SNOW BECKER KRAUSS P.C.
Attorneys at Law
605 Third Avenue
New York, New York 10158
September 25, 1996
VIA ELECTRONIC TRANSMISSION
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Registration Statement on Form S-8 of 700,000 Shares of
Common Stock of Brake Headquarters U.S.A., Inc.
Gentlemen and Ladies:
On behalf of Brake Headquarters U.S.A., Inc. (the "Company"), pursuant to
Rule 101(a)(i) under Regulation S-T as it applies to the Securities Act of 1933,
as amended (the "Act"), we hereby transmit a Registration Statement on Form S-8
with respect to the above offering.
The amount of $1,093.62 was wired to the Securities and Exchange Commission
on September 19, 1996.
Please contact the undersigned at (212) 455-0322 or Joanne Weil of this
office at (212) 455-0312 should you have any questions regarding this filing.
Very truly yours,
SNOW BECKER KRAUSS P.C.
/s/ Elliot H. Lutzker
Elliot H. Lutzker
<PAGE>
Exhibit 5.1
SNOW BECKER KRAUSS P.C.
605 Third Avenue
New York, NY 10158
(212) 687-3860
September 11, 1996
Board of Directors
Brake Headquarters U.S.A., Inc.
33-16 Woodside Avenue
Long Island City, NY 11101
Re: Registration Statement on Form S-8 Relating to 600,000
Options and 700,000 Shares of Common Stock, Par Value $.001
Per Share, of Brake Headquarters U.S.A., Inc. Issuable Under
the Company's Plans
Ladies and Gentlemen:
We are acting as counsel to Brake Headquarters U.S.A., Inc., a Delaware
corporation (the "Company"), in connection with the filing by the Company with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended (the "Securities Act"), of a registration statement on Form S-8 (the
"Registration Statement") relating to the exercise of options to purchase an
aggregate of 600,000 shares of the Company's common stock, par value $.001 per
share (the "Common Stock"), and the sale of 700,000 shares (the "Shares") of
Common Stock, consisting of (i) 300,000 Shares issuable upon exercise of stock
options issued or issuable under the 1994 Employee Stock Option Plan (the "1994
Plan") of the Company; (ii) 300,000 Shares issuable upon exercise of stock
options issued or issuable under the 1995 Employee Stock Option Plan (the "1995
Plan") of the Company; (iii) 100,000 Shares issued or issuable pursuant to the
Company's Employee Stock Bonus Plan (the "Bonus Plan").
We have examined and are familiar with originals or copies, certified
or otherwise identified to our satisfaction, of the Certificate of Incorporation
and By-Laws of the Company, as each is currently in effect, the Registration
Statement, the related prospectus and reoffer prospectus, the 1994 Plan, the
1995 Plan, the Bonus Plan, the corporate proceedings in connection with the
proposed registration and issuance of the Shares and such other corporate
proceedings, documents and records and other certificates, and we have made such
investigations of law, as we have deemed necessary or appropriate in order to
render the opinions hereinafter set forth.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, 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 such latter documents. As to any facts material
to the opinions expressed herein which were not independently established or
verified, we have relied upon statements and representations of officers and
other representatives of the Company and others.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly and validly authorized and, when issued upon full payment
of the exercise price specified in the option agreements executed in accordance
with the terms of the 1994 Plan, or the 1995 Plan or when issued in accordance
with the Bonus Plan, as the case may be, and certificates therefor have been
duly
<PAGE>
executed and delivered, such Shares will be duly and validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the Prospectus accompanying the Registration Statement for
resale of the Shares by affiliates. In giving this consent, we do not hereby
admit that we are within the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations of the Securities
and Exchange Commission thereunder.
Very truly yours,
SNOW BECKER KRAUSS P.C.
F:\WORK\RJD\BRAKE\OPIN-S-8.5-1
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 25, 1996
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
BRAKE HEADQUARTERS U.S.A., INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 22-3048534
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
33-16 WOODSIDE AVE.,
LONG ISLAND CITY, NY 11101
(718) 779-4800
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
1995 EMPLOYEE STOCK OPTION PLAN
1994 EMPLOYEE STOCK OPTION PLAN
EMPLOYEE STOCK BONUS PLAN
(FULL TITLE OF THE PLANS)
MARC J. RUSKIN
CHIEF FINANCIAL OFFICER
BRAKE HEADQUARTERS U.S.A., INC.
33-16 WOODSIDE AVE.,
LONG ISLAND CITY, NY 11101
(718) 779-4800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
A COPY OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS SENT TO THE AGENT
FOR SERVICE SHOULD BE SENT TO:
ELLIOT H. LUTZKER, ESQ.
SNOW BECKER KRAUSS P.C.
605 THIRD AVENUE
NEW YORK, N.Y. 10158-0125
(212) 687-3860
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED
OF SECURITIES TO BE AMOUNT TO BE OFFERING MAXIMUM AMOUNT OF
REGISTERED REGISTERED PRICE AGGREGATE REGISTRATION
PER SHARE OFFERING PRICE FEE
STOCK OPTIONS 300,000(1) -- -- (3)
300,000(2)
COMMON STOCK, PAR 169,000(4)(7) $2.59(8) $437,710 $150.94
VALUE $.001 PER 180,000(5)(7) $3.00(8) $540,000 $186.21
SHARE
COMMON STOCK, PAR 100,000(6)(8) $6.25(11) $625,000 $215.52
VALUE $.001 PER
SHARE
COMMON STOCK, PAR 131,000(9)(8) $6.25(11) $818,750 $282.33
VALUE $.001 PER 120,000(10)(8) $6.25(11) $750,000 $258.62
SHARE
TOTAL $1,093.62
</TABLE>
<PAGE>
(1) REPRESENTS OPTIONS GRANTED OR TO BE GRANTED PURSUANT TO THE 1994 EMPLOYEE
STOCK OPTION PLAN (THE "1994 PLAN") OF BRAKE HEADQUARTERS U.S.A., INC. (THE
"REGISTRANT").
(2) REPRESENTS OPTIONS GRANTED OR TO BE GRANTED PURSUANT TO THE 1995 EMPLOYEE
STOCK OPTION PLAN (THE "1995 PLAN") OF THE REGISTRANT.
(3) NO REGISTRATION FEE IS REQUIRED PURSUANT TO RULE 457(H)(2).
(4) SHARES ISSUABLE UPON EXERCISE OF OPTIONS PREVIOUSLY GRANTED PURSUANT TO THE
1994 PLAN.
(5) SHARES ISSUABLE UPON EXERCISE OF OPTIONS PREVIOUSLY GRANTED PURSUANT TO THE
1995 PLAN.
(6) SHARES ISSUED OR ISSUABLE PURSUANT TO THE REGISTRANT'S EMPLOYEE STOCK BONUS
PLAN (THE "BONUS PLAN").
(7) INCLUDES AN INDETERMINABLE NUMBER OF SHARES OF COMMON STOCK WHICH MAY
BECOME ISSUABLE PURSUANT TO THE ANTI-DILUTION PROVISIONS OF THE 1994 PLAN
AND THE 1995 PLAN.
(8) CALCULATED SOLELY FOR THE PURPOSE OF DETERMINING THE REGISTRATION FEE
PURSUANT TO RULE 457(H)(1) BASED UPON THE AVERAGE EXERCISE PRICE.
(9) SHARES ISSUABLE UPON EXERCISE OF STOCK OPTIONS AVAILABLE FOR GRANT UNDER
THE 1994 PLAN.
(10) SHARES ISSUABLE UPON EXERCISE OF STOCK OPTIONS AVAILABLE FOR GRANT UNDER
THE 1995 PLAN.
(11) CALCULATED SOLELY FOR THE PURPOSE OF DETERMINING THE REGISTRATION FEE
PURSUANT TO RULE 457(C) BASED UPON THE AVERAGE OF THE BID AND ASKED
PRICES FOR THE COMMON STOCK ON SEPTEMBER 18, 1996.
II2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
THE FOLLOWING DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
(THE "COMMISSION") BY THE REGISTRANT, BRAKE HEADQUARTERS U.S.A., INC., A
DELAWARE CORPORATION (THE "COMPANY"), PURSUANT TO THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED (THE "EXCHANGE ACT"), ARE INCORPORATED BY REFERENCE IN THIS
REGISTRATION STATEMENT.
(1) THE COMPANY'S REPORT ON FORM 10 FIRST FILED WITH THE COMMISSION ON
JUNE 5, 1996;
(2) THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 1995;
(3) THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED
JUNE 30, 1996;
(4) THE DESCRIPTION OF THE COMPANY'S COMMON STOCK, PAR VALUE $.001 PER
SHARE (THE "COMMON STOCK"), CONTAINED IN THE COMPANY'S REGISTRATION
STATEMENT ON FORM 10 (FILE NO. 001-11801), FILED PURSUANT TO SECTION 12(G)
OF THE EXCHANGE ACT, INCLUDING ANY AMENDMENT OR REPORT FILED FOR THE
PURPOSE OF UPDATING SUCH INFORMATION.
ALL DOCUMENTS SUBSEQUENTLY FILED BY THE COMPANY PURSUANT TO SECTIONS 13(A),
13(C), 14 AND 15(D) OF THE EXCHANGE ACT, PRIOR TO THE FILING OF A POST-EFFECTIVE
AMENDMENT WHICH INDICATES THAT ALL SECURITIES OFFERED HAVE BEEN SOLD OR WHICH
DEREGISTERS ALL SECURITIES THEN REMAINING UNSOLD, SHALL BE DEEMED TO BE
INCORPORATED BY REFERENCE HEREIN AND TO BE A PART HEREOF FROM THE DATE OF FILING
OF SUCH DOCUMENTS. ANY STATEMENT CONTAINED IN A DOCUMENT INCORPORATED OR DEEMED
TO BE INCORPORATED BY REFERENCE HEREIN SHALL BE DEEMED TO BE MODIFIED OR
SUPERSEDED FOR PURPOSES OF THIS REGISTRATION STATEMENT TO THE EXTENT THAT A
STATEMENT CONTAINED HEREIN OR IN ANY OTHER SUBSEQUENTLY FILED DOCUMENT WHICH
ALSO IS INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE HEREIN MODIFIES
OR SUPERSEDES SUCH STATEMENT. ANY SUCH STATEMENT SO MODIFIED OR SUPERSEDED SHALL
NOT BE DEEMED, EXCEPT AS SO MODIFIED OR SUPERSEDED, TO CONSTITUTE A PART OF THIS
REGISTRATION STATEMENT.
ITEM 4. DESCRIPTION OF SECURITIES.
NOT APPLICABLE.
II3
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
NOT APPLICABLE
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
EXCEPT TO THE EXTENT HEREINAFTER SET FORTH, THERE IS NO STATUTE, CHARTER
PROVISION, BY-LAW, CONTRACT OR OTHER ARRANGEMENT UNDER WHICH ANY CONTROLLING
PERSON, DIRECTOR OR OFFICER OF THE COMPANY IS INSURED OR INDEMNIFIED IN A
MANNER AGAINST LIABILITY WHICH HE MAY INCUR IN HIS CAPACITY AS SUCH.
ARTICLE SEVENTH OF THE COMPANY'S CERTIFICATE OF INCORPORATION AND ARTICLE
VI OF THE COMPANY'S BY-LAWS PROVIDE FOR THE INDEMNIFICATION OF OFFICERS AND
DIRECTORS TO THE FULLEST EXTENT ALLOWED BY THE DELAWARE GENERAL CORPORATION LAW
(THE "DGCL").
THE DGCL PROVIDES, IN PART, THAT NO DIRECTOR SHALL BE PERSONALLY LIABLE TO
A CORPORATION OR ITS STOCKHOLDERS FOR MONETARY DAMAGES FOR ANY BREACH OF
FIDUCIARY DUTY BY SUCH DIRECTOR AS A DIRECTOR, EXCEPT:
(I) FOR BREACH OF THE DIRECTOR'S DUTY OF LOYALTY TO THE CORPORATION OR ITS
STOCKHOLDERS;
(II) FOR ACTS OR OMISSIONS NOT IN GOOD FAITH OR WHICH INVOLVE INTENTIONAL
MISCONDUCT OR A KNOWING VIOLATION OF LAW;
(III) PURSUANT TO SECTION 174 OF THE DGCL; OR
(IV) FOR ANY TRANSACTION FROM WHICH THE DIRECTOR DERIVED AN IMPROPER
PERSONAL BENEFIT.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
NOT APPLICABLE.
ITEM 8. EXHIBITS.
PAGE IN
SEQUENTIALLY
NUMBERED
REGISTRATION
EXHIBIT NO. DESCRIPTION OF EXHIBIT STATEMENT
4.2 1994 EMPLOYEE STOCK OPTION PLAN.(1)
4.3 1995 EMPLOYEE STOCK OPTION PLAN.(2)
4.4 FORM OF STOCK OPTION AGREEMENT.(2)
4.5 EMPLOYEE STOCK BONUS PLAN.(2)
II4
<PAGE>
5.1 OPINION OF SNOW BECKER KRAUSS P.C.
23.1 CONSENT OF SNOW BECKER KRAUSS P.C.
(INCLUDED IN EXHIBIT 5.1 HERETO).
23.2 CONSENT OF DELOITTE & TOUCHE LLP
23.3 CONSENT OF GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.
23.4 CONSENT OF BOREK, STOCKEL & MARDEN
24.1 POWERS OF ATTORNEY (INCLUDED ON THE
SIGNATURE PAGE OF THIS REGISTRATION
STATEMENT.
(1) INCORPORATED BY REFERENCE FROM THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB
FOR THE YEAR ENDED DECEMBER 31, 1993.
(2) INCORPORATED BY REFERENCE FROM THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB
FOR THE YEAR ENDED DECEMBER 31, 1995.
ITEM 9. REQUIRED UNDERTAKINGS.
THE UNDERSIGNED REGISTRANT HEREBY UNDERTAKES:
(A)(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
SECURITIES ACT OF 1933;
(II) TO REFLECT IN THE PROSPECTUS ANY FACTS OR EVENTS ARISING AFTER
THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT (OR THE MOST RECENT
POST-EFFECTIVE AMENDMENT THEREOF) WHICH, INDIVIDUALLY OR IN THE AGGREGATE,
REPRESENTS A FUNDAMENTAL CHANGE IN THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENT; NOTWITHSTANDING THE FOREGOING, ANY INCREASE OR
DECREASE IN VOLUME OF SECURITIES OFFERED (IF THE TOTAL DOLLAR VALUE OF
SECURITIES OFFERED WOULD NOT EXCEED THAT WHICH WAS REGISTERED) AND ANY
DEVIATION FROM THE LOW OR HIGH AND OF THE ESTIMATED MAXIMUM OFFERING RANGE
MAY BE REFLECTED IN THE FORM OF PROSPECTUS FILED WITH THE 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 20 PERCENT CHANGE IN THE MAXIMUM AGGREGATE
OFFERING PRICE SET FORTH IN THE "CALCULATION OF REGISTRATION FEE" TABLE IN
THE EFFECTIVE REGISTRATION STATEMENT.
II5
<PAGE>
(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) DO NOT APPLY IF
THE REGISTRATION STATEMENT IS ON FORM S-3 OR FORM S-8 AND 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 THAT ARE
INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT.
(2) THAT, FOR THE PURPOSE OF DETERMINING ANY LIABILITY UNDER THE SECURITIES
ACT OF 1933, EACH SUCH POST-EFFECTIVE AMENDMENT SHALL BE DEEMED TO BE A NEW
REGISTRATION STATEMENT RELATING TO THE SECURITIES OFFERED THEREIN, AND THE
OFFERING OF SUCH SECURITIES AT THAT TIME SHALL BE DEEMED TO BE THE INITIAL BONA
FIDE OFFERING THEREOF.
(3) TO REMOVE FROM REGISTRATION BY MEANS OF A POST-EFFECTIVE AMENDMENT ANY
OF THE SECURITIES BEING REGISTERED WHICH REMAIN UNSOLD AT THE TERMINATION OF THE
OFFERING.
(B) THE UNDERSIGNED REGISTRANT HEREBY UNDERTAKES THAT, FOR PURPOSES OF
DETERMINING ANY LIABILITY UNDER THE SECURITIES ACT OF 1933, EACH FILING OF THE
REGISTRANT'S ANNUAL REPORT PURSUANT TO SECTION 13(A) OR SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AND, WHERE APPLICABLE, EACH FILING OF AN
EMPLOYEE BENEFIT PLAN'S ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934) 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.
(D) INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES
ACT OF 1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS OR CONTROLLING PERSONS OF
THE REGISTRANT PURSUANT TO ANY ARRANGEMENT, PROVISION 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 OF 1933 AND IS, THEREFORE, UNENFORCEABLE. IN THE EVENT THAT CLAIM
FOR INDEMNIFICATION AGAINST SUCH LIABILITIES (OTHER THAN THE PAYMENT BY THE
REGISTRANT OF EXPENSES INCURRED OR PAID BY A DIRECTOR, OFFICER OR CONTROLLING
PERSON OF THE REGISTRANT IN THE SUCCESSFUL DEFENSE OF ANY ACTION, SUIT OR
PROCEEDING) IS ASSERTED BY SUCH DIRECTOR, OFFICER OR CONTROLLING PERSON IN
CONNECTION WITH THE SECURITIES BEING REGISTERED, THE REGISTRANT WILL, UNLESS IN
THE OPINION OF ITS COUNSEL THE MATTER HAS BEEN SETTLED BY CONTROLLING PRECEDENT,
SUBMIT TO A COURT OF APPROPRIATE JURISDICTION THE QUESTION WHETHER SUCH
INDEMNIFICATION BY IT IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE SECURITIES
ACT OF 1933 AND WILL BE GOVERNED BY THE FINAL ADJUDICATION OF SUCH ISSUE.
II6
<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-8 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN LONG ISLAND CITY, STATE OF NEW YORK, ON SEPTEMBER 19, 1996.
BRAKE HEADQUARTERS U.S.A., INC.
BY: /S/ JOSEPH ENDE
JOSEPH ENDE
PRESIDENT AND CHAIRMAN OF
THE BOARD OF DIRECTORS
POWER OF ATTORNEY
EACH PERSON WHOSE SIGNATURE APPEARS BELOW HEREBY CONSTITUTES AND APPOINTS JOSEPH
ENDE HIS TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENT, WITH POWER OF SUBSTITUTION
AND RESUBSTITUTION, FOR HIM AND IN HIS NAME, PLACE AND STEAD, IN ANY AND ALL
CAPACITIES, TO SIGN ANY AND ALL AMENDMENTS (INCLUDING POST-EFFECTIVE AMENDMENTS)
TO THIS REGISTRATION STATEMENT, AND TO FILE THE SAME, WITH EXHIBITS THERETO AND
OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE
COMMISSION, HEREBY RATIFYING ALL THAT SAID ATTORNEY-IN-FACT AND AGENT OR HIS
SUBSTITUTE OR SUBSTITUTES, OR ANY OF THEM, MAY LAWFULLY DO OR CAUSE TO BE DONE
BY VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED
ON SEPTEMBER 19, 1996.
SIGNATURE TITLE
/S/ JOSEPH ENDE CHAIRMAN OF THE BOARD, PRESIDENT
JOSEPH ENDE AND CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
/S/ MARC J. RUSKIN CHIEF FINANCIAL OFFICER
MARC J. RUSKIN (PRINCIPAL FINANCIAL OFFICER)
/S/ SANDRA ENDE SECRETARY AND DIRECTOR
SANDRA ENDE
II7
<PAGE>
PROSPECTUS
BRAKE HEADQUARTERS U.S.A., INC.
700,000 SHARES
COMMON STOCK, PAR VALUE $.001
THIS PROSPECTUS HAS BEEN PREPARED BY BRAKE HEADQUARTERS U.S.A., INC., A
DELAWARE CORPORATION (THE "COMPANY), FOR USE UPON RESALE OF SHARES OF THE
COMPANY'S COMMON STOCK, PAR VALUE $.001 PER SHARE (THE "COMMON STOCK"), BY
CERTAIN "AFFILIATES" (AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT OF 1933,
AS AMENDED) OF THE COMPANY (THE "SELLING STOCKHOLDERS") WHO HAVE ACQUIRED OR MAY
ACQUIRE SUCH SHARES OF COMMON STOCK UPON EXERCISE OF OPTIONS GRANTED OR TO BE
GRANTED UNDER THE BRAKE HEADQUARTERS U.S.A., INC. 1994 EMPLOYEE STOCK OPTION
PLAN (THE "1994 PLAN"), THE BRAKE HEADQUARTERS U.S.A., INC. 1995 EMPLOYEE STOCK
OPTION PLAN (THE "1995 PLAN") AND THE BRAKE HEADQUARTERS U.S.A., INC. EMPLOYEE
STOCK BONUS PLAN (THE "BONUS PLAN," TOGETHER WITH THE 1994 PLAN AND THE 1995
PLAN, THE "PLANS"). THE MAXIMUM NUMBER OF SHARES WHICH MAY BE OFFERED OR SOLD
HEREUNDER IS SUBJECT TO ADJUSTMENT IN THE EVENT OF STOCK SPLITS OR DIVIDENDS,
RECAPITALIZATION AND OTHER SIMILAR CHANGES AFFECTING THE COMMON STOCK. IT IS
ANTICIPATED THAT THE SELLING STOCKHOLDERS WILL OFFER SHARES OF COMMON STOCK FOR
RESALE AT PREVAILING PRICES ON THE NASDAQ SMALLCAP MARKET (OR ANY EXCHANGE ON
WHICH THE COMMON STOCK MAY BE TRADED) ON THE DATE OF SALE. SEE "PLAN OF
DISTRIBUTION." THE COMPANY WILL RECEIVE NONE OF THE PROCEEDS FROM THE SALE OF
THE COMMON STOCK OFFERED HEREBY, HOWEVER, WILL RECEIVE THE EXERCISE PRICE OF THE
OPTIONS EXERCISED BY THE SELLING STOCKHOLDERS. ALL SELLING AND OTHER EXPENSES
INCURRED BY INDIVIDUAL SELLING STOCKHOLDERS WILL BE BORNE BY SUCH SELLING
STOCKHOLDERS.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN RISKS OF AN INVESTMENT
IN THE COMMON STOCK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE 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 SEPTEMBER 25, 1996.
1
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
ANY OFFER TO SELL OR SALE OF THE SECURITIES TO WHICH THIS PROSPECTUS RELATES
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, IMPLY THAT THERE HAS BEEN NO
CHANGE IN THE FACTS HEREIN SET FORTH SINCE THE DATE HEREOF. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL TO OR A SOLICITATION OF ANY OFFER TO BUY FROM
ANY PERSON IN ANY STATE IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL.
UNIFIED CAPITAL, INC. (THE "COMPANY") WAS INCORPORATED IN THE STATE OF DELAWARE
ON JULY 13, 1988 AS A BLIND POOL WHICH DID NOT CONDUCT BUSINESS OPERATIONS UNTIL
JULY 1992 WHEN IT ACQUIRED, IN A REVERSE ACQUISITION (THE "REVERSE MERGER"), ALL
OF THE OUTSTANDING CAPITAL STOCK OF SANYO AUTOMOTIVE PARTS, LTD. ("SANYO
AUTOMOTIVE"). IN CONNECTION WITH THE REVERSE MERGER, THE COMPANY AMENDED ITS
CERTIFICATE OF INCORPORATION TO CHANGE ITS NAME TO SANYO INDUSTRIES, INC. ON
AUGUST 8, 1995, THE COMPANY CHANGED ITS NAME TO BRAKE HEADQUARTERS U.S.A., INC.
THE COMPANY IS A PUBLICLY-OWNED HOLDING COMPANY THAT CONDUCTS SUBSTANTIALLY ALL
OF ITS CURRENT BUSINESS OPERATIONS THROUGH ITS WHOLLY-OWNED SUBSIDIARY SANYO
AUTOMOTIVE, A NEW YORK CORPORATION FORMED IN 1976, WHICH IS CURRENTLY DOING
BUSINESS UNDER THE NAME BRAKE HEADQUARTERS AND QUALITY FIRST BRAKE, INC., A
WHOLLY-OWNED DELAWARE SUBSIDIARY OF THE COMPANY (QUALITY FIRST"), FORMED IN
AUGUST 1995. THE COMPANY'S OTHER WHOLLY-OWNED SUBSIDIARIES ARE BRAKE
HEADQUARTERS CORP., AN INACTIVE NEW YORK CORPORATION FORMED IN JANUARY 1996, AND
QUALITY FIRST BRAKE CORP., A CURRENTLY INACTIVE CANADIAN CORPORATION FORMED IN
1993. ALL REFERENCES TO BUSINESS HISTORY HEREIN RELATE TO SANYO AUTOMOTIVE WHOSE
OPERATIONS PREDATE THE COMPANY'S FORMATION IN 1988. ITS PRINCIPAL EXECUTIVE
OFFICES ARE LOCATED AT 33-16 WOODSIDE AVENUE, LONG ISLAND CITY, NEW YORK 11101,
AND ITS TELEPHONE NUMBER IS (718) 779-4800.
AVAILABLE INFORMATION
THE COMPANY IS SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF THE SECURITIES
EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT") AND, IN ACCORDANCE THEREWITH, FILES
REPORTS AND OTHER INFORMATION WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION). REPORTS, PROXY STATEMENTS AND OTHER INFORMATION FILED BY THE
COMPANY 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 REGIONAL OFFICES OF THE COMMISSION AT SEVEN
WORLD TRADE CENTER, NEW YORK, NEW YORK 10048 AND AT 500 WEST MADISON STREET,
CHICAGO, ILLINOIS
2
<PAGE>
60611. COPIES CAN BE OBTAINED FROM THE COMMISSION AT PRESCRIBED RATES BY WRITING
TO THE COMMISSION AT 450 FIFTH STREET N.W., WASHINGTON, D.C. 20549.
DOCUMENTS INCORPORATED BY REFERENCE
THE COMPANY HEREBY INCORPORATES BY REFERENCE THE DOCUMENTS LISTED BELOW:
(A) THE COMPANY'S REPORT ON FORM 10 FIRST FILED WITH THE COMMISSION ON
JUNE 6, 1996.
(B) THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 1995.
(C) THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED
JUNE 30, 1996.
(D) THE DESCRIPTION OF THE COMPANY'S COMMON STOCK CONTAINED IN THE
COMPANY'S REGISTRATION STATEMENT ON FORM 10 (FILE NO. 001-11801) FILED
PURSUANT TO SECTION 12(G) OF THE EXCHANGE ACT, INCLUDING ANY AMENDMENT OR
REPORT FILED FOR THE PURPOSE OF UPDATING SUCH INFORMATION.
ALL DOCUMENTS SUBSEQUENTLY FILED BY THE COMPANY AFTER THE DATE OF THIS
PROSPECTUS PURSUANT TO SECTIONS 13(A), 13(C), 14, AND 15(D) OF THE EXCHANGE ACT
SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE HEREIN AND TO BE A PART HEREOF
FROM THE DATE OF FILING OF SUCH DOCUMENTS. ANY STATEMENT CONTAINED IN A
PREVIOUSLY FILED DOCUMENT INCORPORATED BY REFERENCE HEREIN SHALL BE DEEMED TO BE
MODIFIED OR SUPERSEDED FOR PURPOSES OF THIS PROSPECTUS TO THE EXTENT THAT A
STATEMENT HEREIN MODIFIES OR SUPERSEDES SUCH STATEMENT; AND ANY STATEMENT
CONTAINED HEREIN SHALL BE DEEMED TO BE MODIFIED OR SUPERSEDED TO THE EXTENT THAT
A STATEMENT IN ANY DOCUMENT SUBSEQUENTLY FILED, WHICH IS INCORPORATED BY
REFERENCE 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.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS IS DELIVERED, UPON WRITTEN
OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL OF THE INFORMATION THAT HAS
BEEN INCORPORATED BY REFERENCE IN THIS PROSPECTUS (NOT INCLUDING EXHIBITS TO
SUCH INFORMATION, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO THE INFORMATION WHICH THIS PROSPECTUS INCORPORATES). REQUESTS FOR
COPIES OF SUCH INFORMATION SHOULD BE DIRECTED TO THE COMPANY AT 33-16 WOODSIDE
AVENUE, LONG ISLAND CITY, NEW YORK 11101; ATTENTION: CHIEF FINANCIAL OFFICER.
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RECENT DEVELOPMENTS
ON AUGUST 13, 1996, THE COMPANY COMPLETED A PRIVATE OFFERING (THE
"OFFERING") TO ACCREDITED INVESTORS OF 450,000 UNITS (THE "UNITS") AT A PURCHASE
PRICE OF $2.50 PER UNIT, EACH UNIT CONSISTING OF ONE SHARE OF THE COMPANY'S
COMMON STOCK AND TWO REDEEMABLE COMMON STOCK PURCHASE WARRANTS, EACH TO PURCHASE
ONE SHARE OF COMMON STOCK AT AN EXERCISE PRICE OF $3.80 PER SHARE, UNTIL AUGUST
13, 1999.
THE COMPANY PAID THE PLACEMENT AGENT A SELLING COMMISSION OF 7 1/2% OF THE
GROSS PROCEEDS OF THE OFFERING. IN ADDITION, THE COMPANY HAS AGREED TO SELL TO
THE PLACEMENT AGENT, FOR NOMINAL CONSIDERATION, WARRANTS TO PURCHASE 40,000
UNITS, AT AN EXERCISE PRICE OF $2.50 PER UNIT. THE NET PROCEEDS OF APPROXIMATELY
$1,000,000 FROM THE OFFERING WILL BE USED FOR WORKING CAPITAL AND GENERAL
CORPORATE PURPOSES.
RISK FACTORS
IN ADDITION TO CONSIDERING THE OTHER INFORMATION SET FORTH IN, OR
INCORPORATED BY REFERENCE INTO, THIS PROSPECTUS, PROSPECTIVE INVESTORS SHOULD
CAREFULLY CONSIDER THE FOLLOWING FACTORS IN EVALUATING AN INVESTMENT IN THE
COMPANY.
HIGHLY COMPETITIVE INDUSTRY. THE AUTOMOTIVE AFTERMARKET INDUSTRY IN GENERAL, AND
THE BRAKE PARTS MARKET IN PARTICULAR, IS HIGHLY COMPETITIVE. THE DIRECT
COMPETITORS TO THE COMPANY'S DISTRIBUTION ACTIVITIES INCLUDE MANUFACTURERS SUCH
AS BRAKE PARTS, INC., WAGNER BRAKES, A SUBSIDIARY OF COOPER INDUSTRIES, INC.,
EIS BRAKE PLANTS DIVISION OF STANDARD MOTOR PRODUCTS, INC. AND THE ITT
AUTOMOTIVE AFTERMARKET DIVISION OF ITT/AIMCO. MANY OF THE COMPANY'S COMPETITORS
ARE LARGER AND HAVE SUBSTANTIALLY GREATER FINANCIAL RESOURCES THAN THE COMPANY
AND MAY BE ABLE TO SELL MERCHANDISE AT LOWER PRICES THAN THE COMPANY. IN
ADDITION, MANUFACTURERS WHO COMPETE WITH THE COMPANY ARE NOT DEPENDENT ON
RELATIONSHIPS WITH SUPPLIERS AS IS THE COMPANY.
DEPENDENCE ON AUTOMOTIVE INDUSTRY. THE COMPANY'S BUSINESS IS
DEPENDENT UPON THE AUTOMOTIVE INDUSTRY WHICH IS CYCLICAL AND HAS HISTORICALLY
EXPERIENCED PERIODIC DOWNTURNS. THESE DOWNTURNS ARE DIFFICULT TO PREDICT AND
HAVE OFTEN HAD A SEVERE ADVERSE EFFECT ON THE UNDERCAR PARTS INDUSTRY. WHILE THE
COMPANY BELIEVES THAT IT OPERATES IN A RECESSION RESISTANT SEGMENT OF THE
AUTOMOTIVE INDUSTRY, ITS FUTURE PERFORMANCE MAY NEVERTHELESS BE ADVERSELY
AFFECTED BY AUTOMOTIVE INDUSTRY DOWNTURNS.
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<PAGE>
ANTICIPATED DECREASE IN GROWTH RATES. THE COMPANY'S SALES INCREASED BY 30%,
42% AND 21% IN 1993, 1994 AND 1995, RESPECTIVELY, AS THE COMPANY ADDED NEW LARGE
CUSTOMERS. HOWEVER, UNLESS THE COMPANY IS ABLE TO CONTINUE TO ADD NEW LARGE
CUSTOMERS AT AN INCREASING RATE, OR NEW PRODUCT LINES,IT IS UNLIKELY THAT IT
WILL CONTINUE TO GROW AT COMPARABLE RATES TO THE LAST SEVERAL YEARS.
MANAGEMENT OF GROWTH. THE COMPANY WILL ATTEMPT TO EXPAND CURRENT LEVELS OF
OPERATIONS WHICH DEPENDS ON, AMONG OTHER THINGS, ITS ABILITY TO SERVICE ITS
CUSTOMERS, RETAIN SKILLED MANAGEMENT AND OTHER PERSONNEL, SECURE ADEQUATE
SOURCES OF SUPPLY ON COMMERCIALLY REASONABLE TERMS AND SUCCESSFULLY MANAGE
GROWTH. TO MANAGE GROWTH EFFECTIVELY, THE COMPANY WILL NEED TO IMPLEMENT AND
MAINTAIN MORE SOPHISTICATED OPERATIONAL, FINANCIAL AND MANAGEMENT INFORMATION
SYSTEMS, PROCEDURES AND CONTROLS THAN IT HAS REQUIRED TO DATE. THERE CAN BE NO
ASSURANCE THAT THE COMPANY WILL BE ABLE TO MANAGE ITS GROWTH EFFECTIVELY, AND
THE COMPANY'S FAILURE TO DO SO WOULD HAVE A MATERIAL ADVERSE EFFECT ON THE
COMPANY AND ITS OPERATIONS.
RISK OF LOSS OF PRINCIPAL CUSTOMER. DURING 1995 AND THE SIX MONTHS ENDED
JUNE 30, 1996, NET SALES TO THE COMPANY'S LARGEST CUSTOMER, A RETAIL AUTO CHAIN
WHICH BECAME A CUSTOMER IN LATE 1993, ACCOUNTED FOR APPROXIMATELY 17% AND 26% OF
THE COMPANY'S TOTAL NET SALES, RESPECTIVELY. THERE CAN BE NO ASSURANCE THAT SUCH
CUSTOMER WILL CONTINUE TO PURCHASE PRODUCTS FROM THE COMPANY AT CURRENT LEVELS,
OR AT ALL. THE LOSS OF THIS CUSTOMER'S BUSINESS OR A DECLINE IN THE ECONOMIC
PROSPECTS OF THIS CUSTOMER WOULD, IN ALL LIKELIHOOD, HAVE A MATERIAL ADVERSE
EFFECT ON THE COMPANY AND ITS OPERATIONS.
DEPENDENCE ON SUPPLIERS. THE COMPANY DEPENDS UPON CLOSE RELATIONSHIPS WITH ITS
SUPPLIERS OF AUTOMOTIVE PARTS AND EQUIPMENT AND ITS ABILITY TO PURCHASE PRODUCTS
FROM THESE MANUFACTURERS AT FAVORABLE PRICES AND ON FAVORABLE TERMS. THE COMPANY
DOES NOT MAINTAIN SUPPLY CONTRACTS WITH ANY OF ITS SUPPLIERS. ALTERNATIVE
SOURCES EXIST FOR MOST OF THE PRODUCTS IT PURCHASES, AND THE LOSS OF ANY
SIGNIFICANT SUPPLIER,IS NOT EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE
COMPANY. HOWEVER, IF A NEW SUPPLIER IS NOT OBTAINED IN A TIMELY MANNER AND UPON
ACCEPTABLE TERMS THEN THE COMPANY MAY BE ADVERSELY AFFECTED. THE COMPANY'S
PRINCIPAL SUPPLIERS CURRENTLY PROVIDE THE COMPANY WITH CERTAIN INCENTIVES SUCH
AS VOLUME DISCOUNTS.
REGULATORY CONSIDERATIONS. THE COMPANY IS SUBJECT TO VARIOUS FEDERAL, STATE
AND LOCAL LAWS AND REGULATIONS CONCERNING WORKPLACE SAFETY, ZONING AND OTHER
MATTERS RELATING TO ITS BUSINESS. IN ADDITION, THE COMPANY'S WAREHOUSE EMPLOYEES
IN NEW YORK AND ILLINOIS ARE SUBJECT TO COLLECTIVE BARGAINING AGREEMENTS. FROM
TIME TO TIME THE COMPANY HAS BEEN AND MAY
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<PAGE>
CONTINUE TO BE SUBJECT TO DISPUTES WITH ITS UNION, NONE OF WHICH HAVE HAD A
MATERIAL ADVERSE EFFECT ON THE COMPANY'S OPERATIONS TO DATE.
THE COMPANY WILL BE REQUIRED TO COMPLY WITH NATIONAL, STATE AND LOCAL LAWS
AND REGULATIONS GOVERNING ITS PROPOSED UNDERCAR WAREHOUSES. ALTHOUGH TO DATE,
THE COSTS AND EXPENSES OF COMPLYING WITH SUCH REGULATIONS HAVE NOT HAD A
MATERIAL EFFECT ON THE COMPANY, A MATERIAL INCREASE IN THE COST OF SUCH
COMPLIANCE COULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY AND ITS
OPERATIONS.
POSSIBLE NEED FOR ADDITIONAL FINANCING. TO DATE, THE COMPANY'S CAPITAL
REQUIREMENTS HAVE BEEN SIGNIFICANT. THE COMPANY ANTICIPATES, BASED ON THE
COMPANY'S CURRENTLY PROPOSED PLANS AND ASSUMPTIONS RELATING TO ITS OPERATIONS,
THAT THE PROCEEDS OF THE PENDING OFFERING (OR ANY ALTERNATE FINANCING), TOGETHER
WITH CASH FLOW FROM OPERATIONS AND CURRENTLY AVAILABLE FINANCING ARRANGEMENTS,
WILL BE SUFFICIENT TO SATISFY ITS ANTICIPATED CASH REQUIREMENTS FOR AT LEAST THE
NEXT 12 MONTHS. IN THE EVENT THAT THE COMPANY'S PLANS OR ASSUMPTIONS CHANGE OR
PROVE TO BE INACCURATE, THERE CAN BE NO ASSURANCE THAT ADDITIONAL FINANCING WILL
NOT BE REQUIRED.
THE COMPANY'S BUSINESS STRATEGY INCLUDES THE PURSUIT OF ACQUISITIONS, WHICH
MAY ALSO REQUIRE ADDITIONAL FINANCING OR THE ISSUANCE OF ADDITIONAL EQUITY
SECURITIES THAT COULD RESULT IN FURTHER DILUTION TO THE PUBLIC STOCKHOLDERS. TO
THE EXTENT THE COMPANY INCURS INDEBTEDNESS IN CONNECTION WITH AN ACQUISITION,
THE COMPANY WILL BE SUBJECT TO RISKS ASSOCIATED THEREWITH, INCLUDING THE RISKS
OF INTEREST RATE FLUCTUATIONS AND INSUFFICIENCY OF CASH FLOW TO PAY INTEREST AND
PRINCIPAL. THERE CAN BE NO ASSURANCE THAT ADDITIONAL FUNDS, WHETHER IN THE FORM
OF DEBT OR EQUITY, WILL BE AVAILABLE TO THE COMPANY ON COMMERCIALLY REASONABLE
TERMS OR AT ALL.
DEPENDENCE ON PRESIDENT. THE COMPANY'S SUCCESS IS DEPENDENT UPON THE
EFFORTS OF JOSEPH ENDE, THE COMPANY'S PRESIDENT AND CHIEF EXECUTIVE OFFICER. THE
COMPANY HAS ENTERED INTO A THREE-YEAR EMPLOYMENT AGREEMENT WITH MR. ENDE, WHICH
TERMINATES ON JULY 31, 1998. THE LOSS OF MR. ENDE'S SERVICES WOULD HAVE A
MATERIAL ADVERSE EFFECT ON THE COMPANY AND ITS OPERATIONS. THE COMPANY HOLDS A
KEY-MAN LIFE INSURANCE POLICY ON MR. ENDE'S LIFE IN THE AMOUNT OF $2,000,000,
THE PROCEEDS OF WHICH ARE PAYABLE TO THE COMPANY.
CONTROL BY PRESIDENT AND PRINCIPAL STOCKHOLDER AND EFFECTS OF CERTAIN
ANTI-TAKEOVER PROVISIONS. JOSEPH ENDE, THE COMPANY'S PRESIDENT, BENEFICIALLY
OWNS APPROXIMATELY 68% OF THE COMPANY'S OUTSTANDING COMMON STOCK. AS THE SOLE
STOCKHOLDER OF THE SERIES B PREFERRED STOCK, WHICH WILL VOTE AS A SEPARATE
CLASS, MR. ENDE HAS THE EXCLUSIVE RIGHT TO ELECT A MAJORITY OF THE COMPANY'S
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<PAGE>
BOARD OF DIRECTORS UNTIL THE EARLIER OF THE REDEMPTION DATE OF MARCH 31, 2001 OR
THE REPORTING BY THE COMPANY OF AT LEAST $75 MILLION IN REVENUES FOR ANY YEAR
THROUGH DECEMBER 31, 2000. THIS THRESHOLD HAS BEEN ARBITRARILY SELECTED BY THE
COMPANY AND IS NOT TO BE CONSTRUED AS PROJECTIONS OF FUTURE COMPANY OPERATIONS.
IN THE EVENT OF ANY LIQUIDATION, DISSOLUTION OR WINDING-UP, THE HOLDER OF SHARES
OF SERIES B PREFERRED STOCK WILL BE ENTITLED TO AN AGGREGATE PREFERENCE OF
$50,000, HIS BASIS IN THE STOCK; ANY REMAINING PROCEEDS OF LIQUIDATION WILL BE
DISTRIBUTED PRO RATA TO HOLDERS OF THE COMMON STOCK. THE ABOVE-STATED $75
MILLION LEVEL SHALL BE DETERMINED BY THE COMPANY AND REPORTED ON ITS AUDITED
FINANCIAL STATEMENTS. THE SERIES B PREFERRED STOCK COULD BE UTILIZED, UNDER
CERTAIN CIRCUMSTANCES, AS A METHOD OF DISCOURAGING, DELAYING OR PREVENTING A
CHANGE IN CONTROL OF THE COMPANY. SEE "SELLING STOCKHOLDERS." THE COMPANY IS
SUBJECT TO THE PROVISIONS OF SECTION 203 OF THE GENERAL CORPORATION LAW OF
DELAWARE ("DELAWARE GCL"). IN GENERAL, SECTION 203 PROHIBITS A PUBLICLY HELD
DELAWARE CORPORATION FROM ENGAGING IN A "BUSINESS COMBINATION" WITH AN
"INTERESTED STOCKHOLDER" FOR A PERIOD OF THREE YEARS AFTER THE DATE OF THE
TRANSACTION IN WHICH SUCH PERSON BECOMES AN INTERESTED STOCKHOLDER, UNLESS (I)
THE BUSINESS COMBINATION IS APPROVED IN A PRESCRIBED MANNER OR (II) SUCH
INTERESTED STOCKHOLDER OWNS AT LEAST 85% OF THE CORPORATION'S VOTING STOCK
(EXCLUDING SHARES HELD BY CERTAIN DESIGNATED STOCKHOLDERS) UPON COMPLETION OF
THE TRANSACTION IN WHICH SUCH STOCKHOLDER BECOMES AN INTERESTED STOCKHOLDER.
THIS PROVISION OF THE DELAWARE GCL COULD DELAY AND MAKE MORE DIFFICULT A
BUSINESS COMBINATION EVEN IF THE BUSINESS COMBINATION COULD BE BENEFICIAL, IN
THE SHORT TERM, TO THE INTERESTS OF THE STOCKHOLDERS. THIS PROVISION OF THE
DELAWARE GCL ALSO COULD LIMIT THE PRICE CERTAIN INVESTORS MIGHT BE WILLING TO
PAY IN THE FUTURE FOR SHARES OF THE COMMON STOCK. CONSEQUENTLY, MR. ENDE HAS THE
ABILITY TO DIRECT SUBSTANTIALLY ALL OF THE COMPANY'S AFFAIRS.
NO ASSURANCE OF PUBLIC MARKET; VOLATILITY OF STOCK PRICE. PRIOR TO THE DATE
HEREOF, THERE HAS BEEN A LIMITED PUBLIC TRADING MARKET FOR THE COMMON STOCK.
THERE CAN BE NO ASSURANCE THAT AN ACTIVE TRADING MARKET FOR SUCH SECURITIES WILL
DEVELOP OR BE SUSTAINED. FACTORS SUCH AS THE COMPANY'S OPERATING RESULTS, THE
PROPOSED EXPANSION OF THE COMPANY'S OPERATIONS AND VARIOUS FACTORS AFFECTING THE
AUTOMOTIVE INDUSTRY GENERALLY, MAY SIGNIFICANTLY IMPACT THE MARKET PRICE OF THE
COMPANY'S SECURITIES. IN ADDITION, IN RECENT YEARS, PRIOR TO ITS JUNE 1996
LISTING ON NASDAQ, THE COMMON STOCK HAS EXPERIENCED A HIGH LEVEL OF PRICE AND
VOLUME VOLATILITY, NOT NECESSARILY RELATED TO ITS OPERATING PERFORMANCE. SUCH
MARKET PRICE OF THE COMMON STOCK MAY CONTINUE TO BE HIGHLY VOLATILE.
PAYMENT OF DIVIDENDS. NO CASH DIVIDENDS HAVE BEEN PAID ON THE COMMON STOCK
SINCE THE COMPANY'S INCEPTION. ON APRIL 30, 1995, A CASH DIVIDEND IN THE AMOUNT
OF $112,730 WAS DECLARED BUT NOT PAID TO JOSEPH ENDE, PRESIDENT OF THE COMPANY,
ON THE
7
<PAGE>
PREFERRED STOCK WHICH WAS ISSUED TO HIM IN CONNECTION WITH THE REVERSE MERGER.
NO CASH DIVIDENDS ARE CONTEMPLATED IN THE FORESEEABLE FUTURE, AND THE COMPANY
PRESENTLY INTENDS TO RETAIN ALL OF ITS EARNINGS FOR THE FUTURE OPERATIONS AND
GROWTH OF ITS BUSINESS. IN ADDITION, THE COMPANY'S LOAN AGREEMENT WITH ONE OF
ITS LENDERS PROHIBITS THE PAYMENT OF DIVIDENDS IF SUCH PAYMENT WOULD RESULT IN A
BREACH OF SUCH LOAN AGREEMENT.
EFFECT OF OUTSTANDING WARRANTS AND OPTIONS. AN AGGREGATE OF 900,000 CLASS A
COMMON STOCK PURCHASE WARRANTS ("WARRANTS") WERE SOLD IN THE COMPANY'S AUGUST
1996 PRIVATE PLACEMENT AND ARE CURRENTLY ISSUED AND OUTSTANDING. THE PLACEMENT
AGENT FOR SUCH OFFERING IS ENTITLED TO PURCHASE 40,000 UNITS EACH CONSISTING OF
ONE SHARE OF COMMON STOCK AND TWO WARRANTS. THERE ARE OUTSTANDING OPTIONS TO
PURCHASE 349,000 SHARES OF COMMON STOCK WHICH ARE OR WILL BECOME EXERCISABLE ON
VARIOUS DATES. THE EXERCISE OF A SIGNIFICANT NUMBER OF SUCH WARRANTS AND OPTIONS
AT PRICES SUBSTANTIALLY BELOW THE THEN CURRENT MARKET PRICE OF COMMON STOCK MAY
ADVERSELY AFFECT THE PREVAILING MARKET PRICE FOR THE COMMON STOCK AT THE TIME OF
EXERCISE AND WILL DILUTE THE INTERESTS OF THEN EXISTING STOCKHOLDERS. MOREOVER,
THE TERMS UPON WHICH THE COMPANY WILL BE ABLE TO OBTAIN ADDITIONAL EQUITY
CAPITAL, IF REQUIRED, MAY BE ADVERSELY AFFECTED BY THE EXISTENCE OF SUCH
OUTSTANDING OPTIONS AND WARRANTS, BECAUSE THE HOLDERS OF SUCH OUTSTANDING
SECURITIES CAN BE EXPECTED TO EXERCISE THEM AT A TIME WHEN THE COMPANY WOULD, IN
ALL LIKELIHOOD, WANT TO OBTAIN ANY NEEDED CAPITAL ON TERMS MORE FAVORABLE TO THE
COMPANY THAN THOSE PROVIDED IN SUCH WARRANTS AND OPTIONS.
SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS. OF THE 3,868,730
SHARES OF COMMON STOCK ISSUED AND OUTSTANDING, APPROXIMATELY 2,650,000 SHARES OF
COMMON STOCK ARE "RESTRICTED SECURITIES," AS THAT TERM IS DEFINED UNDER RULE 144
PROMULGATED UNDER THE SECURITIES ACT ("RULE 144"), AND MAY NOT BE SOLD IN THE
ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE, INCLUDING THE EXEMPTION PROVIDED BY RULE 144.
THE COMPANY HAS GRANTED DEMAND AND PIGGYBACK REGISTRATION RIGHTS TO THREE
STOCKHOLDERS WITH RESPECT TO AN AGGREGATE OF 306,330 SHARES OF COMMON STOCK. THE
COMPANY HAS GRANTED CERTAIN DEMAND AND PIGGYBACK REGISTRATION RIGHTS TO THE
PLACEMENT AGENT WITH RESPECT TO THE COMMON STOCK ISSUABLE UPON EXERCISE OF THE
PLACEMENT AGENT'S WARRANTS, TO PURCHASE UP TO AN AGGREGATE OF 120,000 SHARES OF
COMMON STOCK, AS WELL AS 900,000 SHARES OF COMMON STOCK UNDERLYING THE WARRANTS
OFFERED TO INVESTORS. NO PREDICTION CAN BE MADE AS TO THE EFFECT, IF ANY, THAT
SALES OF SHARES OF COMMON STOCK OR EVEN THE AVAILABILITY OF SUCH SHARES FOR SALE
WILL HAVE ON THE MARKET PRICE OF THE COMMON STOCK PREVAILING FROM TIME TO TIME.
THE POSSIBILITY THAT SUBSTANTIAL AMOUNTS OF COMMON STOCK MAY BE SOLD IN THE
PUBLIC MARKET MAY ADVERSELY AFFECT THE PREVAILING MARKET PRICE FOR THE COMMON
STOCK
8
<PAGE>
AND COULD IMPAIR THE COMPANY'S ABILITY IN THE FUTURE TO RAISE CAPITAL THROUGH
THE SALE OF ITS EQUITY SECURITIES.
DURING THE RESPECTIVE TERMS OF THE COMPANY'S OUTSTANDING DERIVATIVE
SECURITIES, THE HOLDERS THEREOF MAY BE ABLE TO PURCHASE COMMON STOCK AT PRICES
SUBSTANTIALLY BELOW THE THEN CURRENT MARKET PRICE OF THE COMPANY'S COMMON STOCK
WITH A RESULTANT DILUTION IN THE INTERESTS OF THE EXISTING STOCKHOLDERS. THE
HOLDERS OF THE COMPANY'S DERIVATIVE SECURITIES MAY BE EXPECTED TO EXERCISE THEIR
RIGHTS TO ACQUIRE COMMON STOCK AT TIMES WHEN THE COMPANY WOULD, IN ALL
LIKELIHOOD, BE ABLE TO OBTAIN NEEDED CAPITAL THROUGH A NEW OFFERING OF
SECURITIES ON TERMS MORE FAVORABLE THAN THOSE PROVIDED BY THESE OUTSTANDING
SECURITIES. THUS, THE TERMS UPON WHICH THE COMPANY MAY OBTAIN ADDITIONAL
FINANCING DURING THE NEXT SEVERAL YEARS MAY BE ADVERSELY AFFECTED. IN ADDITION,
THE EXERCISE OF OUTSTANDING DERIVATIVE SECURITIES AND THE SUBSEQUENT PUBLIC
SALES OF COMMON STOCK BY HOLDERS OF SUCH SECURITIES PURSUANT TO A REGISTRATION
STATEMENT EFFECTED AT THEIR DEMAND, UNDER RULE 144 OR OTHERWISE, COULD HAVE AN
ADVERSE EFFECT UPON THE MARKET FOR AND PRICE OF THE COMPANY'S SECURITIES.
SECURITIES MARKET FACTORS. IN RECENT YEARS, THE SECURITIES MARKETS HAVE
EXPERIENCED A HIGH LEVEL OF VOLUME VOLATILITY AND MARKET PRICES FOR MANY
COMPANIES, PARTICULARLY SMALL AND EMERGING GROWTH COMPANIES, HAVE BEEN SUBJECT
TO WIDE FLUCTUATIONS IN RESPONSE TO QUARTERLY VARIATIONS IN OPERATING RESULTS.
THE SECURITIES OF MANY OF THESE COMPANIES WHICH TRADE IN THE OVER-THE-COUNTER
MARKET, HAVE EXPERIENCED WIDE PRICE FLUCTUATIONS, WHICH IN MANY CASES WERE
UNRELATED TO THE OPERATING PERFORMANCE OF, OR ANNOUNCEMENTS CONCERNING, THE
ISSUERS OF THE AFFECTED STOCK. FACTORS SUCH AS ANNOUNCEMENTS BY THE COMPANY OR
ITS COMPETITORS CONCERNING PROPRIETARY INNOVATIONS, NEW PRODUCTS, GOVERNMENT
REGULATIONS AND DEVELOPMENTS OR DISPUTES RELATING TO PROPRIETARY RIGHTS AND
FACTORS AFFECTING THE AUTOMOBILE INDUSTRY GENERALLY MAY HAVE A SIGNIFICANT
IMPACT ON THE MARKET FOR THE COMPANY'S SECURITIES. GENERAL MARKET PRICE DECLINES
OR MARKET VOLATILITY IN THE FUTURE COULD ADVERSELY AFFECT THE FUTURE PRICE OF
THE COMPANY'S SECURITIES.
POSSIBLE DELISTING OF SECURITIES FROM THE NASDAQ STOCK MARKET; RISKS
ASSOCIATED WITH LOW-PRICED STOCK. THE COMPANY'S COMMON STOCK BECAME LISTED ON
NASDAQ SMALLCAP MARKET ON JUNE 6, 1996. NO ASSURANCE CAN BE GIVEN THAT THE
SHARES OF COMMON STOCK WILL REMAIN QUALIFIED FOR LISTING ON NASDAQ. IN ORDER TO
CONTINUE TO BE LISTED ON NASDAQ, THE COMPANY MUST MAINTAIN $2,000,000 IN TOTAL
ASSETS, A $200,000 MARKET VALUE OF THE PUBLIC FLOAT AND $1,000,000 IN TOTAL
CAPITAL AND SURPLUS. IN ADDITION, CONTINUED INCLUSION REQUIRES TWO MARKET MAKERS
AND A MINIMUM BID PRICE OF $1.00 PER SHARE; PROVIDED, HOWEVER, THAT IF A COMPANY
FALLS BELOW SUCH MINIMUM BID PRICE, IT WILL REMAIN ELIGIBLE FOR CONTINUED
LISTING ON NASDAQ IF THE MARKET VALUE OF THE PUBLIC
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FLOAT IS AT LEAST $1,000,000 AND THE COMPANY HAS $2,000,000 IN CAPITAL AND
SURPLUS. THE FAILURE TO MEET THESE MAINTENANCE CRITERIA MAY RESULT IN THE
DELISTING OF THE COMMON STOCK FROM NASDAQ, AND THE TRADING OF THE COMMON STOCK,
IF ANY, WOULD BE CONDUCTED IN THE OVER-THE-COUNTER MARKET THROUGH THE OTC
ELECTRONIC BULLETIN BOARD. AS A RESULT OF SUCH DELISTING, AN INVESTOR MAY FIND
IT MORE DIFFICULT TO DISPOSE OF, OR OBTAIN ACCURATE QUOTATIONS AS TO THE MARKET
VALUE OF, THE COMPANY'S SECURITIES.
FURTHERMORE, IF THE COMMON STOCK IS NOT LISTED ON NASDAQ OR WERE TO BECOME
DELISTED FROM TRADING ON NASDAQ AND THE TRADING PRICE OF THE COMMON STOCK
REMAINS BELOW $5.00 PER SHARE, TRADING IN THE COMMON STOCK WOULD ALSO BE SUBJECT
TO THE REQUIREMENTS OF CERTAIN RULES PROMULGATED UNDER THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), WHICH REQUIRE ADDITIONAL
DISCLOSURE BY BROKER-DEALERS IN CONNECTION WITH ANY TRADES INVOLVING A STOCK
DEFINED AS A PENNY STOCK (GENERALLY, ANY NON- NASDAQ EQUITY SECURITY THAT HAS A
MARKET PRICE OF LESS THAN $5.00 PER SHARE, SUBJECT TO CERTAIN EXCEPTIONS). SUCH
RULES REQUIRE THE DELIVERY, PRIOR TO ANY PENNY STOCK TRANSACTION, OF A
DISCLOSURE SCHEDULE EXPLAINING THE PENNY STOCK MARKET AND THE RISKS ASSOCIATED
THEREWITH, AND IMPOSE VARIOUS RESTRICTIONS ON SALES PRACTICES BY BROKER-DEALERS
WHO SELL PENNY STOCKS TO PERSONS OTHER THAN ESTABLISHED CUSTOMERS AND ACCREDITED
INVESTORS. FOR THESE TYPES OF TRANSACTIONS, THE BROKER-DEALER MUST MAKE A
SPECIAL SUITABILITY DETERMINATION FOR THE PURCHASER AND RECEIVE THE PURCHASER'S
WRITTEN CONSENT TO THE TRANSACTION PRIOR TO SALE. THE ADDITIONAL BURDENS IMPOSED
UPON BROKER- DEALERS BY SUCH REQUIREMENTS MAY DISCOURAGE THEM FROM EFFECTING
TRANSACTIONS IN THE COMMON STOCK, WHICH COULD SEVERELY LIMIT THE LIQUIDITY OF
THE COMMON STOCK AND THE ABILITY OF PURCHASERS IN THE OFFERING TO SELL THE
COMMON STOCK IN THE SECONDARY MARKET. SEE "PLAN OF DISTRIBUTION."
SELLING STOCKHOLDERS
THE SHARES OF COMMON STOCK TO WHICH THIS PROSPECTUS RELATES ARE BEING
REGISTERED FOR REOFFERS AND RESALES BY SELLING STOCKHOLDERS OF THE COMPANY WHO
HAVE ACQUIRED OR MAY ACQUIRE SUCH SHARES PURSUANT TO THE EXERCISE OF OPTIONS
GRANTED OR TO BE GRANTED UNDER THE PLANS OR PURSUANT TO STOCK OPTION AGREEMENTS
WITH THE COMPANY OUTSIDE THE PLANS IN CONNECTION WITH CONSULTING SERVICES
RENDERED TO THE COMPANY. THE SELLING STOCKHOLDERS NAMED BELOW MAY RESELL ALL, A
PORTION, OR NONE OF SUCH SHARES.
PARTICIPANTS UNDER THE PLANS WHO ARE DEEMED TO BE "AFFILIATES" OF THE
COMPANY WHO ACQUIRE COMMON STOCK UNDER THE PLANS MAY BE ADDED TO THE SELLING
STOCKHOLDERS LISTED BELOW FROM TIME TO TIME BY USE OF A PROSPECTUS SUPPLEMENT
FILED PURSUANT TO RULE 424(B) UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
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<PAGE>
"SECURITIES ACT"). AN "AFFILIATE" IS DEFINED IN RULE 405 UNDER THE SECURITIES
ACT AS A "PERSON THAT DIRECTLY, OR INDIRECTLY, THROUGH ONE OR MORE
INTERMEDIARIES, CONTROLS, OR IS CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH,"
THE COMPANY.
THE TABLE BELOW SETS FORTH WITH RESPECT TO EACH SELLING STOCKHOLDER, BASED
UPON INFORMATION AVAILABLE TO THE COMPANY AS OF SEPTEMBER 1, 1996, THE NUMBER OF
SHARES OF COMMON STOCK BENEFICIALLY OWNED BEFORE AND AFTER THE SALE OF THE
SHARES OFFERED HEREBY; THE NUMBER OF SHARES TO BE SOLD; AND THE PERCENT OF THE
OUTSTANDING SHARES OF COMMON STOCK OWNED BEFORE AND AFTER THE SALE OF THE SHARES
OFFERED HEREBY. EACH SELLING STOCKHOLDER'S RELATIONSHIP TO THE COMPANY IS SET
FORTH IN A FOOTNOTE TO THE TABLE.
<TABLE>
<CAPTION>
PERCENT OF CLASS
(1)(3)
<S> <C> <C> <C> <C> <C>
AMOUNT AND
NATURE OF SHARES
BENEFICIAL SHARES TO BENEFICIALLY
OWNERSHIP BE SOLD OWNED AFTER
NAME (1) (2) OFFERING
BEFORE AFTER
OFFERING OFFERING
JOSEPH ENDE 2,689,333 300,000 2,389,333 68.1% 61.8%
(4) (5)
SANDRA ENDE(4) 30,000 0 30,000 * *
(6)
MARC J. RUSKIN 0 30,000 0 * *
(4) (7)
SCOTT OSIAS 15,000 9,000 15,000 * *
(4) (8)
</TABLE>
* LESS THAN 1%
(1) UNLESS OTHERWISE NOTED, THE COMPANY BELIEVES THAT EACH SELLING SHAREHOLDER
HAS SOLE VOTING AND INVESTMENT POWER WITH RESPECT TO ALL SHARES OF COMMON
STOCK BENEFICIALLY OWNED, SUBJECT TO COMMUNITY PROPERTY LAWS, WHERE
APPLICABLE. EACH SELLING SHAREHOLDER IS DEEMED TO BE THE BENEFICIAL OWNER
OF SECURITIES THAT CAN BE ACQUIRED BY SUCH PERSON WITHIN 60 DAYS FROM THE
DATE OF DETERMINATION UPON THE EXERCISE OF WARRANTS OR OPTIONS. THE
PERCENTAGE OWNERSHIP OF EACH SELLING SHAREHOLDER IS DETERMINED BY ASSUMING
THAT OPTIONS OR WARRANTS THAT ARE HELD BY SUCH PERSON (BUT NOT THOSE HELD
BY ANY OTHER PERSON) AND WHICH ARE EXERCISABLE WITHIN 60 DAYS FROM THE DATE
OF DETERMINATION HAVE BEEN EXERCISED.
(2) INCLUDES SHARES OF COMMON STOCK REGISTERED HEREBY, BUT NOT ISSUABLE WITHIN
60 DAYS FROM THE DATE OF DETERMINATION. DOES NOT CONSTITUTE A COMMITMENT TO
SELL ANY OR ALL OF THE STATED NUMBER OF SHARES OF COMMON STOCK. THE NUMBER
OF SHARES OFFERED HEREBY SHALL BE DETERMINED FROM TIME TO TIME BY EACH
SELLING SHAREHOLDER AT HIS SOLE DISCRETION.
(3) BASED ON 3,868,730 SHARES OUTSTANDING, BUT DOES NOT GIVE EFFECT TO (I)
349,000 SHARES OF COMMON STOCK RESERVED FOR ISSUANCE UPON EXERCISE OF STOCK
OPTIONS CURRENTLY OUTSTANDING AND AN ADDITIONAL 120,000 SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE OF OPTIONS AVAILABLE FOR FUTURE GRANTS UNDER
THE 1995 PLAN AND 131,000 SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
OPTIONS AVAILABLE FOR FUTURE GRANTS UNDER THE 1994 PLAN.
11
<PAGE>
(4) THE ADDRESS OF THIS PERSON IS C/O THE COMPANY, 33-16 WOODSIDE AVENUE, LONG
ISLAND CITY, NEW YORK 11101.
(5) INCLUDES (I) 15,000 SHARES OWNED OF RECORD BY THE JOSEPH AND SANDRA ENDE
CHARITABLE TRUST, OF WHICH JOSEPH AND SANDRA ENDE ARE TRUSTEES, (II) 80,000
SHARES WHICH MAY BE OBTAINED UPON THE EXERCISE OF CURRENTLY EXERCISABLE
STOCK OPTIONS, BUT EXCLUDES AN AGGREGATE OF 220,000 SHARES UNDERLYING
OPTIONS WHICH ARE NOT CURRENTLY EXERCISABLE OR EXERCISABLE WITHIN THE NEXT
60 DAYS; AND (III) 386,000 SHARES PLEDGED TO BANK LEUMI TRUST COMPANY AS
SECURITY FOR THE REPAYMENT OF THE LOAN MADE BY SUCH BANK TO THE HOLDER OF
SUCH SHARES TO PURCHASE SUCH SHARES.
(6) INCLUDES 15,000 SHARES OWNED OF RECORD BY THE JOSEPH AND SANDRA ENDE
CHARITABLE TRUST, OF WHICH JOSEPH AND SANDRA ENDE ARE TRUSTEES, BUT DOES
NOT INCLUDE ANY OTHER SHARES BENEFICIALLY OWNED BY JOSEPH ENDE, SANDRA
ENDE'S HUSBAND.
(7) DOES NOT INCLUDE AN AGGREGATE OF 30,000 SHARES OF COMMON STOCK WHICH MAY BE
PURCHASED PURSUANT TO STOCK OPTIONS HELD BY MR. RUSKIN WHICH ARE NOT
CURRENTLY EXERCISABLE OR EXERCISABLE WITHIN THE NEXT 60 DAYS.
(8) DOES NOT INCLUDE 9,000 SHARES OF COMMON STOCK WHICH MAY BE PURCHASED
PURSUANT TO STOCK OPTIONS HELD BY MR. OSIAS WHICH ARE NOT CURRENTLY
EXERCISABLE OR EXERCISABLE WITHIN THE NEXT 60 DAYS.
PLAN OF DISTRIBUTION
THE SHARES ARE BEING SOLD BY THE SELLING STOCKHOLDERS FOR THEIR OWN
ACCOUNTS. THE SHARES MAY BE SOLD OR TRANSFERRED FOR VALUE BY THE SELLING
STOCKHOLDERS, OR BY PLEDGEES, DONEES, TRANSFEREES OR OTHER SUCCESSORS IN
INTEREST TO THE SELLING STOCKHOLDERS, IN ONE OR MORE TRANSACTIONS ON NASDAQ, IN
NEGOTIATED TRANSACTIONS OR IN 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 PRICES OTHERWISE NEGOTIATED. THE SELLING STOCKHOLDERS MAY
EFFECT SUCH TRANSACTIONS BY SELLING THE SHARES TO OR THROUGH BROKERS-DEALERS,
AND SUCH BROKER-DEALERS MAY RECEIVE COMPENSATION IN THE FORM OF UNDERWRITING
DISCOUNTS, CONCESSIONS OR COMMISSIONS FROM THE SELLING STOCKHOLDERS AND/OR THE
PURCHASERS OF THE SHARES FOR WHOM SUCH BROKER-DEALERS MAY ACT AS AGENT (WHICH
COMPENSATION MAY BE LESS THAN OR IN EXCESS OF CUSTOMARY COMMISSIONS). THE
SELLING SHAREHOLDERS AND ANY BROKER-DEALERS THAT PARTICIPATE IN THE DISTRIBUTION
OF THE SHARES MAY BE DEEMED TO BE "UNDERWRITERS" WITHIN THE MEANING OF SECTION
2(11) OF THE SECURITIES ACT, AND ANY COMMISSIONS RECEIVED BY THEM AND ANY PROFIT
ON THE RESALE OF THE SHARES SOLD BY THEM MAY BE DEEMED TO BE UNDERWRITING
DISCOUNTS AND COMMISSIONS UNDER THE SECURITIES ACT.
THERE CAN BE NO ASSURANCE THAT ANY OF THE SELLING STOCKHOLDERS WILL SELL
ANY OR ALL OF THE SHARES OF COMMON STOCK OFFERED BY THEM HEREUNDER.
12
<PAGE>
LEGAL MATTERS
THE VALIDITY OF THE SHARES OF COMMON STOCK OFFERED HEREBY HAS BEEN PASSED
UPON FOR THE COMPANY BY SNOW BECKER KRAUSS P.C., 605 THIRD AVENUE, NEW YORK, NEW
YORK 10158-0125. SNOW BECKER KRAUSS P.C. OWNS 10,000 SHARES OF COMMON STOCK OF
THE COMPANY.
EXPERTS
THE CONSOLIDATED FINANCIAL STATEMENTS OF BRAKE HEADQUARTERS, U.S.A., INC.
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1995, INCORPORATED BY REFERENCE IN
THIS PROSPECTUS, HAVE BEEN AUDITED AND ARE INCLUDED IN RELIANCE UPON THE REPORT
OF DELOITTE & TOUCHE LLP, INDEPENDENT AUDITORS, GIVEN UPON THE AUTHORITY OF SAID
FIRM AS EXPERTS IN ACCOUNTING AND AUDITING; AND, AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1994, INCORPORATED BY REFERENCE IN THIS PROSPECTUS, HAVE BEEN
AUDITED AND ARE INCLUDED IN RELIANCE UPON THE REPORT OF GOLDSTEIN GOLUB KESSLER
& COMPANY, P.C., INDEPENDENT AUDITORS, GIVEN UPON THE AUTHORITY OF SAID FIRM AS
EXPERTS IN ACCOUNTING AND AUDITING, AND, FOR THE YEAR ENDED DECEMBER 31, 1993,
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, HAVE BEEN AUDITED AND ARE INCLUDED
IN RELIANCE UPON THE REPORT OF BOREK, STOCKEL & MARDEN, INDEPENDENT AUDITORS,
GIVEN UPON THE AUTHORITY OF SAID FIRM AS EXPERTS IN ACCOUNTING AND AUDITING.
13
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
WE CONSENT TO THE INCORPORATION BY REFERENCE IN THIS REGISTRATION STATEMENT OF
BRAKE HEADQUARTERS U.S.A., INC. ON FORM S-8 OF OUR REPORT DATED APRIL 8, 1996,
APPEARING IN THE ANNUAL REPORT ON FORM 10-KSB OF BRAKE HEADQUARTERS U.S.A., INC.
FOR THE YEAR ENDED DECEMBER 31, 1995 AND TO THE REFERENCE TO US UNDER THE
HEADING "EXPERTS" IN THE PROSPECTUS WHICH IS PART OF THIS REGISTRATION
STATEMENT.
DELOITTE & TOUCHE LLP
STAMFORD, CONNECTICUT
SEPTEMBER 19, 1996
14
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITOR'S CONSENT
THE BOARD OF DIRECTORS
BRAKE HEADQUARTERS U.S.A., INC.
WE HEREBY CONSENT TO THE USE IN THE PROSPECTUS CONSTITUTING PART OF THE
REGISTRATION STATEMENT ON FORM S-8 OF OUR REPORT DATED FEBRUARY 8, 1995 ON THE
CONSOLIDATED FINANCIAL STATEMENTS OF BRAKE HEADQUARTERS U.S.A., INC. AS OF
DECEMBER 31, 1994 AND FOR THE YEAR THEN ENDED, INCORPORATED HEREIN BY REFERENCE.
WE ALSO CONSENT TO THE REFERENCE TO OUR FIRM UNDER THE CAPTION "EXPERTS" IN THE
PROSPECTUS.
GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.
NEW YORK, NEW YORK
SEPTEMBER 19, 1996
15
<PAGE>
EXHIBIT 23.4
INDEPENDENT AUDITORS CONSENT
THE BOARD OF DIRECTORS
BRAKE HEADQUARTERS U.S.A., INC.:
WE CONSENT TO THE USE OF OUR REPORT RELATED TO THE CONSOLIDATED FINANCIAL
STATEMENTS OF BRAKE HEADQUARTERS U.S.A., INC. INCORPORATED HEREIN BY REFERENCE
AND TO THE REFERENCE TO OUR FIRM UNDER THE HEADING "EXPERTS" IN THE PROSPECTUS.
BOREK, STOCKEL & MARDEN
PORT CHESTER, NEW YORK
SEPTEMBER 19, 1996
16
