As filed with the Securities and Exchange Commission on October ___, 1998
Registration No.:
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SIRCO INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
New York 13-2511270
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
24 Richmond Hill Avenue
Stamford, Connecticut 06901
(203) 359-4100
(Address, including zip code, and telephone number,
including area code of Registrant's principal executive offices)
JOEL DUPRE
Chairman of the Board and Chief Executive Officer
Sirco International Corp.
24 Richmond Hill Avenue
Stamford, Connecticut 06901
(203) 359-4100
(Name, address, including zip code and telephone number,
including area code, of agent for service)
Copy To:
Eric M. Hellige, Esq.
Pryor Cashman Sherman & Flynn LLP
410 Park Avenue
New York, New York 10022
(212) 421-4100
Approximate date of commencement of proposed sale of the
securities to the public: As soon as possible after this Registration Statement
becomes effective.
<PAGE>
If the only securities being registered on this Form are to be 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, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. [X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, 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 of 1933, 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, check the following box. [ ]
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Calculation Of Registration Fee
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Offering Aggregate
Title of Each Class of Amount to Price Per Offering Amount of
Securities to be Registered be Registered Share* Price* Registration Fee
--------------------------- ------------- ------ ------ ----------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value............... 914,916 shares $1.09 $997,258.44 $199.45
</TABLE>
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* Calculated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee (based on the closing price per share of
the Registrant's common stock as reported on the NASDAQ Small Cap market on
October 16, 1998.)
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 this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 22, 1998
PROSPECTUS
914,916 Shares
SIRCO INTERNATIONAL CORP.
Common Stock
(Par value $.10 Per Share)
---------------------
The shareholders listed in this prospectus are offering and selling up
to 914,916 shares of common stock of Sirco International Corp. We will not
receive any proceeds from such sale.
Our common stock is listed on the NASDAQ Small Cap market under the
symbol "SIRC." The last reported bid price for the common stock on October 16,
1998, was $1.06 per share. The last reported ask price for the common stock on
such date was $1.13 per share.
The selling shareholders may offer their shares of common stock through
public or private transactions in the over-the-counter markets, on or off the
United States exchanges, at prevailing market prices or at privately negotiated
prices. The selling shareholders may engage brokers or dealers who may receive
commissions or discounts from the selling shareholders.
---------------------
See "Risk Factors" at page 7 of this prospectus for a discussion of
certain material factors which you should consider before investing in the
common stock offered by this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
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The date of this Prospectus is _______________, 1998.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities Exchange Commission (the "SEC"). You may
read and copy any document we file at the SEC's public reference room located
450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-0330 for further information on the operation of such public reference
room. You may also request copies of such documents, upon payment of a
duplicating fee, by writing to the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549 or obtain copies of such documents from the SEC's web site at
http://www.sec.gov.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information we incorporate by reference is
considered to be part of this prospectus and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended:
(1) Annual Report on Form 10-K for the fiscal year ended November 30,
1997, as amended by Form 10-K/A dated May 7, 1998;
(2) Quarterly Reports on Form 10-Q for the fiscal quarters ended
February 28, 1998, May 31, 1998 and August 31, 1998, and
(3) Proxy Statement dated May 11, 1998.
You may request a copy of these filings (excluding exhibits to such
filings which we have not specifically incorporated by reference in such
filings), at no cost, by writing or telephoning us at the following address:
Sirco International Corp.
24 Richmond Hill Avenue
Stamford, Connecticut 06901
Attn: Mr. Paul H. Riss, Chief Financial Officer
(203) 359-4100
This prospectus is part of a registration statement we filed with the
SEC. You should rely only on the information provided or incorporated by
reference in this prospectus or any related supplement. We have not authorized
anyone else to provide you with different information. The selling shareholders
will not make an offer of these shares in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
supplement is accurate as of any date other than the date on the front of those
documents.
<PAGE>
The following discussion and analysis contains forward-looking
statements. Such statements generally discuss future expectations. You can
identify such statements by the use of forward looking terminology as "may,"
"will," "expect," "anticipate" or other similar words. You should be aware that
any such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties. Actual results may differ materially from those
in the forward-looking statements as a result of various factors. Factors that
might cause such a difference include, among others, general economic and
business conditions. See "Risk Factors."
ABOUT THE COMPANY
The Travel Product Business.
We design, manufacturer and market a broad line of soft luggage, sports
bags, backpacks, children's bags, tote bags and related products. Our strategy
is to produce a diverse line of high quality, fashionable products at
competitive prices. We believe our creative design, manufacturing and sourcing
capabilities facilitate our ability to merchandise high quality products.
As part of our strategy, we, among other things, (1) sell our products
under many registered trade names, including "Cross Trainer," "J.T. Madison,"
"Mondo" and "Mountain Gear;" (2) sell our products under certain trademarked
names we license from others, including "Dunlop," "Generra," "Gold's Gym,"
"Hedgren," "Koosh," "Maui and Sons," "Perry Ellis" and "S>>M" (Sport Music by
MTV); (3) design and manufacture soft luggage and sports bags on a contract
basis for unaffiliated retailers and sportswear companies; and (4) sell luggage
and American Airlines logo products to American Airlines, Inc. employees.
While the primary markets for our products are the United States and
Canada, foreign suppliers manufacture virtually all of our products according to
our design specifications. During the fiscal year ended November 30, 1997,
suppliers in The People's Republic of China manufactured approximately 68% of
our products.
We sell our luggage, sport bags, backpacks and related products
primarily to (1) large national retail chain stores, including Target, Sears,
Kmart and Wal-Mart; and (2) regional discount store chains, including ShopKo,
Bradlees and Caldor. We also sell such products to (1) department stores and
other specialty stores, including Federated Stores (Bloomingdale's and Stern's),
The May Company, Innovation Luggage and Bentley's Luggage; (2) apparel chain
stores, including The Marmaxx Group and Ross Stores; (3) sporting goods
retailers, such as Gold's Gym; and (4) warehouse clubs, such as Price Costco.
While we believe that we could replace most of these customers, loss of their
business could adversely affect our operations.
The following table sets forth the respective percentages of our net
sales to Target, Kmart and The Marmaxx Group for the fiscal years ended November
30 1997, 1996 and 1995. No other customers purchased products representing 10%
or more of our net sales during those fiscal years.
<PAGE>
Fiscal Year
Customer Ended November 30
-------- -------------------------
1995 1996 1997
---- ---- ----
Target 25% 19% 27%
Kmart --- 11% 17%
The Marmaxx Group --- --- 14%
We currently maintain showrooms in New York City and Ontario, Canada.
We use full-time sales persons and independent sales representatives to solicit
business directly from our customers. The independent sales representatives
represent several other manufacturers or wholesalers. We pay them commission for
their services, typically pursuant to the terms of a non-exclusive sales
representative contract. We fill orders on the terms and conditions of standard
purchase orders we receive from customers.
Termination of FILA and Airway Licenses.
After extensive negotiations with FILA Sport S.p.A. ("FILA"), in
February 1996, we agreed to stop shipping FILA product under a non-exclusive
license with FILA during fiscal 1996. Net sales of the FILA product for the
fiscal year ended November 30, 1996 were approximately $8,584,000 (including
approximately $482,000 sold to FILA), or approximately 30.9% of our total net
sales. We did not sell any products bearing the FILA name or logo in fiscal
1997. The loss of the FILA trademark adversely affected our results of
operations in the fiscal year ended November 30, 1997 and will adversely impact
our results of operations for the fiscal year ending November 30, 1998.
During fiscal 1996, Airway Industries Inc. ("Airway") refused to renew
its license agreement with our Canadian subsidiary, Sirco International (Canada)
Limited ("Sirco Canada"). Sirco Canada had an exclusive license to sell in
Canada through December 31, 1996, luggage and luggage related products under the
trade names "Atlantic" and "Oleg Cassini." During the first quarter of fiscal
1997 (prior to the December 31, 1996 termination date), sales of Atlantic
product approximated $472,000, which represented approximately 2.9% of our total
net sales and approximately 63.8% of Sirco Canada's total net sales for that
period. During the fiscal year ended November 30, 1996, sales of such product
approximated $5,782,000, which represented approximately 20.8% of our total net
sales and approximately 95.4% of Sirco Canada's total net sales for that period.
The loss of such license agreement adversely affected our results of operations
for the year ended November 30, 1997 and will adversely effect our results of
operations for the fiscal year ending November 30, 1998.
Diversification Strategy - The Telecommunications Division.
During the latter part of fiscal 1997, our Board of Directors reviewed
proposals to increase the value of our common stock and thereby increase
shareholder value. Included among such proposals were alternative business
opportunities, including several opportunities outside of the luggage industry.
In recognizing the significant growth opportunities in the telecommunications
industry, particularly with respect to the competitive local exchange carriers,
or "CLECs," on which the U.S. capital markets have placed relatively high
<PAGE>
valuations, the Board of Directors decided to diversify our business by
expanding into the telecommunications industry. In the fourth quarter of fiscal
1997, our Board of Directors divided our business into the following two
segments: (1) the travel business (luggage, sport bags and the American Airlines
employee stores), and (2) the telecommunications industry, including primarily
CLECs.
In furtherance of our diversification strategy, since October 1997, we
have made several investments in Access One Communications Corp. (formerly known
as CLEC Holding Corp.) ("Access One"), which owns 95% of the capital stock of
The Other Phone Company, Inc. ("OPC"), an integrated telecommunications provider
based in Florida. We account for our investment in Access One using the equity
method of accounting. As of October 1, 1998, we were the largest shareholder of
Access One, owning approximately 30.6% of Access One's capital stock. Access One
has advised us that OPC had approximately 13,500 local access lines on October
1, 1998, compared to approximately 2,500 local access lines on September 9,
1997.
Consistent with our diversification strategy, we acquired Essex
Communications, Inc. ("Essex"), a newly formed CLEC, on February 27, 1998. Essex
intends to attract and retain a geographically concentrated customer base in the
Northeastern and Mid-Atlantic states, primarily through the resale of products
and services of incumbent and alternative facilities-based local providers. In
March and April 1998, Essex signed agreements with affiliates of Bell Atlantic
Corporation allowing Essex to resell local telephone service in New York and New
Jersey. Essex has received approval to resell local telephone service from the
Connecticut Department of Public Utility Control, the New Jersey Board of Public
Utilities, and the New York Public Service Commission. Essex has also filed
applications to resell local telephone service with the Virginia State
Corporation Commission and the Massachusetts Department of Telecommunication and
Energy. Essex is currently negotiating the terms of a resale agreement with
Southern New England Telecommunications Corporation that will enable Essex to
resell local telephone service in the State of Connecticut. Essex intends to
market primarily to small- and medium-sized businesses with telecommunications
usage of less than $2,000 per month. As part of its customer service strategy,
Essex expects to be more responsive and innovative in satisfying customers'
needs, while providing a product that is less expensive than the telephone
service that the Bell operating companies provide. In addition to local
telephone line usage, Essex plans to sell other enhanced and value added
telecommunication services, such as voice mail, paging, long-distance and
teleconferencing.
Since the purchase of Essex, our telecommunications business has
continued to grow. On August 14, 1998, Essex acquired WebQuill Internet Services
LLC ("WebQuill") and American Telecom, LLC ("American Telecom"). This
acquisition will enable us to provide Internet access to our telecommunications
customers.
On October 6, 1998, we signed a letter of intent with certain principal
shareholders of Access One pursuant to which we expressed our intention to
purchase, and such shareholders expressed their intention to sell, approximately
50.2 % of the outstanding shares of common stock of Access One for approximately
8,014,000 shares of our common stock. In connection with such acquisition,
certain officers of Access One would become our executive officers and two
individuals nominated by such selling shareholders would join our Board of
Directors. Any such transaction is subject to the negotiation of definitive
acquisition agreements and the compliance by the parties with closing conditions
to be negotiated. There is no assurance that the transactions outlined in the
letter of intent will occur as contemplated, if at all.
<PAGE>
Declaration of Dividends.
We have not declared any cash dividends with respect to our common
stock during the past five fiscal years. Our Board of Directors may declare cash
dividends in the future, in light of our earnings, financial position, cash
requirements and other relevant factors existing at the time. Our current
financing arrangements prohibit us from paying dividends without the lender's
prior consent.
Executive Offices.
Sirco International Corp. was incorporated under the laws of New York
on July 22, 1964. Our executive offices are located at 24 Richmond Hill Avenue,
Stamford, Connecticut 06901 and our telephone number at that address is (203)
359-4100.
RISK FACTORS
The purchase of our common stock involves a high degree of risk. You
should carefully consider the following risk factors and other information in
this prospectus before deciding to invest in such stock.
Reliance on License Agreements.
Recent Termination of Material Licenses. Sales of licensed products
accounted for approximately 66% of our net sales during fiscal 1997, 83% of our
net sales during fiscal 1996 and 65% of our net sales during fiscal 1995. Sales
of products developed and sold under our former license from FILA accounted for
approximately 30.9% of our total net sales in fiscal 1996 and 21.4% of our total
net sales in fiscal 1995. Sales of products developed and sold under our former
license from Airway accounted for approximately 2.9% of our total net sales in
fiscal 1997, 20.8% of our total net sales in fiscal 1996 and 14.3% of our total
net sales in fiscal 1995. In 1996, both FILA and Airway terminated their
respective license with us. Primarily because of such terminations, our net
sales for the year ended November 30, 1997 declined by approximately $11,738,000
from the previous fiscal year. Such decline materially adversely affected our
results of operations. See "About The Company." During fiscal 1996, we entered
into new license agreements to develop and sell products bearing the "Perry
Ellis" and "Hedgren" names and logos. However, we may not be able to
successfully develop and sell enough products under such licenses to replace the
product sales under our former FILA and Airway licenses.
Possible Termination of Existing Licenses. Our licensors could
terminate any of our existing licenses at any time. We also may not be able to
procure new license agreements or renew existing license agreements on
commercially reasonable terms.
Terms of Existing License Agreements. Our license agreements limit our
ability to manufacture certain products and to sell products in certain
territories and markets. Typically, our licensors must approve, in their sole
discretion, the products we develop and the third party manufacturers we use.
Some license agreements require licensor approval for mergers, reorganizations,
certain management changes or assignments of the respective license. Obtaining
such approval may be time consuming and may adversely affect the timing of our
introduction of new products. Such restrictions could significantly affect our
growth.
<PAGE>
Success of Products and Product Lines.
Changing Consumer Preferences. As a result of changing consumer
preferences, we may successfully market products for only one or two years. Any
of our products or product lines could lose customer popularity.
New Products Introductions. New products or product lines could be
unsuccessful. During fiscal 1997, we introduced our "Perry Ellis," "Koosh" and
"Hedgren" product lines. We cannot assure you that these new product lines will
be successful.
Competition for Retail Shelf Space. Our products compete with other
similar products for retail shelf space. Limited shelf space in retail stores
may hinder our ability to display existing products or expand our products and
product lines.
Dependence on Key Personnel. Our future success depends on the continued efforts
of Joel Dupre, our Chairman of the Board and Chief Executive Officer. Because we
do not have (1) an employment agreement with Mr. Dupre; (2) a noncompete
agreement with Mr. Dupre; or (3) key-man life insurance on Mr. Dupre's life, the
loss of Mr. Dupre's services could materially adversely affect our Business. Our
future success also depends on our ability to retain our key management, sales,
marketing and product development personnel and to attract other personnel to
satisfy our needs. We may not be successful in retaining and attracting such
personnel.
Dependence on Third Party Manufacturers.
No Long-Term Contracts. To date, third parties in The People's Republic
of China, the Philippines, Taiwan and Thailand have manufactured substantially
all of our products. Foreign suppliers in The People's Republic of China
manufactured approximately 67.8% of our products during the fiscal year ended
November 30, 1997, approximately 63.9% of our products during the fiscal year
ended November 30 1996 and approximately 80.9% of our products during the fiscal
year ended November 30, 1995. We do not have long-term contracts with any of
these manufacturers. Although we believe we could find alternate facilities to
replace such manufacturers, we have not made any arrangements for securing such
replacements and we cannot assure you that we can obtain adequate alternate
manufacturing facilities to meet the demand for production, particularly if a
disruption of manufacturing sources in China or any other foreign country
increased such demand. Further, a shift to alternate facilities, if available to
us, could increase our manufacturing costs and subject our products to
additional and/or higher quotas, duties, tariffs or other restrictions.
International Relations. Foreign manufacturing is generally subject to
risks, including, among others, the following:
- transportation delays and interruptions;
- political and economic disruptions;
- tariff impositions;
- import and export controls;
- governmental policy changes;
- transfer of funds restrictions; and
- United States Dollar fluctuations against foreign currencies.
While such events have not materially adversely affected us in the past, the
occurrence of any such event, particularly one affecting our business with
Chinese manufacturers, could materially adversely affect us in the future.
<PAGE>
Reliance on Customers and Retailers for Sales and Distribution. We sell and
distribute our products principally through large national retail chain stores,
regional discount store chains, department and specialty stores. We may lose our
existing arrangements with our customers and may not establish any new
arrangements with additional customers. A loss of several of these customers
could materially adversely affect our business, results of operations and
profitability. For a description of the respective percentages of net sales
represented by sales to Target, Kmart and The Marmaxx Group for the fiscal years
ended November 30 1997, 1996 and 1995, see "About The Company - Travel Product
Business."
Competition. The luggage, sport bag and backpack industry is highly competitive.
Competition is based primarily on the ability to (1) design and develop new
products; (2) procure licenses for popular characters and trademarks; and (3)
successfully market products. Many of our competitors, including certain of our
licensors, have (1) longer operating histories; (2) broader product lines which
include similar products or alternatives to our products; and (3) greater
financial resources and advertising budgets. We have not in the past nor intend
in the immediate future to devote substantial capital resources to advertising.
Further, the luggage, sport bag and backpack industry has nominal barriers to
entry. We may not be able to compete effectively in this marketplace.
Risks Associated with Telecommunications Division. In the fourth quarter of
fiscal 1997, our Board of Directors decided to diversify our business by
expanding into the telecommunications industry. Since October 1997, we have made
several investments in Access One, which owns 95% of OPC, an integrated
telecommunications provider based in Florida. In February 1998, we acquired
Essex, a newly-formed CLEC, and in August 1998, we acquired WebQuill and
American Telecom to add an Internet service provider. See "About The Company -
Diversification Strategy - the Telecommunication Division." Our diversification
strategy involves significant risks, including, but not limited to, the factors
set forth below.
Short Operating History; Net Losses. Since its inception, Essex has
focused on organizational activities, including securing the proper
authorization to operate as a telephone reseller in the States of Connecticut,
New Jersey, New York, Virginia and Massachusetts. Essex began marketing its
telecommunications products in May 1998 and by October 1, 1998 had approximately
1,250 local access lines. Because of its limited operating history, we cannot
accurately predict Essex's potential success. Accordingly, you should consider
the likelihood of Essex's success in view of all of the risks, expenses and
delays inherent in establishing a new business, including, but not limited to
the following:
- general expenses;
- unforeseeable complications and delays;
- implementation of marketing strategies and activities;
- the uncertainty of market acceptance of new products and
services;
- intense competition from larger, more established
competitors; and
- incurring a net loss before generating any revenues or
establishing an adequate customer base.
<PAGE>
Risks of Acquisitions. We intend to develop and expand our
telecommunications business. Initially, we intend to acquire additional
telecommunications and related businesses to enter new markets. Among the risks
associated with such strategy, which could materially adversely affect our
business, financial condition, results of operations and profitability, are the
following:
- we may not be able to identify, acquire or profitably manage such
additional businesses;
- we may incur substantial costs, delays or other operational or
financial problems in integrating acquired businesses;
- such acquisitions may adversely affect our operating results;
- such acquisitions may divert management's attention; we may not
be able to retain acquired key personnel;
- we may encounter unanticipated events, circumstances or legal
liabilities; and the value of acquired intangible assets could
decrease.
Implementation and Suitable Resale Arrangements. Our development and
expansion of the telecommunications business and our entry into new markets will
depend on our ability to, among other things:
- lease or purchase suitable sites;
- obtain equipment on a timely basis;
- negotiate suitable resale or interconnect arrangements with
incumbent local exchange carriers, or "ILECs," on satisfactory
terms and conditions; and
- finance the expansion of the telecommunications business.
Dependence on Key Personnel and Consultants. A small number of key
management and operating employees and consultants manage our telecommunications
business. Our loss of such employees or consultants could materially adversely
impact our telecommunications business. We believe that our future success in
the telecommunications business significantly depends on our ability to attract
and retain highly skilled and qualified telecommunications personnel.
Reliance on Others. To limit our capital expenditures and support
staff, we rely extensively on third parties. We do not own any part of a local
exchange network or a long distance network. As a result, we depend entirely on
facilities-based carriers for the transmission of customer telephone calls.
Under the Telecommunications Act of 1996, we may purchase capacity from
facilities-based carriers by entering into resale agreements with such carriers.
The risk factors inherent in this approach include, but are not limited to, the
following:
- the inability to negotiate and renew favorable resale agreements;
- lack of timeliness of the ILEC in processing our orders for
customers seeking to utilize our services;
- dependence on the effectiveness of outside telemarketing services
to attract new customers; and
- reliance on others for prompt and accurate billing of our
customers.
<PAGE>
Competition. We may be competing for local telephone services with
ILEC's, which currently dominate their local telecommunications markets, other
CLEC's and several other local exchange carriers. The following factors may,
among other things, prevent us from obtaining the share of the
telecommunications market necessary to achieve profitable telecommunications
operations:
- ILECs' long-standing relationships with their customers;
- the increase in business combinations and alliances in the
telecommunications industry which may create significant new
competitors;
- the greater financial, personnel and other resources of existing
and potential competitors; and
- the ability of competitors with greater resources and capital to
meet or undercut our proposed lower price structure.
Rapid Technological Change. The telecommunications industry is subject
to rapid and significant changes in technology. While we believe that these
changes will not materially affect our ability to acquire necessary
technologies, we cannot predict the effect of technological changes on our
business.
Regulation. Federal, state and local regulation may affect our
telecommunications business. Since regulation of the telecommunications industry
in general, and the CLEC industry in particular, is frequently changing, we
cannot predict whether, when and to what extent new regulations will affect us.
The following, among others, may adversely affect our business, financial
condition and results of operations:
- delays in obtaining required regulatory approvals;
- new court decisions;
- the enactment of new adverse regulations; and
- the establishment of strict regulatory requirements.
Dividend Policy.
Generally. We expect to retain earnings to finance the expansion and
development of our business. Our Board of Directors, which the present
shareholders currently control, may decide whether to make future cash dividend
payments. Such decision will depend on, among other things, the following
factors:
- our earnings;
- our capital requirements;
- our operating condition;
- our financial condition; and
- our compliance with various financing covenants to which we are
or may become a party.
No Dividend Payments in Near Future. We are currently a party to a
credit facility with Coast Business Credit, a division of Southern Pacific
Thrift & Loan Association, that prohibits dividend payments without Coast
Business Credit's prior consent. See "Item 5. Market for the Company's Common
Equity and Related Stockholder Matters" and "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations Liquidity and Capital
Resources" in our Annual Report on Form 10-K for the year ended November 30,
1997, as amended, which we have incorporated by reference.
<PAGE>
Limited Public Market and Possible Volatility of Stock Price. Although there is
a public market for the common stock, the market for the common stock is thinly
traded. The trading prices of the common stock could be subject to wide
fluctuations in response to, among other events and factors, the following:
- variations in our operating results;
- announcements by us or others;
- developments affecting us or our competitors; and
- extreme price and volume fluctuations in the stock market.
Effect of Certain Charter Provisions.
Authority of Board of Directors to Issue Preferred Stock. Pursuant to
the terms of our charter, our Board of Directors has the authority to issue up
to 1,000,000 shares of preferred stock in one or more series. The Board of
Directors may also determine the prices, rights, preferences, privileges and
restrictions, including voting rights, of the shares within each series without
any further shareholder vote or action. In June 1998, our Board of Directors
authorized the issuance of up to 700 shares of Series A Preferred Stock which
shares were subsequently issued. Our Board of Directors intends to increase the
amount of shares designated as Series A Preferred Stock from 700 to 2,000 in
order to effect the issuance of additional shares of Series A Preferred Stock to
prospective investors. We are currently negotiating the terms of an investment
which would result in the issuance of additional Series A Preferred Stock. Each
share of Series A Preferred Stock currently is convertible into 667 shares of
common stock. In connection with the issuance of additional shares of Series A
Preferred Stock to an existing investor, we expect to increase the number of
shares that are issuable upon conversion of the Series A Preferred Stock from
667 shares to 1,000 shares. The rights of the holders of preferred stock that
the Board of Directors may issue may adversely affect the rights of the holders
of common stock. While the issuance of such preferred stock could facilitate
possible acquisitions and other corporate activities, it could also impede a
third party's ability to acquire control of our company.
Limitation of Liability of Directors. Pursuant to the terms of our
charter and to the extent New York law permits, we and our shareholders may not
hold our directors personally liable for monetary damages in the event of a
breach of fiduciary duty.
Anti-takeover Effects of New York Law. Certain anti-takeover provisions of New
York law could delay or hinder a change of control of our company. While such
provisions generally facilitate the Board of Directors' ability to maximize
shareholder value, they may discourage takeovers that could be in the best
interest of certain shareholders. Such provisions could adversely affect the
market value of the our stock in the future.
USE OF PROCEEDS
The shares of common stock offered hereby are being registered for the
account of the selling shareholders identified in this prospectus. See "Selling
Shareholders." All net proceeds from the sale of the common stock will go to the
shareholders who offer and sell their shares. Accordingly, we will not receive
any part of the proceeds from such sales of the common stock.
SELLING SHAREHOLDERS
The selling shareholders have informed us that the name, address,
maximum number of shares of common stock to be sold and total number of shares
of common stock which each selling shareholder owns are as set forth in the
<PAGE>
following table. The selling shareholders may sell all or part of their shares
of common stock pursuant to this prospectus. The offering of such shares of
common stock is not being underwritten on a firm commitment basis. As a result,
we cannot give you estimates as to the number and percentage of shares of common
stock each selling shareholder will hold upon termination of this offering.
<TABLE>
<CAPTION>
Selling Shareholders
--------------------
No. of Shares of Maximum No. No. of Shares of Percentage of
Common Stock of Shares of Common Stock Common Stock
Beneficially Owned Common Stock to be Owned to be Owned
Name and Address Prior to Offering to be Offered After Offering After Offering
---------------- ----------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Henry Azer(a) .................... 375,000 125,000 250,000 3.92%
9 Forest Drive
Westport, CT 06880
Lynn Minella (b)(c) .............. 104,200 87,500 16,700 *
274 Keeler Drive
Ridgefield, CT 06877
Lynn Minella(b)(d) ............... 36,500 35,000 1,500 *
As custodian for
Alexander C. Minella
274 Keeler Drive
Ridgefield, CT 06877
Lynn Minella (b)(d) .............. 36,000 35,000 1,000 *
As custodian for Lauren Minella
274 Keeler Drive
Ridgefield, CT 06877
TN Capital Group, Inc. ........... 267,500 157,500 110,000 1.73%
(b)(e)
1616 Post Road East,
Suite 4442
Fairfield, CT 06860
Anthony Scalice (b)(f) ........... 85,000 35,000 50,000 *
2089 Washington Street
Merrick, NY 11556
Access One Communications ........ 485,000 400,000 85,000 1.34%
Corp.(g)
4205 Vineland Road
Suite L15
Orlando, FL 32811
Geils & Co., Inc. (h) ............ 39,916 39,916 0 *
29B Mill Plain Road
Danbury, CT 06811
</TABLE>
- ----------------------
* Less than 1%.
<PAGE>
(a) Mr. Azer is the Chief Technology Officer and a director of Essex. Mr. Azer
was the principal of WebQuill and American Telecom, which were both
purchased by Essex in August 1998. See "About the Company Diversification
Strategy - The Telecommunications Division." The amount included in the
table does not include certain shares which may be issued to Mr. Azer upon
the attainment of certain performance objectives.
(b) These six shareholders (the "Essex Shareholders") were the shareholders of
Essex, a company whose stock we acquired in February 1998. Pursuant to a
Stock Purchase Agreement between the Company and the Essex Stockholders
dated February 27, 1998 (the "Essex Agreement"), each Essex Stockholder
received shares of common stock and three-year warrants to purchase common
stock at a purchase price of $2.75 ("Three-Year Warrants") that will become
exercisable upon the occurrence of certain events. Ms. Minella, Mr. Scalice
and TN Capital Group, Inc. also received additional Three-Year Warrants
that were vested and presently exercisable.
(c) Ms. Minella received 87,500 shares of common stock pursuant to the Essex
Agreement. The amount listed in the table also includes Three-Year Warrants
to purchase 12,500 shares of common stock that are vested and presently
exercisable. The amount listed in the table does not include Ms. Minella's
right to receive (i) Three Year Warrants to purchase an additional 37,500
shares of common stock or (ii) 50,000 shares of common stock, in each case
exercisable upon the attainment by Essex of certain performance objectives.
(d) These stockholders received 35,000 shares of common stock pursuant to the
Essex Agreement. The amount listed in the table does not include each
stockholder's right to receive (i) Three Year Warrants to purchase an
additional 15,000 shares of common stock or (ii) 10,000 shares of common
stock, in each case exercisable upon the attainment by Essex of certain
performance objectives.
(e) TN Capital received 157,500 shares of common stock pursuant to the Essex
Agreement. The amount listed in the table does not include TN Capital's
right to receive (i) Three Year Warrants to purchase an additional 67,500
shares of common stock or (ii) 90,000 shares of common stock, in each case
exercisable upon the attainment by Essex of certain performance objectives.
(f) Mr. Scalice received 35,000 shares of common stock pursuant to the Essex
Agreement. The amount listed in the table does not include Mr. Scalice's
right to receive (i) Three Year Warrants to purchase an additional 15,000
shares of common stock or (ii) 20,000 shares of common stock, in each case
exercisable upon the attainment by Essex of certain performance objectives.
(g) Access One Communications Corp., a New Jersey corporation (the "Access
One"), acquired 425,000 shares of common stock from us on October 22, 1997
pursuant to a Stock Purchase Agreement dated October 22, 1997 (the
"Purchase Agreement") between the Company and Access One. Pursuant to the
Purchase Agreement, we received 3,000,000 shares of common stock of Access
One in consideration for our shares of common stock. Pursuant to the
Purchase Agreement, we received the right to nominate one director to the
Board of Directors of Access One. We used this right to effect the election
of Mr. Paul Riss, our Chief Financial Officer, to the Board of Access One.
In connection with his election, Mr. Riss received three-year options to
purchase up to 100,000 shares of common stock of Access One with an
exercise price of $1.00 per share.
<PAGE>
Prior to the transactions contemplated by the Purchase Agreement, Access
owned no shares of our common stock or any other of our securities, and was
not otherwise affiliated, and did not have any material relationship, with
us or any of our affiliates, except that on September 10, 1997, Access One
borrowed from Joel Dupre, our Chairman of the Board and Chief Executive
Officer, $150,000 under a promissory note that matured on November 10, 1997
and bore interest at the rate of 12% per annum. At maturity, Mr. Dupre
converted the promissory note plus accrued interest into 306,000 shares of
common stock of Access One. In addition, Mr. Dupre was granted five-year
options to purchase up to 150,000 shares of common stock of Access One at
$1.20 per share. Of the $150,000 originally loaned by Mr. Dupre to Access
One, Mr. Dupre borrowed $100,000 from Joseph Takada, a shareholder of the
Company and the Managing Director of Ideal Pacific Ltd., our manufacturing
agent in Hong Kong, and $50,000 from Albert Cheng, a shareholder of the
Company and the President of Constellation Enterprise Co., Ltd., a supplier
of certain of our luggage and backpack products.
(h) The principal stockholder of Geils & Co. is Alexander G. Minella. Mr.
Minella's wife, Lynn, and their children, Alexander and Lauren, are also
listed as selling shareholders in this prospectus.
PLAN OF DISTRIBUTION
The selling shareholders may offer their shares of common stock
directly or through pledgees, donees, transferees or other successors in
interest in one or more of the following transactions:
- in the over-the-counter market;
- on any stock exchange on which shares of common stock may be
listed at the time of sale;
- in negotiated transactions; or
- in a combination of any of the above transactions.
The selling shareholders may offer their shares of common stock at any
of the following prices:
- fixed prices which may be changed;
- market prices prevailing at the time of sale;
- prices related to such prevailing market prices; or
- at negotiated prices.
The selling shareholders may sell their shares of common stock by one
or more of the following methods, without limitation:
- a block trade in which the broker-dealer so engaged will attempt
to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction;
- a broker or dealer may purchase as principal and resell for its
account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
- face-to-face transactions between the selling shareholders and
purchasers without a broker-dealer.
<PAGE>
In effecting sales, brokers or dealers that the selling shareholders engage may
arrange for other brokers or dealers to participate. The selling shareholders
may give such brokers or dealers commissions or discounts in amounts to be
negotiated immediately prior to the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act in connection with such sales.
In addition, any securities covered by this prospectus that qualify for
sale pursuant to Rule 144 might be sold under Rule 144 rather than pursuant to
this prospectus. The selling shareholders and any broker-dealers acting in
connection with the sale of shares of common stock hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commissions received by them and any profit realized by them on the resale
of shares of common stock as principals may be deemed underwriting compensation
under the Securities Act.
If and when a selling shareholder notifies us of that he or she has
entered into a material arrangement with a broker-dealer for the sale of shares
of common stock through a block trade, special offering or secondary
distribution or a purchase by a broker or dealer, we will file a supplemental
prospectus, if required, pursuant to Rule 424(c) under the Securities Act,
disclosing (1) the name of the selling shareholder and of the participating
broker-dealer(s); (2) the number of shares of common stock involved; (3) the
price at which such shares of common stock were sold; (4) the commissions paid
or discounts or concessions allowed to such broker-dealer(s), where applicable;
(5) that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus; and (6)
other facts material to the transaction.
The selling shareholder reserves the sole right to accept and, together
with any agent of the selling shareholder, to reject in whole or in part any
proposed purchase of the shares of common stock. The selling shareholder will
pay any sales commissions or other seller's compensation applicable to such
transactions.
We have not registered or qualified offers and sales of shares of the
common stock under the laws of any country, other than the United States. To
comply with certain states' securities laws, if applicable, the selling
shareholders will offer and sell their shares of common stock in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the selling shareholders may not offer or sell
shares of common stock unless we have registered or qualified such shares for
sale in such states or we have complied with an available exemption from
registration or qualification.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of shares of the common stock may not
simultaneously engage in market-making activities with respect to such shares of
common stock for a period of two to nine business days prior to the commencement
of such distribution. In addition, the selling shareholders and any other person
participating in a distribution will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation, Rules 10b-2, 10b-6 and 10b-7. Such provisions may limit the timing
of purchases and sales of any of the shares of common stock by the selling
shareholders or any such other person. This may affect the marketability of the
common stock and the brokers' and dealers' ability to engage in market-marking
activities with respect to the common stock.
<PAGE>
We will pay substantially all of the expenses incident to the
registration of the shares of common stock by filing this prospectus, estimated
to be approximately $16,000.
DESCRIPTION OF SECURITIES TO BE REGISTERED
Our authorized capital stock consists of 20,000,000 shares of common
stock, par value $.10 per share, and 1,000,000 shares of preferred stock, par
value $.10 per share. As of October 1, 1998, 6,343,316 shares of common stock
were issued and outstanding and 700 shares of preferred stock were issued and
outstanding.
Common Stock.
Voting, Dividend and Other Rights. Each outstanding share of common
stock will entitle the holder to one vote on all matters presented to the
shareholders for a vote. Holders of shares of common stock will have no
preemptive, subscription or conversion rights. All shares of common stock to be
outstanding following this offering will be duly authorized, fully paid, and
nonassessable. Our Board of Directors will declare if and when distributions may
be paid out of legally available funds to the holders. We have not declared any
cash dividends during the past fiscal year with respect to the common stock. Our
declaration of any cash dividends in the future will depend our Board of
Directors' determination as to whether, in light of our earnings, financial
position, cash requirements and other relevant factors existing at the time, it
appears advisable to do so. In addition, we are a party to a credit facility
that prohibits the payment of dividends without the lender's prior consent.
Rights Upon Liquidation. Upon liquidation, subject to the right of any
holders of the preferred stock to receive preferential distributions, each
outstanding share of Common stock may participate pro rata in the assets
remaining after payment of, or adequate provision for, all our known debts and
liabilities.
Majority Voting. The holders of a majority of the outstanding shares of
common stock constitute a quorum at any meeting of the shareholders. A plurality
of the votes cast at a meeting of shareholders elects our directors. The common
stock does not have cumulative voting rights. Therefore, the holders of a
majority of the outstanding shares of common stock can elect all of our
directors. In general, a majority of the votes cast at a meeting of shareholders
must authorize shareholders action other than the election of directors.
However, the Business Corporation Law of the State of New York (the "BCL")
provides that certain extraordinary matters, such as a merger or consolidation
in which the we are a constituent corporation, a sale or other disposition of
all or substantially all of our assets, and the our dissolution, require the
vote of the holders of two-thirds of all outstanding voting shares. Most
amendments to our certificate of incorporation require the vote of the holders
of a majority of all outstanding voting shares.
Preferred Stock.
Authority of Board of Directors to Create Series and Fix Rights. Under
our certificate of incorporation, as amended, our Board of Directors can issue
shares of preferred stock from time to time in one or more series. The Board of
Directors is authorized to fix by resolution as to any series the designation
and number of shares of the series, the voting rights, the dividend rights, the
redemption price, the amount payable upon liquidation or dissolution, the
conversion rights, and any other designations, preferences or special rights or
restrictions as may be permitted by law. Unless the nature of a particular
<PAGE>
transaction and the rules of law applicable thereto require such approval, the
Board of Directors has the authority to issue these shares of preferred stock
without shareholder approval. As described below, our Board of Directors has
authorized the issuance of up to 700 shares of Series A Preferred Stock. Our
Board of Directors intends to increase the amount of shares designated as Series
A Preferred Stock from 700 to 2,000 in order to effect the issuance of
additional shares of Series A Preferred Stock to prospective investors. We are
currently negotiating the terms of an investment which would result in the
issuance of additional Series A Preferred Stock.
Series A Preferred Stock. Our certificate of incorporation, as amended,
authorizes the issuance of up to 1,000,000 shares of preferred stock, par value
$.10 per share. We have designated 700 preferred shares as "Series A Preferred
Stock." The Series A Preferred Stock is entitled to receive dividends when, as
and if declared by our Board of Directors. Each holder of Series A Preferred
Stock has the right, at the option of the holder at any time, to convert each
share of Series A Preferred Stock into 667 shares of common stock. After May 31,
1999, we have the right to convert each share of Series A Preferred Stock into
common stock. The conversion price of shares of Series A Preferred Stock is
subject to adjustment in the event of any reclassification, subdivision or
combination of our outstanding common stock into a greater or small number of
shares by a stock split, stock dividend or other similar event.
In the event of a dissolution, liquidation or winding up of the
Company, the holders of Series A Preferred Stock are entitled to receive, prior
and in preference to the holders of common stock, an amount equal to $1,000 per
share purchase price per share, plus any cumulative and unpaid dividends.
Thereafter, our remaining assets will be distributed ratably to the holders of
common stock. The holders of shares of Series A Preferred Stock are entitled to
that number of votes on all matters presented to shareholders equal to the
number of shares of common stock then issuable upon conversion of such shares of
Series A Preferred Stock. Without the approval of the holders of at least a
majority of the Series A Preferred Stock then outstanding voting separately as a
class, we may not amend our Certificate of Incorporation in any way which
adversely affects the rights and preferences of the holders of the Series A
Preferred Stock as a class
Potential Dilution of Share Value; Preferences. Our Board of Directors
may issue authorized and unissued shares of one or more new series of preferred
stock with such voting, conversion, liquidation, redemption and other rights as
the Board determines in its sole discretion without further shareholder action.
Any issuance of shares of preferred stock could dilute the earnings per share
and book value of existing shares of common stock. Because our Board of
Directors has the authority to fix the voting rights for any series of preferred
stock, the holders of shares of a new series of preferred stock could be
entitled to vote separately as a class in connection with the approval of
certain extraordinary corporate transactions where New York law does not require
such class vote, or might be given a disproportionately large number of votes.
The issuance of shares of preferred stock could also result in a class of
securities outstanding that would have certain preferences (for example, with
respect to dividends or liquidation), or would enjoy certain voting rights in
addition to those of the common stock.
Potential Frustration in Change of Control . Although we currently have
no such intention, we could use authorized but unissued shares of preferred
stock to hinder a change in control of our company. Any issuance of shares of
preferred stock could dilute the stock ownership of persons seeking to gain
<PAGE>
control. Shares of a new series of preferred stock could also be convertible
into a large number of shares of common stock or have other terms which might
make more difficult or costly the acquisition of a controlling interest in our
company. Under certain circumstances, such shares could be used to create voting
impediments or to frustrate persons attempting to effect a takeover or otherwise
gain control. Such shares could be privately placed with purchasers who might
side with the Board of Directors in opposing a hostile takeover bid. In
addition, the Board of Directors could authorize holders of a series of
preferred stock to vote as a class, either separately or with the holders of the
common stock, on any merger, sale or exchange of assets by us or any other
extraordinary corporate transactions. The ability of the Board of Directors to
take such actions might be considered as having an effect of discouraging any
attempt by another person or entity to acquire control of our company.
Transfer Agent. The registrar and transfer agent for the our common
stock is Registrar and Transfer Company.
LEGAL MATTERS
Pryor Cashman Sherman & Flynn LLP, New York, New York, will pass upon
certain legal matters in connection with this offering, including the validity
of the issuance of the shares of common stock offered by this prospectus.
EXPERTS
Our consolidated balance sheets as of November 30, 1997 and 1996, and
the related consolidated statements of operations, stockholders' equity and cash
flows for the three years ended November 30, 1997 appearing in our Annual Report
on Form 10-K for the years ended November 30, 1997, as amended, have been
audited by Nussbaum Yates & Wolpow, P.C., independent auditors, as set forth in
their report thereon included therein and incorporated by reference, which is
based in part on the report of Blackman Kallick Bartelstein, LLP. The financial
statements referred to above are incorporated herein by reference in reliance
upon such reports given upon the authority of such firms as experts in
accounting and auditing.
<PAGE>
- ----------------------------------------
No dealer, sales representative, 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 representation 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 an offer to buy any of
the securities offered hereby 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 any
implication that there has been no
change in the affairs of the Company
since the date hereof or that the
information contained herein is correct
as of any time subsequent to the date
hereof.
---------------
TABLE OF CONTENTS
Page
Where You Can Find More Information
2
Incorporation of Certain
Documents by Reference......... 2
About the Company................. 3
Risk Factors ..................... 7
Use of Proceeds..................... 13
Selling Shareholders.............. 13
Plan of Distribution.............. 15
Description of Securities to be
Registered...................... 17
Legal Matters....................... 20
Experts............................. 20
- --------------------------------------------
<PAGE>
914,916 Shares
SIRCO INTERNATIONAL CORP.
Common Stock
---------------
PROSPECTUS
---------------
__________, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
Estimated expenses to be paid by the Company in connection with the
issuance and distribution of the securities being registered are as follows:
Registration Fee........................ $ 199.45
Legal Fees and Expenses................. $10,000.00
Accounting Fees and Expenses............ $ 5,000.00
Miscellaneous........................... $ 800.55
Total $16,000.00
ITEM 15. Indemnification of Directors and Officers
Reference is made to Sections 721 through 725 of the Business
Corporation Law of the State of New York (the "BCL"), which provides for
indemnification of directors and officers of New York corporations under certain
circumstances.
Section 722 of the BCL provides that a corporation may indemnify
directors and officers as well as other employees and individuals against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees, in connection with actions or proceedings, whether civil or
criminal (other than an action by or in the right of the corporation, a
"derivation action"), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to amounts paid in settlement and reasonable expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
actions, and the statute does not apply in respect of a threatened action, or a
pending action that is settled or otherwise disposed of, and requires court
approval before there can be any indemnification where the person seeking
indemnification has been found liable to the corporation. Section 721 of the BCL
provides that Article 7 of the BCL is not exclusive of other indemnification
that may be granted by a corporation's certificate of incorporation,
disinterested director vote, shareholders vote, agreement or otherwise.
Article XII of the Registrant's by-laws requires the Registrant to
indemnify its officers and directors to the fullest extent permitted under the
BCL. Article XII of the Registrant's by-laws further provides that no director
of the Registrant shall be personally liable to the Registrant or its
shareholders for monetary damages for breach of fiduciary duty as a director,
except that no indemnification shall be made in respect of (1) a threatened
action, or a pending action which is settled or otherwise disposed of, or (2)
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the Registrant unless and only to the extent that the court in
which such action or suit was brought or, if no action was brought, any court of
competent jurisdiction determines upon application that, in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such portion of the settlement and expenses as the court deems
proper.
<PAGE>
Section 402(b) of the BCL provides that a corporation's certificate of
incorporation may include a provision that eliminates or limits the personal
liability of the corporation's directors to the corporation or its shareholders
for damages for any breach of a director's duty, provided that such provision
does not eliminate or limit (1) the liability of any director if a judgment or
other final adjudication adverse to the director establishes that the director's
acts or omissions were in bad faith or involved intentional misconduct or a
knowing violation of law or that the director personally gained a financial
profit or other advantage to which the director was not legally entitled or that
the director's acts violated Section 719 of the BCL; or (2) the liability of any
director for any act or omission prior to the adoption of a provision authorized
by Section 402(b) of the BCL. Article Sixth of the Registrant's Certificate of
Incorporation, as amended, provides that no director of the Registrant shall be
liable to the Registrant or its shareholders for any breach of duty in such
capacity except as provided in Section 402(b) of the BCL.
Any amendment to or repeal of the Registrant's Certificate of
Incorporation or by-laws shall not adversely affect any right or protection of a
director or officer of the Registrant for or with respect to any acts or
omissions of such director or officer occurring prior to such amendment or
repeal.
The Registrant maintains directors and officers insurance which,
subject to certain exclusions, insures the directors and officers of the
Registrant against certain losses which arise out of any neglect or breach of
duty (including, but not limited to, any error, misstatement, act, or omission)
by the directors or officers in the discharge of their duties, and insures the
Registrant against amounts which it has paid or may become obligated to pay as
indemnification to its directors and/or officers to cover such losses.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing, the Registrant has been informed that in
the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
Item 16. Exhibits
Exhibit No. Description
----------- -----------
5 Opinion of Pryor Cashman Sherman & Flynn LLP
23.1 Consent of Pryor Cashman Sherman & Flynn LLP
(included as part of Exhibit 5.1)
23.2 Consent of Nussbaum Yates & Wolpow, P.C.
23.3 Consent of Blackman Kallick Bartelstein, LLP
24 Powers of Attorney (included in the signature page
of this Registration Statement)
<PAGE>
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the SEC pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the SEC
by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions described in Item 15 of this
Registration Statement, or otherwise, the Registrant has been advised that in
the opinion of the SEC such indemnification is against public policy as
expressed in the Act 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 Securities
Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
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 City of New York, State of New York on this 22nd day of
October, 1998.
SIRCO INTERNATIONAL CORP.
By: /s/ Joel Dupre
--------------
Joel Dupre
Chairman of the Board and
Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes Joel
Dupre, Eric M. Hellige and Paul H. Riss, and each of them singly, his true and
lawful attorneys-in-fact with full power to execute in the name of such person,
in the capacities stated below, and to file, such one or more amendments to this
Registration Statement as the Registrant deems appropriate, and generally to do
all such things in the name and on behalf of such person, in the capacities
stated below, to enable the Registrant to comply with the provisions of the
Securities Act of 1933, and all requirements of the Securities and Exchange
Commission thereunder, hereby ratifying and confirming the signature of such
person as may be signed by said attorneys-in-fact, or any one of them, to any
and all amendments to this Registration Statement.
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.
Dated: October 22, 1998 /s/ Joel Dupre
--------------
(Joel Dupre)
Chairman of the Board and
Chief Executive Officer
Dated: October 22, 1998 /s/ Paul H. Riss
----------------
(Paul H. Riss)
Chief Financial Officer and
Treasurer
Dated: October 22, 1998 /s/ Eric M. Hellige
-------------------
(Eric M. Hellige)
Secretary
Dated: October 22, 1998 /s/ Eric Smith
--------------
(Eric Smith)
Director
Dated: October 22, 1998 /s/ Barrie Sommerfield
----------------------
(Barrie Sommerfield)
Director
Dated: October 22, 1998 /s/ Anthony Scalice
-------------------
(Anthony Scalice)
Director
EXHIBIT 5
October 22, 1998
Sirco International Corp.
24 Richmond Hill Avenue
Stamford, Connecticut 06901
Gentlemen:
We refer to the Registration Statement on Form S-3 (the "Registration
Statement"), to be filed by you with the Securities and Exchange Commission with
respect to the registration under the Securities Act of 1933, as amended (the
"Act"), of 914,916 shares of common stock, par value $.01 per share (the
"Shares"), of Sirco International Corp. (the "Company") for resale by the
Selling Shareholders (as defined in the Registration Statement).
We are qualified to practice law in the State of New York. We express
no opinion as to, and, for the purposes of the opinion set forth herein, we have
conducted no investigation of, and do not purport to be experts on, any laws
other than the laws of the State of New York and the federal laws of the United
States of America.
We have examined such documents as we considered necessary for the
purposes of this opinion. Based on such examination, it is our opinion that the
Shares have been duly authorized and are legally issued, fully-paid and
non-assessable under the laws of the State of New York (the state of
incorporation of the Company).
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/PRYOR CASHMAN SHERMAN & FLYNN LLP
------------------------------------
PRYOR CASHMAN SHERMAN & FLYNN LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related prospectus of Sirco
International Corp. for the registration of 914,916 shares of its common stock
and to the incorporation by reference therein of our report dated February 4,
1998 (except for the last paragraph of such report, as to which the date is
April 23, 1998 and for Note 15, as to which the date is February 27, 1998), with
respect to the consolidated financial statements and schedule of Sirco
International Corp. and subsidiaries included in its Annual Report (Form 10-K)
for the year ended November 30, 1997, as amended, filed with the Securities and
Exchange Commission.
/s/ Nussbaum Yates & Wolpow, P.C.
---------------------------------
NUSSBAUM YATES & WOLPOW, P.C.
Melville, New York
October 19, 1998
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related prospectus of Sirco
International Corp. for the registration of 914,916 shares of its common stock
and to the incorporation by reference therein of our report dated February 18,
1998, with respect to the consolidated financial statements and schedule of
Sirco International Corp. and subsidiaries included in its Annual Report (Form
10-K) for the year ended November 30, 1997, as amended, filed with the
Securities and Exchange Commission.
/s/Blackman Kallick Bartelstein, LLP
------------------------------------
BLACKMAN KALLICK BARTELSTEIN, LLP
Chicago, Illinois
October 19, 1998
