As filed with the Securities and Exchange Commission on June 16, 1998.
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TOPS APPLIANCE CITY, INC.
(exact name of registrant as specified in its charter)
New Jersey 5731 22-3174554
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
45 Brunswick Avenue
Edison, New Jersey 08818
(732) 248-2850
(Address, including zip code, and telephone number,
including area code, of registrant's principal offices)
ROBERT G. GROSS
Chairman and Chief Executive Officer
Tops Appliance City, Inc.
45 Brunswick Avenue
Edison, New Jersey 08818
(732) 248-2850
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
W. RAYMOND FELTON, ESQ.
Greenbaum, Rowe, Smith, Ravin, Davis & Himmel LLP
Metro Corporate Campus One
Post Office Box 5600
Woodbridge, New Jersey 07095
(732) 549-5600
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. X
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of each Class of to be Price per Offering Registration
Securities to be Registered Registered Share (1) Price Fee
<S> <C> <C> <C> <C>
6 1/2% Convertible Subordinated
Debentures Due 2003........ $7,687,500 100% $7,687,500 $2,329.32
- -------------------------------------------------------------------------------------
Common Stock, no par value
per share (2).............. 4,392,857 - - -
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Such number represents the number of shares of Common Stock as are initially
issuable upon conversion of the 6 1/2% Convertible Subordinated Debentures Due
2003 registered hereby.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
TOPS APPLIANCE CITY, INC.
Cross Reference Sheet
<TABLE>
<CAPTION>
Form S-3 Item No. and Caption Prospectus Caption
<S> <C> <C>
1. Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus........................... Outside Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus.................. Inside Front Cover;
Outside Back Cover Page
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges... Offering Summary;
The Company; the Exchange; Risk
Factors
4. Use of Proceeds...................... Use of Proceeds
5. Determination of Offering Price...... Not Applicable
6. Dilution............................. Not Applicable
7. Selling Security Holders............. Exchanging Security Holders
8. Plan of Distribution................. Outside Front Cover Page;
Plan of Distribution
9. Description of Securities
to be Registered..................... The Debentures
10. Interest of Named Experts and Counsel Not Applicable
11. Material Changes..................... Not Applicable
12. Incorporation of Certain Information
by Reference......................... Incorporation of Certain
Documents by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.......................... Not Applicable
</TABLE>
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 16, 1998
PROSPECTUS
$7,687,500
TOPS APPLIANCE CITY, INC.
6 1/2% Convertible Subordinated Debentures due 2003
(Interest Payable February 28 and August 31)
4,392,857 SHARES OF COMMON STOCK
This Prospectus relates to (a) $7,687,500 aggregate principal amount of
the Company's 6 1/2% Convertible Subordinated Debentures due 2003 issued on
September 1, 1997 (the "Debenture Offering") and (b) 4,392,857 shares of Common
Stock, no par value per share, of the Company (the "Shares"), issuable upon the
exercise of the conversion right provided by the Debentures.
The Debentures and the Shares that are being registered hereby are to be
offered for the account of the holders thereof, being the Exchanging Security
Holders as set forth on page 13 hereof.
The Debentures are convertible into Common Stock of the Company after
February 28, 1999 at a conversion price of $1.75 per share (equivalent to
571.42857 shares per $1,000 principal amount of Debentures). On June 15, 1998
the last reported sale price of the Common Stock of the Company on the NASDAQ
National Market System (where it trades under the symbol TOPS) was $4-1/8 per
share.
The Debentures are redeemable at the option of the holder upon a Change
in Control (as defined in the Indenture), subject to certain conditions, at 101%
of the principal amount thereof plus accrued interest, and under certain other
circumstances. The Debentures are unsecured obligations of the Company and
subordinate in right of payment to all existing and future Senior Indebtedness
(as defined in the Indenture) of the Company. At May 28, 1998, the aggregate
amount of Senior Indebtedness of the Company was approximately $26,195,000
million. The Debentures will rank pari passu with the 6 1/2% Convertible
Subordinated Debentures due 2003 issued on November 30, 1993 in respect of
payment of principal and interest.
The Debentures are traded in the Private Offering, Resales and Trading
through the Automated Linkages ("PORTAL") Market. The Company does not intend to
list the Debentures on any national securities exchange. It may be unlikely that
a secondary market in the Debentures themselves (as opposed to the Shares) will
develop.
See "Risk Factors" at page 8 for a discussion of certain factors that
should be considered in connection with an investment in the Debentures.
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 Debentures and the Shares are being registered to permit secondary
trading of the Debentures and, upon conversion, the Shares, by the holders
thereof from time to time after the date of this Prospectus. The Company has
agreed, among other things, to bear all expense (other than underwriting
discounts, selling commissions and fees and the expenses of counsel and other
advisors to holders of the Debentures or the Shares) in connection with the
registration and sale of the Debentures and the Shares covered by this
Prospectus.
The Company anticipates that holders of Shares may sell all or a
portion of the Shares from time to time on the NASDAQ National Market System,
and may sell Debentures or Shares through a broker or brokers or in the
over-the-counter market at prices prevailing on such exchange or the
over-the-counter market, as appropriate, at the times of such sales. Holders of
Debentures or Shares may also make private sales directly or through such broker
or brokers. Brokers participating in such transactions will receive customary
brokerage commissions from sellers of Debentures or Shares. In effecting sales,
brokers or dealers engaged by holders of Debentures or Shares may arrange for
other brokers or dealers to participate. In connection with such sales, holders
of Debentures or Shares and brokers participating in such sales may be deemed to
be underwriters within the meaning of the Securities Act.
The date of this Prospectus is June 16, 1998
<PAGE>
No dealer, salesperson or other person is authorized in connection with
any offering made hereby to give any information or to make any representation
not contained in this Prospectus, and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the Debentures or the Shares into which the Debentures may
be converted to any person in any jurisdiction in which it is unlawful to make
such an offer or solicitation to such person. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create any
implication that the information contained herein is correct as of any date
subsequent to the date hereof.
AVAILABLE INFORMATION
Tops Appliance City, Inc. (the "Company") is subject to the information
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"). Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at 500 West Madison Street, Chicago, Illinois 60601 and 7
World Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission and the address for such site is http://www.sec.gov. The Company's
Common Stock is quoted on the NASDAQ National Market System, and such reports,
proxy statements and other information can also be inspected at the offices of
NASDAQ Operations, 1735 K Street, N.W., Washington, D.C.
The Company has filed with the Commission a registration statement on
Form S-3 (copies of which may be obtained from the Commission at its principal
office in Washington, D.C. upon payment of the charges prescribed by the
Commission, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"). This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement and the exhibits thereto.
Statements contained in this Prospectus as to the contents of any contract or
any other documents are not necessarily complete and, in each such instance,
reference is made to the copy of such contract or document filed as an exhibit
to the Registration Statement, each such statement being qualified by such
reference.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are hereby incorporated by reference in this
Prospectus, except as otherwise superseded or modified herein:
(a) The Company's Annual Report on Form 10-K for the year ended
December 30, 1997.
(b) The Company's Proxy Statement for its Annual Meeting of
Stockholders to be held on June 29, 1998.
(c) The Company's Quarterly Report on From 10-Q for the quarter ended
March 31, 1998.
(d) The Company's Current Report on Form 8-K dated March 31, 1998
(e) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-1 filed on June 3, 1992, as
amended (Registration No. 33-48326).
(f) The description of the Company's 6 1/2% Convertible Subordinated
Debentures due 2003 and the section entitled "ERISA Considerations"
contained in the Company's Registration Statement on Form S-3 filed on
February 10, 1994, as amended (Registration No. 33-75110).
(g) All documents subsequently filed by the Company pursuant to
Section 13, 14, or 15(d) of the Exchange Act prior to the termination of
the offering to which this Prospectus relates shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from
the date of filing of such documents.
Any statement contained in any document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed documents which also is or is deemed
to be 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.
<PAGE>
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon his written or oral request, a copy of any or all
of the documents referred to above which have been incorporated into this
Prospectus by reference (other than exhibits to such documents). Requests for
such copies should be directed to:
TOPS APPLIANCE CITY, INC.
45 Brunswick Avenue
Edison, New Jersey 08818
Attention: Robert G. Gross
Chairman and Chief Executive Officer
(732) 248-2850
<PAGE>
OFFERING SUMMARY
The following summary is qualified in its entirety by the detailed
information appearing, and the financial statements incorporated by reference,
elsewhere in this Prospectus.
THE COMPANY
Tops Appliance City, Inc. ("Tops" or the "Company") is a leading
retailer of home appliances and consumer electronics in New Jersey and New York,
serving a customer base within the Greater New York Metropolitan Area. The
Company operates seven retail megastores, ranging in size from 43,000 to 120,000
square feet, in heavily populated areas in New Jersey and in New York. The
Company also operates a commercial division, selling to small independent
retailers, builders and landlords, corporate buying groups and clubs and others.
Tops' stores display a broad selection of high quality, nationally recognized
brand names in each of its product categories. The Company's primary products
include major appliances (such as refrigerators, washers and dryers),
televisions, VCRs, camcorders, air-conditioners, consumer electronics, audio
equipment, personal computers, small electronic appliances, vacuum cleaners,
seasonal goods, home fitness products, housewares, related accessories and
extended service plans.
THE EXCHANGE
Pursuant to a Debenture Exchange Agreement, dated as of August 20,
1997, between the Company and BEA Associates, a New York partnership ("BEA"), as
agent for certain holders (the "Exchanging Security Holders") of the Company's 6
1/2% Convertible Subordinated Debentures due 2003 (the "Old Debentures") issued
on November 30, 1993, the Company exchanged $7,687,500 of the Debentures
registered hereunder for $15,375,000 of Old Debentures. The Company has been
advised that the Exchanging Security Holders, with the exception of ABT Co.,
Incorporated, Retirement Plan, have transferred all of the Debentures to the
current holders thereof as set forth herein and that BEA is no longer agent for
any holder of any of the Debentures. To the best knowledge of the Company, BEA
was the discretionary money manager for the Exchanging Security Holders pursuant
to certain written advisory agreements between BEA and each such Exchanging
Security Holder and had the discretionary authority to transfer any or all of
the Debentures.
DEFINITIONS
Capitalized terms not defined herein have the respective meanings
assigned to such terms in the 1994 Registration Statement.
<PAGE>
THE OFFERING
Securities Offered............. $7,687,500 principal amount of 6 1/2%
Convertible Subordinated Debentures due
2003 of the Company
Interest Payment Dates......... 6 1/2% per annum payable semi-annually
on February 28 and August 31, commencing
February 28, 1998
Conversion Rights.............. The Debentures are convertible into
Shares after February 28, 1999 at a
conversion price of $1.75 per share.
Accordingly, each $1,000 principal
amount of Debentures is convertible
into 571.42857 shares of the Company's
common stock, subject to adjustment, or
an aggregate of 4,392,857 shares,
representing approximately 32% of the
common stock on a fully diluted basis.
Redemption at the Option of
the Holder.................. If a Redemption Event occurs,
subject to certain conditions, each
holder shall have the right, at the
holder's option, to require the Company
to purchase all or any part of such
holder's Debentures at 101% of the
principal amount thereof plus accrued
interest.
Change of Control............. Upon a Change of Control, the Company
will be required to make an offer to
purchase the aggregate principal
amount of the Debentures then
outstanding at 101% of the principal
amount thereof, plus accrued interest
to the date of purchase.
Subordination................. The Debentures are subordinate in
right of payment to all existing and
future Senior Indebtedness. The
Debentures do not limit or restrict
the Company's ability to incur
any additional Indebtedness.
Use of Proceeds............... The Debentures and, upon conversion
of the Debentures, the Shares, are
not owned by the Company; accord-
ingly, the Company will receive none
of the proceeds from the sale thereof.
ERISA Considerations.......... The Debentures may be sold or trans-
ferred to employee benefit plans only
under certain circumstances. See
"ERISA Considerations" as contained
in the Company's Registration
Statement on Form S-3 filed on February
10, 1994, as amended, (Registration
Statement No. 33-75110). In addition,
transfers of the Debentures are subject
to certain restrictions.
NASDAQ National Market
System Symbol............... TOPS
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the
Debentures offered by this Prospectus.
Going Concern Status
In the Company's annual report (Form 10-K) for the year ended December
31, 1996, the report of the Company's independent accountant's, Ernst & Young
LLP, contained therein, contained an explanatory paragraph with respect to the
uncertainty of the Company's ability to continue as a going concern. The Company
reported operating losses for fiscal year 1997 and for the quarter ended March
31, 1998, which were significantly less than the operating losses for fiscal
year 1996 and for the quarter ended April 1, 1997, respectively. The Company is
taking steps to improve its operating performance, however, no assurances can be
given that such steps will be effective. In the Company's annual report (Form
10-K) for the year ended December 30, 1997, the report of the Company's
independent accountants, Arthur Andersen, LLP, contained therein, did not
contain any statement concerning the Company's ability to continue as a going
concern.
Future Growth
The Company has experienced flat or declining comparable store sales
for the past five years. This sales performance was mostly attributable to the
continuing weak retail environment in the appliance and electronics industries
and increased competition. This competitive environment has put pressure on
gross margins as retailers focus on maintaining market share. In addition, the
recent demand for consumer electronics has decreased due to the lack of new
products brought to market. Research also indicates that high consumer debt
levels have also reduced consumer spending on nonessential items. The fiscal
periods ending December 30, 1997 and December 31, 1996 were also severely
impacted by the unseasonably cooler weather in the northeast during the summer
months which affected sales of room air conditioners. Substantial price
deflation in video and home office products also contributed to the weak sales
performance. The Company believes that increases in comparable store sales are
dependent upon the effectiveness of the Company's merchandising and marketing
strategies and on the Company opening new stores. New store openings are
dependent on the Company's ability to identify and finance new locations on
acceptable terms and to hire appropriate store personnel. There can be no
assurances that the Company will be able to open or operate new stores on a
timely or profitable basis or that comparable store sales will increase in the
future.
Control by Current Shareholders
Leslie S. Turchin, a Director of the Company, owns 2,217,559 shares of
Common Stock, constituting approximately 28.7% of the Company's outstanding
Common Stock, and the Westinghouse Pension Plan owns 2,536,638 shares of Common
Stock, constituting approximately 32.8% of the Company's outstanding Common
Stock. As a result, these two shareholders are able to control the election of
the Company's Board of Directors and thereby direct the policies of the Company.
The Common Stock does not have cumulative voting rights.
Competition
The Company operates in a highly competitive marketplace. The Company
faces competition for customers from specialty and traditional department
stores, other retailers and, in some product lines, warehouse clubs. Some of
these competitors are units of large or regional chains that may have greater
financial and other resources than the Company. One such competitor is Circuit
City, a national retailer of consumer electronics, music and appliances, which
recently entered the Company's marketplace. The Company does not anticipate that
such entrance by Circuit City will have a negative material effect on the
Company. The Company does not believe that there are any major barriers to
competitors entering into the Company's marketplace. If any of the Company's
major competitors seek to gain or retain market share by reducing prices, the
Company may be required to reduce its prices and thereby reduce its gross
margins and profitability. In addition, if the Company expands outside its
traditional geographic region, its success will depend in part on its ability to
gain market share from established competitors. One of the Company's leading
competitors, The Wiz, Inc., filed for bankruptcy protection under Chapter 11 of
the United States Bankruptcy Code. Cablevision subsequently purchased the
business of The Wiz, Inc. The Company does not believe that The Wiz, Inc.
bankruptcy filing or subsequent sale of its business have had, or will have, a
negative material effect on the Company.
Seasonality and General Economic Conditions
The Company's business is affected to a certain extent by a pattern of
seasonality. Historically, the Company's sales have been greater in the fourth
quarter, which includes the Christmas selling season, than in any other quarter.
The Company also generally experiences an increase in sales during May through
August due to air conditioner sales, and the timing and amount of the increase
are largely dependent upon weather conditions. The Company's sales are also
generally lowest in the first quarter. The Company experienced net losses in
fiscal years 1995 and 1996. Similar to other retail businesses, the Company's
operations may be affected adversely by unfavorable local, regional or national
economic developments which result in reduced consumer spending in the markets
served by its stores. If the Company's sales were to be substantially below
those normally experienced during the summer months or during the Christmas
selling season, the Company's operating results would be affected in an adverse
and disproportionate manner.
Extended Service Contracts
Approximately 4.5% to 5% of the Company's net sales and service
revenues in each of the past five years consist of revenues earned from the sale
of extended service plans. The Company's gross margins with respect to such
sales exceed the Company's gross margins from the sale of products. Unlike many
of its competitors, the Company sells these contracts on a non-recourse basis to
a third party administrator that is required to maintain insurance to guarantee
the performance under the Company's extended service contracts program. As a
result of their contribution to profitability, a reduction in the Company's
revenues from extended service contracts could have a disproportionate effect on
the Company's operating results.
Certain Anti-Takeover Effects
The Company's Certificate of Incorporation and By-Laws include
provisions that may be deemed to have anti-takeover effects and may delay, defer
or prevent a takeover attempt that shareholders might consider in their best
interests. These provisions include a classified Board of Directors consisting
of three classes as nearly equal in number as possible, Board of Directors'
authorization to issue up to 20,000,000 shares of preferred stock in one or more
series with such rights, obligations and preferences as the Board of Directors
may provide, a provision under which only the Board of Directors may call
meetings of shareholders, and certain advance notice procedures for nominating
candidates for election to the Board of Directors.
Absence of Public Market
There is no existing market for the Debentures and there can be no
assurance as to the liquidity of any markets that may develop for the
Debentures. Future trading prices of the Debentures will depend on many factors
including, among other things, prevailing interest rates, the Company's
operating results, the price of the Company's Common Stock and the market for
similar securities. The Debentures are traded in the PORTAL Market; however, the
Company does not intend to apply for listing of the Debentures on any securities
exchange.
Subordination
The Debentures are subordinate in right of payment to all Senior
Indebtedness of the Company. At May 28, 1998, the Company's outstanding Senior
Indebtedness was approximately $26,195,000 million. By reason of such
subordination of the Debentures, in the event of the insolvency, bankruptcy,
liquidation, reorganization, dissolution or winding up of the business of the
Company or upon a default in payment with respect to any indebtedness of the
Company or an event of default with respect to such indebtedness resulting in
the acceleration thereof, the assets of the Company will be available to pay the
amounts due on the Debentures only after all Senior Indebtedness of the Company
has been paid in full.
Consolidated Ratio of Earnings to Fixed Charges
Year Ended December 30 or 31
1993 1994 1995 1996 1997
2.8 0.7 0.5 (1.4) 0.2
THE DEBENTURES
The Company has incorporated the description of the 6 1/2% Convertible
Subordinated Debentures due 2003 contained in the Company's Registration
Statement on Form S-3 filed on February 10, 1994, as amended (Registration No.
33-75110) (the "1994 Registration Statement"). The description contained therein
is accurate in all material respects except for the following:
1. The price at which the Debentures may be converted into Shares is
$1.75 per share. Any such conversion may not occur prior to February 28, 1999
unless agreed to by the Company in accordance with all applicable laws.
2. Upon conversion of Debentures into Shares, in the event that BEA
Associates, a New York partnership ("BEA"), owns, beneficially or otherwise, in
excess of 12.5% or 25%, respectively, of the outstanding common stock of the
Company, BEA shall have the right to designate one or two directors of the
Company, as the case may be.
3. The Debentures have not been issued under the Indenture (as such
term is defined in the 1994 Registration Statement). However, all terms of the
Indenture apply to the Debentures except that the trustee under the Indenture
shall have no authority, power or obligation with respect to the Debentures and
no registrar or paying agent shall exist with respect to the Debentures.
4. The Debentures rank pari passu with the debentures registered under
the 1994 Registration Statement in respect of the payment of principal and
interest.
5. The Company has no right to effect an optional redemption of the
Debentures.
6. In the event that a third party offers to purchase all of the common
stock of the Company or the securities of the Company held by BEA, beneficially
or otherwise, at a price in excess of $1.75 per share and the Company's board of
directors rejects such an offer, BEA has the right to convert any Debentures
which it then holds, beneficially or otherwise, and sell all of the common stock
of the Company which it then holds, beneficially or otherwise, to such third
party; provided, however, that the Company has thirty (30) days prior to the
sale of any such common stock to such third party to purchase such common stock
from BEA upon the same terms and conditions as are offered to BEA.
USE OF PROCEEDS
The Company will not receive any proceeds from the issuance of the
Debentures nor will it receive any proceeds from the conversion of the
Debentures to Shares.
<PAGE>
EXCHANGING SECURITY HOLDERS
The Debentures are being registered pursuant to the terms of a certain
Debenture Exchange Agreement between the Company and BEA Associates, a New York
partnership, as agent for certain holders of certain of the Company's
outstanding 6 1/2% Convertible Subordinated Debentures due 2003 (the "Converted
Bonds"), dated as of August 20, 1997. None of the current beneficial holders of
the Converted Bonds (the "Bond Holders") has ever held any position or office
with the Company or has had any other material relationship with the Company.
The following table sets forth certain information with respect to the
beneficial ownership of the Converted Bonds as of the date hereof:
Name of Bond Holder Principal Amount of Debentures
After Exchange
Robert S. Carl, III* $1,500,000
Bay Harbour 90-1 L.P. 1,600,000
Bay Harbour Partners,
Ltd. 2,400,000
Lipstick, Ltd. 2,090,000
Gordon Bennett** 35,000
ABT Co., Incorporated
Retirement Plan 62,500
* The Company understands that Robert S. Carl, III has agreed to purchase
$1,500,000 principal amount of the Debentures and that such sale is pending.
** The Company understands that Gordon Bennett has agreed to purchase $35,000
principal amount of the Debentures and that such sale is pending.
<PAGE>
PLAN OF DISTRIBUTION
The Debentures and the Shares are being registered to permit public
secondary trading of the Debentures and the Shares by the holders thereof from
time to time after the date of this Prospectus. The Company has agreed, among
other things, to bear all expenses (other than underwriting discounts, selling
commissions and fees and the expenses of counsel and other advisors to holders
of the Debentures or the Shares) in connection with the registration and sale of
the Debentures and the Shares covered by this Prospectus.
The Company anticipates that holders of Shares may sell all or a
portion of the Shares from time to time on the NASDAQ National Market System,
and may sell Debentures or Shares through a broker or brokers or in the
over-the-counter market at prices prevailing on such exchange or the
over-the-counter market, as appropriate, at the times of such sales. Holders of
Debentures or Shares may also make private sales directly or through such broker
or brokers. Brokers participating in such transactions will receive customary
brokerage commissions from sellers of Debentures or Shares. In effecting sales,
brokers or dealers engaged by holders of Debentures or Shares may arrange for
other brokers or dealers to participate. In connection with such sales, holders
of Debentures or Shares and brokers participating in such sales may be deemed to
be underwriters within the meaning of the Securities Act. The Company does not
intend to list the Debentures on any national securities exchange. It may be
unlikely that a secondary market in the Debentures themselves (as opposed to the
Shares) will develop.
LEGAL MATTERS
The legality of the Debentures and Shares offered by this Prospectus
has been passed upon by Greenbaum, Rowe, Smith, Ravin, Davis & Himmel LLP,
Woodbridge, New Jersey.
EXPERTS
The consolidated financial statements of Tops Appliance City, Inc.
appearing in the Company's annual report (Form 10-K) for the year ended December
30, 1997, have been audited by Arthur Andersen LLP, independent auditors, as set
forth in their report therein, included therein and incorporated herein by
reference, and the consolidated financial statements of Tops Appliance City,
Inc. for the year ended December 31, 1996 appearing in the Company's annual
report (Form 10-K) for the year ended December 30, 1997, were audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon, (which
contains an explanatory paragraph with respect to the uncertainty of the
Company's ability to continue as a going concern) included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firms as experts in accounting and auditing.
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy by anyone in any jurisdiction in which such
offer or solicitation is not authorized, or in which the person making such
offer or solicitation is not qualified to do so, or to any person to whom it is
unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create an
implication that there has not been any change in the affairs of the Company
since the date hereof.
TABLE OF CONTENTS
Page
Available Information 3
Incorporation of
Certain Documents
by Reference 4
Offering Summary 6
The Company 6
The Offering 7
Risk Factors 8
Use of Proceeds 11
Exchanging Security 12
Holders
Plan of Distribution 13
Legal Matters 13
Experts 13
TOPS APPLIANCE
CITY, INC.
$7,687,500 6 1/2% Convertible
Subordinated Debentures
due 2003
4,392,857 Shares of
Common Stock
PROSPECTUS
June 16, 1998
<PAGE>
II-1
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The registrant estimates expenses in connection with the offering described
in this Registration Statement will be as follows:
Item Amount
Securities and Exchange Commission Registration Fee $2,329.32
Printing and Engraving Expenses 0.00
Accountants' Fees and Expenses 2,000.00
Legal Fees and Expenses 5,000.00
Miscellaneous 170.68
---------
Total $ 9,500.00
==========
Item 15. Indemnification of Directors and Officers.
The description set forth under the caption "Indemnification of
Directors and Officers" in the Company's Form S-1 Registration Statement No.
33-48326 is incorporated herein by reference.
Item 16. Exhibits.
Exhibit Number Description of Document
(1) Filed as an exhibit to the Company's Registration Statement on Form S-1
filed June 3, 1992, and amendments thereto, Registration No. 33-48326.
4 Specimen of stock certificate for shares of Common Stock.
(2) Attached to this Registration Statement:
5 Form of Opinion of Greenbaum, Rowe, Smith, Ravin Davis & Himmel
LLP - page II-9
23.1 Consent of Arthur Andersen LLP - Page II-7
23.2 Consent of Ernst & Young LLP - Page II-8
23.3 Consent of Greenbaum, Rowe, Smith, Ravin Davis & Himmel LLP
(included in Exhibit 5)
Item 17. Undertakings.
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 that is incorporated by reference in this
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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant, 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 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.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, 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, represent
a fundamental change in the information set forth in the
Registration Statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided however that the undertakings set forth in paragraphs (i) and (ii)
above 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable ground to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Township of Edison, State of New Jersey, on the 16th day of
June, 1998.
TOPS APPLIANCE CITY, INC.
By:/s/ Robert G. Gross
-------------------------
Robert G. Gross, Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Robert G. Gross Chairman and Director June 16, 1998
- ------------------------- (Principal Executive Officer)
Robert G. Gross
/s/ Thomas L. Zambelli Executive Vice President, June 16, 1998
- ------------------------- Secretary, Director, and
Thomas L. Zambelli Chief Financial Officer
(Principal Financial and
Accounting Officer)
*/s/ Leslie S. Turchin Director June 16, 1998
- -------------------------
Leslie S. Turchin
*/s/ Anthony L. Formica Director June 16, 1998
- -------------------------
Anthony L. Formica
*/s/ John H. Hollands Director June 16, 1998
- -------------------------
John H. Hollands
*/s/Robert G. Gross Attorney-in-Fact June 16, 1998
- -------------------------
Robert G. Gross
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
EXHIBIT INDEX
Exhibit Number Description of Document Page
5 Form of Opinion of Greenbaum,
Rowe, Smith, Ravin Davis & Himmel LLP II-9
23.1 Consent of Arthur Andersen LLP II-7
23.2 Consent of Ernst & Young, LLP II-8
23.3 Consent of Greenbaum, Rowe, Smith,
Ravin, Davis & Himmel LLP (included in
Exhibit 5)
</TABLE>
<PAGE>
II-1
EXHIBIT 23.1
Consent of Independent Auditors
To: Tops Appliance City, Inc.:
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 18,
1998, included in Tops Appliance City, Inc.'s Form 10-K for the year ended
December 30, 1997 and to all references to our Firm included in this
registration statement.
/s/Arthur Andersen LLP
Roseland, New Jersey
June 8, 1998
<PAGE>
EXHIBIT 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 33-00000) and
related Prospectus of Tops Appliance City, Inc. for the registration of
$7,687,500 aggregate principal amount of the Company's 6-1/2% Convertible
Subordinated Debentures and 4,392,857 shares of its Common Stock and to the
incorporation by reference therein of our report dated April 15, 1997 with
respect to the consolidated financial statements and schedule of Tops Appliance
City, Inc. included in its Annual Report (Form 10-K) for the year ended December
30, 1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young, LLP
MetroPark, New Jersey
June 8, 1998
<PAGE>
___________, 1998
Page 1
II-1
EXHIBIT 5
Greenbaum, Rowe, Smith, Ravin, Davis & Himmel LLP
Metro Corporate Campus One
P.O. Box 5600
Woodbridge, NJ 07095-0988
________, 1998
Tops Appliance City, Inc.
45 Brunswick Avenue
Edison, New Jersey 08818
Re: Tops Appliance City, Inc.
Gentlemen:
We have acted as counsel to Tops Appliance City, Inc., a New Jersey
corporation (the "Company"), in connection with the filing by the Company of a
Registration Statement on Form S-3 (Registration No. 33- ), covering the
registration of $7,687,500 6 1/2% Convertible Subordinated Debentures due 2003
(the "Debentures") and 4,392,857 shares of common stock, no par value per share,
(the "Common Stock") (the Debentures and the Common Stock are collectively the
"Securities"). We have been asked to issue an opinion as to whether the
Securities being registered will, when sold, be legally issued, fully paid,
non-assessable, and binding obligations of the Company.
As counsel to the Company, we have examined the Certificate of
Incorporation and By-Laws, as amended to date, and other corporate records of
the Company and have made such other investigations as we have deemed necessary
in connection with the opinion hereinafter set forth. We have relied, to the
extent we deem such reliance proper, upon certain factual representations of
officers and directors of the Company given in certificates, in answer to our
written inquiries and otherwise, and, although we have not independently
verified all of the facts contained therein, nothing has come to our attention
that would cause us to believe that any of the statements contained therein are
untrue or misleading.
In making the aforesaid examinations, we have assumed the genuineness
of all signatures and the conformity to original documents of all copies
furnished to us. We have assumed that the corporate records of the Company
furnished to us constitute all of the existing corporate records of the Company
and include all corporate proceedings taken by it.
Based solely upon and subject to the foregoing, we are of the opinion
that:
1. The Debentures being registered by the Company are legally
issued, fully paid, non-assessable, and binding obligations of the Company.
2. The shares of Common Stock issuable upon conversion of the
Debentures have been duly authorized and reserved for issuance upon conversion,
and when issued upon conversion in accordance with the terms of the Debentures,
will have been validly issued and will be fully paid and non-assessable, and the
issuance of such shares by the Company is not subject to any preemptive or
similar rights.
We hereby consent to the filing of this opinion as an Exhibit to the
aforesaid Registration Statement and to the reference to our firm under the
caption "Legal Matters" in the Prospectus.
Very truly yours,
Greenbaum, Rowe, Smith,
Ravin, Davis & Himmel LLP
