As filed with the Securities and Exchange Commission on January 14, 1998.
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 (Primary Standard (I.R.S. Employer
jurisidiction of Industrial Classi- Identification No.)
incorporation or fication Code Number)
organization)
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: 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| ---
<PAGE>
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>
<S> <C> <C> <C> <C>
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
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>
<S> <C> <C>
Form S-3 Item No. and Caption Prospectus Caption
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 JANUARY 14, 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.
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
January 13, 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 $1-1/8 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 January 13, 1998, the aggregate
amount of Senior Indebtedness of the Company was approximately $25,354,476. 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.
<PAGE>
See "Risk Factors" 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 January __, 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
31, 1996.
(b) The Company's Proxy Statement for its Annual Meeting of Stockholders
held on May 23, 1997.
(c) The Company's Quarterly Reports on Form 10-Q for the quarters ended
April 1, 1997, July 1, 1997 and September 30, 1997.
(d) The Company's Current Reports on Form 8-K dated (i) January 20, 1997,
(ii) August 26, 1997, (iii) September 4, 1997, (iv) September 4, 1997 and (v)
December 29, 1997.
(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
contracts.
THE EXCHANGE
Pursuant to a Debenture Exchange Agreement, dated as of August 20, 1997,
between the Company and BEA Associates, a New York partnership, as agent for
certain 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.
DEFINITIONS
Capitalized terms not defined herein have the respective meanings assigned
to such terms in the 1994 Registration Statement.
<PAGE>
<TABLE>
THE OFFERING
<S> <C>
Securities Offered............. $7,687,500 principal amount of
6-/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 34%
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; accordingly, the
Company will receive none of
the proceeds from the sale
thereof.
ERISA Considerations.......... The Debentures may be sold or
transferred 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
</TABLE>
RISK FACTORS
Certain Investment Considerations
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.
Future Growth
The Company's sales growth during the last five years has resulted
principally from new store openings and, to a lesser extent, from increases in
comparable store sales. The continued openings of new stores will depend upon
the Company's ability to identify and finance new locations on acceptable terms
and to hire appropriate store personnel. The Company believes that increases in
comparable store sales are dependent upon the effectiveness of the Company's
merchandising and marketing strategies. 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 2,538,337 shares of
Common Stock, constituting approximately 34.8% of the Company's outstanding
Common Stock, and the Westinghouse Pension Plan owns 2,539,000 shares of Common
Stock, constituting approximately 34.8% 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. 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, as 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., recently filed for bankruptcy protection under Chapter 11 of the
United States Bankruptcy Code.
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 contracts. 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 January 13, 1998, the Company's outstanding
Senior Indebtedness was approximately $25,354,476. 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.
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 accountants, 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.
Consolidated Ratio of Earnings to Fixed Charges
Nine Months Ended
Year Ended 31 September 30, 1997
1992 1993 1994 1995 1996
2.1 2.8 0.7 0.5 (1.4) 0.1
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.
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.
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 (the "Bond 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 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 by
the Bond Holders:
<TABLE>
<CAPTION>
<S> <C> <C>
Name of Bond Holder Beneficial Ownership Beneficial Ownership
of Converted Bonds of Debentures
Prior to Exchange After Exchange
Hard & Co. ........................... $ 125,000 $ 62,500
Hare & Co. ........................... 4,860,000 2,430,000
Beamrope & Co. ....................... 150,000 75,000
BOVA ................................. 1,350,000 675,000
Atwell & Co. ......................... 375,000 187,500
Rush & Co. ........................... 380,000 190,000
Morgan Stanley ....................... 4,205,000 2,102,500
Grady & Co. .......................... 190,000 95,000
Deepnet & Co. ........................ 650,000 325,000
Terrapin & Co. ....................... 2,170,000 1,085,000
Speedsail & Co. ...................... 30,000 15,000
Polly & Co. .......................... 60,000 30,000
Bost & Co. ........................... 400,000 200,000
Bob & Co. ............................ 85,000 42,500
Pitt & Co. ........................... 110,000 55,000
Link & Co. ........................... 235,000 117,500
</TABLE>
<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
31, 1996, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report therein (which contains an explanatory paragraph with
respect to the uncertainty of the Company's ability to continue as a going
concern as mentioned in note 1 to the consolidated financial statements),
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated hereby by reference in reliance upon such
report given upon the authority of such firm 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
--------------
January , 1998
<PAGE>
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-8
23.1 Consent of Ernst & Young LLP - Page II-7
23.3 Consent of Greenbaum, Rowe, Smith, Ravin Davis & Himmel LLP
(included in Exhibit 5)
24 Power of Attorney - Page II-6
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 10th day of
December, 1997.
TOPS APPLIANCE CITY, INC.
By: /s/ Robert G. Gross, Chairman
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 December 10, 1997
Robert G. Gross Director (Principal
Executive Officer)
/s/ Thomas L. Zambelli Senior Vice December 10, 1997
Thomas L. Zambelli President, Secretary,
Director, and Chief Financial
Officer (Principal Financial
and Accounting Officer)
/s/ Leslie S. Turchin Director December 10, 1997
Leslie S. Turchin
/s/ Anthony L. Formica Director December 10, 1997
Anthony L. Formica
/s/ John H. Hollands Director December 10, 1997
John H. Hollands
</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-8
23.1 Consent of Ernst & Young II-7
23.3 Consent of Greenbaum, Rowe, Smith,
Ravin, Davis & Himmel LLP (included in
Exhibit 5)
24 Power of Attorney II-6
II-5
</TABLE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert G. Gross or Thomas L. Zambelli his true
and lawful attorney-in-fact and agent, with full 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 all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission and any other regulatory authority, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be one in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in- fact and agent, or his
substitute or substitutes, 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 and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Robert G. Gross Chairman and December 10, 1997
Robert G. Gross Director (Principal
Executive Officer)
/s/ Thomas L. Zambelli Senior Vice December 10, 1997
Thomas L. Zambelli President, Secretary,
Director and Chief
Financial Officer (Principal
Financial and Accounting Officer)
/s/ Leslie S. Turchin Director December 10, 1997
Leslie S. Turchin
/s/ Anthony L. Formica Director December 10, 1997
Anthony L. Formica
/s/ John H. Hollands Director December 10, 1997
John H. Hollands
</TABLE>
II-6
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement Form S-3 (Registration 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 31, 1996,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young, LLP
-----------------------
ERNST & YOUNG, LLP
MetroPark, New Jersey
January 9, 1998
II-7
<PAGE>
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
<PAGE>
