AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 30, 1996
Registration No. 333-1044
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
AMENDMENT NO. 2
TO
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
GREG MANNING AUCTIONS, INC.
(Exact name of Registrant as Specified in its Charter)
New York
(State or Other Jurisdiction of Incorporation or Organization)
22-2365834
(I.R.S. Employer Identification Number)
775 Passaic Avenue
West Caldwell, New Jersey 07006
(201) 882-0004
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's principal executive offices)
Greg Manning
Greg Manning Auctions, Inc.
775 Passaic Avenue
West Caldwell, New Jersey 07006
(201) 882-0004
(Name, Address, including Zip Code, and Telephone Number, Including
Area Code, of Agent for Service)
Approximate date of
commencement of proposed sale to the public: From time to time after the
effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended, other than securities offered in connection
with dividend or reinvestment plans, 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 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 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.[ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED MAXIMUM OFFERING MAXIMUM AGGREGATE REGISTRATION
PRICE PER SHARE(1) OFFERING PRICE FEE(2)
- --------------------------------------------------- ------------------- --------------------- ---------------------- ---------------
- --------------------------------------------------- ------------------- --------------------- ---------------------- ---------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share 1,300,000 shares $2.875 $3,737,500 $1,288.72
- --------------------------------------------------- ------------------- --------------------- ---------------------- ---------------
</TABLE>
(1) Estimated pursuant to Rule 457 under the Securities Act of 1933, as
amended (the "Act"), solely for the purpose of calculating the
registration fee, based on the average of the high and low prices for
the shares reported on the Nasdaq Stock Market's SmallCap Market System
on January 30, 1996.
(2) Filing fee of $1,288.73 previously paid.
(3) An aggregate of 2,292,370 additional shares of Common Stock are being
carried forward from the Company's Registration Statement on Form SB-2
(No. 33-55792-NY), for which a registration fee of $4,525.01 was paid.
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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SECTION 8(A), MAY DETERMINE.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE
PROSPECTUS AND SUPPLEMENTS TO SUCH PROSPECTUS ALSO RELATE TO 2,277,295
ADDITIONAL SHARES OF COMMON STOCK PREVIOUSLY REGISTERED UNDER THE REGISTRANT'S
REGISTRATION STATEMENT ON FORM SB-2 (NO. 33-55792-NY). THIS REGISTRATION
STATEMENT CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 3 TO THE REGISTRANT'S
REGISTRATION STATEMENT ON FORM SB-2 (NO. 33-55792-NY).
<PAGE>
PROSPECTUS
GREG MANNING AUCTIONS, INC.
1,853,800 SHARES OF COMMON STOCK
1,300,000 SHARES OF COMMON STOCK
AND
438,570 SHARES OF COMMON STOCK
This Prospectus relates to the offering by Greg Manning Auctions, Inc. (the
"Company") of 1,853,800 shares of the Company's Common Stock, par value $0.01
per share (the "Common Stock"), issuable upon exercise of outstanding warrants
(the "Public Warrants") that were included in units sold to the public by the
Company in its initial public offering (the "Public Offering") in May 1993. Each
outstanding Public Warrant is immediately exercisable and currently entitles the
holder to purchase 1.24 shares of Common Stock at a price of $2.7733 per share
at any time through May 13, 1998, subject to up to a one-year extension under
certain circumstances.
This Prospectus also relates to the offering by JW Charles Securities,
Inc., Corporate Securities Group, Inc. (together, "JWCharles/CSG"), and certain
other persons and entities (collectively, the "UPW Selling Shareholders"), of an
aggregate of (i) 195,790 shares of Common Stock, comprising a part of units that
are issuable upon the exercise of outstanding Unit Purchase Warrants (the "Unit
Purchase Warrants") that were sold to the UPW Selling Shareholders in connection
with the Public Offering, and (ii) 242,780 shares of Common Stock, issuable upon
the exercise of warrants (the "Underwriters' Warrants) comprising a part of the
units that are issuable upon the exercise of the Unit Purchase Warrants. Each
outstanding Unit Purchase Warrant is immediately exercisable and entitles the
holder thereof to purchase 1.50608 units (each unit consisting of two shares of
Common Stock and two Underwriters' Warrants) at an exercise price of $6.8456 per
Unit. At August 28, 1996, none of the Unit Purchase Warrants had been exercised
and, accordingly, none of the Underwriters' Warrants had been issued. The
exercise price of the Public Warrants and the number of securities issuable upon
the exercise of the Public Warrants, the Unit Purchase Warrants and the
Underwriters' Warrants have been adjusted and are subject to further adjustment
as a result of the application of certain anti-dilution provisions contained
therein.
This Prospectus also relates to the offering by Collectibles Realty
Management, Inc. ("CRM" or the "Selling Shareholder"), a shareholder of the
Company, of the 1,300,000 shares of Common Stock owned by it. The sole
shareholder of the Selling Shareholder is Greg Manning, the Chairman of the
Board, President and Chief Executive Officer of the Company.
The Common Stock of the Company is quoted on the Nasdaq Stock Market's
SmallCap Market System ("Nasdaq") under the symbol "GMAI" and is listed on the
Boston Stock Exchange ("BSE") under the symbol "GGM." On August 27, 1996, the
last reported sale price of the Common Stock as quoted on the Nasdaq was $3.1875
per share. The Public Warrants are quoted on the Nasdaq under the symbol "GMAIW"
and are listed on the BSE under the symbol "GGMW".
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK. SEE "RISK FACTORS", PAGE 5 OF THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
The Company will not receive any of the proceeds from the sale of the
shares of Common Stock by the Selling Shareholder or the UPW Selling
Shareholders. The Company will receive approximately $4,885,498 in net proceeds
if all of the Public Warrants are exercised. See "Use of Proceeds".
JWCharles/CSG may act as market makers with respect to trading in the
Common Stock and Public Warrants. The Company has agreed to pay JWCharles/CSG a
solicitation fee equal to 4% of the exercise price in connection with the
exercise of the Public Warrants under certain conditions. See "Plan of
Distribution". Under Rule 10b-6 promulgated by the Securities and Exchange
Commission (the "Commission") under the Exchange Act of 1934, as amended (the
"Exchange Act"), JWCharles/CSG (and any securities firm to which any or all of
the solicitation fee may be reallowed), will be prohibited from engaging in any
market-making activities with regard to the Company's securities for the period
from nine business days (or such other applicable period as Rule 10b-6 may
provide) prior to any solicitation of the exercise of Public Warrants until the
later of the termination of such solicitation activity or the termination (by
waiver or otherwise) of any such right that JWCharles/CSG may have to receive a
fee for the exercise of the Public Warrants following such solicitation.
JWCharles/CSG may be unable to provide a market for the Company's securities
during certain periods while the Public Warrants are exercisable. See "Risk
Factors" and "Plan of Distribution".
All expenses of the registration of securities covered by thisProspectus,
estimated to be approximately $76,288, are to be borne by the Company, except
that the Selling Shareholder has agreed to reimburse the Company for the
approximate portion (estimated to be approximately $26,288) of the expenses
allocable to the registration of the securities to be sold by it.
A portion of the Common Stock offered by this Prospectus may be sold
following the effective date of this Prospectus by the selling shareholders, or
by their transferees. The distribution of the securities offered hereby may be
effected in one or more transactions that may take place on the over-the-counter
market, including ordinary broker transactions, privately negotiated
transactions or through sales to one or more dealers for resale of such
securities as principals, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. Usual
and customary or specifically negotiated brokerage fees or commissions may be
paid by the selling shareholders.
The selling shareholders and intermediaries through whom such securities
are sold may be deemed "underwriters" within the meaning of the Securities Act
of 1933, as amended (the "Act"), with respect to the securities offered, and any
profits realized or commissions received may be deemed underwriting
compensation. The Company has agreed to indemnify certain of the UPW Selling
Shareholders against certain liabilities, including liabilities under the Act.
THE DATE OF THIS PROSPECTUS IS DATE , 1996
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, Room 1024, 450 Fifth Street N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: New York
Regional Office, Seven World Trade Center, 13th Floor, New York, New York 10048,
and Chicago Regional Office, Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60621-2511. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of the Commission
at Judiciary Plaza, Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549.
The Commission also maintains a site on the World Wide Web, the address of which
is http://www.sec.gov, that contains reports, proxy and information statements
and other information regarding issuers, such as the Company, that file
electronically with the Commission.
This Prospectus constitutes part of a Registration Statement and
Post-Effective Amendment filed by the Company with the Commission under the Act.
This Prospectus does not contain all of the information set forth in the
Registration Statement and Post-Effective Amendment, 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
Post-Effective Amendment. The statements contained in this Prospectus as to the
contents of any contract or other document identified as exhibits in this
Prospectus are not necessarily complete and, in each instance, reference is made
to a copy of such contract or document filed as an exhibit to the Registration
Statement and Post-Effective Amendment, each statement being qualified in any
and all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following Company documents filed with the Commission are incorporated
by reference in this Prospectus (File number 1-11988):
1. Annual Report on Form 10-KSB for the year ended June 30, 1995, as
amended by Form 10-KSB/A, as filed on October 30, 1995, and Form 10-KSB/A2,
filed on August 29, 1996.
2. Proxy Statement for the 1995 Annual Meeting of Shareholders.
3. Quarterly Report on Form 10-QSB for the quarter ended September 30,
1995, as amended by Form 10-QSB/A for the quarter ended September 30, 1995, as
filed on August 29, 1996.
4. Quarterly Report on Form 10-QSB for the quarter ended December 31, 1995,
as amended by Form 10-QSB/A for the quarter ended December 31, 1995, as filed on
August 29, 1996.
5. Quarterly Report on Form 10-QSB for the quarter ended March 31, 1996, as
amended by Form 10-QSB/A for the quarter ended March 31, 1996, as filed on
August 29, 1996.
6. Report on Form 8-K, dated October 31, 1995, regarding a change in the
Registrant's certifying accountants.
All documents filed by the Company with the Commission pursuant to Section
13 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the securities covered by this
Prospectus shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of filing of such documents.
Any statements contained in a 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 document which 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. The Company undertakes
to provide without charge to each person to whom this Prospectus is delivered,
upon request of any such person, a copy of any and all of the documents referred
to above which have been or may be incorporated by reference in this Prospectus
other than the exhibits thereto. Requests for such copies should be directed to
the Company at 775 Passaic Avenue, West Caldwell, New Jersey 07006, Attn: Daniel
M. Kaplan, Chief Financial Officer and Vice President, telephone (201) 882-0004.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES A NEW "SAFE
HARBOR" FOR CERTAIN FORWARD-LOOKING STATEMENTS. THE FACTORS DISCUSSED UNDER
"RISK FACTORS", AMONG OTHERS, COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE CONTAINED IN FORWARD-LOOKING STATEMENTS MADE IN THIS PROSPECTUS, IN
DOCUMENTS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS, IN FILINGS BY THE
COMPANY WITH THE COMMISSION, IN THE COMPANY'S PRESS RELEASES AND IN ORAL
STATEMENTS MADE BY AUTHORIZED OFFICERS OF THE COMPANY. WHEN USED IN THIS
PROSPECTUS, THE WORDS "ESTIMATE", "PROJECT", "ANTICIPATE", "EXPECT", "INTEND",
"BELIEVE" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS.
<PAGE>
THE COMPANY
Greg Manning Auctions, Inc. (the "Company") was founded by Greg Manning,
its Chairman, President and Chief Executive Officer, who has conducted public
auctions of rare stamps, stamp collections and stocks since 1966. The Company
believes, based on its knowledge of the market, that it is one of the largest
auction houses of rare stamps in the world (although there is no publicly
available data with respect to stamp auction sales). In addition to stamps, the
Company has expanded its business to include other types of collectibles, such
as antiquities and, to a lesser extent, sports-related collectibles and rare
autographs and documents, and the reproduction of marketing of replicas of
certain historical items.
The Company conducts its operations directly and through several
subsidiaries and affiliates. Greg Manning Auctions, Inc. and Ivy & Mader
Philatelic Auctions, Inc., a wholly-owned subsidiary of the Company, are engaged
in the stamp and stamp-related auction business. The Company also conducts
auctions of autographs and rare documents, and is also engaged in the
reproduction and marketing of historical items, primarily bank notes. Greg
Manning Galleries, Inc., a wholly-owned subsidiary of the Company, which does
business as Harmer Rooke Galleries, conducts an auction business primarily in
antiquities, including stoneware and rare coins.
In addition to auctions, which is the Company's primary method of sale,
the Company enters into "private treaty" transactions in which the owners of
collectibles arrange to have their property sold to third parties in privately
negotiated transactions. The Company also purchases collectibles for sale for
its own account.
The Company's executive offices are located at 775 Passaic Avenue, West
Caldwell, New Jersey 07006, and its telephone number is (201) 882-0004. The
Company is a New York corporation and was incorporated in 1981. Until the Public
Offering, the Company was a wholly-owned subsidiary of CRM, which is wholly
owned by Greg Manning. At August 28, 1996, CRM owned approximately 30.5% of the
outstanding shares of the Common Stock. Certain of such shares are being
registered pursuant to the Registration Statement of which this Prospectus is a
part.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE IN NATURE AND INVOLVE A HIGH
DEGREE OF RISK. IT IS IMPOSSIBLE TO FORESEE AND DESCRIBE ALL THE RISKS AND
BUSINESS, ECONOMIC AND FINANCIAL FACTORS WHICH MAY AFFECT THE COMPANY.
PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS, AS WELL
AS ALL OTHER MATTERS SET FORTH ELSEWHERE IN THIS PROSPECTUS, BEFORE MAKING A
DECISION TO PURCHASE ANY SECURITIES.
RECENT RESULTS OF OPERATIONS; LOSSES. The Company incurred net losses of
$827,155 for the fiscal year ended June 30, 1995, and $193,766 for the fiscal
quarter ended September 31, 1995. The Company had net income of $20,346 for the
quarter ended December 31, 1995, and net income of $369,158 for the quarter
ended March 31, 1996. The net income for the quarter ended March 31, 1996 was
attributable to a gain of $586,000 (net of taxes) from the sale of certain
investment securities, offset primarily by an operating loss of $168,000 (net of
taxes).
The Company believes that its recent results are attributable primarily to
higher than expected expenses; lower gross margins as a percentage of sales;
decreased revenues from commissions (attributable primarily to the necessity, in
certain cases, for the Company to accept a reduced seller's commission in order
to obtain particular consignments); and the unprofitable results of the
"Americana" division of Harmer Rooke Galleries. The Company has implemented a
cost reduction program, begun to explore new sources of collectibles in an
effort to increase margins and revenues from commissions, and sold the
"Americana" division. There can be no assurance, however, that these steps (or
any others) will result in a significant improvement in the Company's financial
condition, on either a short- or long-term basis.
<PAGE>
In addition, the Company is a party to a revolving credit and term loan
facility with Brown Brothers Harriman & Co. ("BB"). At August 21, 1996,
borrowings under the revolving credit facility and term loan totaled $5,990,000
and $300,000, respectively. BB has agreed that, absent a material adverse change
(as determined by BB) or event of default, it will provide the Company with a
120-day notification period prior to issuing a demand for repayment, provided
that the Company is in compliance with certain financial and operating
guidelines. At June 30, 1995, September 30, 1995 and December 31, 1995, the
Company was not in compliance with a guideline relating to the formula of
earnings before interest, depreciation and taxes to interest expense. As a
result BB had the right under the credit agreement to demand immediate repayment
of all amounts outstanding without the otherwise applicable 120-day advance
notice period. The Company believes that at March 31, 1996, it was in compliance
with such guidelines.
UNCERTAINTY OF MARKET CONDITIONS. The business of the Company is
substantially dependent upon obtaining collectibles on consignment for sale at
auction, and to a lesser extent the ability of the Company to purchase
collectibles outright for sale at auction. At times there is a limited supply of
collectibles available for sale by the Company, and such supply varies from time
to time. While the Company generally has not experienced a lack of collectibles
that has prevented it from conducting appropriately sized auctions on an
acceptable schedule, no assurance can be given that the Company will be able to
obtain consignments of suitable quantities of collectibles in order to conduct
auctions of the size, and at the times, the Company may desire in the future.
The Company's inability to do so would have a material adverse effect on the
Company.
The Company's ability to acquire inventory for sale depends on its success
in marketing its services to owners of property, the quality of such services,
the ability of the Company to sell property consigned to it, and the conditions
in the worldwide stamp and other collectibles markets, such as price levels and
the tastes and demands of collectors. A decline in the price levels of, or the
demand for, stamps and other collectibles could result in a decrease in the
dollar value of stamps and other collectibles sold at auction, and a resulting
reluctance of owners to consign collectibles for sale at auction. The Company
has not, however, observed a general decrease in the prices of stamps or other
collectibles during recent years. The Company believes that only very
substantial decreases in the price levels of collectibles sold by it would
materially adversely affect the Company's business. With respect to stamps,
which is the Company's core business area, price levels and demand have
traditionally not been adversely affected by negative economic conditions,
primarily because the Company's world-wide supplier and customer base has
continued to utilize the services of the Company even during recessionary
periods. In fact, during the recessionary period of the early 1990s, the
Company's sales increased (and have continued to increase), and the Company did
not and has not observed any decline in prices at which stamps have sold. There
can be no assurances, however, that price levels and demand will not decrease in
the future, whether as a result of decline in general economic conditions or
otherwise. The Company believes that the stamp market remained stable during the
recent recessionary period because the predominate participants are collectors
and professional dealers, and not investors. In addition, the Company has
observed an increase in the general market for sports trading cards and sports
memorabilia, and as a result it has moderately expanded its operations in this
area. The sports collectibles market is, however, more volatile than the stamp
market because the predominate participants are investors. In addition, this
market has only recently developed and accordingly does not have the relatively
lengthy history of the stamp market.
DEPENDENCE ON EXISTING MANAGEMENT. The development and success of the
Company's business has been and will continue to be dependent substantially upon
its President, Chairman and Chief Executive Officer, Greg Manning, and
significantly upon its Executive Vice President, William T. Tully, Jr. The
unavailability of Mr. Manning, for any reason, would have a material adverse
effect upon the business, operations and prospects of the Company, and the
unavailability of Mr. Tully could adversely affect the Company's expansion
prospects if a suitable replacement is not engaged. The Company recently entered
into a new employment agreement with Mr. Manning, effective as of June 30, 1995
(when his prior employment agreement terminated), providing, among other things,
for a salary equal to $175,000 per annum and a bonus equal to 10% of the
Company's net income before income taxes between $500,000 and $2,000,000
(subject to increase by the Board of Directors). The new employment agreement
will terminate on June 30, 1997. Mr. Tully's employment agreement, as amended,
has a term ending on June 30, 1998. The Company also currently owns a life
insurance policy on Mr. Manning's life with benefits payable to the Company in
the amount of $1,000,000.
<PAGE>
BROAD DISCRETION IN USE OF PROCEEDS. Assuming all the Public Warrants are
exercised, all of the estimated net proceeds of this offering (approximately
$4,885,498) will be utilized by the Company for working capital purposes.
Accordingly, management will have broad discretion in allocating such proceeds.
See "Use of Proceeds".
EXTENSION OF CREDIT. The Company frequently grants credit to certain
purchasers at its auctions permitting them to take immediate possession of
auctioned property on an open account basis, within established credit limits,
and to make payment in the future, generally within 30 days. This practice
facilitates the orderly conduct and settlement of auction transactions, and
enhances participation at the Company's auctions. In such events, however, the
Company is liable to the seller who consigned the property to the Company for
the net sale proceeds even if the buyer defaults on payment to the Company.
While the dollar volume of the Company's potential exposure from this practice
may be substantial at any particular point in time, this practice has not
resulted in a material loss to the Company. This is primarily because the
Company evaluates customers' creditworthiness on a case-by-case basis and only
extends credit to purchasers whom the Company deems creditworthy; generally such
purchasers are professional dealers or collectors who have regularly purchased
property at the Company's auctions or whose reputations within the industry are
known and respected by the Company.
COMPETITION. The business of selling stamps and other collectibles at
auction is highly competitive. The Company competes with a number of auction
houses throughout the United States and the world. While the Company believes
that there is no dominant company in the stamp auction or collectibles business
in which it operates, there can be no assurances that other concerns with
greater financial and other resources and name recognition will not enter the
market.
DIVIDEND POLICY. The Company has never declared or paid a dividend on its
Common Stock, and management expects that a substantial portion of the Company's
future earnings will be retained for expansion or development of the Company's
business. Whether the Company will pay dividends in the future will be at the
discretion of the Company's Board of Directors and will depend upon, among other
things, future earnings, operations, capital requirements and surplus, the
general financial condition of the Company, restrictive covenants in loan or
other agreements to which the Company may become subject, and such other factors
as the Board of Directors may deem to be relevant.
CONTROL OF THE COMPANY BY GREG MANNING. CRM, which is wholly-owned by Greg
Manning, controls the vote of approximately 30.5% of the outstanding shares of
Common Stock. An agreement between CRM and the Company, in which CRM agreed to
vote its shares with respect to certain transactions in the same proportion as
non-affiliates of the Company, terminated on May 26, 1995. Such concentration of
ownership, not subject to any voting restrictions, could limit the price that
certain investors might be willing to pay in the future for Common Stock. In
addition, CRM is in a position to impede transactions that may be desirable for
other shareholders including, without limitation, making it more difficult for a
third party to acquire, or of discouraging a third party from attempting to
acquire, control of the Company. See " "Description of Securities -- Section 912
of the New York Law and Other Change of Control Provisions."
SHARES ELIGIBLE FOR FUTURE SALE. The prevailing market price of the Common
Stock could be adversely affected by future sales of substantial amounts of
Common Stock by existing shareholders. With the registration of all of the
shares of Common Stock owned by it pursuant to the Registration Statement of
which this Prospectus is a part, CRM, which owns approximately 30.5% of the
outstanding Common Stock, may sell all or any portion of the Common Stock owned
by it without restriction. (50,000 of the shares owned by CRM represent shares
underlying certain currently exercisable options granted to Mr. Manning pursuant
to the Company's Stock Option Plan. Such shares, together with the shares
underlying the options granted and to be granted to all other officers,
employees and directors of the Company pursuant to the Company's Stock Option
Plan, have been registered under the Act and accordingly may be sold without
restriction.) The sole shareholder of CRM is Greg Manning, Chairman of the
Board, President and Chief Executive Officer of the Company. Mr. Manning has,
however, advised the Company that CRM has no present intention of selling the
Company's shares owned by it and that such registration is being done solely for
the purpose of Mr. Manning's estate and tax planning.
<PAGE>
RELATIONSHIP OF JWCHARLES/CSG TO COMMON STOCK TRADING. JWCharles/CSG may
act as market makers with respect to trading in the Common Stock and Public
Warrants. The Company has agreed to pay JWCharles/CSG a solicitation fee equal
to 4% of the exercise price in connection with the exercise of the Public
Warrants under certain conditions. See "Plan of Distribution". Under Rule 10b-6
promulgated by the Commission under the Exchange Act, JWCharles/CSG (and any
securities firm to which any or all of the solicitation fee may be reallowed),
will be prohibited from engaging in any market-making activities with regard to
the Company's securities for the period from nine business days (or such other
applicable period as Rule 10b-6 may provide) prior to any solicitation of the
exercise of Public Warrants until the later of the termination of such
solicitation activity or the termination (by waiver or otherwise) of any such
right that JWCharles/CSG may have to receive a fee for the exercise of the
Public Warrants following such solicitation. JWCharles/CSG may be unable to
provide a market for the Company's securities during certain periods while the
Public Warrants are exercisable.
CERTAIN ANTI-TAKEOVER PROVISIONS. The Company's Restated Certificate of
Incorporation and Amended and Restated Bylaws contain certain anti-takeover
provisions (including the Board of Directors' authority to issue shares of
preferred stock with such lawful rights and preferences it chooses) that could
have the effect of either making it more difficult for a third party to acquire,
or discouraging a third party from attempting to acquire, control of the Company
without negotiating with its Board of Directors. Such provisions could limit the
price that certain investors might be willing to pay in the future for the
Company's securities. Certain of such provisions provide for a classified Board
of Directors with staggered terms, allow the Company to issue preferred stock
with rights senior to the Common Stock, and impose various procedural and other
requirements which could make it more difficult for stockholders to effect
certain corporate actions. See "Principal Shareholders," and "Description of
Securities -- Section 912 of the New York Law and Other Change of Control
Provisions."
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
shares of Common Stock being offered hereby by the Selling Shareholder or the
UPW Selling Shareholders.
Assuming all of the Public Warrants are exercised, the Company will receive
net proceeds of approximately $4,885,498 after expenses of this offering and
payment of the maximum amount of warrant solicitation fees to JWCharles/CSG. The
proceeds, if any, to be received by the Company upon the exercise of such
warrants will be utilized by the Company for working capital purposes.
If all of the Unit Purchase Warrants are exercised, the Company will
receive approximately $670,153 in net proceeds; if all of the Underwriters'
Warrants are exercised, the Company will receive approximately $673,301 in net
proceeds.
There can be no assurance that any of the Public Warrants, Unit Purchase
Warrants or Underwriters' Warrants will be exercised.
DIVIDEND POLICY
The Company has never declared or paid a dividend on its Common Stock, and
management expects that a substantial portion of the Company's future earnings
will be retained for expansion or development of the Company's business. Whether
the Company will pay dividends on its Common Stock in the future will be at the
discretion of the Company's Board of Directors and will depend upon, among other
things, future earnings, operations, capital requirements and surplus, the
general financial condition of the Company, restrictive covenants in loan or
other agreements to which the Company may become subject, and such other factors
as the Board of Directors may deem to be relevant.
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth the beneficial ownership of Common Stock of
the Company by the Selling Shareholder and the UPW Selling Shareholders as of
August 28, 1996, and as adjusted to reflect the sale of shares offered hereby by
the Selling Shareholder and the UPW Selling Shareholders:
<TABLE>
<CAPTION>
Name of Amount of Beneficial Ownership Number of Shares Amount of Beneficial
Beneficial Owner of Common Stock Prior to Offering(1) to be Offered(2) Ownership
of Common Stock After
Offering(3)
Number Percentage Num- Percentage
of of Outstanding ber of Outstanding
Shares(1) Shares (4) of Shares (5)
Shares
- ----------------------- ------------------------- ---------------- ------------------------ -------- -------------------
<S> <C> <C> <C> <C> <C>
JWCharles Securities, 157,213 3.6% 157,213 0 *
Inc. and Corporate
Securities Group,
Inc.(6)
- ----------------------- ------------------------- ---------------- ------------------------ -------- -------------------
Maurice R. 78,942 1.8% 78,942 0 *
Buchsbaum(7)
- ----------------------- ------------------------- ---------------- ------------------------ -------- -------------------
F.N. Wolf & Co., 175,427 4.0% 175,427 0 *
Inc., or its
successors or
assigns(8)
- ----------------------- ------------------------- ---------------- ------------------------ -------- -------------------
CRM(9) 1,350,000 30.5% 1,300,000 50,000 1.1%
- ----------------------- ------------------------- ---------------- ------------------------ -------- -------------------
Steven C. Jacobs(10) 13,494 .3% 13,494 0 *
- ----------------------- ------------------------- ---------------- ------------------------ -------- -------------------
Colette Dorado(11) 13,494 .3% 13,494 0 *
- ----------------------- ------------------------- ---------------- ------------------------ -------- -------------------
* Less than 1%.
</TABLE>
(1) As of August 28, 1996.
(2) Includes (i) 1,300,000 shares being offered by the Selling Shareholder;
(ii) 195,790 shares being offered by the UPW Selling Shareholders, upon exercise
of the Unit Purchase Warrants; and (iii) 242,780 shares being offered by the UPW
Selling Shareholders, upon the exercise of the Underwriters' Warrants issuable
upon exercise of the Unit Purchase Warrants.
(3) Assuming the sale of all offered shares.
(4) Based on 4,419,997 shares outstanding at August 28, 1996.
(5) Based upon a total outstanding amount of 6,712,367 shares, which
assumes full exercise of the Unit Purchase Warrants, the Underwriters' Warrants
and the Public Warrants at the respective conversion ratios in effect on August
28, 1996.
(6) Represents (a) 70,184 shares of Common Stock included in the units
issuable upon exercise of the Unit Purchase Warrants; and (b) 87,029 shares
issuable upon exercise of the Underwriters' Warrants included in the units
issuable upon exercise of the Unit Purchase Warrants.
(7) A former affiliate of JWCharles/CSG. Represents (a) 35,242 shares of
Common Stock included in the units issuable upon exercise of the Unit Purchase
Warrants; and (b) 43,700 shares issuable upon exercise of the Underwriters'
Warrants included in the units issuable upon exercise of the Unit Purchase
Warrants.
<PAGE>
(8) Acted as underwriter in the Public Offering. Represents (a) 78,316
shares of Common Stock included in the units issuable upon exercise of the Unit
Purchase Warrants; and (b) 97,111 shares issuable upon exercise of the
Underwriters' Warrant included in the units issuable upon exercise of the Unit
Purchase Warrants.
(9) Greg Manning owns all of the outstanding shares of common stock of CRM.
Includes 50,000 currently exercisable options (but does not include an
additional 50,000 non-currently exercisable options) granted to Mr. Manning
pursuant to the Company's Stock Option Plan. Mr. Manning is the Chief Executive
Officer, President and Chairman of the Board of the Company. Mr. Manning has
been Chairman of the Board of the Company since 1981 and Chief Executive Officer
since 1992. Mr. Manning served as President of the Company from 1981 until
August 1993, and from March 1995 to the present.
(10) A former affiliate of JWCharles/CSG. Represents (a) 6,024 shares of
Common Stock included in the units issuable upon exercise of the Unit Purchase
Warrants; and (b) 7,470 shares issuable upon exercise of the Underwriters'
Warrant included in the units issuable upon exercise of the Unit Purchase
Warrants.
(11) An affiliate of JWCharles/CSG. Represents (a) 6,024 shares of Common
Stock included in the units issuable upon exercise of the Unit Purchase
Warrants; and (b) 7,470 shares issuable upon exercise of the Underwriters'
Warrant included in the units issuable upon exercise of the Unit Purchase
Warrants.
PLAN OF DISTRIBUTION
The Company is hereby offering for sale pursuant to this Prospectus
1,853,800 shares of Common Stock issuable upon exercise of the Public Warrants.
The Selling Shareholder is hereby offering for sale pursuant to this Prospectus
1,300,000 shares of Common Stock owned by it. The UPW Selling Shareholders are
hereby offering for sale, upon exercise of the Unit Purchase Warrants, (a)
195,790 shares of Common Stock, and (b) 242,780 shares of Common Stock issuable
upon exercise of the Underwriters' Warrants. At August 28, 1996, none of the
Unit Purchase Warrants had been exercised and, accordingly, none of the
Underwriters' Warrants have been issued.
The distribution of shares of Common Stock by the selling shareholders may
be effected in one or more transactions that may take place on the
over-the-counter market, including ordinary broker transactions, privately
negotiated transactions or through sales to one or more dealers for resale of
such securities as principals, at market prices prevailing at the time of sale,
at prices related to such prevailing market prices or at negotiated prices.
Usual and customary or specifically negotiated brokerage fees or commissions may
be paid by the selling shareholders in connection with such sales of securities.
The Company has agreed to pay to JWCharles/CSG (who may reallow all or a
portion thereof to any securities dealer firm that solicited the exercise) a fee
equal to 4% of the aggregate exercise price of the Public Warrants that are
exercised if (i) the market price of the Common Stock on the date of exercise is
greater than the exercise price of the Public Warrant; (ii) the exercise of the
Warrant was solicited by JWCharles/CSG or by the dealer to whom a reallowance is
to be made; (iii) the Public Warrant was not held in a discretionary account
maintained with such Representative or dealer; (iv) the solicitation was not in
violation of Rule 10b-6 under the Exchange Act; and (v) JWCharles/CSG and any
soliciting dealer to whom a reallowance is to be made is then a member in good
standing of the NASD.
Under Rule 10b-6 promulgated by the Commission under the Exchange Act,
JWCharles/CSG (and any securities firm to which any or all of the solicitation
fee may be reallowed), will be prohibited from engaging in any market-making
activities with regard to the Company's securities for the period from nine
business days (or such other applicable period as Rule 10b-6 may provide) prior
to any solicitation of the exercise of Public Warrants until the later of the
termination of such solicitation activity or the termination (by waiver or
otherwise) of any such right that JWCharles/CSG may have to receive a fee for
the exercise of the Public Warrants following such solicitation. JWCharles/CSG
may be unable to provide a market for the Company's securities during certain
periods while the Public Warrants are exercisable.
<PAGE>
The selling shareholders and intermediaries through whom such securities
are sold may be deemed "underwriters" within the meaning of Section 2(11) of the
Act with respect to the securities offered, and any profits realized or
commissions received may be deemed underwriting compensation.
In order to comply with certain state securities laws, if applicable, the
securities offered hereby will not be sold in a particular state unless such
securities have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and complied with.
JW Charles Securities, Inc. and Corporate Securities Group, Inc. are
affiliated corporations which have separate operations but which share a common
parent corporation.
CERTAIN TRANSACTIONS
All future material affiliated transactions, loans and loan guarantees will
be made or entered into on terms no less favorable to the Company than could be
obtained from unaffiliated parties, and shall be approved by a majority of the
directors of the Company, including a majority of the independent disinterested
directors of the Company.
DESCRIPTION OF SECURITIES
The Company is authorized to issue 20,000,000 shares of Common Stock, $.01
par value per share, and 10,000,000 shares of Preferred Stock, $.01 par value
per share (the "Preferred Stock"). As of August 28, 1996, there were 4,419,997
shares of Common Stock outstanding; no shares of Preferred Stock are
outstanding.
The following summary is qualified in its entirety by reference to the
Restated Certificate of Incorporation and the Company's Amended and Restated
By-Laws (the "By-Laws"), a copy of each of which has been filed as an exhibit to
the Registration Statement of which this Prospectus forms a part.
COMMON STOCK
Each shareholder is entitled to cast one vote, either in person or by
proxy, for each share owned of record on all matters submitted to a vote of
stockholders, including the election of directors. The holders of shares do not
possess cumulative voting rights, which means that the holders of more than 50%
of the outstanding shares voting for the election of directors can elect all of
the directors, and, in such event, the holders of the remaining shares will be
unable to elect any of the Company's directors.
Holders of outstanding shares of Common Stock are entitled to share ratably
in such dividends as may be declared by the Board of Directors out of funds
legally available therefor. See "Dividend Policy." Upon the liquidation,
dissolution, or winding up of the Company, each outstanding share of Common
Stock will be entitled to share equally in the assets of the Company legally
available for distribution to stockholders of any outstanding shares of
Preferred Stock.
<PAGE>
Holders of the shares of Common Stock have no preemptive rights. There are
no conversion or subscription rights, and shares are not subject to redemption.
All of the outstanding shares of Common Stock are, and the shares underlying the
various outstanding warrants and options will be, when issued and paid for in
accordance with the terms thereof, duly issued, fully paid and nonassessable.
An agreement between CRM and the Company, in which CRM agreed to vote its
shares with respect to certain transactions in the same proportion as
non-affiliates of the Company, terminated on May 26, 1995. Such concentration of
ownership, not subject to any voting restrictions, could limit the price that
certain investors might be willing to pay in the future for Common Stock. In
addition, CRM is in a position to impede transactions that may be desirable for
other shareholders including, without limitation, making it more difficult for a
third party to acquire, or of discouraging a third party from attempting to
acquire, control of the Company.
PREFERRED STOCK
The Board of Directors of the Company has authority (without action by the
shareholders) to issue the authorized and unissued Preferred Stock in one or
more series and, within certain limitations, to determine the voting rights
(including the right to vote as a series on particular matters and elect
directors in certain circumstances), preferences, conversion, and other rights
of each such series. While the Company believes that allowing the Board of
Directors the authority to issue such shares of Preferred Stock is in the best
interests of the Company and its shareholders, such authority may have the
effect of protecting management against outside interests and in retaining its
position. The Company has no present plans to issue any shares of Preferred
Stock.
WARRANTS
PUBLIC WARRANTS. Each of the warrants issued pursuant to the Warrant
Agreement between the Company and American Stock Trust Company, as Warrant Agent
(the "Warrant Agent") initially entitled the registered holder to purchase one
share of Common Stock at an exercise price of $3.4375. As a result of the
adjustment of the Public Warrants pursuant to the Warrant Agreement, resulting
from the offering of additional Common Stock in the Company's private placement
in November 1994 (the "Private Placement") and Regulation S offering in July
1995 (the "Regulation S Offering"), registered holders are now entitled to
purchase 1.24 shares of Common Stock per Public Warrant at an exercise price of
$2.7733. The Public Warrant holders are entitled to the benefit of adjustments
in the exercise prices of the Public Warrants and in the number of shares of
Common Stock or other securities deliverable upon the exercise of the Public
Warrants in the event of certain subsequent issuances of securities, stock
dividends, stock split, reclassifications, reorganizations, consolidations, or
mergers. At August 28, 1996, none of the Public Warrants have been exercised.
The Public Warrants may be exercised at any time beginning 12:01 A.M.,
Eastern Time, May 14, 1994 and continuing thereafter until the close of business
on May 13, 1998, unless such period is extended by the Company to a date not
later than May 13, 1999. After the expiration date, Public Warrant holders shall
have no further rights.
Public Warrant holders do not have any voting or any other rights as
stockholders of the Company. The Company has the right at any time beginning May
14, 1995 to repurchase the Public Warrants, at a price of $.05 per Public
Warrant, by written notice to the registered holders thereof, mailed 30 days
prior to the repurchase date. The Company may exercise this right only if the
closing bid price for the Common Stock for 20 trading days during a 30
consecutive trading day period ending not more than 10 days prior to the date
that the notice of repurchase is given, equals or exceeds 125% of the then
applicable exercise price. Any such repurchase shall be for all outstanding
Public Warrants. If the Company exercises its right to call Public Warrants for
repurchase, such Public Warrants may still be exercised until the close of
business on the day immediately preceding the date fixed for repurchase. If any
Public Warrant called for repurchase is not exercised by such time, it will
cease to be exercisable and the holder thereof will be entitled only to the
repurchase price. Notice of repurchase will be mailed to all holders of Public
Warrants of record at least thirty (30) days, but not more than sixty (60) days,
before the repurchase date.
UNDERWRITERS' WARRANTS. Upon exercise, the Underwriters' Warrants will be
subject to the same terms and conditions as the Public Warrants, except that the
Underwriters' Warrants will not be subject to repurchase by the Company.
<PAGE>
UNIT PURCHASE WARRANTS. Each Unit Purchase Warrant issued to JWCharles/CSG
(the representatives of the underwriters in the Public Offering), another
underwriter in the Public Offering and certain affiliated persons in connection
with the Public Offering initially entitled the holder to purchase, at any time
prior to May 14, 1998, one unit (each consisting of two shares of the Company's
Common Stock and two Underwriters' Warrants) at an exercise price of $10.31, for
an aggregate of 65,000 units. As a result of the adjustment of the Unit Purchase
Warrants pursuant to the terms thereof, resulting from the offering of
additional securities in the Private Placement, the Regulation S Offering and as
described under "Other Warrants" below, holders are now entitled to purchase
1.50608 units at an exercise price of $6.8456 per unit. At August 28, 1996, none
of the Unit Purchase Warrants have been exercised. The shares of Common Stock
comprising a part of the units issuable upon the exercise of the Unit Purchase
Warrants, as well as the shares of Common Stock issuable upon exercise of the
Underwriters' Warrants (upon issuance thereof), are being offered for sale
pursuant to this Prospectus. The Company has caused the units to be de-listed
and de-registered with the Nasdaq, the BSE and the Commission.
PRIVATE PLACEMENT WARRANTS. In connection with the Private Placement, the
Company issued 257,500 warrants (the "Purchaser Warrants") which, after certain
amendments to the terms thereof and after taking into account certain
adjustments resulting from the Regulation S Offering, entitled the holders to
purchase 1.13 shares of Common Stock per Purchaser Warrant at an exercise price
of $1.5528 at any time prior to May 3, 1996. The Company also issued warrants
(the "Agents' Warrants") to JWCharles/CSG, the placement agents of the private
placement, which warrants, having been adjusted to reflect the foregoing
amendment to the terms of the Purchaser Warrants and the Regulation S Offering,
entitled the holders to purchase 72,720 shares of Common Stock at an exercise
price of $1.74 per share at any time prior to November 4, 1999. The Company
registered the shares underlying the Purchaser Warrants and Agents' Warrants
pursuant to the Securities Act. All of the Purchaser Warrants and Agents'
Warrants have been exercised, resulting in net proceeds to the Company of
$577,935.
REGULATION S WARRANTS. In connection with the Regulation S Offering, the
Company issued 500,000 Warrants (the "Regulation S Warrants") entitling the
holder thereof to purchase one share of Common Stock per Warrant at an exercise
price of $1.50 per share (subject to certain adjustments) at any time from the
date of issuance to two years thereafter. All of such warrants have been
exercised, resulting in net proceeds to the Company of $750,000.
OTHER WARRANTS. In February 1996, the Company issued to an individual in a
private placement a warrant to purchase, at any time prior to March 1, 1997,
400,000 shares of the Company's Common Stock at an exercise price of $4.00 per
share. The purchase price for the warrant was $100,000, which was paid in full
in April 1996. Upon request of the investor, the Company has agreed to register
the shares of Common Stock underlying the warrant under the Securities Act of
1933, as amended, the cost of which (other than allocable overhead) will be
borne by the investor.
Transfer Agent and Warrant Agent
The transfer agent for the Common Stock, Regulation S Warrants and Public
Warrants is American Stock Transfer & Trust Co., 40 Wall Street, New York, New
York 10005 ("AST").
SECTION 912 OF THE NEW YORK LAW AND OTHER CHANGE OF CONTROL PROVISIONS
Generally, Section 912(b) of the New York Business Corporation Law (the
"NYBCL") prohibits a publicly held New York corporation from engaging in a
"business combination" with an "interested shareholder" for a period of five
years after the date of the transaction in which the person became an interested
shareholder, unless the combination or the transaction in which the person
became an interested shareholder is approved by the board of directors of the
corporation before the date such person became an interested shareholder. If the
business combination is not previously approved, the interested shareholder may
effect a business combination after the five-year period only if a majority of
the shares not owned by interested shareholders vote in favor of the combination
or the aggregate amount of the offer meets certain fair price criteria. A
"business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the shareholder. An "interested shareholder"
is a person who together with affiliates and associates owns (or within five
years, did own) 20% or more of the corporation's voting stock.
<PAGE>
The Restated Certificate of Incorporation and the By-laws contain certain
other provisions that may make it more difficult to effectuate a change in
control of the Company. The Restated Certificate of Incorporation provides that
the Board be classified into three classes, as nearly equal in size as possible,
with the term of office of one class expiring each year; directors can be
removed from office only for cause and only by a majority vote of the
shareholders; shareholders who desire to nominate a director for election at an
annual meeting of shareholders give the Company at least 60 days prior written
notice of such intent; and that shareholders who desire to nominate a director
for election at a special meeting of shareholders give written notice of such
intent by the close of business on the seventh day following the notice of such
meeting.
CERTAIN PROVISIONS RELATING TO LIMITATION OF LIABILITY AND INDEMNIFICATION OF
DIRECTORS
The Restated Certificate of Incorporation contains provisions which would
limit the scope of personal liability of directors to the Company or its
shareholders for monetary damages for breach of fiduciary duty. The provisions
are consistent with Section 402(b) of the NYBCL, which is designed, among other
things, to encourage qualified individuals to serve as directors of New York
corporations by permitting a New York corporation and its shareholders to adopt
provisions in the corporation's certificate of incorporation limiting directors'
liability for monetary damages for breach of duty of care.
The indemnification provisions will protect the Company's directors against
personal liability from breaches of their duty of care in certain circumstances.
The provisions would absolve directors of liability for negligence in the
performance of their duties. Directors would remain liable, under current law,
for breaches of their duty of loyalty to the corporation and its shareholders,
as well as acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or a transaction from which a director
derives improper personal benefit. Also, the provisions would not absolve
directors of liability under Section 719 of the NYBCL, which makes directors
personally liable for unlawful dividends or unlawful stock repurchases or
redemptions and expressly sets forth a negligence standard with respect to such
liability. Further, these provisions would not eliminate or limit liability of
directors arising in connection with causes of action brought under Federal
securities laws.
While the provisions of the Restated Certificate of Incorporation provide
directors with protection from awards of monetary damages for breaches of their
duty of care, it does not eliminate the directors' duty of care. Accordingly,
the provisions of the Restated Certificate of Incorporation would have no effect
on the availability of suitable remedies such as an injunction or rescission
based upon a director's breach of his duty of care.
LEGAL MATTERS
Legal matters relating to the securities offered hereby have been passed
upon for the Company by Kramer, Levin, Naftalis & Frankel, New York, New York.
Scott S. Rosenblum is a partner of that firm and is a director of the Company.
<PAGE>
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-KSB for the year ended June 30, 1995, have been so
incorporated in reliance upon the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement and Post-Effective Amendment on Form
S-3 under the Securities Act of 1993, as amended, covering the securities
offered hereby. For further information with respect to the Company and the
securities offered hereby, reference is made to such Registration Statement and
Post-Effective Amendment and to the exhibits filed as part thereof. Such
information is available for inspection at the Public Reference Section
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of the materials contained in the Registration Statement may be obtained
from the Commission upon payment of the fees prescribed by its rules and
regulations. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein are not necessarily complete. In
each instance, reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement and Post-Effective Amendment,
each such statement being qualified in all respects by such reference.
<PAGE>
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offer made hereby. If given or made, such information or
representations must not be relied upon as having been authorized by the Company
or any Underwriter. This Prospectus does not constitute an offer to sell or a
solicitation of any offer to buy any of the securities offered hereby in any
circumstance in which such offer or solicitation would be unlawful. Neither the
delivery of this Prospectus nor any sale made hereunder shall under any
circumstances create an implication that the information contained herein is
correct as of any time subsequent to the date of this Prospectus.
GREG MANNING
AUCTIONS, INC.
1,853,800 SHARES
OF
COMMON STOCK
1,300,000 SHARES
OF
COMMON STOCK
438,566 SHARES
OF
COMMON STOCK
---------------
PROSPECTUS
---------------
[DATE] , 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses payable in connection with the issuance and distribution of
the securities being registered are estimated to be as follows:
<TABLE>
<CAPTION>
<S> <C>
Registration fee(actual) ...........................$1,288.72
Legal and Accounting fees and expenses..............72,500.00
Printing and engraving expenses......................1,500.00
Miscellaneous........................................1,000.00
Total..........................................$76,288.72
==========
</TABLE>
All of the costs identified above will be paid by the Company, except that the
Selling Shareholder has agreed to reimburse the Company for the approximate
portion (estimated to be approximately $26,288.72) of the expenses allocable to
the registration of the securities to be sold by it. The above does not include
an additional filing fee of $4,525.01 previously paid.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to Section 402(b) of the New York Business Corporation
Law (the "NYBCL"), which enables a corporation in its original certificate or an
amendment thereto to eliminate or limit the personal liability of a director for
violations of the director's fiduciary duty, except for the liability of any
director if a judgment or other final adjudication adverse to him establishes
that (i) his acts or omissions were in bad faith or involved intentional
misconduct or a knowing violation of law or (ii) he personally gained in fact a
financial profit or other advantage to which he was not legally entitled or
(iii) his acts violated Section 719 of the NYBCL (providing for liability of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions). The Registrant's Restated Certificate of Incorporation contains
provisions permitted by Section 402(b) of the NYBCL.
Reference also is made to Section 722 of the NYBCL which provides that a
corporation may indemnify any persons, including officers and directors, who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an officer, director,
employee or agent of such corporation, or is or was serving at the request of
such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
necessarily incurred by such person in connection with such action, suit or
proceeding, provided such officer, director, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, for criminal proceedings, had no reasonable
cause to believe that his conduct was unlawful. A New York corporation may
indemnify officers and directors in an action by or in the right of the
corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually and reasonably incurred.
The Registrant's Restated Certificate of Incorporation provides for
indemnification of directors and officers of the Registrant to the fullest
extent permitted by the NYBCL. The Registrant has obtained liability insurance
for each director and officer for certain losses arising from claims or charges
made against them while acting in their capacities as directors or officers of
the Registrant.
Item 16. EXHIBITS
4.1 Certificate of Incorporation of the Registrant. Incorporated by
Reference to Exhibit 3(a) to the Company's Form SB-2, Registration
Number 33-55792-NY, dated May 14, 1993 (the "1993 Form SB- 2").
4.2 By-laws, as amended, of Registrant. Incorporated by reference to
Exhibit 3(b) to the 1993 Form SB-2.
<PAGE>
4.3 Form of Statement of Rights, Terms and Conditions for Common Stock
Purchase Warrants, with form of Warrant Certificate. Incorporated by
reference to Exhibit 4(b) of the 1993 Form SB-2.
4.4 Form of Warrant Agreement between Registrant and American Stock
Transfer & Trust Company. Incorporated by reference to Exhibit 4(c) to
the 1993 Form SB-2.
4.5 Form of Underwriters' Unit Purchase Warrant. Incorporated by reference
to Exhibit 4(d) to the 1993 Form SB-2.
5.1 Opinion of Kramer, Levin, Naftalis & Frankel regarding legality of
securities being registered (including consent).*
5.2 Opinion of Kramer, Levin, Naftalis & Frankel regarding legality of
securities being registered. Incorporated by reference to Exhibit 5 to
the 1993 Form SB-2.
23.1 Consent of Price Waterhouse LLP.*
23.2 Consent of Kramer, Levin, Naftalis & Frankel.*
24.1 Power of Attorney (included on signature page).
--------------------------------
* Filed herewith.
Item 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells,
post-effective amendments or further post-effective amendments to this
Registration Statement and Post-Effective Amendment to:
Include any Prospectus required by Section 10(a)(3) of the Securities Act;
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new Registration Statement of the securities
offered and the offering of the securities at that time to be the initial BONA
FIDE offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, 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 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933, as amended, and will
be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements of filing on Form S-3 and authorizes this Registration
Statement to be signed on its behalf by the undersigned, in the City of West
Caldwell, State of New Jersey, on [DATE], 1996.
GREG MANNING AUCTIONS, INC.
By:
Greg Manning,
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Greg Manning 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
further 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, 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 done 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, agent, or his substitute 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 dates indicated.
SIGNATURE TITLE(S) Date
- -------------------- ----------------------------------- ---------------
Greg Manning
Chairman of the Board,President and August 28,1996
Chief Executive Officer
(Principal Executive Officer)
Daniel M. Kaplan* Chief Financial Officer and August 28, 1996
Vice President
(Principal Financial Officer)
William T. Tully, Jr.* Director, Executive Vice President August 28, 1996
and Chief Operating Officer
David C. Graham* Senior Vice-President August 28, 1996
Robert J. Gesso* Secretary and Controller August 28, 1996
(Comptroller)
William J. Dolan* Director August 28, 1996
Scott S. Rosenblum* Director August 28, 1996
*By: Greg Manning
Greg Manning as Power of Attorney
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
4.1 Certificate of Incorporation of the
Registrant. Incorporated by Reference to
Exhibit 3(a) to the Company's Form SB-2,
Registration Number 33-55792-NY, dated May
14, 1993 (the "1993 Form SB-2").
4.2 By-laws, as amended, of Registrant.
Incorporated by reference to Exhibit 3(b)
to the 1993 Form SB-2.
4.3 Form of Statement of Rights, Terms and
Conditions for Common Stock Purchase
Warrants, with form of Warrant
Certificate. Incorporated by reference to
Exhibit 4(b) of the Company's Registration
Statement on Form SB-2, dated May 14, 1993
(the "Form SB-2").
4.4 Form of Warrant Agreement between
Registrant and American Stock Transfer &
Trust Company. Incorporated by reference
to Exhibit 4(c) to the Form SB-2.
4.5 Form of Underwriters' Unit Purchase
Warrant. Incorporated by reference to
Exhibit 4(d) to the Form SB-2.
5.1 Opinion of Kramer, Levin, Naftalis &
Frankel regarding legality of securities
being registered (including consent).
5.2 Opinion of Kramer, Levin, Naftalis &
Frankel regarding legality of securities
being registered. Incorporated by reference
to Exhibit 5 to the Form SB-2.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Kramer, Levin, Naftalis & Frankel
24.1 Power of Attorney (included on signature
page).
Kramer, Levin, Naftalis & Frankel
9 1 9 T H I R D A V E N U E
NEW YORK, N.Y. 10022-3852
(212) 715-9100
Arthur H. Aufses III Richard Marlin
Thomas D. Balliett Thomas E. Molner
Jay G. Baris Thomas H. Moreland
Saul E. Burian Ellen R. Nadler
Barry Michael Cass Gary P. Naftalis
Thomas E. Constance Michael J. Nassau
Michael J. Dell Michael S. Nelson
Kenneth H. Eckstein Jay A. Neveloff
Charlotte M. Fischman Michael S. Oberman
David S. Frankel Paul S. Pearlman
Marvin E. Frankel Susan J. Penry-Williams
Alan R. Friedman Bruce Rabb
Carl Frischling Allan E. Reznick
Mark J. Headley Scott S. Rosenblum
Robert M. Heller Michele D. Ross
Philip S. Kaufman Max J. Schwartz
Peter S. Kolevzon Mark B. Segall
Kenneth P. Kopelman Judith Singer
Michael Paul Korotkin Howard A. Sobel
Kevin B. Leblang Jeffrey S. Trachtman
David P. Levin D. Grant Vingoe
Ezra G. Levin Harold P. Weinberger
Larry M. Loeb E. Lisk Wyckoff, Jr.
Monica C. Lord
Martin Balsam
Joshua M. Berman
Jules Buchwald
Rudolph de Winter
Meyer Eisenberg
Arthur D. Emil
Sherwin Kamin
Arthur B. Kramer
Maurice N. Nessen
Maxwell M. Rabb
James Schreiber
Counsel
-------
M. Frances Buchinsky
Debora K. Grobman
Christian S. Herzeca
Pinchas Mendelson
Lynn R. Saidenberg
Jonathan M. Wagner
Special Counsel
---------------
FAX
(212) 715-8000
WRITER'S DIRECT NUMBER
(212) 715-9100
August 28, 1996
Greg Manning Auctions, Inc.
775 Passaic Avenue
West Caldwell, New Jersey 07006
Re: Amendment No. 2 to Registration Statement on Form S-3
Ladies and Gentlemen:
We refer to Amendment No. 2 to Registration Statement on Form S-3 (No.
333-1044) (the "Registration Statement"), to be filed by Greg Manning Auctions,
Inc., a New York corporation (the "Company"), with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended,
relating to the offering by Collectibles Realty Management, Inc. of up to
1,300,000 shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), on a delayed or continuous basis.
In connection herewith, we have reviewed copies of the Restated Certificate
of Incorporation and By-laws of the Company, resolutions of the Company's Board
of Directors, and we have reviewed such other documents and records as we have
deemed necessary to enable us to express an opinion on the matters covered
hereby. In such examinations and reviews, we have assumed the genuineness of all
signatures on original documents and the conformity to authentic originals of
all copies submitted to us as conformed or photostatic copies. We have also
examined and relied upon representations, statements or certificates of public
officials and officers and representatives of the Company and others.
We are admitted to the Bar of the State of New York, and we express no
opinion as to the laws of any other jurisdiction other than the laws of the
United States of America.
Based upon the foregoing, we are of the opinion that the shares of Common
Stock have been validly authorized and will, when sold in accordance with the
terms and conditions of the Registration Statement, be legally issued, fully
paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and reference to our firm under the heading "Legal
Matters" in the Prospectus which forms a part thereof. In giving this consent,
we do not thereby admit that we are within the category of persons whose consent
is required under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Commission.
We are delivering this opinion to the Company, and no person other than the
Company may rely upon it.
Very truly yours,
KRAMER, LEVIN, NAFTALIS & FRANKEL
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of Amendment No. 2 to Registration Statement on Form S-3 of
our report dated October 12, 1995 appearing on page 21 of Greg Manning Auctions,
Inc.'s Annual Report on Form 10-KSB/A-2 for the year ended June 30, 1995. We
also consent to the reference to us under the heading "Experts" in such
Prospectus.
Price Waterhouse LLP
Morristown, New Jersey
August 28, 1996
Kramer, Levin, Naftalis & Frankel
9 1 9 T H I R D A V E N U E
NEW YORK, N.Y. 10022-3852
(212) 715-9100
Arthur H. Aufses III Richard Marlin
Thomas D. Balliett Thomas E. Molner
Jay G. Baris Thomas H. Moreland
Saul E. Burian Ellen R. Nadler
Barry Michael Cass Gary P. Naftalis
Thomas E. Constance Michael J. Nassau
Michael J. Dell Michael S. Nelson
Kenneth H. Eckstein Jay A. Neveloff
Charlotte M. Fischman Michael S. Oberman
David S. Frankel Paul S. Pearlman
Marvin E. Frankel Susan J. Penry-Williams
Alan R. Friedman Bruce Rabb
Carl Frischling Allan E. Reznick
Mark J. Headley Scott S. Rosenblum
Robert M. Heller Michele D. Ross
Philip S. Kaufman Max J. Schwartz
Peter S. Kolevzon Mark B. Segall
Kenneth P. Kopelman Judith Singer
Michael Paul Korotkin Howard A. Sobel
Kevin B. Leblang Jeffrey S. Trachtman
David P. Levin D. Grant Vingoe
Ezra G. Levin Harold P. Weinberger
Larry M. Loeb E. Lisk Wyckoff, Jr.
Monica C. Lord
Martin Balsam
Joshua M. Berman
Jules Buchwald
Rudolph de Winter
Meyer Eisenberg
Arthur D. Emil
Sherwin Kamin
Arthur B. Kramer
Maurice N. Nessen
Maxwell M. Rabb
James Schreiber
Counsel
-------
M. Frances Buchinsky
Debora K. Grobman
Christian S. Herzeca
Pinchas Mendelson
Lynn R. Saidenberg
Jonathan M. Wagner
Special Counsel
---------------
FAX
(212) 715-8000
WRITER'S DIRECT NUMBER
(212) 715-9100
August 28, 1996
Greg Manning Auctions, Inc.
775 Passaic Avenue
West Caldwell, New Jersey 07006
Re: Post-Effective Amendment No. 3 on Form S-3
Ladies and Gentlemen:
We refer to Post-Effective Amendment No. 3 on Form S-3 to Registration
Statement on Form SB-2 (No. 33-55792-NY) (the "Registration Statement"), to be
filed by Greg Manning Auctions, Inc., a New York corporation (the "Company"),
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended.
We hereby consent to the incorporation by reference in the Registration
Statement to our opinion filed as Exhibit 5 to the Company's Registration
Statement on Form SB-2, dated May 14, 1993 and to the reference to our firm
under the heading "Legal Matters" in the Prospectus which forms a part of the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Commission.
We are delivering this consent to the Company, and no person other than the
Company may rely upon it.
Very truly yours,
KRAMER, LEVIN, NAFTALIS & FRANKEL
