As filed with the Securities and Exchange Commission on May 17, 1996
Registration No. 33-93842
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
AMENDMENT NO.3
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 May 17, 1996
PROSPECTUS
2,405,744 COMMON SHARES
--------------------------
PC ETCETERA, INC.
This Prospectus relates to 2,405,744 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 _____________, 1996, the closing bid and
asked prices for the Company's Common Shares, as quoted on the Bulletin Board,
were $________ and $______________ , respectively, per share.
--------------------------
, 1996
<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 REPRESENTA TION 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 CIRCUM
STANCES, 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 State ment") 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.
--------------------------
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company with the
Commission (File No. 0-17419) and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1995 (the "1995 Form 10-KSB");
(b) The Company's Quarterly Report on Form 10-QSB for the fiscal
period ended March 31, 1996 (the "March 1996 Form 10-QSB"); and
(c) The Company's Current Reports on Form 8-K for events dated August
12, 1994, as amended, and January 31, 1996, as amended (the "January 31,
1996 Form 8-K") (collectively the "Forms 8-K").
The 1995 Form 10-KSB and March 1996 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 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 ........................................ 9
Description of Common Stock ............................................... 17
Legal Matters ............................................................. 17
Experts ................................................................... 17
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. As of March 31, 1996, the Company had an accumulated deficit of
$6,430,579 and a working capital deficiency of $1,446,428. In addition, during
the fiscal years ended December 31, 1994 and 1995 and fiscal quarter ended March
31, 1996, 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 and debt 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. No assurances can
be given as to the foregoing. See Item 6 of the 1995 Form 10-KSB and Item 2 of
Part I of the March 1996 Form 10-QSB incorporated herein by reference.
2. Recent Diversification of Business and Sales of Certain Operations.
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. In addition, as discussed
in the January 31, 1996 Form 8-K, the Company has sold its wholly-owned Canadian
subsidiary ("PC Canada"). Further, as discussed under "Subsequent Events, the
Company has sold the operating assets of its San Francisco, California office
and Boise, Idaho business location training. As a result, the Company now
operates only three training facilities - two in New York and one in Metropark,
New Jersey - as compared to ten at its peak. No assurances can be given that the
Company's remaining operations will be viable. Moreover, as discussed under
"Subsequent Events", of the approximately $750,000 in proceeds received at the
closing of the sale of PC Canada, the Company was required to use approximately
$500,000 to repay loans made to the Company effective December 5, 1995. To date,
only $250,000 has been repaid. See Item 1 of the 1995 Form 10-KSB and Items 2
and 7 of the January 31, 1996 Form 8-K incorporated herein by reference. In
addition, see Item 6 of the 1995 Form 10-KSB incorporated herein by reference
for a discussion of, among other matters, the losses incurred by the Company
with regard to its CBT operations.
4
<PAGE>
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 ILT and
consulting services, and market CBT products, have greater financial and
marketing resources than the Company. See Item 1 of the 1995 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, marketing and executive personnel. The 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 1995 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 1995 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 1995 Form 10-KSB incorporated
herein by reference.
7. Uncertain Operating Environment. A new network operating system entitled
"Windows NT 4.0" is scheduled for release in August, 1996. Many of the Company's
clients have delayed any software conversions and training projects awaiting the
release of Windows NT 4.0 and a determination of its effect on current operating
systems such as Windows 95. Such circumstance has had an adverse effect on the
Company's revenues. No assurances can be given that the release of Windows NT
4.0 will have a material positive effect on the Company's revenues.
5
<PAGE>
8. 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.
9. 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 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 2,405,744 shares available
for resale pursuant to this Prospectus represent approximately 62% 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 2,405,744 shares).
Sales of substantial amounts of Common Shares 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
Shares.
10. 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 (the "Series A Preferred Shares") 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 1995 Form 10-KSB, in addition to those events
discussed in the January 31, 1996 Form 8-K and March 1996 Form 10-QSB
incorporated herein by reference or otherwise discussed herein, the following
events have occurred:
(a) Pursuant to the provisions of a certain Stock Purchase Agreement,
dated as of March 15, 1995, since the Registration Statement of which this
Prospectus forms a part was not declared effective by the Commission on or
before
6
<PAGE>
December 31, 1995, the Company is obligated to issue to certain of the
persons and entities listed herein as Selling Shareholders an aggregate of
200,000 Common Shares and warrants for the purchase of an aggregate of
100,000 Common Shares (such warrants to provide for an exercise price of
$2.75 per share, subject to adjustment for certain antidilution events, and
an expiration date of March 15, 1999. The foregoing is not intended to
imply that the Commission is in any way responsible for such obligation of
the Company. See "Principal and Selling Stockholders".
(b) Effective April 1, 1996, the Company sold the operating assets of
its San Francisco, California training office and Boise, Idaho business
location for an aggregate cash purchase price of approximately $42,000. In
addition, the purchaser agreed to assume certain obligations and
liabilities of the Company. Further, the parties agreed to a license
arrangement pursuant to which the Company shall be entitled to certain
royalties with respect to custom CBT projects developed as well as CBT
titles sold or licensed. The Company believes that the transaction was not
significant to the Company as a whole as the transferred assets had a book
value of only approximately $24,000 as of December 31, 1995 and the
transferred operations generated revenues and profit of only approximately
$919,000 and $44,000, respectively, during the 1995 fiscal year.
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. During 1995, the Company expanded its
marketing efforts with regard to CBT training to include the small office/home
office ("SoHo") marketplace.
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 software is segmented into
two product lines: STAR for the corporate market and HELP Plus for the SoHo
market. The STAR line includes offerings on Lotus Notes, CC Mail, Microsoft
Office, and Lotus Smartsuite. The HELP Plus line includes all of the STAR
offerings as well as training on software specifically geared to the SoHo user
such as Netscape, Quicken and American OnLine.
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
7
<PAGE>
conducted solely for the benefit of such employees. The Company has been
authorized as a training center by many software and hardware manufacturers with
regard to end-user application programs as well as back office systems. 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 as well as to SoHo users who do not find classroom training cost
effective. 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, CBTs utilize a different training methodology.
Computer-based training is supplied to consumers/students on either floppy
disks, compact discs (CDs) 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.
See the January 31, 1996 Form 8-K incorporated herein by reference for a
discussion of the sale by the Company of PC Canada (which company offers ILT and
CBT programs, as well as consulting services) and "Subsequent Events" for a
discussion of the sale by the Company of its San Francisco, California and
Boise, Idaho training operations.
The Company presently operates three training facilities - two in New York
City 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.
8
<PAGE>
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 April 30, 1996 (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.
9
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Common Shares
Principal Stockholders Common Shares Common Shares to be Bene-
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>
Elron Electronic 858,750(3) 25.4% 840,000(3) 18,750(3) *
Industries Ltd.(2)
Terry I. Steinberg(4) 848,343(5) 26.9% -0- 848,343(5) 26.9%
(6) (6)
Gilbert H. Steinberg 839,493(5) 26.7% -0- 839,493(5) 26.7%
Six Nevada Drive
Lake Success, New York
- ---------------------------- ------------ ------ ----------- ----------- -----------
Gibraltar Trust(7) 620,664(8) 18.5% 501,914(8) 118,750(8) 3.5%
Joshua Ruch(7) 620,664(8) 18.5% -0-(8) 118,750(8) 3.5%
Jan Philipp F. Reemtsma 571,011(8) 17.1% -0-(8) 109,250(8) 3.3%
Mera GmbH
Grosse Bleichen 8, D-2000
Hamburg, Germany
- ---------------------------- ------------- ------ ----------- ----------- -----------
Meir Barel(9) 620,664(10) 18.5% -0-(10) 118,750(10) 3.5%
SVM STAR Ventures 310,332(10) 9.6% -0-(10) 59,375(10) 1.8%
Management GmbH No. 3(9)
SVM STAR Venture Capital 310,332(10) 9.6% -0-(10) 59,375(10) 1.8%
Management Ltd.(11)
SVE STAR Ventures 213,214(10) 6.7% 172,426(10) 40,788(10) 1.3%
Enterprises No. III (12) (12) (12)
GbR(9)
Justy Ltd.(11) 186,199(10) 5.8% 150,574(10) 35,625(10) 1.1%
(13) (13) (13)
Yozma Venture 124,132(10) 3.9% 100,382(10) 23,750(10) *
Capital Ltd. (14) (14) (14)
SVE STAR Ventures 79,459(10) 2.5% 64,256(10) 15,203(10) *
Enterprises No. II GbR (15) (15) (15)
SVE STAR Ventures 17,660(10) * 14,276(10) 3,384(10) *
Enterprises No. IIIA GbR (16) (16) (16)
- ----------------------------- ------------ ------ ----------- ----------- -----------
Austin W. Marxe(17) 601,916(18) 18.1% -0-(18) 100,000(18) 3.0%
(19) (19)
AWM Investment 601,916(18) 18.1% -0-(18) 100,000(18) 3.0%
Company, Inc.(17) (19) (19)
Special Situations 451,436(18) 13.8% 376,436(18) 75,000(20) 2.3%
Fund III, L.P.(17) (20) (20)
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Common Shares
Principal Stockholders Common Shares Common Shares to be Bene-
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>
MGP Advisers 451,436(18) 13.8% -0-(18) 75,000(20) 2.3%
Limited Partnership(17) (20)
Special Situations 150,480(18) 4.2% 125,480(18) 25,000(18) *
Cayman Fund, L.P. (21) (21) (21)
- ----------------------------- ------------- ------ ----------- ----------- -----------
Joseph Sabrin(4) 315,458(6) 10.0% -0- 315,458(6) 10.0%
(22) (22)
Avshalom Aderet 51,000(23) 1.6% 36,000 15,000(23) *
28 Hacharoshet Street (24) (24)
Or-Yehuda, Israel
Martin F. Kahn 40,000(25) * -0- 40,000(25) *
c/o Cadence Information (26) (26)
Associates LLC
767 Fifth Avenue
New York, New York
Menasche Rothschild 14,800(24) * 14,800 -0- --
Eyal Gluska 2,000(24) * 2,000 -0- --
Shai Kreisler 2,000(24) * 2,000 -0- --
Aviv Lustig 2,000 * 2,000 -0- --
Daphna Steinmetz 900(24) * 900 -0- --
Yosef Blatman 600(24) * 600 -0- --
Alon Cooper 600(24) * 600 -0- --
Lior Gendel 400 * 400 -0- --
Ira Moskowitz 400 * 400 -0- --
Rona Lustig 300 * 300 -0- --
Abraham Peri(2) -0-(27) -- -0- -0-(27) --
Jacov Ben-Zvi(2) -0-(27) -- -0- -0-(27) --
All executive officers 969,343(5) 29.9% 36,000 933,343(5) 28.8%
and directors as a (6)(23)(25) (6)(23)(25)
group (6 persons) (26) (26)
</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
11
<PAGE>
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 Advanced Technology Center, Haifa, Israel.
(3) Pursuant to Schedule 13D filed with the Commission, the number of Common
Shares beneficially owned before the offering and offered for sale includes
(i) 200,000 shares issuable upon conversion of Series A Preferred Shares;
and (ii) 40,000 shares issuable upon exercise of currently exercisable
warrants. The number of Common Shares beneficially owned after the offering
represents shares issuable upon exercise of currently exercisable warrants.
(4) Address is 462 Seventh Avenue, New York, New York.
(5) For each of Terry I. Steinberg and Gilbert H. Steinberg, 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 December 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.
(6) Includes 30,000 shares issuable upon exercise of currently exercisable
options held by each of Messrs. T. Steinberg and Sabrin.
(7) Address is c/o Rho Management Co., Inc., 767 Fifth Avenue, New York, New
York.
(8) Pursuant to Schedule 13D filed with the Commission and other information
available to the Company, Messrs. Ruch and Reemtsma are two of the grantors
of Gibraltar Trust, a Selling Stockholder, which is the record owner of
400,000 Common Shares (giving effect to the issuance described in
"Subsequent Events") and holds currently exercisable warrants for the
purchase of approximately 220,664 Common Shares. Based upon the Schedule
13D, (i) Mr. Reemtsma beneficially owns approximately 571,011 shares
(including approximately 203,010 shares issuable upon exercise of currently
exercisable warrants) and (ii) Mr. Ruch beneficially owns approximately
49,653 shares (including approximately 17,654 shares issuable
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<PAGE>
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 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 (10)); however, neither Mr. Ruch nor Mr. Reemtsma has voting or
dispositive power over the shares of the Company beneficially owned by SVE
IIIA. The number of Common Shares beneficially owned before the offering
and offered for sale by Gibraltar Trust, and the number of Common Shares
beneficially owned before the offering by Mr. Ruch, includes 168,581 shares
issuable upon currently exercisable warrants (155,094 for Mr. Reemtsma).
The number of Common Shares beneficially owned after the offering by
Gibraltar Trust and Mr. Ruch includes 52,083 shares issuable upon exercise
of currently exercisable warrants (47,916 for Mr. Reemtsma).
(9) Address is 28A Leopoldstrasse, Munich, Germany.
(10) 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.
(11) Address is 25 Lechi Street, Bnei Brak, Israel.
(12) The number of Common Shares beneficially owned before the offering and
offered for sale includes 57,914 shares issuable upon exercise of currently
exercisable warrants. The number of Common Shares beneficially owned after
the offering
13
<PAGE>
includes 17,886 shares issuable upon exercise of currently exercisable
warrants.
(13) The number of Common Shares beneficially owned before the offering and
offered for sale includes 50,574 shares issuable upon exercise of currently
exercisable warrants. The number of Common Shares beneficially owned after
the offering includes 15,625 shares issuable upon exercise of currently
exercisable warrants.
(14) The number of Common Shares beneficially owned before the offering and
offered for sale includes 33,715 shares issuable upon exercise of currently
exercisable warrants. The number of Common Shares beneficially owned after
the offering includes 10,417 shares issuable upon exercise of currently
exercisable warrants.
(15) The number of Common Shares beneficially owned before the offering and
offered for sale includes 21,582 shares issuable upon exercise of currently
exercisable warrants. The number of Common Shares beneficially owned after
the offering includes 6,668 shares issuable upon exercise of currently
exercisable warrants.
(16) The number of Common Shares beneficially owned before the offering and
offered for sale includes 4,795 shares issuable upon exercise of currently
exercisable warrants. The number of Common Shares beneficially owned after
the offering includes 1,488 shares issuable upon exercise of currently
exercisable warrants.
(17) Address is 153 East 53rd Street, New York, New York.
(18) 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
14
<PAGE>
the sole power to dispose or direct the disposition of the shares
beneficially owned by the III Fund.
(19) Based upon Schedule 13G filed with the Commission and other information
available to the Company, the number of Common Shares beneficially owned
before and after the offering includes 168,582 and 33,333 shares,
respectively, issuable upon exercise of currently exercisable warrants.
(20) The number of Common Shares beneficially owned before the offering and
offered for sale by the III Fund includes 126,436 shares issuable upon
exercise of currently exercisable warrants. The number of Common Shares
beneficially owned after the offering includes 25,000 shares issuable upon
exercise of currently exercisable warrants.
(21) The number of Common Shares beneficially owned before the offering and
offered for sale includes 42,146 shares issuable upon exercise of currently
exercisable warrants. The number of Common Shares beneficially owned after
the offering includes 8,333 shares issuable upon exercise of currently
exercisable warrants.
(22) Shares (excluding shares subject to outstanding options) are held subject
to a Voting Trust Agreement as described in footnote (5).
(23) Includes 15,000 shares issuable upon exercise of currently exercisable
options.
(24) Shares are held in trust for the benefit of the various beneficial owners.
(25) Represents shares issuable upon exercise of options which are exercisable
currently or within 60 days.
(26) 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.
(27) Does not include shares beneficially owned by Elron for which Mr. Peri and
Dr. Ben-Zvi serve as officers.
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.
15
<PAGE>
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 another Elron representative
served as the second designee from September 1994 until his resignation as a
director in May 1995; in December 1995, Dr. Jacov Ben-Zvi, an Elron designee,
was elected a director to fill the vacancy created thereby); (ii) Avshalom
Aderet served as President of PC Etcetera Israel Ltd. ("PC Israel"), a
wholly-owned subsidiary of the Company, from August 1994 to April 1996 and has
served as 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 served as
employees of PC Israel; (iv) Joshua Ruch, a grantor of Gibraltar Trust, has a
minority equity 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; and (v) effective December 5, 1995, certain of the
Selling Stockholders loaned an aggregate of $500,000 to the Company as described
under Item 12 of the 1995 Form 10-KSB incorporated herein by reference.
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.
As indicated above, Elron currently has the right to designate two persons
to the Board of Directors of the Company. Such right, which Elron has exercised,
shall continue, however, only for as long as it beneficially owns equity
securities of the Company representing, or which are convertible into, at least
20% of the outstanding Common Shares of the Company. Of the 858,750 Common
Shares owned by, or issuable to, Elron, 840,000 are registered for resale
pursuant to the Registration Statement of which this Prospectus forms a part. In
the event, sales by Elron reduce its beneficial ownership below the 20%
threshold, it will no longer have the right to designate any directors of the
Company. Any sales by Elron prior to August 12, 1996 will require the prior
written approval of the Company.
Similarly, a representative of Justy, Yozma, SVE II, SVE III and SVE IIIA
(collectively, the "STAR Entities") has the collective right to designate one
person to the Board of Directors of the Company for so long as the Star Entities
beneficially own collectively at least 10% of the outstanding Common Shares of
the Company. To date, such right has not been exercised. As with
16
<PAGE>
Elron, substantially all of the shares beneficially owned by the Star Entities
have been registered for resale. In the event sales by such entities reduce
their collective beneficial ownership below 10% of the outstanding Common
Shares, they will no longer have the right to designate a director of the
Company.
DESCRIPTION OF COMMON STOCK
The Company is currently authorized to issue 15,000,000 Common Shares, par
value $.01 per share. As of April 30, 1996, there were 3,137,462 Common Shares
issued and outstanding (including the 200,000 issuable as described under
"Subsequent Events") and held of record by approximately 70 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 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.
EXPERTS
The consolidated balance sheet of the Company as of December 31, 1995 and
the consolidated statements of operations, stockholders' equity and cash flows
of the Company for the year then ended included in the 1995 Form 10-KSB
incorporated by reference in this Prospectus have been so incorporated in
reliance on the report of Arthur Andersen LLP, independent auditors, given
17
<PAGE>
upon the authority of that firm as experts in auditing and accounting.
The consolidated statements of operations, stockholders' equity and cash
flows of the Company for the year ended December 31, 1994 included in the 1995
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 revenues
constituting 4% of the consolidated revenues of the Company for the year ended
December 31, 1994. 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 statements of income, changes in shareholders' deficiency and
cash flows of PC Israel for the period ended December 31, 1994, given upon the
authority of that firm as experts in auditing and accounting, has been included
in the 1995 Form 10- KSB and incorporated by reference in this Prospectus.
18
<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 ......................................... $ 2,070.65
Accountants' Fees and Expenses ........................... 10,000.00
Legal Fees and Expenses .................................. 30,000.00
Printing ................................................. 3,000.00
Miscellaneous ............................................ 929.35
----------
Total .................................................. $46,000.00
==========
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 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
II-1
<PAGE>
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(a) 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)
(b) Stock Purchase Agreement dated as of January 31, 1996 by
and between Training Holdings L.L.C. and PC Etcetera,
Inc.(2)
4(a) Certificate of Incorporation, as amended.(3)
(b) Certificate of Designation with regard to Series A
Preferred Shares.(4)
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.(5)
(c) Lease for premises situated at 19 Fulton Street, New
York, New York.(6)
II-2
<PAGE>
(d) Lease for premises situated at 120 Wood Avenue South,
Iselin, New Jersey.(6)
(e) Lease Amendment for premises situated at 120 Wood Avenue
South, Iselin, New Jersey.*
(f) Amended and Restated 1987 Stock Option Plan.(7)
(g) Agreement dated as of May 30, 1989 among Terry I.
Steinberg, Joseph Sabrin and the Registrant, as amended.(5)
(h) Financing Agreement - Receivables dated November 20, 1990
between the Registrant and Rosenthal & Rosenthal, Inc.*
(i) Stockholders' Agreement dated as of August 12, 1994 among
the Registrant, Elron Electronic Industries
Ltd.("Elron"), Adar International, Inc, Elron
Technologies Inc., Terry I. Steinberg, Joseph Sabrin and
Gilbert H. Steinberg.(1)
(j) 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
("Gibraltar"), Justy Ltd. ("Justy"), Yozma Venture
Capital Ltd. ("Yozma"), 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")(collectively, the "Series B
Purchasers").(4)
(k) 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.(4)
(l) Loan and Registration Rights Agreement dated December 5, 1995
among the Registrant, Gibraltar, Justy, Yozma, SVE II, SVE
III, SVE IIIA, Elron and Gilbert H. Steinberg (collectively,
the "Lenders").*
(m) Form of Promissory Note dated December 5, 1995 issued to
the Lenders with regard to $500,000 aggregate principal
amount of indebtedness.*
(n) Form of Warrant dated December 5, 1995 issued to the
Lenders for the purchase of an aggregate of 75,000 Common
Shares of the Registrant.*
13 Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1996.8
23(a) Consent of Arthur Andersen LLP.**
(b) Consent of Norman Stumacher.*
II-3
<PAGE>
(c) Consent of Luboshitz, Kasierer & Co.*
(d) 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).
*Denotes document previously filed as an exhibit to this
Registration Statement.
- ----------
**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 Current Report on
Form 8-K for an event dated January 31, 1996 (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, 1995 (File No. 0-17419) and
incorporated herein by reference.
(4) 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.
(5) 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.
(6) 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.
(7) 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.
(8) Denotes document filed with the Commission (File No. 0-17419) and
incorporated herein by reference.
II-4
<PAGE>
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; notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of the
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective 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.
(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
II-5
<PAGE>
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-6
<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 16th day of
May, 1996.
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.
<TABLE>
<CAPTION>
<S> <C> <C>
* Chairman and Director May 16, 1996
- ---------------------
Martin F. Kahn
President, Treasurer
and Director
(Principal Executive
* and Financial Officer) May 16, 1996
- ----------------------
Terry I. Steinberg
Executive Vice President,
Secretary and
* Director May 16, 1996
- ------------------------
Joseph Sabrin
Controller (Principal
* Accounting Officer) May 16, 1996
- ------------------------
Adrienne Haber
* Director May 16, 1996
- ------------------------
Avshalom Aderet
* Director May 16, 1996
- ------------------------
Abraham Peri
________________________ Director
Jacov Ben-Zvi
</TABLE>
<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
and 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
May 16, 1996
Exhibit 5
May 16, 1996
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
Amendment No. 3 to 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,
which Registration Statement covers 2,405,744 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 745,744 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.
May 16, 1996
Page 2
Based upon and subject to the foregoing, including the assump tions 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
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement (File No. 33-93842) of our report dated
March 8, 1996 included in PC Etcetera, Inc's Form 10-KSB for the year ended
December 31, 1995 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
New York, New York
May 16, 1996
