UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2 TO FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE VERMONT TEDDY BEAR CO., INC.
(Exact name of registrant as specified in charter)
NEW YORK
(State or other jurisdiction of incorporation or organization)
03-0291679
(I.R.S. Employer Identification No.)
6655 Shelburne Road, Shelburne, VT 05482, (802) 985-3001
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Elisabeth B. Robert, President, The Vermont Teddy Bear Co., Inc.
6655 Shelburne Road, Shelburne, VT 05482, (802) 985-3001
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copy to: Spencer R. Knapp, Esquire, Dinse, Knapp & McAndrew, P.C.,
209 Battery Street, Burlington, VT 05402, (802) 864-5751
Approximate date of commencement of proposed sale to the public:
from time to time after this Registration Statement becomes effective
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, 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, 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
registrations 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. [ ]
<TABLE>
Calculation of Registration Fee
<S> <C> <C> <C> <C>
Title of each Amount to be Proposed Proposed Amount of
Class of registered(1) maximum offer- maximum registration
securities ------------ ing price per aggregate fee
to be unit(2) offering ------------
registered -------------- price(2)
- ------------- ----------
Common Stock, 1,897,251 $4.07815 $7,737,274.17 $2,150.96
par value $.05 shares
per share
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act of 1933, there are
also being registered such indeterminate number of additional shares of Common
Stock as may be issuable upon exercise of the Common Stock purchase warrants
described herein pursuant to the provisions thereof regarding adjustment for
stock dividends, stock splits or similar events.
(2) Of the shares being registered hereby, 588,562 shares are issuable
upon conversion of Series C Preferred Stock at a conversion price of $1.05 per
share, and 688,967 shares are issuable upon the exercise of outstanding common
stock purchase warrants at an exercise prices ranging from $1.05 to $1.31 (as
of June 30, 1999).
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to section 8(a), may determine.
<PAGE>
PROSPECTUS, Subject to Completion, dated February 10, 2000
THE VERMONT TEDDY BEAR CO., INC.
1,897,251 shares of Common Stock
These shares of common stock are being offered and sold from time to time
by certain of our current shareholders.
The selling shareholders may sell the shares from time to time at fixed
prices, market prices, prices computed with formulas based on market prices,
or at negotiated prices, and may engage a broker or dealer to sell the shares.
For additional information on the selling shareholders' possible methods of
sale, you should refer to the section of this prospectus entitled "Plan of
Distribution" on page 6. We will not receive any proceeds from the sale of
the shares, but will bear the costs relating to the registration of the
shares.
Our common stock is traded on the Nasdaq Small Cap market under the
symbol "BEAR." On November 11, 1999, the closing price for our common stock
was $4.0313 per share. Our principal executive offices are located at 6655
Shelburne Road, Shelburne, Vermont 05482 (802) 985-3001.
- --------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the shares, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
- --------------------------------------------
The date of this Prospectus is __________________.
</PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
Risk Factors 3
Business of the Company 3
Selling Shareholders 4
Plan of Distribution 6
Experts 8
Limitation of Liability and Indemnification 8
Information Incorporated by Reference 8
Available Information 9
You should rely only on information contained or incorporated by
reference in this prospectus. See "Information Incorporated by Reference" on
page 6. Neither Vermont Teddy Bear nor the selling shareholders have
authorized any other person to provide you with information different from
that contained in this prospectus.
The shares of common stock are not being offered in any jurisdiction
where the offering is not permitted.
The information contained in this prospectus is correct only as of the
date on the cover, regardless of the date this prospectus was delivered to you
or the date on which you acquired any of the shares.
RISK FACTORS
The purchase of shares involves risks. Investors should be aware of
these risk factors:
If We Are Unprofitable, Our Stock Prices May Decline. Although we have
reported profits for our last fiscal year ended June 30, 1999, and for the
first quarter of our current fiscal year, ended September 30, 1999, we have
been unprofitable in prior fiscal years. No assurance can be given that we
will continue to be profitable in future years. If we are unprofitable, our
stock prices may decline.
If Other Competing Companies Are More Successful, Our Business May
Decline. Our principal business segment is our gift delivery business, which
is a highly competitive business industry. We compete with a number of other
gift delivery businesses, including sellers of flowers, balloons, candy, cakes
and other gift items, which can be ordered by telephone or through the
Internet for special occasions and delivered by express service in a manner
similar to Bear-Gram gifts. There are low barriers to entry into the market
for these businesses. Many of our competing businesses have far greater
financial, sales and marketing resources than us.
If Competing Companies Copy Our Products or Marketing Techniques, Our
Business Could Be Adversely Affected. Our products and marketing techniques
are entitled to only limited protection under United States Copyright and
Trademark Law, and aspects of our business are not protected and could be
replicated by competitors.
BUSINESS OF VERMONT TEDDY BEAR
Founded in 1981 and incorporated in 1984, The Vermont Teddy Bear Co.,
Inc. ("Vermont Teddy Bear"), with its principal offices located at 6655
Shelburne Road, Shelburne, Vermont, is a designer, manufacturer, and direct
marketer of teddy bears and related products.
Our primary business segments are our Bear-Gram delivery business, our
retail business and our wholesale business. The largest business segment is
the Bear-Gram gift delivery service comprising 84.0 percent of our total
business for the fiscal year ended June 30, 1999. Our retail store operations
represented 11.2 percent of net revenues, and wholesale, corporate affinity,
and licensing programs together were 4.8 of net revenues for the fiscal year
ended June 30, 1999.
The Bear-Gram delivery service involves sending personalized teddy bears
directly to recipients for special occasions such as birthdays, anniversaries,
weddings, and new births, as well as holidays such as Valentine's Day,
Christmas, and Mother's Day. Through this service, we offer teddy bears in a
variety of sizes and colors, as well as approximately 100 different teddy bear
outfits to further customize the teddy bear. Every Bear-Gram gift includes a
customized teddy bear made in our Shelburne, Vermont factory, which can be
further personalized with embroidery on the outfit, a candy treat, and a
personal message on a card all delivered in a colorful box with an "airhole".
Orders for the Bear-Gram delivery service are generally placed by calling a
toll-free telephone number (1-800-829-BEAR) and speaking with Vermont Teddy
Bear's sales representatives, called Bear Counselors. An increasing number of
orders, however, are being placed by customers online at our website with
twenty-five percent of total orders in the Bear-Gram gift delivery service
segment placed on line during the month of June 1999, versus ten percent in
June 1998. Orders placed by 4:00 p.m. can be shipped the same day; packages
are delivered primarily via Federal Express and other carriers by next-day
air, two-day air or United States Postal Service Priority Mail.
Our Bear-Gram segment sales are heavily seasonal, with Valentine's Day,
Christmas, and Mother's Day as the Company's largest sales seasons.
The retail operations business segment was second only to the Bear-Gram
delivery service segment in its contribution to the Vermont Teddy Bear's total
sales in the fiscal year ended June 30, 1999, at 11.2 percent of net revenues.
During 1997 and 1998, we had placed a greater emphasis on retail operations
operating company-owned retail stores in North Conway, New Hampshire,
Freeport, Maine and on Madison Avenue in New York City, in addition to its
factory store in Shelburne, Vermont. The contribution of all retail
operations was 18% of net revenues for the fiscal year ended June 30, 1998.
Due to continued unprofitability in the satellite stores, Vermont Teddy
Bear began to reverse its retail expansion strategy during its fiscal year
ended June 30, 1998, closing its New York City store on December 7, 1997. The
remaining satellite stores were closed during the fiscal year ended June 30,
1999. The Freeport, Maine store was closed in August 1998 and the North
Conway, New Hampshire store was closed in October 1998. Our very successful
factory retail store is the only retail location which remains in operation.
We actively promote family tours of our teddy bear factory and store at the
factory location in Shelburne, located ten miles south of Burlington, Vermont.
The factory drew over 103,000 visitors in the twelve-month period ended June
30, 1999, and has drawn more than 493,000 visitors since moving to its new
location in July 1995. In an effort to make a visit to the factory more
entertaining and draw additional traffic, we have implemented the Make-A
Friend-For-Life bear assembly area, where visitors can participate in the
creation of their own teddy bear.
During its fiscal year 1998, we began pro-actively developing
opportunities in the corporate affinity market and certain wholesale markets
as a business segment. The Wholesale/Corporate business segment accounted for
4.8% of net revenues for fiscal year ended June 30, 1999, and is the fastest
growing segment of Vermont Teddy Bear's business. While numerous corporate
affinity programs involve our Vermont Teddy Bear brand bear, manufactured at
the Shelburne, Vermont factory, the largest orders involve teddy bear products
which were designed by Vermont Teddy Bear and manufactured off shore. We also
sell wholesale our Make-A Friend for Life teddy bears designed and imported by
Vermont Teddy Bear to Zany Brainy, Inc., an educational toy store chain based
in King of Prussia, Pennsylvania. Zany Brainy's retail customers participate
in the making of their own teddy bear in the Make-A-Friend-for-Life kiosks in
select Zany Brainy locations.
SELLING SHAREHOLDERS
Based upon information supplied to Vermont Teddy Bear by each selling
shareholder, the following table sets forth certain information as of October
22, 1999, regarding the beneficial ownership of the common stock held by each
selling shareholder. Fractional shares have been rounded down to the nearest
whole share.
Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities. Except as indicated, each person possesses sole voting and
investment power with respect to all of the shares of common stock owned by
such person, subject to community property laws where applicable.
<TABLE>
<S> <C> <C> <C> <C> <C>
Selling Shareholder Shares Owned Shares Being Ownership After
Prior to Offered Offering If All
------------ ------------ Shares Offered
Hereby Are Sold
Percent ---------------
Number (%) Shares Percent(%)
------ ------- ------ ----------
Former Holders of
Series B Preferred
Stock (1):
- ------------------
J. Bacon 70,840 1.121 22,670 48,170 .762
E. Cronin 28,029 .443 28,029 -0- -0-
J. Crowl 37,669 .596 22,670 14,999 .237
Split Rock Fund LLC 22,670 .359 22,670 -0- -0-
D. Granquist 50,949 .806 26,950 23,999 .380
S. Hunt 34,669 .548 22,670 11,999 .190
W. King 32,669 .517 22,670 9,999 .158
C. Kireker 23,618 .374 17,619 5,999 .095
Kireker Trust 63,723 1.008 36,724 26,999 .427
C. K. Smith 45,341 .717 45,341 -0- -0-
L. Orton 326,712 5.168 226,712 100,000 1.582
D. Boardman 22,670 .359 22,670 -0- -0-
A. Horowitch 2,318 .037 2,318 -0- -0-
</TABLE>
(1) The following persons own shares acquired upon conversion of the our Series
B Convertible Preferred Stock (the "Series B Preferred Stock") on February 3,
1999, and upon exercise of related warrants in July, 1999, issued in connection
with the Series B Preferred Stock. The Series B Stock and related warrants were
issued by Vermont Teddy Bear in July, 1996 for an aggregate purchase price of
$550,000. The exercise prices on the warrants were either $1.00 or $1.05 per
share. We used the proceeds from the sale of the series B Preferred Stock and
for exercise of the warrants for working capital. The Series B Preferred Stock,
the warrants and the underlying shares were issued under an applicable exemption
from registration under Section 4(2) of the Securities Act of 1933, as amended
(the "Securities Act"). The shares purchased upon exercise of the warrants are
offered hereby.
<TABLE>
<S> <C> <C> <C> <C> <C>
Selling Shareholder Shares Owned Shares Being Ownership After
- ------------------- Prior to Offered Offering If All
------------ ------------ Shares Offered
Hereby Are Sold
Percent ---------------
Number (%) Shares Percent(%)
------ ------- ------ ----------
Green Mountain
Capital, L.P.(2) 100,000 1.582 100,000 -0- -0-
URSA(VT)QRS
12-30, Inc.(3) 193,111 3.055 193,111 -0- -0-
Holders of Series
C Preferred Stock(4)
- -----------------
Candlish Trust(4/3/91) 54,221 .858 54,221 -0- -0-
E. Kozlowski 72,295 1.144 72,295 -0- -0-
S.Z. Lee 27,111 .429 27,111 -0- -0-
Schiff Lee Trust 27,111 .429 27,111 -0- -0-
C. Robins, Custodian 27,111 .429 27,111 -0- -0-
D. Lucas 135,554 2.144 135,554 -0- -0-
S.D. McCullough 18,073 .286 18,073 -0- -0-
R. Perkins 36,147 .572 36,147 -0- -0-
R. Rossetti 72,295 1.144 72,295 -0- -0-
S. Schoen 45,184 .715 45,184 -0- -0-
C. Smith 36,147 .572 36,147 -0- -0-
S. Oberg 5,422 .086 5,422 -0- -0-
J.S. Surface 5,422 .086 5,422 -0- -0-
S. Marsh 10,844 .172 10,844 -0- -0-
D. Jones I/JL Cust. 45,184 .715 45,184 -0- -0-
M.G. Thompson 100,607 .801 50,607 50,000 .791
W. Watts 54,221 .858 54,221 -0- -0-
Shepherd Venture Fund 225,383 3.565 225,383 -0- -0-
Shepherd Group LLC 2,276 .036 2,276 -0- -0-
T.R. Shepherd 112,131 1.774 112,131 -0- -0-
T.N. Shepherd 21,688 .343 21,688 -0- -0-
</TABLE>
None of the selling shareholders has held any positions or office or had
any other material relationship with Vermont Teddy Bear or any of its
affiliates within the past three years, except J. Bacon, T.R. Shepherd and
T.N. Shepherd, who are currently serving on the Board of Directors.
In recognition of the fact that the selling shareholders may wish to be
legally permitted to sell their shares when they deem appropriate, Vermont Teddy
Bear agreed with the selling shareholders to file with the SEC, under the
Securities Act, a registration statement on Form S-3, of which this prospectus
forms a part, with respect to the resale of the shares.
(2) Green Mountain Capital, L.P. acquired 100,000 shares on November 5, 1999
upon exercise of a warrant at an exercise price of $1.00 per share. The warrant
had been issued in connection with a loan made by Green Mountain Capital, L.P.
to Vermont Teddy Bear in December, 1995. The proceeds of the warrant exercised
were used by the Company to reduce the amount due on the loan. The warrant and
underlying shares were issued under an applicable exemption under Section 4(2)
of the Securities Act.
(3) USRA (VT) QRS 12-30, Inc. holds two warrants to purchase 150,611 shares at
an exercise price of $1.310 and to purchase 42,500 shares at an exercise price
of $1.05 per shares, respectively, which have not expired as of the date of this
Prospectus. The warrants were issued as part of the consideration in connection
with a sale-lease back of our real estate in July, 1997 and subsequent consents
by the lessor in November, 1998.
(4) The following persons are holders of our Series C Convertible Preferred
Stock (the "Series C Preferred Stock") and related warrants, which were issued
in November, 1998 for an aggregate purchase price of $600,000. The proceeds of
the sale of Series C Preferred Stock were used for working capital. The shares
offered hereby include 588,562 shares issuable upon conversion of the Series C
Preferred Stock at a conversion price of $1.05 per share and 495,856 shares
issuable upon exercise of the related warrants at an exercise price of $1.05 per
share. The Series C Preferred Stock and the warrants were issued under an
applicable exemption from registration under Section 4(2) of the Securities Act.
PLAN OF DISTRIBUTION
The shares offered by this prospectus may be sold from time to time by
the selling shareholders or by their pledgees, donees, transferees or other
successors in interest. Sales may be made on one or more exchanges or in the
over-the-counter market, in privately negotiated transactions, through the
writing of options on the shares, or otherwise at market prices then
prevailing or at prices related to the then-current market price, at fixed
prices that may be changed, or at negotiated prices. Any shares covered by
this prospectus that qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under such Rule rather pursuant to this prospectus.
The shares may be sold to or through brokers or dealers, who may act as
agent or principal, or in direct transactions between the selling shareholders
and purchasers. In addition, the selling shareholders may, from time to time,
sell short the common stock, and in such instances this prospectus may be
delivered in connection with such short sale and the shares offered hereby may
be used to cover the short sale.
Transactions involving brokers or dealers may include (a) ordinary
brokerage transactions, (b) transactions in which the broker or dealer
solicits purchasers, (c) block trades in which the broker or dealer will
attempt to sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction, and (d) purchases by a
broker or dealer as a principal and resale by such broker or dealer for its
account. In effecting sales, brokers and dealers engaged by the selling
shareholders or from the purchasers of the shares may arrange for other
brokers or dealers to participate. Participating brokers or dealers may
receive discounts, concessions or commissions from the selling shareholders,
the purchasers of the shares for whom such broker or dealer may act as agent
or to whom they may sell as principal. Any such compensation payable to a
broker or dealer may exceed customary commissions. The selling shareholders
and such brokers and dealers who act in connection with the sale of shares may
be deemed to be "underwriters" within the meaning of the Securities Act, and
any commissions received by them and any profit on any resale of the shares as
principal may be deemed to be underwriting discounts and commissions under the
Securities Act.
In connection with distributions of the common stock, the selling
shareholders may enter into hedging transactions with brokers or dealers and
the brokers or dealers may engage in short sales of the common stock in the
course of hedging the positions they assume with the selling shareholders.
The selling shareholders also may enter into option or other transactions with
brokers or dealers that involve the delivery of the common stock to the
brokers or dealers, who may then recall or otherwise transfer such common
stock. The selling shareholders also may loan or pledge the common stock to a
broker or dealer and the broker or dealer may sell the common stock so loaned
or upon default may sell or otherwise transfer the pledged common stock.
Vermont Teddy Bear is bearing all costs relating to the registration of
the shares. Any commissions, discounts or other fees payable to brokers or
dealers in connection with any sale of the shares will be borne by the selling
shareholders, the purchasers of the shares, or both. Vermont Teddy Bear will
receive none of the proceeds from the sale of the shares by the selling
shareholders. Vermont Teddy Bear and the selling shareholders each have
agreed to indemnify the other against certain liabilities, including
liabilities arising under the Securities Act, that relate to statements or
omissions in the registration statement of which this prospectus forms a part.
EXPERTS
Our balance sheets as of June 30, 1998, and June 30, 1999, and the
related statements of operations, stockholders' equity and cash flows for each
of the two years in the period ended June 30, 1999, incorporated by reference
into this prospectus, have been audited by Arthur Andersen, LLP, independent
auditors, as stated in their reports with respect thereto. Such financial
statements have been so incorporated in reliance on the reports of such firm
given upon their authority as experts in accounting and auditing.
LIMITATION OF LIABILITY AND INDEMNIFICATION
Vermont Teddy Bear's Amended and Restated Articles of Incorporation
provide that, to the fullest extent permitted by the New York Business
Corporation Act, Vermont Teddy Bear's directors will not be liable for
monetary damages to Vermont Teddy Bear or its shareholders, excluding,
however, liability for acts or omissions involving intentional misconduct or
knowing violations of law, illegal distributions or transactions from which the
director receives benefits to which the director is not legally entitled.
Vermont Teddy Bear's Amended and Restated Bylaws provide that the Vermont
Teddy Bear will indemnify its directors and, by action of the Board of
Directors, may indemnify its officers, employees and other agents of Vermont
Teddy Bear to the fullest extent permitted by applicable law, except for any
legal proceeding that is initiated by such directors, officers, employees or
agents without authorization of the Board of Directors.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of Vermont
Teddy Bear pursuant to the foregoing provisions or otherwise, Vermont Teddy
Bear has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" certain of our publicly
filed documents into this prospectus, which means that information included in
those documents is considered part of this prospectus. Information that we
file with the SEC subsequent to the date of this prospectus will automatically
update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the
selling shareholders have sold all the shares.
The following documents filed with the SEC are incorporated by reference
in this prospectus:
1. Our Annual Report on Form 10-KSB for the year ended June 30, 1999;
2. Our Quarterly Report on Form 10-QSB for the period ended September
30, 1999; and
3. The description of our common stock set forth in our Registration
Statement on Form SB-2 (Registration No. 33-69898), including any amendment or
report filed for the purpose of updating such description, as incorporated by
reference in our Registration Statement on Form 8-A.
We will furnish without charge to you, on written or oral request, a copy
of any or all of the documents incorporated by reference, other than exhibits
to such documents. You should direct any requests for documents to Investor
Relations, The Vermont Teddy Bear Co., Inc., 6655 Shelburne Road, Shelburne,
VT 05482, telephone (802) 985-3001.
The information relating to the Company contained in this prospectus is
not comprehensive and should be read together with the information contained
in the incorporated documents.
AVAILABLE INFORMATION
This prospectus is part of a Registration Statement on Form S-3 that we
filed with the SEC. Certain information in the Registration Statement has
been omitted from this prospectus in accordance with SEC rules.
We file annual, quarterly and special reports and other information with
the SEC. You may read and copy the Registration Statement and any other
document that we file at the SEC's public reference rooms located at Room
1024, Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C. 20549; 7 World
Trade Center, Suite 1300, New York, New York 10048; and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60662. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our
SEC filings are also available to you free of charge at the SEC's web site at
http://www.sec.gov or through our web site at http://www.vtbear.com.
Statements contained in this prospectus as to the contents of any
contract or other document referred to are not necessarily complete and in
each instance you should refer to the copy of such contract or other document
filed as an exhibit to the Registration Statement.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
------------------------------------------
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All expenses in connection with the issuance and distribution of the
securities being registered will be paid by Vermont Teddy Bear. The following
is an itemized statement of these expenses (all amounts are estimated except
for the SEC and Nasdaq listing fees):
SEC Registration fee $ 2,150.96
Nasdaq listing fee $ 0.00
Legal fees $10,000.00
Accountant's fees $ 2,000.00
Printing fees $ 500.00
Miscellaneous $ 500.00
Total $15,150.96
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Article VI of our Amended and Restated Articles of Incorporation and
Article XI of Vermont Teddy Bear's Amended and Restated Bylaws permit
indemnification of our directors, officers, employees and agents to the
fullest extent permitted by the New York Business Corporation Law (the "Act").
Sections 721 through 726 of the Act authorize a court to award, or a
corporation's board of directors to grant, indemnification to directors and
officers on terms sufficiently broad to permit indemnification for liabilities
arising under the Securities Act, if such director or officer acted in good
faith for a purpose which he reasonably believed to be in, or not opposed to,
the best interests of the corporation and, in criminal actions or proceedings,
in addition, had no reasonable cause to believe that his conduct was unlawful.
EXHIBITS
3.1 Amended and Restated Articles of Incorporation of the Company(5)
3.2 Amended and Restated Bylaws of the Company(6)
4.1 Form of Warrant, dated July 10, 1997 issued to URSA(VT)QRS 12-30, Inc.(7)
4.2 Form of Warrant, dated November 3, 1998, issued to URSA(VT)QRS 12-30,
Inc.(8)
4.3 Form of Warrant, dated November 3, 1998, issued to holders of Series C
Convertible Redeemable Preferred Stock(9)
5 Opinion on Legality (filed herewith)
23 Consent of Arthur Andersen, LLP (filed herewith)
24 Power of Attorney (previously filed)
(5) Incorporated by reference to Exhibit 3.5 of the Company's Form 10-KSB for
the year ended June 30, 1999, commission file number 1-12580, filed with the
Commission on September 28, 1999.
(6) Incorporated by reference to Exhibit 3.6 of the Company's Form 10-KSB for
the year ended June 30, 1999, commission file number 1-12580, filed with the
Commission on September 28, 1999.
(7) Incorporated by reference to Exhibit 4.7 of the Company's Form 10-KSB for
the year ended June 30, 1999, commission file number 1-12580, filed with the
Commission on September 28, 1999.
(8) Incorporated by reference to Exhibit 4.12 of the Company's Form 10-KSB for
the year ended June 30, 1999, commission file number 1-12580, filed with the
Commission on September 28, 1999.
(9) Incorporated by reference to Exhibit 4.11of the Company's Form 10-KSB for
the year ended June 30, 1999, commission file number 1-12580, filed with the
Commission on September 28, 1999.
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 this Registration Statement (or
the most recent post-effective amendment thereof) that,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(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 Commission 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, each 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; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that 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 of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in 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.
(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 foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities 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 an 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.
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 Town of Shelburne, State of Vermont, on
November 11, 1999.
THE VERMONT TEDDY BEAR CO., INC.
By: /s/ Elisabeth B. Robert
----------------------------
Elisabeth B. Robert, President
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EXHIBIT 5
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Dinse, Knapp & McAndrew, P.C.
Attorneys at Law
February 9, 2000
Board of Directors
The Vermont Teddy Bear Co., Inc.
Shelburne, Vermont 05482
Ladies and Gentlemen:
We have acted as counsel to the Vermont Teddy Bear Co. (the "Company") in
connection with the registration under the Securities Act of 1933 as amended of
1,897,251 shares of the Company's common stock (the "Shares") by the
registration statement, dated November 11, 1999, on Form S-3 (the "Registration
Statement"). As counsel, we are familiar with the corporate proceedings
relative to the incorporation of the Company and the registration and issuance
of the Shares. Based upon the foregoing and having due regard for legal
considerations as we deemed relevant, we are of the opinion that:
1. The Company is a corporation duly incorporated and validly
existing under the laws of the State of New York, with full
corporate power to issue the Shares, the warrants referred to in
the registration statement (the "Warrants"), and the shares of
Series C Convertible Redeemable Preferred Stock referred to in the
Registration Statement (the "Series C Preferred Stock").
2. The Shares which are presently issued and outstanding have been
duly authorized by appropriate corporate action and are validly
issued, fully paid and non-assessable.
3. The Shares issuable upon exercise of the Warrants and upon
conversion of the Series C Preferred Stock have been duly
authorized and reserved for such purpose by appropriate corporate
action. Upon issuance of Shares following due exercise of
Warrants or conversion of Series C Preferred Stock, all such
shares will be validly issued, fully paid and non-assessable.
Very truly yours,
DINSE, KNAPP & McANDREW, P.C.
/s/ Dinse, Knapp & McAndrew, P.C.
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EXIBIT 23
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 of The Vermont Teddy
Bear Co., Inc. of our report dated August 20, 1999, relating to the balance
sheet of The Vermont Teddy Bear Co., Inc. as of June 30, 1999 and 1998, and the
related statements of operations, stockholders' equity, and cash flows for the
years then ended, which report appears in the June 30, 1999 annual report on
Form 10-KSB of The Vermont Teddy Bear Co., Inc. It should be noted that we have
not audited any financial statements of the Company subsequent to June 30, 1999.
/s/ Arthur Andersen
Arthur Andersen, LLP
Boston, Massachusetts
February 8, 2000
