from time to time in the over-the-counter
market at then prevailing prices or in private transactions at negotiated
prices, and that usual and customary brokerage fees will be paid by the Selling
Stockholders in connection therewith.
References in this Prospectus to numbers of shares of Common Stock
("Common Shares") and per share amounts give retroactive effect to the one-for-
five reverse split of the Company's Common Shares effectuated on April 19, 1995
(the "Reverse Split").
The Company's Common Shares are traded in the over-the-counter market
on the National Association of Securities Dealers, Inc.'s OTC Bulletin Board
(the "Bulletin Board") (Symbol: PCEZ). On __________, 1995, the closing bid and
asked prices for the Company's Common Shares, as quoted on the Bulletin Board,
were $__________ and $__________, respectively, per share.
---------------
, 1995
<PAGE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY TO ANYONE
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR
TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT ANY INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
---------------
AVAILABLE INFORMATION
The Company files reports and other information with the Securities
and Exchange Commission (the "Commission"). Such reports and other information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional
Offices of the Commission: New York Regional Office, 7 World Trade Center,
Suite 1300, New York, New York 10048; and Chicago Regional Office, Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such material can also be obtained from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates.
The Company has filed a registration statement on Form S-2 (together
with all amendments thereto, the "Registration Statement") with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Shares offered hereby. This Prospectus does not contain all of
the information set forth in the Registration Statement. For further
information with respect to the Company and the Shares offered hereby, reference
is made to the Registration Statement and to the exhibits filed therewith or
incorporated by reference, copies of which may be obtained upon payment of a fee
prescribed by the Commission, or may be examined free of charge at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. Each statement made or incorporated by
reference in this Prospectus referring to a document filed as an exhibit to the
Registration Statement or incorporated by reference therein is qualified by
reference to the exhibit for a complete statement of its terms and conditions.
---------------
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company with the
Commission and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1994, as amended (the "1994 Form 10-KSB");
(b) The Company's Quarterly Reports on Form 10-QSB for the quarters
ended March 31, 1995, as amended (the "March 31, 1995 Form 10-QSB"), and
June 30, 1995 (the "June 30, 1995 Form 10-QSB"); and
(c) The Company's Current Reports on Form 8-K for events dated August
12, 1994, as amended, and August 11, 1995 (collectively the "Forms 8-K").
The 1994 Form 10-KSB and June 30, 1995 Form 10-QSB accompany this
Prospectus. The Company will provide without charge to each person to whom a
copy of this Prospectus is delivered, upon the written or oral request of any
such person, a copy of the March 31, 1995 Form 10-QSB and Forms 8-K (other than
exhibits to such documents). Requests for such copies should be directed to
Joseph Sabrin, Secretary, PC Etcetera, Inc., 462 Seventh Avenue, New York, New
York 10018.
Any statement contained in a document incorporated herein by reference
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
---------------
TABLE OF CONTENTS
PAGE
----
Available Information........................... 2
Incorporation of Certain Documents
by Reference.................................. 3
Risk Factors.................................... 4
Subsequent Events............................... 6
The Company..................................... 7
Use of Proceeds................................. 8
Principal and Selling Stockholders.............. 8
Description of Common Stock..................... 15
Legal Matters................................... 15
Experts......................................... 16
---------------
3
<PAGE>
RISK FACTORS
This offering entails certain risks. In analyzing a purchase, the
following factors, among others, should be read and considered carefully in
conjunction with the more detailed information set forth elsewhere or
incorporated by reference herein.
1. ACCUMULATED DEFICIT, WORKING CAPITAL DEFICIENCY, RECENT
UNPROFITABLE OPERATIONS, AND EFFECT OF INTANGIBLE ASSETS. As of June 30, 1995,
the Company had an accumulated deficit of $3,099,782 and a working capital
deficiency of $229,134. In addition, during the fiscal year ended December 31,
1994 and six months ended June 30, 1995, the Company's operations were
unprofitable. Moreover, to date, a substantial portion of the working capital
requirements of the Company and its subsidiaries has been provided from the sale
of equity securities. The ability of the Company to continue its operations
successfully is materially dependent upon the marketing of its services and
products in a profitable manner, the raising of any additional capital which it
may require and the continuation of its existing asset-based lending
arrangement. In addition, the amortization expense of the Company's intangible
assets (i.e., goodwill and patented software), which represented almost 50% of
the Company's assets and more than 80% of the Company's net worth as of June 30,
1995, will adversely affect the Company's results of operations. See Item 6 of
the 1994 Form 10-KSB and Item 2 of Part I of the June 30, 1995 Form 10-QSB
incorporated herein by reference.
2. RECENT DIVERSIFICATION OF BUSINESS. During the past two years,
the Company has diversified its business operations by introducing two new
service/product lines: contract consulting services and computer-based training
("CBT") programs. Due to the limited operating history with respect to such new
services and products, an evaluation of the long-term prospects of such business
lines is difficult to make. See Item 1 of the 1994 Form 10-KSB incorporated
herein by reference.
3. COMPETITION. The Company faces competition from a number of
entities which presently provide computer training and consulting services, or
market CBT products, similar to those furnished by the Company. The Company
also encounters competition from educational institutions providing personal
computer training programs, including universities, colleges and adult education
centers, and customers' in-house training staffs. Many of the entities which
provide instructor-led training ("ILT") and consulting services, and market CBT
products, have greater financial and marketing resources than the Company. See
Item 1 of the 1994 Form 10-KSB incorporated herein by reference.
4. DEPENDENCE UPON KEY PERSONNEL. The success of the Company depends
to a large extent on the efforts, abilities and expertise of a relatively small
group of courseware development, software development, marketing and executive
personnel. The
4
<PAGE>
Company has not entered into any employment agreements with any persons. The
loss of services of such key personnel could have a material adverse effect on
the Company. See Items 1 and 9 of the 1994 Form 10-KSB incorporated herein by
reference.
5. PROPRIETARY PROTECTION. The protection of proprietary information
developed by the Company and used in its training programs will be limited to
such protection as the Company may be able to secure under copyright and patent
laws and confidentiality agreements. However, there can be no assurance that
the scope of any such protection that the Company is able to secure will be
adequate to protect its proprietary information, or that the Company will have
the financial resources to engage in litigation against parties who may infringe
such patents or copyrights. In addition, there can be no assurance that others
will not develop similar training programs independently of the Company. See
Item 1 of the 1994 Form 10-KSB incorporated herein by reference.
6. TECHNOLOGICAL OBSOLESCENCE. The personal computer industry is
characterized by the continual introduction of new hardware and software
products and rapid changes in customer preferences. There can be no assurance
that the Company will have the resources to develop programs at a pace
sufficient to satisfy demand. See Item 1 of the 1994 Form 10-KSB incorporated
herein by reference.
7. DELAYED RELEASE OF WINDOWS 95. A new operating system entitled
"Windows 95" was originally scheduled for release during the first quarter of
1995. The release date was continually deferred and was finally released in
August, 1995. Many of the Company's clients delayed any software conversions
and training projects awaiting the release of Windows 95 with a resulting
adverse effect on the Company's revenues. No assurances can be given that the
release of Windows 95 will have a material positive effect on the Company's
revenues.
8. CONTINGENT OBLIGATION TO ISSUE SECURITIES. In the event the
Registration Statement of which this Prospectus forms a part is not declared
effective by the Commission by December 31, 1995, the Company will be obligated
to issue a substantial number of Common Shares as well as a substantial number
of warrants for the purchase of Common Shares. In the event the Registration
Statement is not declared effective by June 30, 1996 or December 31, 1996, a
similar obligation will exist. See Item 12 of the 1994 Form 10-KSB incorporated
herein by reference.
9. NO DIVIDENDS. The Company has never paid any dividends on its
Common Shares and does not anticipate paying any such dividends in the
foreseeable future.
10. LIMITED MARKET FOR COMMON SHARES; SHARES AVAILABLE FOR RESALE.
The Company does not currently meet the initial listing requirements for NASDAQ.
Accordingly, trading in the
5
<PAGE>
Company's Common Shares is conducted in the over-the-counter market on the
Bulletin Board where there is presently only a limited trading market for such
securities. As a consequence, purchasers of the Shares could find it difficult
to dispose of, or obtain accurate quotations as to the market value of, such
Shares. In addition, the 2,400,000 shares available for resale pursuant to this
Prospectus represents approximately 65% of the outstanding shares of Common
Stock of the Company (assuming the conversion of Series A Preferred Stock into
Common Stock, and the exercise of warrants for the purchase of Common Stock,
constituting a portion of such 2,400,000 shares). Sales of substantial amounts
of Common Stock of the Company in the public market following the effective date
of the registration statement of which this Prospectus forms a part could
adversely affect the market price for such Common Stock.
11. POSSIBLE ISSUANCES OF PREFERRED STOCK. The Company has 5,000,000
shares of authorized Preferred Stock, of which 1,000,000 shares of Series A
Preferred Stock are outstanding. Although the Company has no current plans to
issue Preferred Stock, the Company may issue shares of such Preferred Stock in
the future without further stockholder approval and upon such terms and
conditions, and having such rights, privileges and preferences, as the Board of
Directors may determine. The rights of the holders of Common Shares will be
subject to, and may be adversely affected by, the rights of the holders of any
Preferred Stock that may be issued in the future. The availability of Preferred
Stock, while providing flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult for
a third party to acquire, or of discouraging a third party from seeking to
acquire, a majority of the outstanding voting stock of the Company. See
"Description of Common Stock".
SUBSEQUENT EVENTS
Since the filing of the 1994 Form 10-KSB, in addition to those events
discussed in the March 31, 1995 Form 10-QSB, June 30, 1995 Form 10-QSB and
Current Report on Form 8-K for an event dated August 11, 1995 incorporated
herein by reference or otherwise discussed herein, the following events have
occurred:
(a) Effective April 19, 1995, the Company effected the Reverse Split.
(b) Effective with the Reverse Split, 1,000,000 outstanding shares of
Series B Preferred Stock of the Company were mandatorily converted into an
aggregate of 1,000,000 Common Shares of the Company (on a post-Reverse
Split basis). The resale of such Common Shares is covered by this
Prospectus. See "Principal and Selling Stockholders".
(c) In May 1995, Martin F. Kahn was elected Chairman of the Board and
a director of the Company to fill the vacancy created by the resignation of
Gilbert H. Steinberg. Mr. Kahn,
6
<PAGE>
age 45, has served since 1989 as Chairman of Ovid Technologies, Inc.
(formerly CDP Technologies, Inc.), a leading producer of medical,
scientific and technical CD-ROM and network products; since 1993 as
Chairman of OneSource Information Services (formerly Lotus One Source),
which develops and markets a comprehensive set of integrated business
information and software products; since 1991 as Chairman of Vista
Information Solutions, Inc. (formerly DataMap, Inc., a successor through
merger to Vista Environmental Information, Inc.), which supplies site-
specific risk information about real estate for the insurance, banking, and
environmental engineering markets; since April 1995 as Chairman of
ShopperVision Express, Inc., which offers home grocery shopping through
dial-up and online services; and since 1990 as Managing Director of Cadence
Information Associates L.L.C. (or its predecessor), a consulting and
management services firm. Mr. Kahn holds a Bachelors Degree in
Administrative Sciences from Yale College and a Masters Degree in Business
Administration from Harvard Business School.
(d) In May 1995, Dr. Abraham Peled, a designee of Elron Electronic
Industries Ltd. ("Elron"), resigned as a director of the Company. The
vacancy created by Dr. Peled's resignation will be filled upon the
designation of a replacement by Elron.
THE COMPANY
The Company develops and offers instructor-led and computer-based
personal computer training programs, and provides consulting services, primarily
to large business and public sector organizations. The Company's ILT programs
include a wide range of introductory and advanced classes in operating systems
(including MS/DOS, Microsoft Windows, IBM OS/2 and Apple Macintosh System 7.0),
word processing, spreadsheets, databases, communications, executive overviews,
integrated software packages, computer graphics and desktop publishing. The
Company's CBT programs include offerings on Lotus Notes, CC Mail, Microsoft
Office, and Lotus Smartsuite.
The Company's ILT programs, which are primarily marketed to those
business concerns and public sector organizations that devote substantial
resources to personal computer technology, are conducted solely for the benefit
of such employees. The Company has been authorized as a training center by many
software and hardware manufacturers. The Company does not sell or distribute
any computer hardware, software or related products (other than CBT programs as
discussed below).
The Company develops and offers CBT programs to augment its live
training classes. Whereas live classroom training is delivered in a classroom
setting by one of the Company's qualified instructors to students sitting in
front of personal computers,
7
<PAGE>
CBTs utilize a different training methodology. Computer-based training is
supplied to students on either floppy disks or over a communication line which
is tied directly to their desk-top personal computer. This approach eliminates
the need for either classrooms or instructors. The Company believes that
certain software packages and other computer-related topics lend themselves to
being taught in this manner. CBT programs, for example, are a more cost
effective way of delivering training on new features available in software
upgrades, as well as in delivering training in geographically remote locations.
In addition, the Company's proprietary authoring tool, ACE, allows CBT designers
to develop custom CBT for a client's in-house computer applications.
The Company's Consulting Services Division is responsible for
identifying and providing independent computer personnel, on a temporary basis,
to the Company's client base for special projects. At the present time, the
Company is furnishing its full time employees, as well as independent
contractors, to satisfy its clients' requirements.
The Company presently operates nine training facilities -four in New
York City, one in Northern California, three in Ontario, Canada and one in
Metropark, New Jersey.
The Company was incorporated in New York in March 1985 and changed its
corporate domicile to Delaware in December 1987. The Company's executive
offices are located at 462 Seventh Avenue, New York, New York 10018 (telephone
number (212) 736-5870).
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
by the Selling Stockholders.
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth, to the Company's knowledge, certain
information regarding the Company's outstanding Common Shares beneficially owned
as of August 31, 1995 (i) by each person who is known by the Company to
beneficially own or exercise voting or dispositive control over more than 5% of
the Company's Common Shares, (ii) by each of the Company's directors, (iii) by
all executive officers and directors of the Company as a group and (iv) by each
of the Selling Stockholders. Except as set forth below, to the Company's
knowledge, each beneficial owner has the sole power to vote and dispose of the
shares reflected.
8
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS COMMON SHARES
OF PRINCIPAL STOCK- COMMON SHARES COMMON SHARES TO BE BENE-
HOLDERS AND DIRECTORS; BENEFICIALLY OWNED OFFERED FICIALLY OWNED
NAME OF SELLING STOCKHOLDERS BEFORE OFFERING(1) FOR SALE AFTER OFFERING (1)
- ---------------------------- ------------------ -------- ------------------
PERCENT PERCENT
OF OF
NUMBER OUTSTANDING NUMBER OUTSTANDING
------ ----------- ------ -----------
<S> <C> <C> <C> <C> <C>
Terry I. Steinberg(2) 848,343(3) 28.7% -0- 848,343(3) 28.7%
(4) (4)
Elron Electronic
Industries Ltd.(5) 840,000(6) 26.5% 840,000(6) -0- --
Gilbert H. Steinberg 820,743(3) 28.0% -0- 820,743(3) 28.0%
Six Nevada Drive
Lake Success, New York
Austin W. Marxe(7) 500,000(8) 16.2% -0-(8) -0- --
(9)
AWM Investment
Company, Inc.(7) 500,000(8) 16.2% -0-(8) -0- --
(9)
Gibraltar Trust(10) 500,000(11) 16.2% 500,000(11) -0- --
Joshua Ruch(10) 500,000(11) 16.2% -0-(11) -0- --
Meir Barel(12) 500,000(13) 16.2% -0-(13) -0- --
Jan Philipp F. Reemtsma 460,000(11) 14.9% -0-(11) -0- --
Mera GmbH
Grosse Bleichen 8, D-2000
Hamburg, Germany
Special Situations
Fund III, L.P.(7) 375,000(8) 12.3% 375,000(8) -0- --
(14) (14)
MGP Advisers
Limited Partnership(7) 375,000(8) 12.3% -0-(8) -0- --
(14)
Joseph Sabrin(2) 315,458(4) 10.7% -0- 315,458(4) 10.7%
(15) (15)
SVM STAR Ventures
Management GmbH No. 3(12) 250,000(13) 8.1% -0-(13) -0- --
SVM STAR Venture Capital
Management Ltd.(16) 250,000(13) 8.1% -0-(13) -0- --
SVE STAR Ventures
Enterprises No. III GbR(12) 171,768(13) 5.8% 171,768(13) -0- --
(17) (17)
9
<PAGE>
NAME AND ADDRESS COMMON SHARES
OF PRINCIPAL STOCK- COMMON SHARES COMMON SHARES TO BE BENE-
HOLDERS AND DIRECTORS; BENEFICIALLY OWNED OFFERED FICIALLY OWNED
NAME OF SELLING STOCKHOLDERS BEFORE OFFERING(1) FOR SALE AFTER OFFERING (1)
- ---------------------------- ------------------ -------- ------------------
PERCENT PERCENT
OF OF
NUMBER OUTSTANDING NUMBER OUTSTANDING
------ ----------- ------ -----------
<S> <C> <C> <C> <C> <C>
Justy Ltd.(16) 150,000(13) 5.0% 150,000(13) -0- --
(18) (18)
Special Situations
Cayman Fund, L.P. 125,000(8) 4.2% 125,000(8) -0- --
(19) (19)
Yozma Venture
Capital Ltd. 100,000(13) 3.4% 100,000(13) -0- --
(20) (20)
SVE STAR Ventures
Enterprises No. II GbR 64,011(13) 2.2% 64,011(13) -0- --
(21) (21)
John Towsley
5160 Yonge Street 55,367(22) 1.9% -0- 55,367(22) 1.9%
North York, Ontario
Canada
Avshalom Aderet
28 Hacharoshet Street 51,000(23) 1.7% 36,000 15,000(24) *
Or-Yehuda, Israel (24)
Martin F. Kahn
c/o Cadence Information 20,000(22) * -0- 20,000(22) *
Associates LLC (25) (25)
767 Fifth Avenue
New York, New York
Menasche Rothschild 14,800(23) * 14,800 -0- --
SVE STAR Ventures
Enterprises No. IIIA GbR 14,221(13) * 14,221(13) -0- --
(26) (26)
Eyal Gluska 2,000(23) * 2,000 -0- --
Shai Kreisler 2,000(23) * 2,000 -0- --
Aviv Lustig 2,000 * 2,000 -0- --
Daphna Steinmetz 900(23) * 900 -0- --
Yosef Blatman 600(23) * 600 -0- --
Alon Cooper 600(23) * 600 -0- --
Lior Gendel 400 * 400 -0- --
10
<PAGE>
NAME AND ADDRESS COMMON SHARES
OF PRINCIPAL STOCK- COMMON SHARES COMMON SHARES TO BE BENE-
HOLDERS AND DIRECTORS; BENEFICIALLY OWNED OFFERED FICIALLY OWNED
NAME OF SELLING STOCKHOLDERS BEFORE OFFERING(1) FOR SALE AFTER OFFERING (1)
- ---------------------------- ------------------ -------- ------------------
PERCENT PERCENT
OF OF
NUMBER OUTSTANDING NUMBER OUTSTANDING
------ ----------- ------ -----------
<S> <C> <C> <C> <C> <C>
Ira Moskowitz 400 * 400 -0- --
Rona Lustig 300 * 300 -0- --
Abraham Peri(5) -0- (27) -- -0- -0- --
All executive officers
and directors as a
group (8 persons) 1,033,710(3) 33.3% 36,000 997,710(3) 32.1%
(4)(22)(24) (4)(22)(24)
(25)(28) (25)(28)
</TABLE>
-------------------------------
* Less than 1%.
(1) Calculated pursuant to Rule 13d-3 promulgated under the Securities
Exchange Act of 1934. Accordingly, with respect to each particular
beneficial owner, the percentage gives effect to the deemed exercise
of such owner's options and warrants (which are currently exercisable
or exercisable within 60 days) and the deemed conversion of such
owner's convertible shares of Preferred Stock (which are currently
convertible or convertible within 60 days); the percentage, however,
does not give effect to any deemed exercise or conversion of other
holders' outstanding options, warrants and convertible Preferred
Stock.
(2) Address is 462 Seventh Avenue, New York, New York.
(3) Includes shares beneficially owned by Terry I. Steinberg (285,458),
Joseph Sabrin (285,458) and Gilbert H. Steinberg (247,427). Such
shares are held subject to a Voting Trust Agreement among such
persons, expiring in 1997, wherein the Messrs. Steinberg exercise
joint voting control as co-trustees. Each of the Messrs. Steinberg
and Mr. Sabrin retain dispositive control over their respective
shares.
(4) Includes 30,000 shares issuable upon exercise of currently exercisable
options held by each of Messrs. T. Steinberg and Sabrin.
(5) Address is Advanced Technology Center, Haifa, Israel.
11
<PAGE>
(6) Pursuant to Schedule 13D filed with the Commission, includes (i)
200,000 shares issuable upon conversion of Series A Preferred Stock;
and (ii) 40,000 shares issuable upon exercise of currently exercisable
warrants.
(7) Address is 153 East 53rd Street, New York, New York.
(8) Pursuant to Schedule 13G filed with the Commission, (i) AWM Investment
Company, Inc. ("AWM") serves as (a) the sole general partner of MGP
Advisers Limited Partnership ("MGP") and (b) the investment adviser
to, and general partner of, Special Situations Cayman Fund, L.P.
("Cayman Fund"), a Selling Stockholder; (ii) Austin W. Marxe is
President, Chief Executive Officer and primary owner of AWM and
principal limited partner of MGP; and (iii) MGP is a general partner
of, and investment adviser to, Special Situations Fund III, L.P. ("III
Fund"), a Selling Stockholder. Pursuant to the Schedule 13G, (i) Mr.
Marxe has the sole power to vote or direct the vote of the shares
beneficially owned by the Cayman Fund, shared power to vote or direct
the vote of the shares beneficially owned by the III Fund and the sole
power to dispose or direct the disposition of the shares beneficially
owned by the Cayman Fund and the III Fund; (ii) AWM has the sole power
to vote or direct the vote of the shares beneficially owned by the
Cayman Fund and the sole power to dispose or direct the disposition of
the shares beneficially owned by the Cayman Fund and the III Fund; and
(iii) MGP has the sole power to dispose or direct the disposition of
the shares beneficially owned by the III Fund.
(9) Pursuant to Schedule 13G filed with the Commission, includes 166,666
shares issuable upon exercise of currently exercisable warrants.
(10) Address is c/o Rho Management Co., Inc., 767 Fifth Avenue, New York,
New York.
(11) Pursuant to Schedule 13D filed with the Commission, Messrs. Ruch and
Reemtsma are two of the grantors of Gibraltar Trust, a Selling
Stockholder, which is the record owner of 333,333 Common Shares and
holds currently exercisable warrants for the purchase of approximately
166,666 Common Shares. Pursuant to the Schedule 13D, (i) Mr. Reemtsma
beneficially owns approximately 460,000 shares (including
approximately 153,333 shares issuable upon exercise of currently
exercisable warrants) and (ii) Mr. Ruch beneficially owns
approximately 40,000 shares (including approximately 13,333 shares
issuable upon exercise of currently exercisable warrants) and
exercises sole voting and dispositive control over such shares. The
Schedule 13D indicates further that Mr. Ruch's beneficial ownership
includes 25,000 shares held by Rho Management Co., Inc. ("Rho"), an
entity over the assets of which Mr. Ruch
12
<PAGE>
exercises sole investment and voting control. As stated in the
Schedule 13D, through his position with Rho, which acts as investment
adviser to Mr. Reemtsma, Mr. Ruch has investment authority over Mr.
Reemtsma's shares and, therefore, shares voting and dispositive power
with Mr. Reemtsma over such shares. In addition, an entity affiliated
with Messrs. Ruch and Reemtsma is a limited partner of SVE IIIA (as
defined in footnote (13)); however, neither Mr. Ruch nor Mr. Reemtsma
has voting or dispositive power over the shares of the Company
beneficially owned by SVE IIIA.
(12) Address is 28A Leopoldstrasse, Munich, Germany.
(13) Pursuant to Schedule 13D filed with the Commission, (i) SVM STAR
Ventures Management GmbH No. 3 ("STAR Germany") manages the
investments of SVE STAR Ventures Enterprises No. II GbR ("SVE II"),
SVE STAR Ventures Enterprises No. III GbR ("SVE III") and SVE STAR
Ventures Enterprises No. IIIA GbR ("SVE IIIA"), each a Selling
Stockholder; (ii) SVM STAR Venture Capital Management Ltd. ("STAR
Israel") manages the investments of Justy Ltd. ("Justy") and Yozma
Venture Capital Ltd. ("Yozma"), each a Selling Stockholder; (iii) Meir
Barel is the sole director and primary owner of STAR Germany and STAR
Israel; (iv) Mr. Barel has the sole power to vote or direct the vote,
and the sole power to dispose or direct the disposition of, the shares
beneficially owned by SVE II, SVE III, SVE IIIA, Justy and Yozma; (v)
STAR Germany has the sole power to vote or direct the vote, and the
sole power to dispose or direct the disposition of, the shares
beneficially owned by SVE II, SVE III and SVE IIIA; and (vi) STAR
Israel has the sole power to vote or direct the vote, and the sole
power to dispose or direct the disposition of, the shares beneficially
owned by Justy and Yozma.
(14) Includes 125,000 shares issuable upon exercise of currently
exercisable warrants.
(15) Shares (excluding shares subject to outstanding options) are held
subject to a Voting Trust Agreement as described in footnote (3).
(16) Address is 25 Lechi Street, Bnei Brak, Israel.
(17) Includes 57,256 shares issuable upon exercise of currently exercisable
warrants.
(18) Includes 50,000 shares issuable upon exercise of currently exercisable
warrants.
(19) Includes 41,666 shares issuable upon exercise of currently exercisable
warrants.
13
<PAGE>
(20) Includes 33,334 shares issuable upon exercise of currently exercisable
warrants.
(21) Includes 21,337 shares issuable upon exercise of currently exercisable
warrants.
(22) Represents shares issuable upon exercise of currently exercisable
options.
(23) Shares are held in trust for the benefit of the various beneficial
owners.
(24) Includes 15,000 shares issuable upon exercise of currently exercisable
options.
(25) Options are held in the name of Cadence Information Associates LLC, a
Delaware limited liability company of which Mr. Kahn is the sole
manager and a member with a 50% membership interest.
(26) Includes 4,740 shares issuable upon exercise of currently exercisable
warrants.
(27) Does not include shares beneficially owned by Elron for which Mr. Peri
serves as an officer.
(28) Includes 29,000 shares issuable upon exercise of currently exercisable
options held by executive officers of the Company.
The Common Shares set forth in the above table are included in this
Prospectus pursuant to registration commitments accorded to the Selling
Stockholders. Such Shares may be sold either pursuant to the Registration
Statement of which this Prospectus forms a part or, if available, under Section
4(1) of the Securities Act or Rule 144 promulgated thereunder. The Company will
not receive any proceeds from the sale of the Shares by the Selling
Stockholders.
To the Company's knowledge, no Selling Stockholder has had any
material relationship with the Company or any of its affiliates during the past
three years, except that (i) Elron has the right, under certain circumstances,
to designate two persons as directors of the Company (Abraham Peri having served
since September 1994 as one such designee while Dr. Abraham Peled served as the
second designee from September 1994 until his resignation as a director in May
1995); (ii) Avshalom Aderet has served as President of PC Etcetera Israel Ltd.
("PC Israel"), a wholly-owned subsidiary of the Company, since August 1994 and a
director of the Company since September 1994; (iii) Menasche Rothschild, Eyal
Gluska, Shai Kreisler, Aviv Lustig, Daphna Steinmetz, Yosef Blatman, Alon
Cooper, Lior Gendel, Ira Moskowitz and Rona Lustig have served as employees of
PC Israel since August 1994; and (iv) Joshua Ruch, a grantor of Gibraltar Trust,
has a minority equity
14
<PAGE>
interest in Cadence Information Associates, L.L.C., an entity that provides
consulting services to the Company and with respect to which Martin F. Kahn,
Chairman of the Board of the Company, has a 50% interest and acts as Managing
Director.
The Company is not aware of any underwriting arrangements with respect
to the sale of the Shares by the Selling Stockholders. The Company believes
that such securities will be sold from time to time in the over-the-counter
market at then prevailing prices or in private transactions at negotiated
prices, and that usual and customary brokerage fees will be paid by the Selling
Stockholders in connection therewith.
DESCRIPTION OF COMMON STOCK
The Company is currently authorized to issue 15,000,000 Common Shares,
par value $.01 per share. As of June 15, 1995, there were 2,927,462 Common
Shares issued and outstanding and held of record by approximately 58 persons.
Holders of Common Shares are entitled to one vote per share on all
matters submitted to a vote of stockholders, including the election of
directors. Such holders do not have the right to cumulate their votes for the
election of directors. Accordingly, the holders of a majority of the shares
voting for election of directors can elect all members of the Board of
Directors. A plurality vote is sufficient for the election of directors, and a
majority vote is required for other actions that require the vote or concurrence
of stockholders. Dividends may be paid to holders of Common Shares, on an equal
basis with the holders of the Company's 1,000,000 outstanding shares of Series A
Preferred Stock ("Series A Preferred Shares") when and if declared by the Board
of Directors out of funds legally available therefor. In the event of the
dissolution or liquidation of the Company, holders of Common Shares would be
entitled to share ratably in the assets of the Company remaining after
satisfaction of all liabilities of the Company and the payment to the holders of
the Series A Preferred Shares of a liquidation preference of $1.00 per share.
The holders of Common Shares have no preemptive or conversion rights,
and there are no redemption or sinking fund provisions applicable to the Common
Shares. All of the outstanding Common Shares are fully paid and nonassessable.
LEGAL MATTERS
Matters relating to the legality of the securities being offered
hereby are being passed upon for the Company by Certilman Balin Adler & Hyman,
LLP, 90 Merrick Avenue, East Meadow, New York 11554.
15
<PAGE>
EXPERTS
The consolidated balance sheet of the Company as of December 31, 1994
and the consolidated statements of operations, stockholders' equity and cash
flows of the Company for the years ended December 31, 1994 and 1993 included in
the 1994 Form 10-KSB incorporated by reference in this Prospectus have been so
incorporated in reliance on the report of Norman Stumacher ("Stumacher"),
certified public accountant, given upon the authority of that firm as an expert
in auditing and accounting.
Stumacher's report indicates that he did not audit the financial
statements of PC Israel, which financial statements, Stumacher indicates,
reflect total assets and revenues constituting 8% and 4%, respectively, of the
related consolidated totals. Stumacher's report states that such statements
were audited by other auditors whose report had been furnished to him and his
opinion, insofar as it relates to amounts included for PC Israel, is based
solely on the report of the other auditors. The Company has been advised that
the auditors whose report had been furnished to Stumacher were Luboshitz,
Kasierer & Co., certified public accountants (Israel)("Luboshitz"). The report
of Luboshitz with respect to the balance sheet of PC Israel as of December 31,
1994 and the statements of income, changes in shareholders' deficiency and cash
flows of PC Israel for the period then ended, given upon the authority of that
firm as experts in auditing and accounting, has been included in the 1994 Form
10-KSB and incorporated by reference in this Prospectus.
The balance sheets of the ACE Division of Elron ("ACE") as of December
31, 1993 and 1992, the statement of income of ACE for the years ended December
31, 1993, 1992 and 1991 and the statement of cash flows of ACE for the year
ended December 31, 1993 included in the Company's Current Report on Form 8-K for
an event dated August 12, 1994, as amended, incorporated by reference in this
Prospectus have been so incorporated in reliance on the opinion of Luboshitz,
given upon the authority of that firm as experts in auditing and accounting.
16
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses (estimated except for the
Registration Fee) in connection with the offering described in the Registration
Statement:
Registration Fee................................... $2,068.97
Accountants' Fees and Expenses..................... *
Legal Fees and Expenses............................ *
Printing .......................................... *
Miscellaneous...................................... *
---------
Total............................................ $ *
---------
---------
- ----------------
* To be provided by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to Section 145 of the Delaware General Corporation Law, the
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 completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Registrant), by reason of the fact that he is or was a director, officer,
employee or agent of the Registrant, or is or was serving at the request of the
Registrant as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Registrant, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
Pursuant to such Section 145, the 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 completed action or
suit by or in the right of the Registrant to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the Registrant or was serving at the request of the Registrant as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against
II-1
<PAGE>
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Registrant, except that no indemnification generally shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Registrant.
Pursuant to Section 145, to the extent that a director, officer,
employee or agent of the Registrant has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to above, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
Article IX of the Registrant's Certificate of Incorporation and
Article VI of the Registrant's By-Laws provide generally that the Registrant
shall, to the fullest extent permitted by law, indemnify all its officers and
directors.
The Registrant's Certificate of Incorporation contains provisions
relating to the elimination of directors' liability for damages for breach of
duty in such capacity.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
2 Asset Purchase Agreement dated as of August 12, 1994 among the
Company, PC Etcetera Israel Ltd., Elron Electronic Industries Ltd.,
Adar International, Inc. and Elron Technologies Inc.(1)
4(a) Certificate of Incorporation, as amended.
(b) Certificate of Designation with regard to Series A Preferred Stock.(2)
5 Opinion of Certilman Balin Adler & Hyman, LLP regarding the legality
of the securities being registered.*
10(a) Lease for premises situated at 462 Seventh Avenue, 4th Floor, New
York, New York, as amended.
(b) Lease for premises situated at 462 Seventh Avenue, 18th Floor, New
York, New York.(3)
(c) Lease for premises situated at 19 Fulton Street, New York, New
York.(4)
II-2
<PAGE>
(d) Lease for premises situated at 120 Wood Avenue South, Iselin, New
Jersey.(4)
(e) Lease Amendment for premises situated at 120 Wood Avenue South,
Iselin, New Jersey.
(f) Lease for premises situated at 80 Bloor Street, Toronto, Canada.(4)
(g) Amended and Restated 1987 Stock Option Plan.(5)
(h) Lease for premises situated at 341 Madison Avenue, New York, New York.
(i) Agreement dated as of May 30, 1989 among Terry I. Steinberg, Joseph
Sabrin and the Registrant, as amended.(3)
(j) Lease for premises situated at City Centre Tower, North York, Ontario,
Canada.
(k) Financing Agreement - Receivables dated November 20, 1990 between the
Registrant and Rosenthal & Rosenthal, Inc.
(l) Stockholders' Agreement dated as of August 12, 1994 among the
Registrant, Elron Electronic Industries Ltd., Adar International, Inc,
Elron Technologies Inc., Terry I. Steinberg, Joseph Sabrin and Gilbert
H. Steinberg. (1)
(m) Stock Purchase Agreement dated as of March 15, 1995 among the
Registrant, Special Situations Fund III, L.P., Special Situations
Cayman Fund, L.P., Gibraltar Trust, Justy Ltd., Yozma Venture Capital
Ltd., SVE STAR Ventures Enterprises No. II GbR, SVE STAR Ventures
Enterprises No. III GbR and SVE STAR Ventures Enterprises No. IIIA GbR
(collectively, the "Series B Purchasers").(2)
(n) Form of Warrant dated March 15, 1995 issued to the Series B Purchasers
for the purchase of an aggregate of 500,000 Common Shares of the
Registrant.(2)
13 Quarterly Report on Form 10-QSB for the quarter ended June 30,
1995.(6)
23(a) Consent of Norman Stumacher.*
(b) Consent of Luboshitz, Kasierer & Co.*
(c) Consent of Certilman Balin Adler & Hyman, LLP (included in its opinion
filed as Exhibit 5).
24 Powers of Attorney (included in signature page forming a part hereof).
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<PAGE>
- ------------------
*Denotes document filed herewith.
(1) Denotes document filed as an exhibit to the Registrant's Current Report on
Form 8-K for an event dated August 12, 1994 (File No. 0-17419) and incorporated
herein by reference.
(2) Denotes document filed as an exhibit to the Registrant's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1994 (File No. 0-17419) and
incorporated herein by reference.
(3) Denotes document filed as an exhibit to the Registrant's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1993 (File No. 0-17419) and
incorporated herein by reference.
(4) Denotes document filed as an exhibit to the Registrant's Registration
Statement on Form S-18 (File No. 33-19521) and incorporated herein by reference.
(5) Denotes document filed as an exhibit to the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1992 (File No. 0-17419) and
incorporated herein by reference.
(6) Denotes document filed with the Commission (File No. 0-17419) and
incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the Registration Statement; and
(iii) Include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
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<PAGE>
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the 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 Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-2 and has duly caused this Amendment
to the 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 the
20th day of October, 1995.
PC ETCETERA, INC.
By: /s/ Terry I. Steinberg
-------------------------
Terry I. Steinberg,
President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
* Chairman and Director October 20, 1995
- ---------------------
Martin F. Kahn
President, Treasurer
and Director
(Principal Executive
* and Financial Officer) October 20, 1995
- ----------------------
Terry I. Steinberg
Executive Vice President,
Secretary and
* Director October 20, 1995
- ------------------------
Joseph Sabrin
Vice President
* and Director October 20, 1995
- ------------------------
John Towsley
Controller (Principal
* Accounting Officer) October 20, 1995
- ------------------------
Adrienne Haber
President of PC Etcetera
* Israel Ltd. and Director October 20, 1995
- ------------------------
Avshalom Aderet
* Director October 20, 1995
- ------------------------
Abraham Peri
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<PAGE>
*Terry I. Steinberg, pursuant to Powers of Attorney (executed by each of the
persons listed above and indicated as signed above, and filed with the
Securities and Exchange Commission), by signing his name hereto does hereby sign
Sand execute this Amendment to the Registration Statement on behalf of each of
the persons named above and indicated as signing above in the capacities in
which the names of each appear above, and does hereby sign and execute this
Amendment to the Registration Statement in his own behalf in the capacity of
President, Treasurer, Director and Principal Executive and Financial Officer.
/s/ Terry I. Steinberg
---------------------------
Terry I. Steinberg
October 20, 1995
II-7
<PAGE>
[CERTILMAN BALIN ADLER & HYMAN, LLP]
Exhibit 5
October 20, 1995
PC Etcetera, Inc.
462 Seventh Avenue
New York, NY 10018
RE: REGISTRATION STATEMENT ON FORM S-2
---------------------------------------
Gentlemen:
In our capacity as counsel to PC Etcetera, Inc., a Delaware corporation
(the "Company"), we have been asked to render this opinion in connection with
the Company's Registration Statement on Form S-2 (the "Registration Statement")
being filed contemporaneously by the Company with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, covering 2,400,000
shares of Common Stock, $.01 par value, of the Company (the "Shares") comprised
of 1,660,000 outstanding shares of Common Stock (the "Outstanding Shares") and
740,000 shares of Common Stock issuable upon the exercise of warrants or the
conversion of Series A Preferred Stock (the "Issuable Shares"). The Shares are
being registered for resale by certain selling stockholders.
In connection with our opinion, we have examined the Certificate of
Incorporation and By-Laws of the Company, each as amended, and the Registration
Statement. We are also familiar with proceedings of the Board of Directors of
the Company relating to the authorization of the issuance of the Shares. We
have examined such other instruments and documents as we deemed relevant under
the circumstances.
For purposes of the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted as certified, photostatic or
facsimile copies and the authenticity of the originals, (iii) the legal capacity
of natural persons and (iv) the due authorization, execution and delivery of all
documents by all parties and the validity and binding effect thereof.
<PAGE>
PC Etcetera, Inc.
October 20, 1995
Page 2
Based upon and subject to the foregoing, including the assumptions
made, we are of the opinion that (i) the Outstanding Shares have been duly and
validly authorized and issued, and are fully paid and nonassessable shares of
Common Stock, $.01 par value, of the Company and (ii) the Issuable Shares have
been duly and validly authorized and, when issued in accordance with the terms
of the respective warrants and Series A Preferred Stock, will be duly and
validly issued, fully paid and nonassessable shares of Common Stock, $.01 par
value, of the Company.
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.
This opinion is as of the date hereof, and we do not undertake, and
hereby disclaim, any obligation to advise you of any changes in any of the
matters set forth herein.
We are rendering this opinion only as to the matters expressly set
forth herein, and no opinion should be inferred as to any other matters.
This opinion is for your exclusive use only and is to be utilized and
relied upon only in connection with the matters expressly set forth herein.
Very truly yours,
CERTILMAN, BALIN, ADLER & HYMAN, LLP
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
I consent to the incorporation by reference in this Registration Statement on
Form S-2 (Registration No. 33-9388427) of my report on the consolidated
financial statements included in the Annual Report on Form 10-KSB of PC
Etcetera, Inc. for the year ended December 31, 1994, as amended and to all
references to my firm included in the foregoing Registration Statement.
/S/NORMAN STUMACHER
CERTIFIED PUBLIC ACCOUNTANT
GARDEN CITY, NY
OCTOBER 19, 1995
<PAGE>
Exhibit 23 (b)
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS (ISRAEL)
We consent to the incorporation by reference in Registration Statement No. 33-
93842 on Form S-2 of PC Etcetera, Inc. of our report dated March 9, 1994, on the
financial statements of Elron Electronic Industries Ltd. - ACE Division,
included in the Current Report on Form 8-K of PC Etcetera, Inc. for an event
dated August 12, 1994, as amended, and of our report dated February 28, 1995 on
the financial statements of PC Etcetera Israel Ltd. included in the Annual
Report on Form 10-KSB of PC Etcetera, Inc. for the year ended December 31, 1994,
as amended, and to all references to our firm included in the foregoing
Registration Statement.
/s/ LUBOSHITZ, KASIERER & CO
Certified Public Accountants (Israel)
Tel Aviv, Israel
October 19, 1995
