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As filed with the Securities and Exchange Commission on May 29, 1997
Registration No. 333-17071
- --------------------------------------------------------------------------------
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Amendment No. 1 to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MBf USA, INC.
(Name of registrant in its charter)
MARYLAND 73-1326131
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification Number)
500 Park Boulevard, Suite 1260, Itasca, Illinois 60143
(630) 285-9191
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
MR. EDWARD J. MARTEKA
500 PARK BOULEVARD, SUITE 1260, ITASCA, ILLINOIS 60143
(630) 285-9191
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
MITCHELL D. GOLDSMITH
DENNIS B. O'BOYLE
SHEFSKY & FROELICH LTD.
444 N. MICHIGAN AVENUE
CHICAGO, ILLINOIS 60611
(312) 527-4000
(312) 527-5921 (FACSIMILE)
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: as soon as practicable after
this Registration Statement has become effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box:
[ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ] ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(b) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ] ______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting prusuant to said Section 8(a)
may determine.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to pay be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED MAY 29, 1997
PRELIMINARY PROSPECTUS
1,978,571 SHARES
OF
MBf USA, INC.
COMMON STOCK
($0.01 PAR VALUE)
This Prospectus relates to the public offering of up to 1,978,571
shares of Common Stock, $.01 par value (the "Shares" or the "Common Stock"), of
MBf USA, Inc. (the "Company"). All of the Shares offered hereby may be sold
from time to time by the selling shareholders described herein (each a "Selling
Shareholder," collectively, the "Selling Shareholders").
The Shares trade on the Nasdaq SmallCap Market under the symbol "MBFA."
On May __, 1997, the last reported bid price was $______ for the Shares.
The Selling Shareholders and any broker-dealers through whom such
Shares are sold may be deemed "underwriters," as that term is defined in the
Securities Act of 1933, as amended (the "Securities Act"). The Shares to be
offered by the Selling Shareholders may be offered in one or more transactions
on the Nasdaq/SmallCap Market or in negotiated transactions or a combination of
such methods of sale, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices.
Brokers or dealers may receive commissions or discounts from the
Selling Shareholders in amounts to be negotiated immediately prior to the sale.
The Company will pay substantially all other expenses of this offering
(including the expense of preparing and duplicating this Prospectus and the
Registration Statement of which it is a part). The Company will not receive
any proceeds from the sale of any of the Shares by the Selling Shareholders.
SEE "RISK FACTORS" ON PAGE 6 FOR INFORMATION THAT SHOULD BE CONSIDERED
BY PROSPECTIVE INVESTORS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE
The date of this Prospectus is May __, 1997
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DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference. The Company's file number with
the Commission for all reports filed under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), is 0-17458:
1. The Company's Annual Report on Form 10-K, for fiscal year
ended December 31, 1996 (filed on April 11, 1997).
2. The Company's Quarterly Report on Form 10-Q, for the quarter
ended March 31, 1997 (filed on May 15, 1997).
3. The Company's Current Report on Form 8-K dated March 27, 1997
(filed April 5, 1997).
4. All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934
prior to the termination of the offering made hereby, shall be
deemed to be incorporated by reference in this Prospectus.
5. The Company's Form 8-A dated February 2, 1989.
Any statements contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which is also deemed to be incorporated
by reference herein modifies or supersedes such statements. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (OTHER THAN EXHIBITS
THERETO) ARE AVAILABLE WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST BY ANY
PERSON TO WHOM THIS PROSPECTUS HAS BEEN DELIVERED, FROM THE COMPANY. REQUESTS
TO OBTAIN SUCH DOCUMENTS SHOULD BE DIRECTED TO THE COMPANY, 500 PARK BLVD.,
SUITE 1260, ITASCA, ILLINOIS, 60143, ATTN.: MR. STEPHEN TAN (TELEPHONE:
(630) 285-9191).
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THE COMPANY
MBf USA, Inc. (the "Company"), known as American Drug Screens, Inc.
("ADS") until May 21, 1993, was organized February 24, 1988, under Oklahoma law
as SHL, Inc. The Company was reorganized upon the acquisition of ADS on June
28, 1988, whereby ADS was merged with and into the Company, with the Company
being the surviving corporation and assuming control of the ownership and
operation of ADS. The name of the surviving corporation was changed to ADS on
the effective date of the merger.
On February 27, 1992, the Company acquired American Health Products
Corporation ("AHPC") from MBf International Limited, a Hong Kong corporation
("MBfI"), which is a subsidiary of MBf Holdings Bhd ("MBf Holdings"). AHPC
markets latex examination gloves. In connection with the acquisition of AHPC,
the Company issued a class of securities to MBfI giving control of the Company
to MBfI. See "Risk Factors--Control of Board of Directors."
In June 1995, the Company announced a restructuring plan which
included the resignation of its Chairman/CEO, President/COO, and CFO. The
Board of Directors filled the vacancies of its executive management team by
electing Mr. Loi Heng Sewn from MBf Holdings as its Chairman. Mr. Loi was
formerly the President of MBf Holdings' manufacturing facilities. Mr. Edward
J. Marteka was named President of the Company while retaining his
responsibilities as President of AHPC, which he co-founded. The Board of
Directors directed the Company to focus on its core businesses and to exit the
nutritional products business which it had commenced during the third quarter
of 1994, for which sales were negligible and the entry costs were very high,
contributing to significant losses. Furthermore, the use of AHPC's cash flow
for starting the nutritional products business was limiting AHPC's ability to
purchase glove inventory.
Key components of the restructure charge were costs related to the
exit of the nutritional product business, executive management changes, and the
closing of the former executive office in New Jersey. The charge includes
provisions for personnel severance and work force reductions, relocation and
related costs, the write down of intangible and other assets, and costs
associated with the execution of the restructure. The restructuring resulted
in a one-time charge of $1,808,757 in the second quarter of 1995, which is
expected to be paid over the next twelve months.
On December 11, 1995 the Company's shareholders approved the
reincorporation of the Company as a Maryland corporation by merger of the
Company into a newly formed, wholly owned subsidiary of the Company. In
connection with the reincorporation, the Board of Directors approved and the
Company effected a 10 for 1 reverse stock split of its Series A Common Stock
and Common Stock. As a result, each shareholder was entitled to receive one
share of Series A Common Stock or Common Stock of the Company's successor
subsequent to the Merger for every 10 shares of Series A Common Stock or Common
Stock, respectively, then held by such shareholder.
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LATEX GLOVE PRODUCTS
Through its subsidiary, AHPC, the Company markets non-sterile,
ambidextrous latex and vinyl examination gloves used primarily in the health
care industry. Gloves marketed by AHPC are manufactured by PIE Healthcare Sdn
Bhd ("PIE"), PT MBf Buana Multicorpora ("PT Buana"), a 70% subsidiary of the
Company, and other third parties. Gloves are marketed by AHPC under the brand
names "Glovetex(R)" and "DermaSafe(R)" to medical/surgical distributors,
dental distributors, nursing homes and food service distributors. AHPC also
sells gloves to other companies, which market the gloves under their own brand
names or "private labels."
In addition to the standard examination gloves, AHPC distributes other
product lines which include hypoallergenic gloves, powder-free gloves, vinyl
examination gloves and latex utility gloves. In 1991, PIE obtained FDA
approval of its 510(k) application which entitles it to label its DermaSafe(R)
gloves as "hypoallergenic." AHPC began selling the hypoallergenic DermaSafe(R)
gloves in the United States in January 1992. The hypoallergenic gloves are
also available to private label customers. Expansion of the product line into
other latex-based products is planned, and AHPC has identified for possible
introduction in the future such products as industrial gloves and other
products related to infection-control.
AHPC purchases its powder-free latex gloves from an unrelated
Malaysian factory. AHPC has entered into a supply agreement with this company
for its powder free gloves which will enable the Company to obtain the
necessary inventory levels to meet customer glove demands.
AHPC markets latex gloves through a network of national, regional and
local medical/surgical dealers that sell primarily to hospitals and nursing
homes. AHPC also markets to alternate care and home health care dealers,
dental dealers, food service distributors, and major retail outlets. The
principal methods of marketing are trade shows, seminars, and sales
representatives, as well as advertising and direct mail. In addition, AHPC
employs a sales force of 25 persons comprised of manufacturer sales
representatives, regional sales managers and representatives and an
in-house sales and customer support staff.
The quality control procedures for the manufacture of examination
gloves marketed in the United States are regulated by the FDA. Included within
such procedures are minimum testing requirements, as well as FDA Good
Manufacturing Practices. As explained previously, in order to be labeled
"hypoallergenic," latex examination gloves must meet more stringent FDA
testing requirements.
The market for latex examination gloves is highly competitive. With
the discovery of the Acquired Immune Deficiency Syndrome/HIV virus ("AIDS") in
the 1980's, and the perception of the latex glove as being a barrier to
infection from AIDS and other communicable diseases, several companies entered
the latex glove industry, many of which failed or were acquired by other
companies. Further consolidation of companies in the industry may be expected
to occur in the future. The primary means of competition are price, product
quality, service, and the size and reliability of the manufacturer.
LATEX CONDOM PRODUCTS
On December 30, 1993 the Company purchased the rights to the condom
license agreement dated December 31, 1992 between Playboy Enterprises, Inc.
("PEI") and MACC Trading Limited, an affiliate of MBf Holdings. In November
1996, the Company reached an amicable agreement with Playboy Enterprises, Inc.
to terminate the license agreement under which the Company distributed
Playboy(R) brand
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condoms in 15 countries. Under the negotiated agreement, the Company will,
until June 30, 1997, continue to sell Playboy(R) condoms in the 15 countries
where it has launched the product. Subsequent to June 30, 1997, the Company
will be entitled to receive royalty revenues on sales of Playboy(R) condoms in
these countries and Japan through June 30, 2000 and 1998, respectively.
Prior to October 1996, condoms bearing the Playboy(R) brand name and
rabbit-head design marketed by the Company were manufactured primarily by MBf
Personal Care Sdn. Bhd., a Malaysian company ("MBf Personal Care"), which
accounted for 95% of the Company's products. Subsequent to October 1996, the
Company purchased its condoms from an unrelated manufacturer following the sale
of MBf Personal Care's plant by its parent.
Condoms are marketed by the Company through a network of international
distributors. Each authorized distributor sells and distributes the condom
products throughout an identified country to consumers through normal retail
channels of distribution for such country. Typically, these channels include
pharmacies, supermarkets, chain stores and supermarkets. The Company had
entered into 23 distribution agreements for the sale and distribution of the
condom products but only had condom sales in 15 countries.
The Company works closely with each distributor in each country to
obtain governmental approval, if necessary, indicating that the Playboy(R)
brand condom meets the quality control procedures for the manufacture of latex
condoms and quality specification standards for condoms as determined by each
such country. The Company has met the specification standards for latex condom
products in each country wherein the Playboy(R) brand condom is distributed.
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RISK FACTORS
This offering involves a high degree of risk. Prospective investors
in the Company should consider carefully the following risk factors with
respect to the Company and this offering.
Product Liability Insurance. Participants in the medical supplies
business are potentially subject to lawsuits alleging product liability, many
of which involve significant damage claims and defense costs. A successful
claim against the Company in excess of the Company's insurance coverage could
have a material adverse effect on the Company's results of operations or
financial condition. Claims made against the Company, regardless of their
merit, could also have a material adverse effect on the Company's reputation.
There is no assurance that the coverage limits of the Company's insurance
policy will be adequate or that present levels of coverage will be available at
affordable rates in the future. While the Company has been able to obtain
product liability insurance in the past, such insurance varies in cost, is
difficult to obtain and may not be available in the future on acceptable terms
or at all. The Company is subject to a number of lawsuits filed against it and
other manufacturers of latex gloves alleging injuries relating to allergic
reactions caused by the residual chemicals or latex proteins in gloves.
However, management believes all such matters are adequately provided for,
and if not provided for are without merit or involve such amounts that would
not materially adversely affect the Company's results of operations or
financial condition.
Dependence Upon Significant Customers. During 1996, two of the
Company's customers, Owens & Minor, Inc. and Sysco Co., accounted for
approximately 34.1% and 29.2% of net sales, respectively. The loss of either
of the Company's principal customers would have a material adverse effect on the
Company.
Control of Board of Directors by MBfI. MBfI, as the sole holder of the
Company's Series A Common Stock, has the right to elect seven Class A Directors,
which constitutes a majority of the Company's Board of Directors. As a result,
MBfI controls the Board. Even if the Series A Common Stock owned by MBfI,
which is convertible into Common Stock of the Company and which elects the two
Class B Directors of the Company, is converted into Common Stock, MBfI may
nonetheless own a sufficient number of shares of Common Stock to effectively
control of the Company. MBfI's control of the Company's Board of Directors may
have certain anti-takeover effects since there are significant impediments,
both existing and contingent, for any potential purchaser of a majority of the
Company's Common Stock to gain control of the Company. Because MBfI owns all
of the Company's authorized Series A Common Stock, the only presently available
method for a potential purchaser to obtain control of the Company would be to
hold at least a majority of the Series A Common Stock. Absent conversion of
Series A Common Stock into Common Stock, a potential purchaser would not be
able to obtain control of the Company by simply owning a majority of the
Common Stock. See "Selling Shareholders" for information concerning a recently
signed agreement between MBfI and Wembley Rubber Products (M) Sdn. Bhd.
("Wembley") wherein MBfI agreed to sell all of its Class A Common Stock to
Wembley.
Absence of Dividends; Dividends Policy. The Company has not paid any
dividends upon its Shares since it formation. The Company does not currently
intend to pay any dividends upon it Shares in the foreseeable future and
anticipates that earnings, if any, will be used to finance the development and
expansion of its business. Any payment of future dividends and the amounts
thereof will be dependent upon the Company's earnings, financial requirements
and other factors deemed relevant by the Company's Board of Directors. The
Company cannot provide any assurance that its operations will result in
revenues sufficient to enable the distribution of dividends to shareholders.
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Variations in Quarterly Results. The Company's quarterly operating
results are subject to various risks and uncertainties, including risks and
uncertainties related to: local economic conditions; competitive pressures; the
composition, timing and size of orders from and shipments to major customers;
variations in product mix and the size mix between sales; variations in product
cost; infrastructure costs; obsolescence of inventory; and other factors as
discussed below. Accordingly, the Company's operating results may vary
materially from quarter to quarter.
The Company operates with little backlog and, as a result, net product
sales in any quarter are substantially dependent on the orders booked and
shipped in that quarter. Because the Company's operating expenses are based on
anticipated revenue levels and because a high percentage of the Company's
expenses are relatively fixed, if anticipated shipments in any quarter do not
occur as expected, the Company's operating results may be adversely effected and
fall significantly short of expectations. Any other unanticipated decline in
the growth rate of the Company's net revenues, without a corresponding and
timely reduction in the growth of operating expenses, could also have an
adverse effect on the Company and its future operating results.
The Company aims to prudently control its operating expenses. However,
there is no assurance that, in the event of any revenue, gross margin or other
shortfall in a quarter, the Company will be able to control expenses
sufficiently to meet profitability objectives for the quarter.
Financing. The Company's current credit facility expires October 31,
1997, and there can be no assurances that it will be renewed, extended or
sufficient to finance continued growth of the Company. The facility is
guaranteed by MBf Holdings, which has significantly greater resources than the
Company. Should such guarantee not continue to be made available to the
Company, there can be no assurances that the Company will be able to obtain
the same level of, or interest rate for, bank financing.
Working Capital Deficit. The Company's balance sheet for the year
ended December 31, 1996 shows current assets of $14,416,294 and current
liabilities of $16,121,561, resulting in a working capital deficit of
$1,705,267. For the year ended December 31, 1995, the Company had a working
capital surplus of $2,915,498. Although the Company is aggressively working
toward eliminating this deficit, the Company is unable to guarantee that it
will be successful in its efforts.
Dependence on Gloves. The Company is exclusively engaged in the
manufacture and sale of disposable gloves. Accordingly, the Company's results
of operations and financial condition are highly dependent on the level of
supply of and demand for disposable gloves. There can be no assurance that the
supply of or demand for disposable gloves will continue at current levels or
that changes in such supply or such demand will not have a material adverse
effect on the Company's results of operations or financial condition. In
addition, the Company currently has a substantial investment in PT Buana, which
exclusively manufacturers powdered gloves, as well as a long term supply
contract with PIE Healthcare for the purchase of powdered gloves. Should the
demand for powdered gloves decline, due to the greater level of allergic
reactions associated with such gloves than powder free latex or synthetic
gloves, then the Company will continue to be subject to the aforesaid
commitments. Conversions of powdered glove manufacturing capacity to powder
free capacity requires substantial time, capital investment and know how, and
there can be no assurance such conversion could be made economically or at all,
in the event of a substantial decline in the demand for powdered gloves.
Dependence on Rubber Harvest and Latex Concentrate. The ability of
the Company to produce and purchase its products profitably is entirely
dependent upon the consistent availability, at competitive
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prices, of raw rubber harvested by independent growers in Malaysia and
Indonesia and locally processed by the Company and others into latex
concentrate. Any disruption in the consistent supply of rubber for latex
concentrate due to weather or other natural phenomena, labor or transportation
stoppages, shortages or other factors, could cause significant adverse effects
to the Company's results of operations and financial condition. In addition,
rubber is a commodity traded on world commodities exchanges and is subject to
price fluctuations driven by changing market conditions over which the Company
has no control. Increases in the price of latex concentrate have adversely
effected the Company's raw material costs in the past and could do so again.
Changes in Gross Margins. Certain of the Company's net product sales
are derived from products and markets which typically have lower gross margins
compared to other products and markets, due to higher costs and/or lower prices
associated with the lower gross margin products and markets. The Company
currently expects that its net product sales from powder free gloves will
continue to increase as a percentage of total net product sales. In addition,
the Company is currently experiencing pricing pressures due to a number of
factors, including competitive conditions, consolidation within certain groups
of suppliers and changing technologies in the production of powder-free gloves
and increasing demand for new glove products. To the extent that these factors
continue, the Company's gross margins would decline, which would adversely
effect the Company and its future operating results.
Downward pressure on the Company's gross margins may be mitigated by
other factors, such as reduction in product costs and/or an increased
percentage of new product sales from higher gross margin products, such as
powder free gloves. The Company is aiming to reduce its product costs and to
increase its percentage of net product sales from powder free gloves. However,
there is no assurance that these efforts will be successful.
New Glove Products. The Company is planning to distribute a number of
new glove products, in addition to the glove products released in 1996,
including synthetic and powder free vinyl gloves. There is no assurance that
these development efforts will be successful or that, if successfully
developed, these products will achieve commercial success.
Growth Dependencies. In general, the Company's future growth is
dependent on the Company's ability to successfully and timely enhance existing
products, develop and introduce new products, establish new distribution
channels, develop affiliations with leading market participants and continue to
develop its relationships with its existing customer base. The failure to
achieve these and other objectives could limit future growth and have an
adverse effect on the Company and its future operating results.
On a related note, the pressure to develop and enhance products, and
to establish and expand markets may cause the Company's selling, general and
administrative expenses to increase substantially, which could also have an
adverse effect on the Company and its future operating results.
International Operations. The Company's international manufacturing
operation has grown substantially, and, thus, the Company is increasingly
affected by the risks associated with international operations. Such risks
include: managing an organization in Indonesia; fluctuations in currency
exchange rates; the burden of complying with international laws and other
regulatory and product certification requirements; changes in such laws and
requirements; tariffs and other trade barriers; import and export controls;
international staffing and employment issues; and political and economic
stability. The inability to effectively manage these and other risks could
adversely effect the Company and its future operating results.
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Competition. The various markets in which the Company operates are
becoming increasingly competitive as a number of other companies develop and
sell products that compete with the Company's products in these markets.
Certain of these competitors have significantly more financial and technical
resources than the Company. The Company faces additional competitive factors
besides price, such as product quality, consistency, timeliness of delivery,
service, and the size and reliability of the manufacturer. These competitive
factors may result in, among other things, price discounts by the Company and
sales lost by the Company to competitors that may adversely affect the Company
and its future operating results.
Third-Party Distributors. The Company uses various channels to
market and distribute its products primarily by sales to end-users via
third-party distributors. Third-party distributors are a substantial channel for
distribution to medical facilities. Accordingly, the Company's ability to
market and distribute its products depends significantly on its relationship
with third-party distributors, as well as the performance and financial
condition of these distributors. In the event that the Company's relationship
with its distributors deteriorates, or the performance or financial condition
of the distributor becomes unsatisfactory, the Company and its future operating
results could be adversely affected.
Excess or Obsolete Inventory. Managing the Company's inventory of
various size mix and product mix is a complex task. A number of factors,
including the need to maintain a significant inventory of certain sizes or
products which are in short supply or which must be purchased in bulk to obtain
favorable pricing, the general unpredictability of demand for specific products
and customer requests for quick delivery schedules, may result in the Company
maintaining excess inventory. Other factors, including changes in market demand
and technology, may cause inventory to become obsolete. Any excess or obsolete
inventory could result in price reductions and inventory write-downs, which, in
turn, could adversely effect the Company and its operating results.
Hiring and Retention of Employees. The Company's continued growth
and success depend to a significant extent on the continued service of senior
management and other key employees and the hiring of new qualified employees.
Competition for highly skilled business, technical, marketing and other
personnel is intense, particularly in the strong economic cycle currently
prevailing for companies. The loss of one or more key employees or the
Company's inability to attract additional qualified employees or retain other
employees could have an adverse effect on the Company and its future operating
results. In addition, the Company may experience increased compensation costs in
order to compete for skilled employees.
Stock Market Fluctuations. In recent years, the stock market in
general, including the Company's Common Stock, have experienced extreme price
fluctuations. The market price of the Company's Common Stock may be
significantly affected by various factors such as: quarterly variations in the
Company's operating results; changes in revenue growth rates for the Company;
changes in earnings estimates by market analysts; the announcement of new
products or product enhancements by the Company or its competitors;
speculation in the press or analyst community; and general market conditions or
market conditions specific to particular industries. There can be no assurance
that the market price of the Company's Common Stock will not experience
significant fluctuations in the future.
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USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Shares by
the Selling Shareholders.
SELLING SHAREHOLDERS
A total of 1,978,571 Shares may be offered by the Selling
Shareholders. The following table sets forth certain information with respect
to the Selling Shareholders and the Shares which they beneficially own. The
Company will not receive any of the proceeds from the sale of such Shares.
<TABLE>
<CAPTION>
Shares Shares to be
Shares Beneficially Being Beneficially
Owned Prior Offered Owned After
to Offering(1) Offering (1)(2)
-----------------------------------------------------------
Selling Shareholders Number Percent Number Percent
------- ------------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
MBf International Ltd., Hong Kong 2,934,813 (1) 68.1% 1,682,275 1,252,538 29.1%
17th Floor, One Pacific Place
88, Queensway
Hong Kong
PIE Healthcare Sdn Bhd, Malaysia 296,296 (1) 6.9% 296,296 0 -
---------
158 Jalan Selar, Taman Cantik
4 1/2 Miles, Jalan Cheras
56100 Kuala Lumpur, Malaysia
TOTAL
3,231,109 (1)
---------
</TABLE>
(1) Includes 1,252,538 shares of Series A Common Stock which are convertible at
the option of MBf I into shares of Common Stock on a one-for-one basis.
(2) Assumes the sale of all Shares offered pursuant to this Prospectus.
However, since the Shares offered pursuant to this Prospectus are not being
underwritten, no estimate can be given as to the exact number of Shares
that will be held by the Selling Shareholders after the offering.
Based on information provided by the Selling Shareholders, and subject to
the limitations set forth in the notes to the table above, the Selling
Shareholders beneficially own approximately 68% of the Company's outstanding
Shares prior to this Offering. Beneficial ownership after the offering of
these Shares will depend upon the number of Shares sold by the Selling
Shareholders.
In October 1995, the Company issued 250,980 shares of Common Stock to MBfI
for $1,200,000. MBfI loaned the Company $1,200,000 to pay for AHPC's 7%
Cumulative Preferred Stock, having a value of $1,200,000, which the Company had
purchased on September 29, 1995. MBfI agreed to accept shares of the Company's
Common Stock having a value of $1,200,000 in satisfaction of the Company's
indebtedness to it.
In October 1995, the Company issued 255,072 shares of Common Stock to MBfI
in exchange for (i) a 70% equity interest in PT Buana, an Indonesian
corporation owning a glove manufacturing factory, and (ii) a note receivable in
the amount of $737,769.
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In June 1996, the Company issued 488,973 Shares and 296,296 Share to
MBfI and PIE, respectively, the proceeds of which were used to provide working
capital to the Company.
In August 1996, the Company issued 672,269 Shares to MBfI, the proceeds of
which were used to provide working capital to the Company.
The Company recently announced that Wembley Rubber Products (M) Sdn. Bhd.
("Wembley"), the largest Malaysian powder-free glove company and principal
supplier of the Company's powder-free latex business glove, has entered into
two agreements totaling $13,000,000 with the Company and MBfI. The agreements
call for: (1) the purchase by Wembley of all of the Company's Class A Common
Stock (1,252,538 shares) from MBfI at $5.00 per share for a value of
$6,270,000. MBfI will retain its 1,682,275 shares of common stock of the
Company; and (2) the purchase by Wembley of 2,500,000 unregistered shares of
Common Stock at a price of $2.70 per share, with demand registration rights.
The Company will receive $6,750,000 in proceeds which will be applied toward
working capital, to expand market share, introduce new products, reduce debt
and introduce advanced technologies to the Company's 70% owned powdered latex
glove manufacturing factory in Indonesia. The Company has received a fairness
opinion from The Griffing Group supporting the proposed equity infusion.
Under the Exchange Act and the regulations thereunder, any person engaged
in a distribution of any Shares offered by this Prospectus may not
simultaneously engage in market-making activities with respect to any Shares
during the applicable "cooling off" period prior to the commencement of such
distribution. In addition, and without limiting the foregoing, the Selling
Shareholders will be subject to applicable provisions of the Securities Act of
1933, as amended (the "Securities Act"), the Exchange Act and the rules and
regulations thereunder, including, without limitation, Regulation M under the
Securities Act, in connection with transactions in the Shares, which provisions
may limit the timing of purchases and sales of Shares by the Selling
Shareholders.
11
<PAGE> 13
PLAN OF DISTRIBUTION
This Prospectus, as appropriately amended or supplemented, may be used from
time to time by the Selling Stockholders, or their transferees, to offer and
sell the Shares in transactions in which the Selling Stockholders and any
broker-dealer through whom any of the Shares are sold may be deemed to be
underwriters within the meaning of the Securities Act. The Company will
receive none of the proceeds from any such sales. There presently are no
arrangements or understandings, formal or informal, pertaining to the
distribution of the Shares.
The Company anticipates that resales of the Shares by the Selling
Shareholders will be effected from time to time on the open market in ordinary
brokerage transactions in the Nasdaq SmallCap Market ("Nasdaq Small Cap"), on
which the Common Stock is included for quotation, in the over-the-counter
market, or in private transactions. The Shares will be offered for sale at
market prices prevailing at the time of sale or at negotiated prices and on
terms to be determined when the agreement to sell is made or at the time of
sale, as the case may be. The Shares may be offered directly by the Selling
Shareholders or through brokers or dealers. A member firm of the National
Association of Securities Dealers, Inc. ("NASD") may be engaged to act as the
Selling Shareholders' agent in the sale of the Shares by the Selling
Shareholders and/or may acquire Shares as principal. Member firms
participating in such transactions as agent may receive commissions from the
Selling Shareholders (and, if they act as agent for the purchaser of such
Shares, from such purchaser), such commissions computed, in appropriate cases,
in accordance with the applicable rates of the NASD, which commissions may be
negotiated rates where permissible. Sales of the Shares by the member firm may
be made on the Nasdaq SmallCap from time to time at prices related to prices
then prevailing.
Participating broker-dealers may agree with a Selling Stockholder to sell a
specified number of shares at a stipulated price per share and, to the extent
such broker dealer is unable to do so acting as agent for a Selling
Shareholder, to purchase as principal any unsold shares at the price required
to fulfill the broker-dealer's commitment to a Selling Shareholder.
Broker-dealers who acquire Shares as principal may thereafter resell such
Shares from time to time in transactions on the Nasdaq SmallCap, in negotiated
transactions, or otherwise, at market prices prevailing at the time of sale or
at negotiated prices.
Upon the Company's being notified by a Selling Shareholder that a
particular offer to sell the Shares is made and a material arrangement has been
entered into with a broker-dealer for the sale of Shares, a supplement to this
Prospectus will be delivered together with this Prospectus and filed pursuant
to Rule 424(b) under the Securities Act setting forth with respect to such
offer or trade the terms of the offer or trade; including: (i) the number of
Shares involved; (ii) the price at which the Shares were sold; (iii) any
participating brokers, dealers, agents or member firm involved; (iv) any
discounts, commissions and other items paid as compensation from, and the
resulting net proceeds to, the Selling Shareholder;
12
<PAGE> 14
and (v) other facts material to the transaction.
Shares may be sold directly by a Selling Shareholder or through agents
designated by a Selling Shareholder from time to time. Unless otherwise
indicated in the supplement to this Prospectus, any such agent will be acting
on a best efforts basis for the period of its appointment.
The Selling Shareholders and any brokers, dealers, agents, member firm or
others that participate with the Selling Shareholders in the distribution of
the Shares may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commissions or fees received by such persons and any
profit on the resale of the Shares purchased by such person may be deemed to be
underwriting commissions or discounts under the Securities Act.
The Selling Shareholders will be subject to the applicable provisions of
the Securities Act and the Exchange Act and the rules and regulations
thereunder, including without limitation Regulation M under the Securities Act,
which provisions may limit the timing of purchases and sales of any of the
Shares by the Selling Shareholders. All of the foregoing may affect the
marketability of the Shares.
The Company will pay substantially all the expenses incident to this
offering of the Shares by the Selling Shareholders to the public other than
brokerage fees, commissions and discounts of underwriters, dealers or agents.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the Shares may not be sold
unless the Shares have been registered or qualified for sale in such state or
an exemption from registration or qualification is available and the Company or
Selling Shareholders comply with the applicable requirements.
DESCRIPTION OF SECURITIES
The total number of shares of stock which the Company has authority to
issue is 10,000,000 shares of Common Stock, $0.01 par value and 1,252,538
shares of Series A Convertible Common Stock ("Series A Common Stock"), $0.01
par value.
The following description of the capital stock of the Company is a summary
and is qualified in its entirety by the provisions of the Company's Articles of
Incorporation and Bylaws, copies of which are on file with the Securities and
Exchange Commission.
COMMON STOCK
As of the date of this Prospectus, there are a total of 3,058,333 shares of
Common Stock outstanding. Holders of shares of Common Stock are entitled to
such dividends as may be declared by the Board of Directors from assets legally
available for that purpose, and are entitled at all meetings of shareholders to
one vote for each share held by them. The shares of Common Stock are not
redeemable and do not have any pre-emptive or conversion rights. All of the
outstanding shares of Common Stock are, and shares of Common Stock offered
13
<PAGE> 15
hereby will be, fully paid and non-assessable. In the event of a voluntary or
involuntary winding up or dissolution, liquidation, or partial liquidation of
the Company, holders of Common Stock shall participate, pro rata with the
holder of Series A Common Stock, in any distribution of the assets of the
Company.
The shares of Common Stock have non-cumulative voting rights, which means
that shareholders holding more than 50% of the shares of Common Stock can elect
100% of the Class B directors of the Company if they choose to do so.
SERIES A COMMON STOCK
All of the Company's authorized 1,252,538 shares of Series A Common Stock
are issued and outstanding. All such shares of Series A Common Stock were
issued to MBfI pursuant to the Share Exchange Agreement and 1,252,538 shares of
Common Stock have been reserved for issuance upon conversion of the Series A
Common Stock. Except as discussed below, the terms of the Series A Common
Stock are substantially the Company's Common Stock.
The Series A Common Stock is convertible at the option of MBfI into shares
of Common Stock on a one-for-one basis, subject to customary antidilution
adjustments as well as reduction to the extent that AHPC does not achieve
certain net income targets.
Series A Common Stockholders vote as a separate class for the election of
all Class A Directors and with the holders of Common Stock as a single class
with respect to any other matters subject to a vote of the shareholders. The
holders of Series A Common Stock shall have one vote for each share of Common
Stock issuable upon conversion of each share of Series A Common Stock held.
The holder of Series A Common Stock is entitled to share in any dividends
of the Company or any distributions upon liquidation or dissolution of the
Company, ratable with the holders of Common Stock, based upon the number of
shares of Common Stock issuable upon conversion of each outstanding share of
Series A Common Stock at the time of the declaration of such dividend,
liquidation or dissolution.
As of the date of this Prospectus, the 1,252,538 shares of Common Stock
issuable under the conversion of the Series A Common Stock will represent
approximately 29% of the total issued and outstanding shares of Common Stock.
Such shares will represent, upon conversion and coupled with Common Stock
Shares already owned by MBfI, a total ownership of approximately 68% of the
then outstanding shares.
TRANSFER AGENT
The transfer agent for the Common Stock is The Liberty Mutual National Bank
and Trust Company of Oklahoma City.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Maryland General Corporation Law ("MGCL") permits a corporation formed
in Maryland to include in its articles a provision eliminating or limiting the
liability of its directors and officers to the corporation or its stockholders
for money damages except for: (i) actual receipt of an improper benefit or
profit in money, property
14
<PAGE> 16
or services, or (ii) active and deliberate dishonesty established by a judgment
or other final adjudication as being material to the cause of action
adjudicated in such proceeding. The Company's Articles of Incorporation (the
"Articles") include such a provision limiting liability to the fullest extent
permitted by the MGCL.
The Company's Articles authorize it to indemnify present and former
officers and directors and to pay or reimburse expenses in advance of the final
disposition of the proceeding to the maximum extent permitted from time to time
by Maryland law. The Company's Bylaws obligate the Company to indemnify and
advance expenses to present and former officers and directors to the maximum
extent permitted by Maryland law. The MGCL permits the Company to indemnify
its present and former officers and directors, among others, against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by them
in connection with any proceeding to which they may be made a party by reason
of their service in those or other capacities unless it is established that:
(i) the act or omission of the officer or director was material to the matter
giving rise to the proceeding and was committed in bad faith or was the result
of active and deliberate dishonesty; (ii) the officer or director actually
received an improper personal benefit in money, property or services; or (iii)
in the case of any criminal proceeding, the officer or director had reasonable
cause to believe that the act or omission was unlawful. The MGCL requires the
Company, as a condition to advancing expenses, to obtain: (a) a written
affirmation by the officer of director of the individual's good faith belief
that he has met the standard of conduct necessary for indemnification by the
Company as authorized by the MGCL; and (b) a written agreement by or on his
behalf to repay the amount paid or reimbursed by the Company if it shall
ultimately be determined that the standard of conduct was not met. The
Company's Bylaws permit the Company to provide indemnification and advance
expenses to a present or former officer or director who served a predecessor of
the Company in such capacity, and to any employee or agent of the Company or a
predecessor of the Company.
LEGAL MATTERS
The validity of the issuance of the Shares offered hereby has been passed
on for the Company by Coon & Schach LLC, Baltimore, Maryland.
EXPERTS
The consolidated balance sheets of MBf USA, Inc. as of and for the years
ended December 31, 1996 and December 31, 1995 and the related consolidated
statements of operations, stockholders' equity, and cash flows for the years
ended December 31, 1996, December 31, 1995 and December 31, 1994, incorporated
by reference in this Prospectus, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said reports.
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement (of
which this Prospectus is a part) on Form S-3 under 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, certain parts of which
are omitted in accordance with the rules and regulations of the Commission.
The Registration Statement and any amendments thereto, including exhibits filed
as a part thereof, are available for inspection and copying as set forth below.
15
<PAGE> 17
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Commission. These reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; New
York Regional Office, Public Reference Room, Seven World Trade Center, 13th
Floor, New York, New York 10048; and Chicago Regional Office, Suite 1400, 500
West Madison Street, Chicago, Illinois 60661. Copies of this material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site on the Internet that contains reports, proxy and
information statements and other information regarding registrants (including
the Company) that file electronically with the Commission via EDGAR. The
address of such Web site is http://www.sec.gov. The Common Stock is included
for quotation on the Nasdaq SmallCap Market and these reports, proxy statements
and other information concerning the Company may be inspected at the office of
the Nasdaq SmallCap Market, 1735 K Street, N.W., Washington, D.C. 20006.
16
<PAGE> 18
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY TO ANY
PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL OR TO ANY PERSON TO
WHOM IT IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY OR THAT INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
DOCUMENTS INCORPORATED BY
REFERENCE . . . . . . . . . . . . . . . . . . 2
THE COMPANY . . . . . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . . 6
USE OF PROCEEDS . . . . . . . . . . . . . . . . 10
SELLING SHAREHOLDERS . . . . . . . . . . . . . 10
PLAN OF DISTRIBUTION . . . . . . . . . . . . . 12
DESCRIPTION OF SECURITIES . . . . . . . . . . 13
INDEMNIFICATION OF DIRECTORS
AND OFFICERS . . . . . . . . . . . . . . . 14
LEGAL MATTERS . . . . . . . . . . . . . . . . 15
EXPERTS . . . . . . . . . . . . . . . . . . . 15
AVAILABLE INFORMATION . . . . . . . . . . . . 15
</TABLE>
1,978,571 SHARES
MBf USA, INC.
COMMON STOCK
($0.01 PAR VALUE)
PROSPECTUS
----------
<PAGE> 19
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is a schedule of the estimated expenses to be incurred
by the Company in connection with the issuance and sale of the securities being
registered hereby. NONE OF THESE EXPENSES WILL BE BORNE BY THE SELLING
SHAREHOLDERS.
<TABLE>
<S> <C>
Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,873.64
--------
Blue Sky Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000.00*
--------
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 500.00
------
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000.00*
--------
Printing Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00*
------
Transfer Agent and Registrar Fees . . . . . . . . . . . . . . . . . . . . . . . 0.00
----
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500.00*
-------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,973.64*
---------
*Estimated.
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Maryland General Corporation Law ("MGCL") permits a corporation
formed in Maryland to include in its articles a provision eliminating or
limiting the liability of its directors and officers to the corporation or its
stockholders for money damages except for: (i) actual receipt of an improper
benefit or profit in money, property or services; or (ii) active and deliberate
dishonesty established by a judgment or other final adjudication as being
material to the cause of action adjudicated in such proceeding. The Company's
Articles of Incorporation (the "Articles") include such a provision limiting
liability to the fullest extent permitted by the MGCL.
The Company's Articles authorize it to indemnify present and former
officers and directors and to pay or reimburse expenses in advance of the final
disposition of the proceeding to the maximum extent permitted from time to time
by Maryland law. The Company's Bylaws obligate the Company to indemnify and
advance expenses to present and former officers and directors to the maximum
extent permitted by Maryland law. The MGCL permits the Company to indemnify
its present and former officers and directors, among others, against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by them
in connection with any proceeding to which they may be made a party by reason
of their service in those or other capacities unless it is established that:
(i) the act or omission of the officer or director was material to the matter
giving rise to the proceeding and was committed in bad faith or was the result
of active and deliberate dishonesty; (ii) the officer or director actually
received an improper personal benefit in money, property or services; or (iii)
in the case of any criminal proceeding, the officer or director had reasonable
cause to believe that the act or omission was unlawful. The MGCL requires the
Company, as a condition to advancing expenses, to obtain: (a) a written
affirmation by the officer of director of the individual's good faith belief
that he has met the standard of conduct necessary for indemnification by the
Company as authorized by the MGCL; and (b) a written agreement by or on his
behalf to repay the amount paid or reimbursed by the Company if it shall
ultimately be determined that the standard of conduct was not met. The
Company's Bylaws permit the Company to provide indemnification
II-1
<PAGE> 20
and advance expenses to a present or former officer or director who served a
predecessor of the Company in such capacity, and to any employee or agent of
the Company or a predecessor of the Company.
<TABLE>
<S> <C>
ITEM 16. EXHIBITS
EXHIBIT NO.
- ------- --
5 Opinion of Coon & Schach LLC regarding legality.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Coon & Schach LLC (see Exhibit 5).
</TABLE>
ITEM 17. UNDERTAKINGS
A. The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Act;
(ii) To reflect in the prospectus any facts of
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement; and
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability
under the Act, each post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
II-2
<PAGE> 21
C. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
B. Indemnification
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities, other than the payment by
the 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 preceding, 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-3
<PAGE> 22
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 of filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Itasca, State of Illinois, on May 29, 1997.
MBf USA, INC.
By: /s/ Edward J. Marteka
---------------------
Edward J. Marteka
President
<PAGE> 23
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
*
- ------------- Chief Executive Officer & Chairman May 29, 1997
Heng Sewn Loi
*
- --------------------------------- Director May 29, 1997
Tan Sri Dato (Dr.) Hean Heong Loy
*
- ------------ Director May 29, 1997
Loy Teik Hok
*
- --------------- Director May 29, 1997
Teoh Cheng Soon
*
- ----------------- Director May 29, 1997
Dr. Teo Sen Chong
*
- ----------------- Director May 29, 1997
Edward J. Marteka
/s/ George J. Mennen
- --------------------
George J. Mennen Director May 29, 1997
*
- -------------- Director May 29, 1997
Robert Simmons
/s/ Don Arnwine
- ---------------
Don Arnwine Director May 29, 1997
/s/ Stephen Tan
- ----------------
Stephen Tan Secretary, Chief Financial Officer and May 29, 1997
Chief Accounting Officer
</TABLE>
<PAGE> 24
* Signed pursuant to powers of attorney granted to Stephen Tan
/s/ Stephen Tan
- ----------------
Stephen Tan May 29, 1997
<PAGE> 1
EXHIBIT 5
[COON & SHACH, LLC LETTERHEAD]
May 29, 1997
MFfUSA, Inc.
500 Park Boulevard, Suite 1260
Itasca, Illinois 60143
RE: MBfUSA, Inc.
Registration Statement on Form S-3
Gentlemen:
We have acted as special counsel to MBfUSA, Inc., a Maryland corporation
(the "Company"), in connection with rendering an opinion to be used as an
exhibit to a registration statement on Form S-3 filed on November 27, 1996 (the
"Registration Statement"), as amended, with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), and the prospectus contained therein with respect to the public
offering of up to 1,978,571 shares of the Company's common stock, par value
$0.01 which were previously issued by the Company to the individuals set forth
under the heading "Selling Stockholders" in the Registration Statement (the
"Shares"). All of the Shares are being offered on behalf of the Selling
Stockholders as set forth in the Registration Statement. In connection with the
registration of the Shares, you have requested our opinion with respect to the
matters set forth below.
For purposes of this opinion, we have reviewed the Registration Statement.
In addition, we have examined the orginals or copies certified or otherwise
identified to our satisfaction of (i) the Company's Certificate of
Incorporation, as amended to date; (ii) the By-laws of the Company, as amended
to date; (iii) records of the corporate proceedings of the Company as we deemed
necessary or appropriate as a basis for the opinions set forth herein; and (iv)
those matters of law as we have deemed necessary or appropriate as a basis for
the opinions set forth herein. We have not made any independent review or
investigation of the organization, existence, good standing, assets, business
or affairs of the Company, or of any other matters. In rendering our opinion,
we have assumed without inquiry the legal capacity of all natural persons, the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of these documents submitted to us as copies.
<PAGE> 2
MBfUSA, Inc.
May 29, 1997
Page 2
------------
We have not undertaken any independent investigation to determine facts
bearing on this opinion, and on inference as to the best of our knowledge of
facts based on an independent investigation should be drawn from this
representation. Further, our opinions, as hereinafter expressed, are subject to
the following exceptions, limitations and qualifications: (i) the effect of
bankruptcy, insolvency, fraudulent conveyance, reorganization, arrangement,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights and remedies or creditors; and (ii) the effect of general
principles of equity whether enforcement is considered in a proceeding in
equity or at law and the discretion of the court before which any proceeding
therefore may be brought.
We are admitted to the practice of law only in the State of Maryland and,
accordingly, we do not purport to be experts on the laws of any other
jurisdiction nor do we express an opinion as to the laws of jurisdictions other
than the laws of the State of Maryland, as currently in effect.
On the basis of, and in reliance upon, the foregoing, and subject to the
qualification contained herein, we are of the opinion that the Shares are
validly issued, fully-paid and nonassessable.
We hereby consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm contained under the
heading "Legal Matters."
Respectfully submitted,
/s/ COON & SCHACH, LLC
--------------------------
COON & SCHACH, LLC
CCC/gi
<PAGE> 1
[ARTHUR ANDERSEN LLP LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report dated February 19, 1997, and to all references to our Firm included in
or made a part of this registration statement File No. 333-17071.
/s/ Arthur Andersen LLP
------------------------
Arthur Andersen LLP
Chicago, Illinois
May 23, 1997
