As filed with the Securities and Exchange Commission on July 24, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE HAIN FOOD GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3240619
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
50 Charles Lindbergh Boulevard
Uniondale, New York 11553
(516) 237-6200
(Address, including zip code, and telephone number, including area code, all
registrants principal executive offices)
Irwin D. Simon
President and Chief Executive Officer
The Hain Food Group, Inc.
50 Charles Lindbergh Boulevard
Uniondale, New York 11553
(516) 237-6200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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copy to:
Roger Meltzer, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
(212) 701-3000
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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 to
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, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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<CAPTION>
CALCULATION OF REGISTRATION FEE
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Title of Securities to be Amount to be Proposed Maximum Proposed Maximum Amount of
Registered Registered Offering Price Per Share Aggregate Offering Price (1) Registration Fee(1)
(1)
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<S> <C> <C> <C> <C>
Common Stock, par value 2,826,161 shares $24.4375 $69,064,309 $20,374
$.01 per share
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(1) Estimated pursuant to Rule 457 solely for the purpose of calculating the
registration fee. Estimate based on the average of the high and low sales
price reported on the Nasdaq National Market for July 23, 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, as amended, or until the Registration Statement
shall become effective on such date as the Commission acting pursuant to Section
8(a), may determine.
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PROSPECTUS
THE HAIN FOOD GROUP, INC.
2,826,161 Shares of Common Stock
This Prospectus relates to the offer and sale of an aggregate of 2,826,161
shares of the common stock, par value $.01 per share (the "Common Stock"), of
The Hain Food Group, Inc. ("Hain" or the "Company") by certain stockholders of
Hain (the "Selling Stockholders"). Of the shares of Common Stock offered hereby,
1,187,011 shares are reserved for issuance upon the exercise of warrants (the
"Warrants") to purchase Common Stock. See "Selling Stockholders." The aggregate
of 2,826,161 shares of Common Stock offered by the Selling Stockholders are
referred to herein as the "Selling Stockholders' Shares."
The Common Stock is traded on the Nasdaq National Market System under the
Nasdaq symbol "HAIN." The last reported sales price of the Common Stock as
reported by the Nasdaq National Market System on July 23, 1998 was $23 7/8 per
share.
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See "Risk Factors" for a discussion of certain factors which should be
considered in an investment of securities offered hereby.
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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.
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The date of this Prospectus is July , 1998.
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AVAILABLE INFORMATION
Hain is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and is required to file
periodic reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission") relating to its business, financial
statements and other matters. Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60621-2511 and at Seven World Trade Center, 13th Floor, New York, New York
10048. Copies of such material can also be obtained from the Commission at
prescribed rates from the public reference section of the Commission,
Washington, D.C. 20549. Such reports and other information can be reviewed
through the Commission's Electronic Data Gathering Analysis and Retrieval
System, which is publicly available through the Commission's web site
(http://www.sec.gov).
Hain has filed a Registration Statement on Form S-3 with the Commission
under the Securities Act of 1933, as amended (the "Securities Act") with respect
to the Common Stock offered hereby. As permitted by the rules and regulations of
the Commission, this Prospectus omits certain information contained in the
Registration Statement. For further information, reference is made to the
Registration Statement, including the financial schedules and exhibits
incorporated therein by reference or filed as a part thereof. Statements made in
this Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete, and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement shall be
deemed qualified in its entirety by such reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by Hain with the Commission and are
hereby incorporated by reference in this Prospectus and made a part hereof:
(1) The description of Hain's Common Stock contained in Hain's
Registration Statement on Form 8-A/A dated November 12, 1993 and any
amendment or report filed for the purpose of updating such
description;
(2) Hain's annual report on Form 10-K filed with Commission for the fiscal
year ended June 30, 1997;
(3) Hain's quarterly reports on Form 10-Q filed with the Commission for
the three-month periods ended September 30, 1997, December 31, 1997
and March 31, 1998;
(4) Hain's current reports on Form 8-K dated September 8, 1997, September
12, 1997, October 29, 1997, April 24, 1998 and July 14, 1998 and Form
8-K/A dated July 23, 1998;
(5) Westbrae Natural, Inc.'s annual report on Form 10-K filed with
Commission (under Westbrae's prior name of Vestro Natural Foods, Inc.)
for the fiscal year ended December 31, 1996 (the "Vestro 10-K"); and
(6) Westbrae Natural Inc.'s quarterly reports on Form 10-Q filed with the
Commission for the three-month periods ended March 31, 1997 and June
30, 1997.
All documents subsequently filed by Hain with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
No person has been authorized in connection with the offering made hereby
to give any information or make any representation not contained in this
Prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by Hain or any other person. This
Prospectus does not constitute an offer to sell or solicitation of any offer to
buy any of the securities offered hereby in any jurisdiction in which 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 the information contained herein is correct as of any date
subsequent to the date hereof.
Hain will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated herein by reference (other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference in such documents). Requests for such copies should be directed to
the President, The Hain Food Group, Inc., 50 Charles Lindbergh Boulevard,
Uniondale, New York 11553, (516) 237-6200.
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NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements within the
meaning of the United States Private Securities Litigation Reform Act of 1995
regarding future financial condition and results of operations and Hain's
business operations. The words "expect," "estimate," "anticipate," "predict,"
"intend," and similar expressions are intended to identify forward-looking
statements. Such statements involve risks, uncertainties and assumptions,
including but not limited to industry and economic conditions and customer
actions and other factors discussed in this Prospectus (including but not
limited to statements under the caption "Risk Factors") and in Hain's filings
with the Commission. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual outcomes
may vary materially from those indicated.
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SUMMARY/RECENT TRANSACTIONS
The following is a summary of certain information contained elsewhere in
this Prospectus or incorporated by reference herein. On July 1, 1998, Hain
acquired (i) Arrowhead Mills, Inc., a Texas corporation ("AMI") and its
subsidiaries AMI Operating Inc., a Texas corporation ("Arrowhead"), Dana
Alexander, Inc., a New York corporation ("Terra"), and DeBoles Nutrutional
Foods, Inc., a New York corporation ("DeBoles") and (ii) Garden of Eatin', Inc.,
a California corporation ("GOE") in a merger transaction (the "Merger") pursuant
to which AMI and GOE were merged with and into a subsidiary of Hain, which then
changed its name to Arrowhead Mills, Inc., a Delaware corporation ("New AMI").
The Hain Food Group, Inc.
Hain markets and sells dry, refrigerated and frozen specialty food products
under brand names which are sold as "better-for-you" products. The product
categories encompass natural and organic foods, medically-directed foods, weight
management and portion-control foods, and kosher foods. These products are sold
primarily to specialty and natural food distributors and are marketed nationally
to supermarkets, natural food stores, and other retail classes of trade. Hain's
products are produced by independent food processors ("co-packers") using
proprietary specifications and formulations controlled by Hain.
Hain was organized in May 1993 to acquire certain specialty food brands.
Since its formation, Hain has completed several acquisitions of companies or
brands. In March 1997, Hain entered into a licensing agreement with Weight
Watchers Gourmet Food Company ("Weight Watchers"), a subsidiary of H.J. Heinz
Company ("Heinz"), pursuant to which Hain manufactures, markets and sells Weight
Watchers dry and refrigerated products. In May 1997, Hain acquired The Boston
Popcorn Company ("Boston Better Snacks"), a marketer of high quality popcorn and
chip snack products. In July 1997, Hain acquired the Alba brand of dry milk,
shake and cocoa products from Heinz. In October 1997, Hain acquired Westbrae
Natural Inc. ("Westbrae"), a marketer of over 300 high quality natural and
organic food and snack products. In addition, on May 27, 1998, Hain entered into
a distribution and licensing agreement with Heinz U.S.A., a division of Heinz,
to market and sell the "Earth's Best" line of organic baby food products to the
natural food channel in the United States. See "Information Concerning
Hain--Recent Developments."
As a leading natural and organic food company, Hain sells a full line of
products under its "Hain Pure Foods", "Westbrae Natural", "Westsoy", "Little
Bear", "Bearitos" and "Farm Foods" brands. Hain's specialty food products
include cooking oil and condiment products under its "Hollywood" brand; sugar-
free, medically-directed food products under its "Estee" brand (all of which
carry the logo of the American Diabetes Association); low-sodium food products
under its "Featherweight" brand; weight management and portion-control foods
under the "Weight Watchers" brand; frozen kosher food products under its
"Kineret" and "Kosherific" brands; regular and reduced fat snack products under
its "Boston Better Snacks" brand; natural snack products under the "Harry's
Premium Snacks" brand; and dry milk products under the "Alba" brand. Hain's
brand names are well-recognized in the various market categories they serve.
Hain has acquired these brands over the past four years and will seek future
growth through internal expansion, as well as the acquisition of complementary
brands.
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Hain's mission is to be the leading marketer and seller of specialty food
products, with a strong commitment to total quality management in all
departments. Hain intends to increase sales and improve operating results by
investing in product development and building brand equity. Key elements of
Hain's business strategy are to (i) continue growth through mergers and
acquisitions, (ii) invest in brands and consumer awareness, (iii) outsource
manufacturing, (iv) leverage economies of scale in production and logistics and
(v) develop export opportunities.
Arrowhead Mills, Inc.
Prior to the Merger, AMI was a holding company whose two direct
subsidiaries were Arrowhead and Terra. Unless otherwise noted, references to
Arrowhead mean AMI Operating, Inc., including its subsidiary DeBoles. Financial
and certain other information relating to AMI included and incorporated by
reference in this Prospectus is presented for Arrowhead and its subsidiaries and
Terra on a stand-alone basis. Management believes that such information reflects
the business, results of operations and financial condition of AMI on a
consolidated basis.
Arrowhead, founded in 1960, is a leading supplier of natural and organic
whole grain products to the natural foods industry. Arrowhead was a pioneer in
the natural foods industry and has produced consistently high-quality
organically grown foods for over 35 years. In 1995, Arrowhead acquired DeBoles
Nutritional Foods, Inc. ("DeBoles"), a leading pasta producer in the natural
foods industry for 65 years. Arrowhead utilizes a good-tasting and "good-for-
you" marketing approach to attract health conscious consumers and those with
special dietary concerns.
Arrowhead produces over 360 stock-keeping units ("SKUs") in nine major
categories, including ready-to-eat cold cereals, hot cereals, pasta, flour,
baking mixes, packaged grains, nut butters, nutritional oils and soups/chilies.
Arrowhead's product line includes one of the widest arrays of organic products
in the natural foods industry. The products are considered "natural" because
they do not contain any artificial additives or preservatives. Consistent with
Arrowhead's policy of strict adherence to federal guidelines, Arrowhead's
organic label products are independently certified as such by an officially
recognized third party certification organization.
In November 1997, AMI acquired Terra for approximately $20.0 million in
cash and stock. Terra is a leading manufacturer of specialty snacks in the
premium snack category. Terra markets its premium lines of all natural gourmet
vegetable chips under the Terra Chips(R) (meaning "chips of the earth") and
Yukon Gold(R) brand names. Terra, headquartered in Brooklyn, New York, was
founded in 1989 by chefs Dana Sinkler and Alexander Dzieduszycki. The chips are
produced utilizing a variety of root vegetables which provide a wide array of
colors, flavors and textures. Terra's products appeal to health conscious
consumers because they are significantly lower in fat and cholesterol than
traditional potato chips. Terra has expanded from selling its products
exclusively in New York to selling three separate products lines and 12 flavors
throughout the United States. Terra has earned the prestigious NASFT (National
Association for the Specialty Food Trade) awards for "Outstanding Snack Food"
and "Outstanding Food Service Product."
Garden of Eatin', Inc.
GOE, founded in 1971, is a marketer of organic tortilla chips and a variety
of specialty breads. GOE's primary products include blue or red corn tortilla
chips in salted and unsalted varieties,
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and in a number of package sizes. GOE's product offerings are distributed
nationally through the natural foods channel. GOE's products are also available
in specialty and mainstream grocery retailers.
At December 31, 1997, approximately 90% of GOE's total product sales were
tortilla chip products. The remainder was split between bread products (7%),
salsa (2%) and dessert items (1%). Certain of the bread products and all of the
salsa and dessert items were discontinued in 1998.
Recent Transactions
On April 15, 1998, Hain redeemed all of its outstanding 12-1/2% Senior
Subordinated Debentures due April 14, 2004, in the principal amount of
$8,500,000, plus a prepayment fee of $612,000. The Senior Credit Facility was
amended as of such date to provide the necessary funds to complete the
redemption.
On May 27, 1998, Hain entered into a distribution and licensing agreement
with Heinz U.S.A., a division of Heinz, to market and sell the "Earth's Best"
line of organic baby food products to the natural food channel in the United
States. Heinz will continue to market and sell the Earth's Best line of products
to supermarkets and other mass market channels.
In connection with the Merger, Hain entered into its Third Amended and
Restated Revolving Credit and Term Loan Agreement with IBJ Schroder Bank & Trust
Company, as issuer and agent for the lenders named therein (as amended, the
"Senior Credit Facility"). Under the Credit Facility, the term loan portion is
$60.0 million (increased from $18.6 million) and the revolving line of credit is
$15.0 million.
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Hain's corporate headquarters are located at 50 Charles Lindbergh
Boulevard, Uniondale, New York 11553. Its telephone number is (516) 237-6200.
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RISK FACTORS
Prospective investors in the Common Stock should carefully consider the
following factors, in addition to the other information set forth in this
Prospectus, before making an investment in the Common Stock offered hereby.
Certain of the statements in this Prospectus are forward-looking in nature and,
accordingly, are subject to many risks and uncertainties. The actual results
that Hain achieves may differ materially from any forward-looking statements in
this Prospectus.
Integration of Acquisitions
Since its formation, Hain has completed several acquisitions of companies
and brands, including the recent acquisitions of Westbrae in October 1997 and
Boston Better Snacks in May 1997. In addition, in March 1997, Hain entered into
a licensing agreement with Weight Watchers, a subsidiary of Heinz, pursuant to
which Hain will manufacture, market and sell Weight Watchers dry and
refrigerated products and in May 1998 entered into a distribution and licensing
agreement with Heinz U.S.A., a division of Heinz, to market and sell the
"Earth's Best" line of baby food products to the natural food channel in the
United States. In July 1997, Hain acquired the Alba brand from Heinz.
Hain's future success may be dependent upon its ability to effectively
integrate these companies and brands, including its ability to realize
potentially available marketing opportunities and cost savings, some of which
may involve operational changes. There can be no assurance as to the timing or
number of marketing opportunities or amount of cost savings that may be realized
as the result of the integration process. Further, there can be no assurance
that Hain will not experience difficulties with customers, personnel or other
parties as a result of these acquisitions, that these acquisitions will enhance
Hain's competitive position and business prospects or that the combination of
Hain and these acquisitions will be successful.
Uncertainties Related to Combined Operations After the Merger
While the acquisition of the Companies by Hain offers the possibility of
achieving operating efficiencies, it also entails the diversion of management's
attention to the assimilation of operations of the Companies, which might have
possible adverse short-term effects on Hain's operating results. There can be no
assurance that the combined companies will retain their respective key personnel
or customers, the same volume of business from such customers, or that Hain will
realize any of the potential benefits of the Merger.
There can be no assurance that Hain will be successful in integrating its
own distribution channels with those of AMI and GOE, in coordinating the
activities of the Hain, AMI and GOE sales forces or in selling AMI's or GOE's
products to Hain's customer base, in integrating AMI and GOE into Hain's
management information systems or in integrating AMI's and GOE's products so
that they can be fully integrated with Hain. In addition, Hain is in the process
of integrating the business of Westbrae, which was acquired by Hain in October
1997. Integrating these businesses will require management resources and may
divert Hain management from Hain's day-to-day operations. There can be no
assurance that Hain can effectively integrate AMI or GOE into Hain's operations.
Acquisition Strategy
Hain's acquisition strategy is based on identifying and acquiring
businesses with products and/or brands that complement Hain's existing product
mix. Hain will evaluate specific acquisition opportunities based on prevailing
market and economic conditions. There can be no assurance that
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Hain will be able to successfully identify suitable acquisition candidates,
obtain necessary financing, complete acquisitions or integrate acquired
businesses into its operations. Acquisitions may not achieve acceptable levels
of operating results or otherwise perform as expected. Acquisitions also involve
special risks, including risks associated with unanticipated problems,
liabilities and contingencies, diversion of management attention and possible
adverse effects on earnings resulting from increased goodwill amortization,
increased interest costs, the issuance of additional securities and difficulties
related to the integration of the acquired business. Hain may encounter
increased competition for acquisitions in the future, which could result in
acquisition prices Hain does not consider acceptable. In addition, the Senior
Credit Facility (as defined) contains restrictions that limit Hain's ability to
make acquisitions. Hain is unable to predict whether or when any prospective
acquisition candidate will become available or the likelihood that any
acquisition will be completed.
Evolving Customer Preferences
Hain's business is limited to specialty food products in niche markets
geared to consumers of natural foods, medically-directed and weight management
food products, kosher foods and other specialty food items. Hain is subject to
evolving consumer preferences for these products. While Hain continues to
diversify its product offerings, there can be no assurance that demand for
Hain's products will continue at current levels or increase in the future. A
significant shift in consumer demand away from Hain's products or failure to
maintain its current market position would have a material adverse effect on
Hain's financial statements. For example, sales of Hain's rice cakes declined
from approximately $22 million during fiscal year 1996 to approximately $12
million in fiscal year 1997 due in part to competition from other snack products
and an overall decline in rice cake demand. Hain has other significant product
categories, such as cooking oils and non-dairy beverages, which, if consumer
demand for such categories were to decrease, could have a material adverse
effect on Hain's business, results of operations and financial condition.
Competition
The geographic and product markets in which Hain operates are highly
competitive. Hain faces competition in all of its markets from larger, more
established companies that have greater financial, managerial, sales and
technical resources than Hain, and some of Hain's markets are dominated by such
large firms. There can be no assurance that Hain can successfully compete for
sales to distributors or stores that purchase from such larger competitors.
Larger competitors also may be able to benefit from economies of scale, pricing
advantages or the introduction of new products that compete with Hain's
products. There can be no assurance that Hain will achieve the market
penetration that it seeks in order to implement its business strategy. There can
be no assurance that competitors will not introduce other products in the future
that compete with Hain's products or that such competitive products will not
have an adverse effect on Hain's business, results of operations and financial
condition.
Limited Management; Dependence on Key Personnel
Hain is highly dependent upon the services of Irwin D. Simon, its President
and Chief Executive Officer. Although Hain has entered into an employment
agreement with Mr. Simon and maintains $1.0 million of key man life insurance on
the life of Mr. Simon, the loss of the services of Mr. Simon could have a
material adverse effect on Hain's business, results of operations and financial
condition. In addition, Hain's ability to develop and market its products and to
achieve and maintain a competitive position depends, in large part, on its
ability to attract and retain qualified operations, sales and marketing
personnel.
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Reliance on Independent Distributors and Brokers
Other than on a limited basis at Arrowhead, Terra and Deboles, Hain relies
upon sales efforts made by or through non-affiliated food brokers to
distributors and other customers. The success of its business depends, in large
part, upon the establishment of a strong distribution network. Food brokers act
as selling agents representing specific brands on a non- exclusive basis under
oral or written agreements generally terminable at any time on 30 days notice
and receive a percentage of net sales as compensation. Distributors purchase
directly for their own account for resale. Two distributors, United Natural
Foods and Tree of Life, accounted for approximately 18% and 14%, respectively,
of Hain's pro forma fiscal year 1997 sales. The loss of, or business disruption
at, one or more of these distributors or brokers may have a material adverse
effect on Hain's business, results of operations and financial condition. If
Hain were required to obtain additional or alternative distribution and food
brokerage agreements or arrangements in the future, there can be no assurance it
will be able to do so on satisfactory terms or in a timely manner. The inability
to enter into satisfactory brokerage agreements may inhibit Hain's ability to
implement its business plan or to establish markets necessary to develop its
products successfully. See "Information Concerning Hain Sales and Marketing
Structure" and "Customers."
Reliance on Independent Manufacturers and Co-Packers
Other than on a limited basis at Arrowhead, Terra and Deboles, Hain does
not manufacture, produce or package any of the products or brands which it
currently markets, although it develops and owns the formulas and recipes and
designs the packaging for its products. Accordingly, Hain is dependent upon
independent manufacturers and co-packers to produce and package its products.
Hain obtains substantially all of its rice cake requirements from two suppliers,
all of its non-dairy products from two suppliers, a substantial portion of its
Weight Watchers refrigerated products from one supplier, and all of its
Hollywood cooking oils from one supplier. In addition, one manufacturer
accounted for the manufacture of approximately 91% of GOE's products in its
fiscal 1997. The loss of one or more of these manufacturers or co-packers, or
the failure by Hain to retain manufacturers and co-packers for products or
brands acquired pursuant to the Merger, could have a material adverse effect on
Hain's financial statements until such time as an alternate source of supply
could be secured, which may be on less favorable terms. Failure to obtain in a
timely manner and on comparable terms other suppliers if a present supplier
terminated its relationship with Hain could have a material adverse effect on
Hain's business, results of operations and financial condition.
Trademark Ownership
Hain owns the principal trademarks for its products, including HAIN PURE
FOODS(R), HOLLYWOOD(R), KINERET(R), KOSHERIFIC(R), ESTEE(R), FEATHERWEIGHT(R),
WESTBRAE(R), WESTSOY(R), LITTLE BEAR(R), BEARITOS(R), ALBA(R), ARROWHEAD
MILLS(R), DEBOLE'S(R), TERRA(R) and GARDEN OF EATIN'(R) and owns a number of
other trademarks used on individual products, such as those for PIZSOY(R), and
BOSTON LITE(R). Hain believes that such trademarks are important to the
marketing of Hain's products. In connection with the licensing agreement between
Weight Watchers and Hain, Hain obtained the right to use the WEIGHT WATCHERS(R)
and certain other trademarks. Hain's inability to use these trademarks could
have a material adverse effect on Hain's business, results of operations and
financial condition.
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Government Regulation
The manufacture, marketing, distribution and sale of Hain's specialty food
products are subject to various federal, state and local laws and regulations
governing the production, sale, safety, advertising, labeling and ingredients of
such products. In addition, Hain's kosher food products are subject to
additional regulation and inspection. There can be no assurance that Hain, its
manufacturers, distributors and co-packers will be able to comply with all such
laws and regulations in the future or that new governmental laws and regulations
will not be introduced which could result in additional compliance costs,
seizures, confiscation, recall or monetary fines, any of which could prevent or
inhibit the development, distribution and sale of Hain's products or have a
material adverse effect on Hain's business, results of operations and financial
condition. In addition, product recalls could adversely affect sales of other of
Hain's products.
Product Liability
As a marketer of food products, Hain is subject to a risk of claims for
product liability. Hain maintains product liability insurance and generally
requires that its co-packers maintain product liability insurance with Hain as a
co-insured. There is no assurance that such coverage will be sufficient to
insure against claims which may be brought against Hain, or that Hain will be
able to maintain such insurance or obtain additional insurance covering existing
or new products. If a product liability claim exceeding Hain's insurance
coverage were to be successfully asserted against Hain, it could have a material
adverse effect on Hain's business, results of operations and financial
condition.
Reliance on Certification
Hain must comply with the requirements of independent organizations or
certification authorities in order to make certain statements on the labels of
its products. For example, for Hain's Estee products to carry the logo of the
American Diabetes Association (the "ADA"), the packaging must meet the standards
of the ADA. In addition, Hain's kosher foods are certified kosher by the
Orthodox Union of Rabbis. The loss of any such independent certifications or
permissions could adversely affect the marketing position and goodwill afforded
such products, which could have a material adverse effect on Hain's business,
results of operations and financial condition.
Control by Current Stockholders, Officers and Directors
After taking into account Common Stock issued in connection with the
Merger, Mr. Simon, Hain's President and Chief Executive Officer, together with
the other officers and directors of Hain, will beneficially own an aggregate of
22.7% of the Common Stock, on a fully diluted basis. Accordingly, the officers
and directors of Hain will be in a position to influence the election of Hain's
directors and otherwise influence stockholder action. In addition, according to
a Schedule 13D filed with the Commission dated May 11, 1998, certain
unaffiliated stockholders of Hain beneficially owned, prior to the Merger, an
aggregate of 20.37% of the outstanding Common Stock.
Authorization and Discretionary Issuance of Preferred Stock
Hain's Certificate of Incorporation authorizes the issuance of up to
5,000,000 shares of "blank check" preferred stock with such designations, rights
and preferences as may be determined from time to time by the Board of
Directors. Accordingly, the Board of Directors is empowered, without stockholder
approval, to issue preferred stock with dividends, liquidation, conversion,
voting or other rights which could decrease the amount of earnings and assets
available for distribution to holders of the Common Stock and adversely affect
the relative voting power or other rights of the holders of the
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<PAGE>
Common Stock. In the event of issuance, the preferred stock could be used, under
certain circumstances, as a method of discouraging, delaying or preventing a
change in control of Hain. Although Hain has no present intention to issue any
shares of its preferred stock, there can be no assurance that Hain will not do
so in the future. See "Description of Securities."
No Dividends
Hain has not paid any dividends on its Common Stock to date and does not
anticipate declaring or paying any dividends in the foreseeable future. The
ability of Hain to pay dividends is currently restricted by the Senior Credit
Facility. See "Price Range of Common Stock and Dividend Information."
Fluctuations in Operating Results; Fluctuations in Quarterly Results
Hain's operating results have fluctuated in the past and will fluctuate in
the future based on many factors. These factors include failure to adequately
integrate acquired companies, fluctuations in the general economy, increased
competition, changes in operating expenses, expenses related to acquisitions,
the potential adverse effect of acquisitions, the size and timing of customer
orders, new product introductions, changes in customer preferences and market
acceptance of new products. Many of these factors are outside the control of
Hain. Due to these and many unforeseen factors, it is likely that in some future
quarter Hain's operating results will be below the expectations of public market
analysts and investors. In such event, the price of Common Stock would likely be
materially adversely affected.
Forward-Looking Statements
This Prospectus contains certain forward-looking statements regarding
future financial condition and results of operations and Hain's business
operations. The words "expect," "estimate," "anticipate," "predict," "intend,"
and similar expressions are intended to identify forward- looking statements.
Such statements involve risks, uncertainties and assumptions, including but not
limited to industry and economic conditions and customer actions and the other
factors discussed in this Prospectus (including but not limited to statements
under the caption "Risk Factors") and in Hain's filings with the Commission.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual outcomes may vary materially from
those indicated.
Year 2000 Risks
Prior to the year 2000, Hain intends to integrate AMI's, Terra's and GOE's
computer systems and software applications with Hain's existing systems, which
Hain believes to be "Year 2000" compliant. The ability of third parties with
whom Hain transacts business to adequately address their Year 2000 issues is
outside of Hain's control. There can be no assurance that the failure of such
third parties to adequately address their Year 2000 issues will not have a
material adverse effect on Hain's business, financial condition, cash flows and
results of operations.
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<PAGE>
PRICE RANGE OF COMMON STOCK AND
DIVIDEND INFORMATION
Hain's Common Stock is traded on the Nasdaq National Market under the
symbol "HAIN." Immediately prior to the consummation of the Merger, there were
11,556,299 shares of Common Stock outstanding. Upon the consummation of the
Merger and the issuance of up to 1,716,111 shares of Common Stock in connection
therewith, Hain will have 13,272,410 shares of Common Stock outstanding. The
information presented in the table below represents the high and low sales
prices per share for Common Stock for the periods indicated. Following the
Merger, Common Stock will continue to be traded on the Nasdaq National Market.
Price
High Low
Year Ended June 30, 1996
First quarter................................. $ 4 1/2 $ 3 1/2
Second quarter................................ 3 3/4 2
Third quarter................................. 3 11/16 2
Fourth quarter................................ 4 1/8 3 1/16
Year Ended June 30, 1997
First quarter................................. $ 4 $ 3 1/16
Second quarter................................ 4 3 1/4
Third quarter................................. 5 3/4 3 3/8
Fourth quarter................................ 5 5/16 4 1/8
Year Ended June 30, 1998
First quarter................................. $12 1/16 $ 4
Second quarter................................ 12 13/16 7 7/8
Third quarter................................. 20 3/4 9
Fourth quarter (through June 30, 1998)........ 28 5/8 20 1/2
Year Ending June 30, 1999
First quarter (through July 23, 1998) ........ $ 28 $23 1/2
On July 23, 1998, the last reported sale price of the Common Stock on the
Nasdaq National Market was $23 7/8 per share.
Hain has not paid any dividends on its Common Stock to date. Hain intends
to retain all future earnings for use in the development of its business and
does not anticipate declaring or paying any dividends in the foreseeable future.
The payment of all dividends will be at the discretion of Hain's Board of
Directors and will depend on, among other things, future earnings, operations,
capital requirements, contractual restrictions, the general financial condition
of Hain and general business conditions. The ability of Hain to pay dividends is
currently restricted by the Senior Credit Facility.
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<PAGE>
USE OF PROCEEDS
Hain will not receive any of the proceeds from the sale of the Selling
Stockholders' Shares, which are being sold by the Selling Stockholders. Under
the terms of Hain's Senior Credit Facility, Hain is required to use the proceeds
from the exercise of outstanding Warrants which generates net proceeds in excess
of $100,000 to reduce its commitments under the Senior Credit Facility. On July
1, 1998, in order to consummate the Merger and refinance outstanding
indebtedness, Hain amended the Senior Credit Facility by increasing the term
loan portion thereof from $18.6 million to $60.0 million and entering into a
revolving line of credit of up to $15.0 million. The term loan and revolving
credit portions of the Senior Credit Facility mature on July 1, 2005 and 2006,
respectively, and each initially bears interest, at the option of the Company,
at an annual rate of either (x) 2.5% over LIBOR or (y) the greater of (i) the
Federal Funds Rate plus .5% or (ii) the lender base rate plus .5%. Any proceeds
from the exercise of the Warrants not utilized to repay indebtedness under the
Senior Credit Facility will be utilized by Hain for general corporate purposes.
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<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock by the Selling Stockholders as of July 1, 1998, and
the number of shares of Common Stock covered by this Prospectus.
<TABLE>
<CAPTION>
Number of Shares of Number of Shares
Common Stock Percent of Common Stock
Name Beneficially Owned of Class Registered Hereby(1)
- ----------------------------------------- ---------------------------- ------------------ ---------------------------
<S> <C> <C> <C>
Irwin D. Simon(2) 1,531,405 10.9% 761,405
Andrew R. Heyer(3)(4) 1,334,893 9.6% 62,648
Jack Kaufman 105,000 * 5,000
Ellen Deutsch 50,000 * 5,000
Benjamin Brecher(5) 117,097 * 2,097
Beth L. Bronner(6)(7) 66,667 * 36,667
William Fox(6)(8) 32,500 * 10,000
Jack Futterman(6)(8) 23,500 * 1,000
Fir, Inc. 27,283 * 27,283
Argosy-Hain Warrant Holdings, L.P.(9) 522,717 3.8% 522,717
Argosy-Hain Investment Group, L.P. 619,528 4.7% 619,528
Jay R. Bloom(4) 1,287,939 9.3% 45,694
Dean C. Kehler(4) 1,305,073 9.5% 62,828
Argosy Investment Corp. (4)(10) 1,242,245 9.0% 100,000
P.L. Thomas Group, Inc.(11) 100,000 * 100,000
Kelli Keuhne(12) 100,000 * 100,000
Weight Watchers Gourmet Food Company(13) 250,000 1.8% 250,000
IBJS Capital Corporation(14) 114,294 * 114,294
-------
Total shares registered 2,826,161
=========
- ----------------
</TABLE>
* Indicates less than 1%.
(1) Shares registered hereby on behalf of each of Irwin D. Simon, Andrew R.
Heyer, Jack Kaufman, Ellen Deutsch, Benjamin Brecher, Beth L. Bronner,
William Fox, Jack Futterman, Fir, Inc., Argosy-Hain Investment Group, L.P.,
Jay R. Bloom and Dean C. Kehler represent shares of Common Stock owned
directly by such individuals or entities. Shares registered hereby on
behalf of Argosy-Hain Warrant Holdings, L.P., Argosy Investment Corp., P.L.
Thomas Group, Inc., Kelli Keuhne, Weight Watchers Gourmet Food Company and
IBJS Capital Corporation represent shares issuable upon the exercise of
Warrants held by such individuals or entities.
(2) Includes 600,000 shares of Common Stock issuable upon the exercise of
options under Hain's 1993 Executive Stock Option Plan and 170,000 shares of
Common Stock issuable upon the exercise of options under Hain's 1994 Long
Term Incentive and Stock Award Plan (the "1994 Plan"). Mr. Simon is
President, Chief Executive Officer and Director of Hain.
(3) Includes 30,000 shares of Common Stock issuable upon the exercise of
options under Hain's 1996 Directors Stock Option Plan (the "Directors
Plan"). Mr. Heyer is Chairman of the Board of Directors of Hain.
(4) As the officers and directors of Argosy Investment Corp. ("AIC"), which is
the general partner of Argosy-Hain Investment Group, L.P. ("AHIG") and
Argosy-Hain Warrant Holdings, L.P. ("AHWH"), Messrs. Heyer, Kehler and
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<PAGE>
Bloom may be deemed to be the beneficial owners of the 522,717 shares of
Common Stock to be issued upon the exercise of Warrants held by AHWH,
100,000 shares of Common Stock to be issued upon the exercise of Warrants
by AIC and the 619,528 shares of Common Stock owned by AHIG.
(5) Includes 115,000 shares of Common Stock issuable upon the exercise of
options under the 1994 Plan. Mr. Brecher is an officer of the company.
(6) Director of Hain.
(7) Includes 30,000 shares of Common Stock issuable upon exercise of options
under the Directors Plan.
(8) Includes 22,500 shares of Common Stock issuable upon the exercise of
options under the Directors Plan.
(9) Consists of Warrants to purchase 550,000 shares of Common Stock at $3.25
per share.
(10) As general partner of AHIG and AHWH, AIC may be deemed to be the beneficial
owner of the 522,717 shares of Common Stock to be issued upon the exercise
of Warrants held by AHWH and 619,528 shares of Common Stock owned by AHIG.
Also includes Warrants to purchase 100,000 shares of Common Stock at an
exercise price of $12.6875 per share.
(11) Consists of 50,000 Warrants to purchase shares of Common Stock at $6.00 per
share and 50,000 Warrants to purchase shares of Common Stock at $8.00 per
share.
(12) Consists of Warrants to purchase shares of Common Stock at $4.125 per
share.
(13) Consists of 150,000 Warrants to purchase shares of Common Stock at $7.00
per share, 50,000 Warrants to purchase shares of Common Stock at $8.00 per
share and 50,000 Warrants to purchase shares of Common Stock at $9.00 per
share.
(14) Consists of Warrants to purchase shares of Common Stock at $12.294 per
share.
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<PAGE>
DESCRIPTION OF SECURITIES
General
As of April 24, 1998, the authorized capital stock of is 40,000,000 shares
of common stock, $.0l par value per share, of which, prior to the Merger,
11,556,299 shares were outstanding, and, upon consummation of the Merger and the
issuance of up to 1,716,111 shares of Common Stock in connection therewith, up
to 13,272,410 shares will be outstanding and 5,000,000 shares of preferred
stock, $.0l par value per share ("Preferred Stock"), none of which had been
issued.
The following description is qualified in all respects by reference to the
Certificate of Incorporation (the "Charter") and the bylaws (the "Bylaws") of
Hain.
Common Stock
Each share of Common Stock entitles the holder thereof to one vote on all
matters submitted to a vote of the stockholders. Since the holders of Common
Stock do not have cumulative voting rights, holders of more than 50% of the
outstanding shares can elect all of the directors then being elected and holders
of the remaining shares by themselves cannot elect any directors. The holders of
Common Stock do not have preemptive rights or rights to convert their Common
Stock into other securities. Holders of Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of funds
legally available therefor. In the event of a liquidation, dissolution or
winding up of Hain, holders of the Common Stock have the right to a ratable
portion of the assets remaining after payment of liabilities. All outstanding
shares of Common Stock are fully paid and nonassessable.
Preferred Stock
Hain is authorized by the Charter to issue a maximum of 5,000,000 shares of
Preferred Stock, in one or more series and containing such rights, privileges
and limitations including voting rights, dividend rates, conversion privileges,
redemption rights and terms, redemption prices and liquidation preferences, as
the Board of Directors may, from time to time, determine.
The issuance of shares of Preferred Stock pursuant to the Board of
Directors' authority described above could decrease the amount of earnings and
assets available for distribution to holders of Common Stock, and otherwise
adversely affect the rights and powers, including voting rights, of such holders
and may have the effect of delaying or preventing a change in control. Hain is
not required by the Delaware General Corporation Law (the "DGCL") to seek
stockholder approval prior to any issuance of authorized but unissued stock and
the Board of Directors does not currently intend to seek stockholder approval
prior to any issuance of authorized but unissued stock, unless otherwise
required by law.
Warrants
Warrants to purchase an aggregate of 1,187,011 shares of Common Stock are
currently outstanding. Each Warrant entitles the holder to purchase one share of
common stock, subject to anti-dilution adjustments, at an exercise price ranging
from $3.25 to $12.69 per share. The Warrants have expiration dates ranging from
April 14, 2000 to October 14, 2004.
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<PAGE>
Certificate of Incorporation and Bylaws
Pursuant to the DGCL, the power to adopt, amend and repeal bylaws is
conferred solely upon the stockholders unless the corporation's certificate of
incorporation also confers such power upon the board of directors. Under the
Charter, the Board of Directors are granted the power to amend the Bylaws. Such
Bylaws provide that each director has one vote on each matter for which
directors are entitled to vote. The Charter and/or the Bylaws also provide that
(i) from time to time, by resolution, the Board of Directors has the power to
change the number of directors, (ii) the directors will hold office until the
next annual meeting of stockholders and until their respective successors are
elected and qualified, and (iii) special meetings of stockholders may only be
called by the Board of Directors or officers of Hain. These provisions, in
addition to the existence of authorized but unissued capital stock, may have the
effect, either alone or in combination with each other, of making more difficult
or discouraging an acquisition of Hain deemed undesirable by the Board of
Directors. The Board of Directors of Hain currently consists of nine persons.
Section 203 of the Delaware Law
Section 203 of the DGCL prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless (i) prior to the date of the business
combination, the transaction is approved by the board of directors of the
corporation; (ii) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owns
at least 85 % of the outstanding voting stock, or (iii) on or after such date
the business combination is approved by the board of directors and by the
affirmative vote of at least 66-2/3% of the outstanding voting stock that is not
owned by the interested stockholder. A "business combination" includes mergers,
asset sales and other transactions resulting in a financial benefit to the
stockholder. An "interested stockholder" is a person, who, together with
affiliates and associates, owns (or within three years, did own) 15 % or more of
the corporation's voting stock. This provision of law could discourage, prevent
or delay a change in management or stockholder control of Hain, which could have
the effect of discouraging bids for Hain and thereby prevent stockholders from
receiving the maximum value for their shares, or a premium for their shares in a
hostile takeover situation.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Common Stock is Continental Stock
Transfer & Trust Company, New York, New York.
PLAN OF DISTRIBUTION
The Selling Stockholders may sell shares of Common Stock from time to time
on The Nasdaq National Market in the over-the-counter market or in privately
negotiated transactions, at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Stockholders may effect such
transactions in sales to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholders or the purchasers of the
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<PAGE>
Common Stock for whom such broker-dealers may act as agent or to whom they sell
as principal, or both (which compensation to a broker-dealer might be in excess
of customary commissions).
The Selling Stockholders and any broker-dealers who act in connection with
the sale of Common Stock offered hereby may be deemed to be "underwriters" as
that term is defined in the Act and any commissions received by them and any
profit on resale thereof as principal might be deemed to be underwriting
discounts and commissions thereunder.
LEGAL MATTERS
Certain legal matters with respect to the issuance of the securities
offered hereby will be passed upon for Hain by Cahill Gordon & Reindel (a
partnership including a professional corporation), 80 Pine Street, New York, New
York 10005.
EXPERTS
The consolidated financial statements of The Hain Food Group Inc. appearing
in the Company's Annual Report (Form 10-K) for the year ended June 30, 1997,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The consolidated financial statements of Westbrae Natural, Inc. (formerly
Vestro Natural Foods, Inc.) incorporated in this Prospectus by reference to the
Annual Report on 10-K for the year ended December 31, 1996, have been so
incorporated in reliance on the report of PriceWaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as expert in
auditing and accounting.
The financial statements of: (i) Arrowhead incorporated in this Prospectus
by reference herein for the fiscal year ended July 31, 1997 and as of July 31,
1997; (ii) Terra incorporated in this Prospectus by reference herein for the
period from January 1, 1997 through July 31, 1997 and as of July 31, 1997; and
(iii) GOE incorporated in this Prospectus by reference herein for the period
from January 1, 1997 through December 23, 1997 and as of December 23, 1997 have
been audited by McGladrey & Pullen, LLP, independent auditors, given upon the
authority of such firm as experts in accounting and auditing.
The financial statements of Arrowhead incorporated in this Prospectus by
reference herein for the fiscal years ended July 31, 1996 and 1995 and the
balance sheet as of July 31, 1996 have been audited by McGinty & Associates,
independent auditors, given upon the authority of such firm as experts in
accounting and auditing.
The financial statements of Terra incorporated in this Prospectus by
reference for the years ended December 31, 1996 and 1995 and the balance sheet
as of December 31, 1996 have been audited by Katz & Bloom, LLC, independent
auditors, given upon the authority of such firms as experts in accounting and
auditing.
-15-
<PAGE>
<TABLE>
<CAPTION>
============================================================ =============================================================
<S> <C>
No dealer, salesman or other person has been authorized to give
any information or to make representations other than those
contained in this Prospectus, and, if given or made,
such information or representation must not be relied upon THE HAIN FOOD GROUP, INC.
as having been authorized by Hain or the Selling
Stockholders. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances,
create an implication that the information herein is
correct as of any time subsequent to its date. This
Prospectus does not constitute an offer or solicitation by
anyone in any jurisdiction in which such offer or
solicitation is not authorized or in which the person 2,826,161 SHARES OF
making such offer or solicitation is not qualified to do COMMON STOCK
so or to anyone to whom it is unlawful to make such offer
or solicitation.
--------------------
TABLE OF CONTENTS
Page
Available Information.........................i
Incorporation of Certain Documents by
Reference.................................ii
Note Regarding Forward Looking Statements.....iii
Summary/Recent Transactions...................1 ____________
Risk Factors..................................4
Price Range of Common Stock and Dividend PROSPECTUS
Information...............................9
Use of Proceeds...............................10 ____________
Selling Stockholders..........................11
Description of Securities.....................13
Plan of Distribution..........................14
Legal Matters.................................15
Experts.......................................15
------------------------
July , 1998
============================================================ =============================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with this offering are as follows:
Amount
to Be Paid
SEC registration fee........................................ $20,374
Legal fees and expenses (including Blue Sky
fees and expenses)........................................ 10,000
Accounting fees and expenses................................ 5,000
Miscellaneous............................................... 3,323
---------
Total......................................... $ 38,697
=========
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Tenth of the certificate of incorporation of the Registrant
eliminates the personal liability of directors to the Issuer or its stockholders
for monetary damages for breach of fiduciary duty as a director, provided that
such elimination of the personal liability of a director of the Registrant does
not apply to (a) any breach of the director's duty of loyalty to the Registrant
or its stockholders, (b) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) actions prohibited
under Section 174 of the Delaware General Corporation Law (the "DGCL") (i.e.,
liabilities imposed upon directors who vote for or assent to the unlawful
payment of dividends, unlawful repurchase or redemption of stock, unlawful
distribution of assets of the Issuer to the stockholders without the prior
payment or discharge of the Registrant's debts or obligations, or unlawful
making or guaranteeing of loans to directors), or (d) any transaction from which
the director derived an improper personal benefit.
Section 145 of the DCGL provides, in summary, that directors and officers
of Delaware corporations such as the Registrant are entitled, under certain
circumstances, to be indemnified against all expenses and liabilities (including
attorneys' fees) incurred by them as a result of suits brought against them in
their capacity as a director or officer, 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, if they
had no reasonable cause to believe their conduct was unlawful; provided, that no
indemnification may be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which such action
or suit was brought shall determine upon application that despite the
adjudication of liability but in view of all the circumstances of the case, they
are fairly and reasonably entitled to indemnify for such expenses which such
court shall deem proper. Any such indemnification may be made by the corporation
only as authorized in each specific case upon a determination by stockholders or
disinterested directors that indemnification is proper because the indemnitee
has met the applicable standard of conduct. In addition, Article Eleventh of the
Registrant's certificate of incorporation and Article VI of the Registrant's
by-laws provide for the Registrant to indemnify its corporate personnel,
directors and officers to the full extent permitted by Section 145 of the DGCL,
as the same may be supplemented or amended from time to time.
II-1
<PAGE>
Item 16. EXHIBITS.
The following exhibits are filed as part of this Registration Statement:
Exhibit No. Description
4.1 Securities Purchase Agreement, dated as of April 14, 1994, relating to,
among other things, 768,229 shares of Common Stock of the Registrant.
(Incorporated by reference to Exhibit 4.2 of the Registrant's Current
Report on Form 8-K dated April 14, 1994 (the "Hain 8-K"))
4.2 Common Stock Subscription Agreement, dated as of April 14, 1994, relating
to the issue and sale of 1,871,770 shares of Common Stock of the
Registrant. (Incorporated by reference to Exhibit 4.3 to the Hain 8-K)
4.3 Common Stock Registration Rights Agreement, dated as of April 14, 1994,
relating to the shares of Common Stock of the Registrant, issued pursuant
to the Securities Purchase Agreement and Common Stock Subscription
Agreement. (Incorporated by reference to Exhibit 4.5 to the Hain 8-K)
4.4 Form of Warrant to purchase Common Stock of the Registrant. (Incorporated
by reference to Exhibit 4.6 to the Hain 8-K)
5 Opinion of Cahill Gordon & Reindel regarding the legality of the securities
being registered
16.1 Letter from McGinty & Associates regarding change in certifying accountants
(Incorporated by reference to Exhibit 16.1 of the Registrant's Registration
Statement on Form S-4/S-3, File No. 333-56319)
16.2 Letter from Katz & Bloom, LLC regarding change in certifying accountants
(Incorporated by reference to Exhibit 16.2 of the Registrant's Registration
Statement on Form S-4/S-3, File No. 333-56319)
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of PriceWaterhouseCoopers LLP, Independent Auditors
23.3 Consent of McGladrey & Pullen, LLP, Independent Auditors
23.4 Consent of McGinty & Associates, Independent Auditors
23.5 Consent of Katz & Bloom, LLC, Independent Auditors
23.6 Consent of Cahill Gordon & Reindel (included in Exhibit 5)
II-2
<PAGE>
24 Powers of Attorney authorizing execution of Registration Statement of Form
S-3 on behalf of certain directors of Registrant (included on the signature
page to this Registration Statement)
- ----------------------------
II-3
<PAGE>
Item 17. UNDERTAKINGS.
The undersigned hereby undertakes:
(a) (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;
(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 (a) (1) (i) and (a) (1) (ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering;
(b) For purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to Section 13
(a) or Section 15(d) of the 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 herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, 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
II-4
<PAGE>
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(d) To deliver or cause to be delivered or cause to be delivered with
the Prospectus, to each person to whom the Prospectus is sent or given, the
latest annual report to security holders that is incorporated by reference in
the Prospectus and furnished pursuant to and meeting the requirements of Rule
14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the Prospectus, to deliver, or cause to be
delivered to each person to whom the Prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
Prospectus to provide such interim financial information.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the State of New York, on this 24th day of July 1998.
THE HAIN FOOD GROUP, INC.
By: /s/ Irwin D. Simon
-------------------------------
Name: Irwin D. Simon
Title: President and Chief Executive
Officer
II-6
<PAGE>
Each person whose signature appears below hereby constitutes and appoints
Irwin D. Simon, the President and Chief Executive Officer of the Registrant, and
Jack Kaufman, the Chief Financial Officer, Treasurer and Assistant Secretary of
the Registrant, or either of them, acting alone, as his true and lawful
attorney-in-fact, with full power and authority to execute in the name, place
and stead of each such person in any and all capacities and to file an amendment
or amendments to the Registration Statement (and all exhibits thereto) and any
documents relating thereto, which amendments may make such changes in the
Registration Statement as said officer or officers so acting deem(s) advisable.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Andrew R. Heyer Chairman of the Board of Directors July 24, 1998
- ------------------------------
Andrew R. Heyer
/s/ Irwin D. Simon President, Chief Executive July 24, 1998
- ------------------------------ Officer and Director
Irwin D. Simon
/s/ Jack Kaufman Vice President-Chief Financial Officer July 24, 1998
- ------------------------------
Jack Kaufman
/s/ Beth L. Bronner Director July 24, 1998
- ------------------------------
Beth L. Bronner
/s/ William P. Carmichael Director July 24, 1998
- -------------------------------
William P. Carmichael
/s/ William J. Fox Director July 24, 1998
- -------------------------------
William J. Fox
/s/ Jack Futterman Director July 24, 1998
- -------------------------------
Jack Futterman
/s/ James S. Gold Director July 24, 1998
- -------------------------------
James S. Gold
/s/ Barry Gordon Director July 24, 1998
- -------------------------------
Barry Gordon
/s/ Steven S. Schwartzreich Director July 24, 1998
- -------------------------------
Steven S. Schwartzreich
</TABLE>
II-7
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
4.1 Securities Purchase Agreement, dated as of April 14, 1994, relating to,
among other things, 768,229 shares of Common Stock of the Registrant.
(Incorporated by reference to Exhibit 4.2 of the Registrant's Current
Report on Form 8-K dated April 14, 1994 (the "Hain 8-K"))
4.2 Common Stock Subscription Agreement, dated as of April 14, 1994, relating
to the issue and sale of 1,871,770 shares of Common Stock of the
Registrant. (Incorporated by reference to Exhibit 4.3 to the Hain 8-K)
4.3 Common Stock Registration Rights Agreement, dated as of April 14, 1994,
relating to the shares of Common Stock of the Registrant, issued pursuant
to the Securities Purchase Agreement and Common Stock Subscription
Agreement. (Incorporated by reference to Exhibit 4.5 to the Hain 8-K)
4.4 Form of Warrant to purchase shares of Common Stock of the Registrant.
(Incorporated by reference to Exhibit 4.6 to the Hain 8-K)
5 Opinion of Cahill Gordon & Reindel regarding the legality of the securities
being registered
16.1 Letter from McGinty & Associates regarding change in certifying accountants
(Incorporated by reference to Exhibit 16.1 of the Registrant's Registration
Statement on Form S-4/S-3, File No. 333-56319)
16.2 Letter from Katz & Bloom, LLC regarding change in certifying accountants
(Incorporated by reference to Exhibit 16.2 of the Registrant's Registration
Statement on Form S-4/S-3, File No. 333-56319)
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of PriceWaterhouseCoopers LLP, Independent Auditors
23.3 Consent of McGladrey & Pullen, LLP, Independent Auditors
23.4 Consent of McGinty & Associates, Independent Auditors
23.5 Consent of Katz & Bloom, LLC, Independent Auditors
24 Powers of Attorney (included on the signature page to this Registration
Statement)
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Exhibit 5
July 24, 1998
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
Re: The Hain Food Group, Inc.
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special counsel to The Hain Food Group, Inc. (the
"Company") in connection with the preparation of the Company's registration
statement on Form S-3 (the "Registration Statement") filed with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act") in connection with the sale by certain selling
stockholders listed therein (the "Selling Stockholders") of up to 2,826,161
shares of common stock of the Company, par value $.01 per share (the "Common
Stock") of which 1,639,150 shares are issued and outstanding (the "Issued
Shares") and 1,187,011 shares are reserved for issuance upon the exercise of
warrants (the "Warrant Shares").
In rendering the opinion set forth herein, we have examined originals,
photocopies or conformed copies certified to our satisfaction of all such
corporate records, agreements, instruments and documents of the Company,
certificates of public officials and other certificates and opinions, and we
have made such other investigations, as we have deemed necessary in connection
with the opinions set forth herein. In our examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity to originals of all documents submitted to us as
photocopies or conformed copies.
Based on the foregoing, and subject to the effectiveness of the
Registration Statement under the Securities Act, we advise you that in our
opinion, the Issued Shares are, and, upon exercise of warrants, the Warrant
Shares will be, legally issued, fully paid and nonassessable.
We are members of the bar of the State of New York, and in rendering this
opinion we express no opinion as to the laws of any jurisdiction other than the
laws of the State of New York, the General Corporation Law of the State of
Delaware and the Federal laws of the United States of America.
We hereby consent to the use of our firm's name under the caption "Legal
Matters" and to the filing of a copy of this opinion with the Commission as an
exhibit to the Registration Statement referred to above.
Very truly yours,
/s/ Cahill Gordon & Reindel
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of The Hain Food Group,
Inc. for the registration of 2,826,161 shares of its common stock and to the
incorporation by reference therein of our report dated September 3, 1997, with
respect to the consolidated financial statements and schedule of The Hain Food
Group, Inc. included in its Annual Report (Form 10-K) for the year ended June
30, 1997, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Melville, New York
July 23, 1998
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of the Hain Food
Group of our report dated March 25, 1997 appearing on page F-1 of the Westbrae
Natural, Inc. (formerly Vestro Natural Foods, Inc.). Annual Report on Form 10-K
for the year ended December 31, 1996. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
/s/ PRICEWATERHOUSECOOPERS LLP
Costa Mesa, California
July 20, 1998
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation of our reports, relating to the
consolidated financial statements of AMI, Operating, Inc. and subsidiaries dated
May 27, 1998 and the financial statements of Dana Alexander, Inc., dated May 22,
1998 and the financial statements of Garden of Eatin', Inc., dated May 8, 1998,
included in the Form 8-K/A dated July 23, 1998 and incorporated by reference in
the previously filed Registration Statement of The Hain Food Group, Inc. on Form
S-4/S-3 (No. 333-57343) and incorporated by reference in the Registration
Statement of The Hain Food Group, Inc. on Form S-3 filed on or about July 23,
1998.
/s/ MCGLADREY & PULLEN, LLP
Anaheim, California
July 20, 1998
Exhibit 23.4
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation of our report, relating to the
consolidated financial statements of Arrowhead Mills, Inc., dated October 4,
1996, except for Note 10, as to which the date is June 1, 1998, for the years
ended July 31, 1996 and 1995 included in the Form 8-K/A dated July 23, 1998 and
incorporated by reference in the previously filed Registration Statement of the
Hain Food Group, Inc. on Form S-4/S-3 (No. 333-57343) and incorporated by
reference in the Registration Statement of the Hain Food Group, Inc. on Form S-3
filed on or about July 20, 1998.
/s/ MCGINTY & ASSOCIATES
July 20, 1998
Exhibit 23.5
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation of our report, relating to the
financial statements of Dana Alexander, Inc. dated March 19, 1997 except for
Note L, as to which date is June 2, 1997, for the years ended December 31, 1996
and 1995 included in the Form 8-K/A dated July 23, 1998 and incorporated by
reference in the previously filed Registration Statement of The Hain Food Group,
Inc. on Form S-4/S-3 (No. 333-57343) and incorporated by reference in the
Registration Statement of the Hain Food Group, Inc. on Form S-3 filed on or
about July 20, 1998.
/s/ KATZ & BLOOM, LLC
July 20, 1998
