As filed with the Securities and Exchange Commission on June 10, 1996.
File No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
CAPITAL BRANDS, INC.
(Exact name of issuer as specified in its charter)
Florida 65-0506539
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1225 Broken Sound Parkway N.W.
Suite A
Boca Raton, Florida 33481
(Address of principal executive offices) (Zip Code)
---------------
CONSULTING AGREEMENTS
(Full title of the plan)
---------------
Brian A. Kahan, President
1225 Broken Sound Parkway N.W.
Suite A
Boca Raton, Florida 33481
Telephone No.: (407) 994-8585
(Name and address of agent for service)
Copy to:
Joel D. Mayersohn, Esq.
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, FL 33301
(954) 763-1200
---------------
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE PRICE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) SHARE(1) PRICE(1) FEE (1)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
($.0008 par value) 625,000 shares $3.00 $1,875,000 $646.55
- ---------------------------------------------------------------------------------------------------
<FN>
(1)Pursuant to Rule 457(h), the maximum offering price was calculated based upon
the exercise price of the Options described herein.
</FN>
</TABLE>
2
<PAGE>
CAPITAL BRANDS, INC.
CROSS REFERENCE SHEET REQUIRED BY ITEM 501(B) OF REGULATION S-K
FORM S-8 ITEM NUMBER
AND CAPTION CAPTION IN PROSPECTUS
-------------------- ---------------------
1. Forepart of Registration State- Facing Page of Registration
ment and Outside Front Cover Statement and Cover Page of
Page of Prospectus Prospectus
2. Inside Front and Outside Back Inside Cover Page of Pro-
Cover Pages of Prospectus spectus and Outside
Cover Page of Prospectus
3. Summary Information, Risk Fac- Not Applicable
tors and Ratio of Earnings to
Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Sales by Selling
Security Holders
8. Plan of Distribution Cover Page of Prospectus
and Sales by Selling
Security Holders
9. Description of Securities to be Description of Securities;
Registered Consulting Agreements
10. Interests of Named Experts and Legal Matters
Counsel
11. Material Changes Not Applicable
12. Incorporation of Certain Infor- Incorporation of Certain
mation by Reference Documents by Reference
13. Disclosure of Commission Posi- Indemnification of Direc-
tion on Indemnification for tors and Officers; Under-
Securities Act Liabilities takings
3
<PAGE>
PROSPECTUS
CAPITAL BRANDS, INC.
625,000 SHARES OF COMMON STOCK
($.0008 PAR VALUE)
Issued Pursuant to the Exercise of Options under
the Company's Consulting Agreements
with F.B.W. Holdings, Inc.
and Shulman & Associates, Inc., and Todd Roberti
This Prospectus is part of a Registration Statement which registers an
aggregate of 625,000 shares of Common Stock, $.0008 par value (such shares being
referred to as the "Shares"), of Capital Brands, Inc. (the "Company" or
"Capital") which may be issued upon exercise of certain options, as set forth
herein, to (i) F.B.W. Holdings, Inc., a consultant to the Company ("F.B.W.")
pursuant to a written Consulting Agreement (the "F.B.W. Consulting Agreement"),
providing for the issuance of options to purchase 175,000 of such Shares and
(ii) Shulman & Associates, Inc., a consultant to the Company ("Shulman")
pursuant to a written Consulting Agreement (the "Shulman Consulting Agreement")
providing for the issuance of options to purchase an additional 300,000 of such
Shares and (iii) Todd Roberti, a consultant to the Company ("Roberti") pursuant
to a written Consulting Agreement (the "Roberti Consulting Agreement") providing
for the issuance of options to purchase an additional 150,000 of such shares
(all of such options being hereinafter collectively referred to as the
"Options"). F.B.W., Shulman and Roberti may be sometimes collectively referred
to as the "Consultants," and the F.B.W. Consulting Agreement, the Shulman
Consulting Agreement and the Roberti Consulting Agreement may be collectively
referred to as the "Consulting Agreements." In addition, the Consultants, in
their capacity as selling shareholders, may sometimes hereafter be collectively
referred to as the "Selling Security Holders." All of the Options are being
issued to the Consultants pursuant to written consulting agreements. The Company
has been advised by the Selling Security Holders that they may sell all or a
portion of the Shares from time to time in the over-the-counter market, in
negotiated transactions, directly or through brokers or otherwise, and that such
Shares will be sold at market prices prevailing at the time of such sales or at
negotiated prices, and the Company will not receive any proceeds from such
sales.
No person has been authorized by the Company to give any information or
to make any representation other than as contained in this Prospectus, and if
given or made, such information or representation must not be relied upon as
having been authorized by the Company. Neither the delivery of this Prospectus
nor any distribution of the Shares issuable under the terms of the Consulting
Agreements shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereof.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY
STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
The date of this Prospectus is June 10, 1996.
4
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed with the Commission can be inspected and
copied at the public reference facilities of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of this material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Company's Common Stock is traded on the NASDAQ SmallCap Market under the symbol
"CAAS."
The Company has filed with the Commission a Registration Statement on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), with respect to the resale of up to an aggregate of up to
625,000 shares of the Company's Class A Common Stock, to be issued to
Consultants of the Company upon exercise of certain options pursuant to written
Consulting Agreements of Capital. This Prospectus, which is Part I of the
Registration Statement, omits certain information contained in the Registration
Statement. For further information with respect to the Company and the shares of
the Common Stock offered by this Prospectus, reference is made to the
Registration Statement, including the exhibits thereto. Statements in this
Prospectus as to any document are not necessarily complete, and where any such
document is an exhibit to the Registration Statement or is incorporated by
reference herein, each such statement is qualified in all respects by the
provisions of such exhibit or other document, to which reference is hereby made,
for a full statement of the provisions thereof. A copy of the Registration
Statement, with exhibits, may be obtained from the Commission's office in
Washington, D.C. (at the above address) upon payment of the fees prescribed by
the rules and regulations of the Commission, or examined there without charge.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated herein by reference and made a part hereof:
1. The Company's Annual Report on Form 10-KSB and
10-KSB/A for the fiscal year ended December 31, 1995.
2. The Company's Quarterly Report on Form 10-QSB for the
quarterly period ended March 31, 1996.
5
<PAGE>
3. All reports and documents filed by the Company pursuant to Section
13, 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby 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 respective
date of filing of such documents. Any statement 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 other subsequently filed
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of the Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all of the documents referred to above which have been or may be incorporated by
reference in this Prospectus, other than exhibits to such documents. Written
requests for such copies should be directed to Corporate Secretary, Capital
Brands, Inc., 1225 Broken Sound Parkway N.W., Suite A, Boca Raton, Florida
33481.
6
<PAGE>
THE COMPANY
GENERAL
Capital Brands, Inc. was organized to engage in the following
activities:
(a) Acquisition of at least a majority interest in, and
operational control of, business enterprises;
(b) Development and marketing of commercial enterprises,
products and/or services; and
(c) Participation in business ventures of existing and newly formed
business entities on a joint venture or other active business relationship
basis.
As a result of Capital's recent share exchange agreement with
CompScript, Inc. ("CompScript"), which closed on April 26, 1996, where
shareholders of CompScript exchanged approximately 90% of the outstanding stock
of CompScript for approximately 80% of the shares of the Company, Capital is now
principally engaged in the business of providing comprehensive pharmacy
management services. In addition, in connection with the share exchange, Capital
divested itself of its 100% equity interest in Family Chicken, Inc.,
International Fast Food Corporation and International Hotel Corporation. Capital
continues to maintain ownership of 1,125,000 shares of common stock of QPQ
Corporation.
BUSINESS OF COMPSCRIPT, INC.
CompScript is a comprehensive provider of pharmacy management services
equipped to both lower costs and improve the quality of care. CompScript offers
a broad range of pharmacy, infusion therapy, consulting services, mail order,
and pharmacy benefit claim administration to managed care networks, long-term
and sub- acute care facilities, home health patients, and recipients of managed
care. CompScript's proprietary pharmacy management capabilities combine
sophisticated clinical tools with the latest technologies in databases and drug
profiles. CompScript's network of participating retail pharmacies, along with
electronic on-line adjudication system and a mail service dispensing facility,
allow CompScript to offer a fully integrated pharmacy benefit management
program. CompScript's operations consist of the following:
INSTITUTIONAL PHARMACY: CompScript operates an institutional pharmacy
that serves long-term and sub-acute facilities in the southeast Florida market.
CompScript's proprietary computer system and specialization in the sub-acute
arena have been instrumental in new business development and the reason over 65%
of the facilities are considered sub-acute or competent in IV Therapy.
CompScript is unique among LTC providers in areas of medical records,
7
<PAGE>
consultant/nursing services, formulary management, and IV Therapy. An emphasis
on managed care and outcomes monitoring provides institutions with monthly cost
savings. Consultant pharmacists work on a proprietary laptop program to offer
institutions patient specific clinical data.
HOME INFUSION: CompScript has established a JCAHO home infusion company
to serve homebound patients. Therapies offered include enteral nutrition, TPN,
antibiotics, chemotherapy, pain management and AIDS therapies. CompScript offers
outcome management with an emphasis on diagnosis of level of severity,
specialized management reporting, and statewide coverage, which makes the
CompScript particularly attractive to managed care companies. CompScript offers
managed care companies a full continuum of coverage for their clients, from
hospitals to subacute units to LTC facilities to their homes.
LONG-TERM CARE PHARMACY NETWORK: In May of 1995, CompScript formed the
first of its kind, Long-Term Care Planning Network. This network is organized to
provide full comprehensive services to the institutionalized frail elderly
population with the consistencies of one long-term care model benefit. This net
work is being marketed to payers with both national and regional interests for
one pharmaceutical vendor for their long-term pharmaceutical care beneficiaries.
WORKERS' COMPENSATION: CompScript has developed a program to serve its
workers' compensation clients. CompScript offers its First Prescription program
to insurers and large employers which allow 60% of the prescriptions dispensed
under a compensation program to be captured by the program. CompScript offers a
proprietary, on line, workers' compensation formulary which screens out
non-compensation prescriptions.
HEALTHCARE PHARMACY MANAGEMENT: CompScript clinical pharmacy practice
puts it in an ideal position to provide outcomes-oriented healthcare programs.
RETAIL PHARMACY NETWORK: CompScript has developed a dual national
network system.
The Company's principal executive offices are located at 1225 Broken
Sound Parkway N.W., Suite A, Boca Raton, Florida 33481.
CONSULTING AGREEMENTS
On January 12, 1996, CompScript entered into three Consulting Agreements
with F.B.W., Shulman and Roberti pursuant to which options would be issued to
purchase 175,000, 300,000 and 150,000, respectively, shares of Common Stock of
the Company in consideration for consulting services to be provided to
CompScript principally in connection with the share exchange between
8
<PAGE>
Compscript and the Company. The share amounts have been adjusted for the
Company's 1 for 8 reverse stock split. F.B.W. is wholly- owned by Mr. Franklyn
Weichelsbaum, who is the sole officer and director of F.B.W. Shulman is
wholly-owned by Mr. Manny Shulman, who is the sole officer and director of
Shulman.
COMPENSATION
In connection with the Consulting Agreements, the Company has agreed to
issue Options to purchase up to 625,000 shares of Common Stock of the Company
over a three (3) year period until 1999 and which are not being administered by
either the Board of Directors of the Company or any committee of the Board of
Directors organized for that purpose. The specific terms of the Options are as
follows:
(a) OPTION PRICE. Options to purchase 475,000 shares of Common Stock
shall be exercisable at $1.00 per share and Options to purchase
150,000 shares shall be exercisable at $3.00 per share. The
Options may be exercised in part or in whole.
(b) TERM OF OPTIONS. Each Option expires January 12, 1999.
(c) PAYMENT FOR SHARES. The purchase price for the exercise of the
Options is payable in cash, and the price for the shares of
Common Stock is to be paid in full upon exercise of the Options.
(d) TRANSFERABILITY. The Options are not transferable by the holder
thereof except to the Consultant's sole shareholder or pursuant
to the laws of descent and distribution.
(e) REDEMPTION. There are no redemption rights afforded to the
Company in connection with the Options.
(f) ADJUSTMENTS. The number of shares of Common Stock of the Company
purchasable upon exercise of the Options and the exercise price
of the Options are subject to adjustment upon the occurrence of
specified events primarily involving stock dividends, stock
splits, reorganizations, reclassifications, consolidations and
mergers. There will be no adjustment for the payment of cash
dividends by the Company on its Common Stock. The Company is not
required to issue fractional shares. Options for fractional
shares amounting to less than one share will be disregarded.
(g) MISCELLANEOUS. It is intended that the resale of the shares of
Common Stock issued on exercise of the Options
9
<PAGE>
will be fully registered under the Securities Act of 1933.
RESTRICTIONS UNDER SECURITIES LAWS
The sale of any shares of Common Stock acquired upon the exercise of the
Options must be made in compliance with federal and state securities laws.
Officers, directors and 10% or greater stockholders of the Company, as well as
certain other persons or parties who may be deemed to be "affiliates" of the
Company under the Federal Securities Laws, should be aware that resales by
affiliates can only be made pursuant to an effective Registration Statement,
Rule 144 or any other applicable exemption. Officers, directors and 10% and
greater stockholders are also subject to the "short swing" profit rule of
Section 16(b) of the Securities Exchange Act of 1934. Section 16(b) of the
Exchange Act generally provides that if an officer, director or 10% and greater
stockholder sold any Common Stock of the Company acquired pursuant to the
exercise of a stock option or warrant, he would generally be required to pay to
the Company any "profits" resulting from the sale of the stock and receipt of
the stock option. Section 16(b) exempts all option exercises from being treated
as purchases and, instead, treats an option grant as a purchase of the
underlying security, which grant/purchase may be matched with any sale of the
underlying security within six months of the date of grant.
SALES BY SELLING SECURITY HOLDERS
The following table sets forth the name of the Selling Security Holders,
the amount of shares of Common Stock held directly or indirectly or underlying
the maximum number of Options to be issued to the Selling Security Holders, the
maximum amount of shares of Common Stock underlying the Options to be offered by
the Selling Security Holders, the exercise price for the Options, the amount of
Common Stock to be owned by the Selling Security Holders following sale of such
shares of Common Stock and the percentage of shares of Common Stock to be owned
by the Selling Security Holders following completion of such offering (based on
9,275,449 shares of Common Stock of the
Company outstanding at May 31, 1996).
<TABLE>
<CAPTION>
ESTIMATED SHARES TO BE PERCENTAGE
PER SHARE OWNED TO BE OWNED
NAME OF SELLING NUMBER OF SHARES TO EXERCISE AFTER AFTER
SECURITY HOLDER SHARES OWNED BE OFFERED PRICE OFFERING OFFERING
- --------------- ------------ ---------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
F.B.W. Holdings,
Inc. 175,000* 175,000* $1.00 -0- --
Shulman &
Associates, Inc. 300,000* 300,000* $1.00 -0- --
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
ESTIMATED SHARES TO BE PERCENTAGE
PER SHARE OWNED TO BE OWNED
NAME OF SELLING NUMBER OF SHARES TO EXERCISE AFTER AFTER
SECURITY HOLDER SHARES OWNED BE OFFERED PRICE OFFERING OFFERING
- --------------- ------------ ---------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Todd Roberti 150,000* 150,000* $3.00 **** ****
<FN>
- --------------
* Represents shares of Common Stock underlying Options.
** Does not include options to purchase 300,000 shares held by
LT Lawrence & Co. Inc., a corporation in which Mr. Roberti
is a principal.
</FN>
</TABLE>
DESCRIPTION OF SECURITIES
The Company is currently authorized to issue up to 12,500,000 shares of
Common Stock, $.0008 par value per share, of which 9,275,449 shares were
outstanding as of May 15, 1996. The Company is authorized to issue up to
1,000,000 shares of Preferred Stock, $.01 par value per share, none of which
were outstanding as of May 15, 1996.
CLASS A COMMON STOCK
The Company's Common Stock, $.0008 par value, is traded on the NASDAQ
SmallCap Market under the symbol "CAAS." The following sets forth the range of
high and low closing bid prices for the Common Stock as reported on the NASDAQ
during each of the quarters presented. The quotations set forth below are
inter-dealer quotations, without retail mark-ups, mark-downs or commissions and
may not necessarily represent actual transactions. The quotations have been
adjusted for the Company's 1 to 8 reverse stock split on April 26, 1995.
HIGH LOW
------ ------
1994
First Quarter...................................... $30.00 $26.00
Second Quarter..................................... 26.00 21.00
Third Quarter...................................... 23.00 21.00
Fourth Quarter..................................... 23.00 16.00
1995
First Quarter...................................... 20.25 11.00
Second Quarter..................................... 20.50 6.50
Third Quarter...................................... 7.25 3.50
Fourth Quarter..................................... 6.50 3.00
1996
First Quarter...................................... 8.75 3.00
As of March 18, 1996, there were 164 record holders of Capital Brands'
Common Stock. Capital Brands believes that there are in excess of 300 beneficial
holders of Capital Brands' Common Stock.
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Neither Capital nor any of its subsidiaries has paid any cash dividends
on its common stock and neither Capital nor any of its subsidiaries currently
intends to declare or pay cash dividends in the foreseeable future. Capital and
each of its subsidiaries intends to retain any earnings that may be generated to
provide funds for the operation of their respective business.
As of March 18, 1996, there were 164 holders of record of the Company's
Common Stock.
VOTING RIGHTS
Holders of shares of Common Stock are entitled to one vote. The holders
of shares of Common Stock are not entitled to cumulative voting rights.
Upon liquidation, dissolution or winding up of the Company,
distributions to holders of any class of common stock would only be made after
payment in full of creditors and provision for the preference of any preferred
stock having preference over the Common Stock. Any remaining amount would then
be shared pro ratably by the holders of Common Stock.
The holders of the Common Stock are not entitled to preemptive rights or
subscription or redemption privileges.
PREFERRED STOCK
The Board of Directors is authorized to issue the authorized and
unissued preferred stock in one or more series, to fix or alter the rights,
preferences, privileges and restrictions, including the dividend rights,
dividend rate, conversion rights, voting rights and terms of redemption,
liquidation preferences and sinking fund of any series of preferred stock which
is authorized and unissued. No shares of Preferred Stock have been issued or are
outstanding as of the date hereof.
OVER-THE-COUNTER MARKET
The Company's Common Stock is traded on the NASDAQ under the symbol
"CAAS."
TRANSFER AGENT
The Transfer Agent for the shares of Common Stock is Continental Stock
Transfer & Trust Company, 2 Broadway, New York, New York 10004.
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<PAGE>
LEGAL MATTERS
Certain legal matters in connection with the securities being offered
hereby will be passed upon for the Company by Atlas, Pearlman, Trop & Borkson,
P.A., Special Counsel for the Company, Fort Lauderdale, Florida.
INDEMNIFICATION
The Company has authority under Section 607.0850 of the Florida Business
Corporation Act (the "FBCA") to indemnify its directors and officers to the
extent provided for in such Statute.
The provision of the FBCA authorizes the Company to indemnify its
officers and directors in connection with actions, suits and proceedings brought
against them if the person acted in good faith and in a manner which the person
reasonably believed to be in, or not opposed to, the best interest of the
Company and, with respect to any criminal actions, had no reasonable cause to
believe the person's conduct was unlawful. Unless pursuant to a determination by
a court, the determination of whether a director, officer or employee has acted
in accordance with the applicable standard of conduct must be made by (i) a
majority vote of the directors who were not parties to the proceeding or a
committee consisting solely of two or more directors not party to the
proceedings, (ii) independent legal counsel selected by a majority vote of the
directors who were parties to the proceeding or committee of directors (or
selected by the full board if a quorum or committee cannot be obtained), or
(iii) the affirmative vote of the majority of the Company's shareholders were
not parties to the proceeding.
The FBCA further provides that the Company may make any other further
indemnity by resolution, by-law, agreement, vote of shareholders, disinterested
directors or otherwise, except with the respect to certain enumerated acts or
omissions of such persons. Florida law prohibits indemnification or advancement
of expenses if a judgement or other final adjudication establishes that the
actions of a director, officer or employee constitute (i) a violation of
criminal law, unless the person had reasonable cause to believe his conduct was
unlawful, (ii) a transaction from which such person derived an improper personal
benefit, (iii) wilful misconduct or conscious disregard for the best interest of
the Company in the case of a derivative action by a shareholder, or (iv) in the
case of a director, a circumstance under which a director would be liable for
improper distributions under Section 607.0384 of the FBA. The FBCA does not
affect a director's responsibilities under any other law, such as federal
securities laws.
13
<PAGE>
The Company maintains directors and officers liability insurance, which
covers the Company's subsidiaries and the respective directors and officers.
14
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed in (a) through (b) below are incorporated by
reference in the Registration Statement. All documents subsequently filed by the
Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (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 in the Registration Statement and to be part
thereof from the date of filing of such documents.
(d) The Registrant's Annual Report on Form 10-KSB and 10-KSB/A
for the fiscal year ended December 31, 1995.
(e) The Company's Quarterly Reports on Form 10-QSB for the
quarterly period ended March 31, 1996.
(f) All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the Registrant's
document referred to in (a) above.
(g) The description of the Common Stock of the Company which is
contained in a Registration Statement filed under the Exchange Act, including
any amendment or report filed for the purpose of updating such description.
ITEM 4. DESCRIPTION OF SECURITIES
A description of the Company's securities is set forth in the Prospectus
incorporated as a part of this Registration Statement.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has authority under Section 607.0850 of the Florida Business
Corporation Act (the "FBA") to indemnify its directors and officers to the
extent provided for in such Statute.
The provision of the FBCA authorizes the Company to indemnify its
officers and directors in connection with actions, suits and proceedings brought
against them if the person acted in good faith and in a manner which the person
reasonably believed to be in, or not opposed to, the best interest of the
Company and, with respect
i
<PAGE>
to any criminal actions, had no reasonable cause to believe the person's conduct
was unlawful. Unless pursuant to a determination by a court, the determination
of whether a director, officer or employee has acted in accordance with the
applicable standard of conduct must be made by (i) a majority vote of the
directors who were not parties to the proceeding or a committee consisting
solely of two or more directors not party to the proceedings, (ii) independent
legal counsel selected by a majority vote of the directors who were parties to
the proceeding or committee of directors (or selected by the full board if a
quorum or committee cannot be obtained), or (iii) the affirmative vote of the
majority of the Company's shareholders were not parties to the proceeding.
The FBCA further provides that the Company may make any other further
indemnity by resolution, by-law, agreement, vote of shareholders, disinterested
directors or otherwise, except with the respect to certain enumerated acts or
omissions of such persons. Florida law prohibits indemnification or advancement
of expenses if a judgement or other final adjudication establishes that the
actions of a director, officer or employee constitute (i) a violation of
criminal law, unless the person had reasonable cause to believe his conduct was
unlawful, (ii) a transaction from which such person derived an improper personal
benefit, (iii) wilful misconduct or conscious disregard for the best interest of
the Company in the case of a derivative action by a shareholder, or (iv) in the
case of a director, a circumstance under which a director would be liable for
improper distributions under Section 607.0384 of the FBA. The FBCA does not
affect a director's responsibilities under any other law, such as federal
securities laws.
The Company does not maintain directors and officers liability
insurance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inasmuch as the Consultants who received the Options of the Company were
knowledgeable, sophisticated and had access to comprehensive information
relevant to the Company, such transaction was undertaken in reliance on the
exemption from registration provided by Section 4(2) of the Act. As a condition
precedent to such grant, the Consultants were required to express an investment
intent and consent to the imprinting of a restrictive legend on each stock
certificate to be received from the Company except upon sale of the underlying
shares of Common Stock pursuant to a registration statement.
ITEM 8. EXHIBITS
EXHIBIT DESCRIPTION
- ------- -----------
(4)(a) Consulting Agreement with F.B.W. Holdings, Inc.
ii
<PAGE>
(4)(b) Consulting Agreement with Shulman & Associates, Inc.
(4)(c) Consulting Agreement with Todd Roberti
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P.A.
relating to the issuance of shares of securities
pursuant to the above Consulting Agreements
(23.1) Consent of Atlas, Pearlman, Trop & Borkson, P.A.
included in the opinion filed as exhibit (5) hereto
(23.2) Consent of independent certified public accountants,
Coopers & Lybrand L.L.P.
ITEM 9. UNDERTAKINGS
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offerings or sales are
being made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
(b) That, for the purposes of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and
(c) 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.
(2) 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.
(3) Insofar as indemnification for liabilities arising under the Act 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 Act and is,
therefore,
iii
<PAGE>
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a Director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
iv
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 the City of Boca Raton and the State of Florida, on the
10th day of June, 1996.
CAPITAL BRANDS, INC.
By:/s/ BRIAN A. KAHAN
---------------------------------
Brian A. Kahan
Chairman of the Board
and President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
Chairman of the Board
and Chief Executive
Officer (Principal
/s/ BRIAN A. KAHAN Executive Officer) June 10, 1996
- ----------------------
Brian A. Kahan
Controller (Principal
/s/ GARY SPLAIN Accounting Officer) June 10, 1996
- ----------------------
Gary Splain
/s/ MARTHA M. LITTLE Director June 10, 1996
- ----------------------
Martha M. Little
/s/ GERARD N. ALTIERI Director June 10, 1996
- ----------------------
Gerard N. Altieri
/s/ MALCOLM LEONARD Director June 10, 1996
- ----------------------
Malcolm Leonard
/s/ ROBERT EDELHEIT Director June 10, 1996
- ----------------------
Robert Edelheit
/s/ PAUL HEIMBERG Director June 10, 1996
- ----------------------
Paul Heimberg
v
Exhibit 4(a)
CAPITAL BRANDS, INC.
1225 BROKEN SOUND PARKWAY, N.W.
SUITE A
BOCA RATON, FL 33481
May 30, 1996
F.B.W. HOLDINGS, INC.
6516 Via Rosa
Boca Raton, Florida 33433
Gentlemen:
This letter shall serve to memorialize an agreement made on January 12,
1996 between F.B.W. Holdings, Inc. and Compscript, Inc., a majority owned
subsidiary of Capital Brands pursuant to which F.B.W. Holdings, Inc. agreed to
provide certain consulting services to Compscript principally in connection
with the share exchange between Compscript and the Company.
In connection with such consulting services F.B.W. Holdings, Inc. is
entitled to options to purchase 175,000 shares of Capital Brands' Common Stock
at $1.00 per share (such amounts have been adjusted for Capital's 1 for 8
reverse stock split). Such options are exercisable for a three year period
expiring January 12, 1999.
If this accurately sets forth the agreement between the parties, please
indicate your acceptance by signing in the space provided below and returning a
copy to the undersigned.
Very truly yours,
CAPITAL BRANDS, INC.
By: /s/ BRIAN A. KAHAN
-----------------------------------
Brian A. Kahan, Chief Executive
Officer
ACCEPTED AND AGREED TO
THIS 6TH DAY OF JUNE, 1996.
F.B.W. HOLDINGS, INC.
By: /s/ FRANKLYN B. WEICHSELBAUM
-----------------------------------
Franklyn B. Weichselbaum, President
Exhibit 4(b)
CAPITAL BRANDS, INC.
1225 BROKEN SOUND PARKWAY, N.W.
SUITE A
BOKA RATON, FL 33481
May 30, 1996
SHULMAN & ASSOCIATES, INC.
7777 Glades Road, Suite 201
Boca Raton, Florida 33434
Gentlemen:
This letter shall serve to memorialize a understanding made on January 12,
1996 between Shulman & Associates, Inc. and Compscript, Inc. a majority owned
subsidiary of Capital Brands pursuant to which Shulman & Associates provided a
series of consulting services to Compscript principally in connection with the
share exchange between Capital and Compscript.
In connection with such consulting services, you are entitled to receive
300,000 (such amounts have been adjusted for Capital's 1 for 8 reverse stock
split) options to purchase an equivalent number of shares of Capital Brands'
Common Stock at an exercise price of $1.00 per share for a three year period
expiring January 12, 1999.
If this accurately sets forth the agreement between the parties, please
indicate your acceptance by signing in the space provided below and returning a
copy to the undersigned.
Very truly yours,
CAPITAL BRANDS, INC.
By: /s/ BRIAN A. KAHAN
--------------------------------
Brian A. Kahan, Chief Executive
Officer
ACCEPTED AND AGREED TO THIS
6TH DAY OF JUNE, 1996.
SHULMAN & ASSOCIATES, INC.
By: /s/ MANNY SHULMAN
-------------------------------
Manny Shulman, President
Exhibit 4(c)
CAPITAL BRANDS, INC.
1225 BROKEN SOUND PARKWAY, N.W.
SUITE A
BOCA RATON, FL 33481
May 30, 1996
Mr. Todd Roberti
1 Loveys Drive
Florhem Park, New Jersey 07932
Dear Mr. Roberti:
This letter shall serve to memorialize a understanding dated January 12,
1996 between Compscript, Inc., the Company's majority owned subsidiary and Todd
Roberti pursuant to which Mr. Roberti undertook and consulted with Compscript,
primarily in connection with the share exchange between Compscript and the
Company.
In connection with such services, Mr. Roberti is entitled to receive
options to purchase an aggregate of 150,000 shares of common stock of the
Company at an exercise price of $3.00 per share (such amounts have been adjusted
for the 1 for 8 reverse stock split). Such options to be exercisable until
January 12, 1999.
If this accurately sets forth the agreement between the parties, please
indicate your acceptance by signing in the space provided below and returning a
copy to the undersigned.
Very truly yours,
CAPITAL BRANDS, INC.
By: /s/ BRIAN A. KAHAN
-----------------------------------
Brian A. Kahan, Chief Executive
Officer
ACCEPTED AND AGREED TO
THIS 6TH DAY OF JUNE, 1996.
By: /s/ TODD ROBERTI
-----------------------------------
Todd Roberti
Exhibit 5
Direct Line: (954) 766-7816
June 7, 1996
Capital Brands, Inc.
1225 Broken Sound Parkway N.W.
Suite A
Boca Raton, Florida 33481
RE: REGISTRATION STATEMENT ON FORM S-8
Gentlemen:
This opinion is submitted pursuant to the applicable rules of the
Securities and Exchange Commission with respect to the registration by Capital
Brands, Inc. (the "Company") of 625,000 shares of Common Stock, par value $.0008
per share (the "Common Stock") issued pursuant to certain Consulting Agreements
(the "Agreements").
In our capacity as counsel to the Company, we have examined the
original, certified, conformed, photostat or other copies of the Agreements, the
Company's Certificate of Incorporation, By-Laws and corporate minutes provided
to us by the Company. In all such examinations, we have assumed the genuineness
of all signatures on original documents, and the conformity to originals or
certified documents of all copies submitted to us as conformed, photostat or
other copies. In passing upon certain corporate records and documents of the
Company, we have necessarily assumed the correctness and completeness of the
statements made or included therein by the Company and we express no opinion
thereon.
Based upon and in reliance of the foregoing, we are of the opinion that
the Common Stock, when issued in accordance with the terms of the Agreements
will be validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion in the Registration
Statement on Form S-8 to be filed with the Commission.
Very truly yours,
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
JDM/bb
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Capital Brands, Inc. on Form S-8 of our report dated March 29, 1996, on our
audits of the consolidated financial statements of Capital Brands, Inc. and
Subsidiary as of December 31, 1995 and 1994 and for the years then ended, which
report is included in the Company's Annual Report on Form 10-KSB.
COOPERS & LYBRAND L.L.P.
Miami, Florida
June 5, 1996
