As filed with the Securities and Exchange Commission
on February 4, 1997
Registration No. 333-15587
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
Pre-effective
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
MANHATTAN BAGEL COMPANY, INC
(Exact name of issuer as specified in its charter)
New Jersey 22-2981539
(State or other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification No.)
246 Industrial Way West
Eatontown, New Jersey 07724
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Jack Grumet
Chairman of the Board
Manhattan Bagel Company, Inc.
246 Industrial Way West
Eatontown, New Jersey 07724
(908) 544-0155
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Jack Levy
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, New York 10022
(212) 735-8600
Approximate date of commencement of proposed sale to public: From time to time
after the effective date of this Registration Statement
<PAGE>
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
registration statement number of the earlier effective registration statement
for the same offering. [ ] _________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed
Title of each class of maximum Proposed
securities to offering maximum Amount of
be registered Amount to price per aggregate registration
be registered unit (1) offering price (1) fee
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<S> <C> <C> <C> <C>
Common Stock, no 291,500 $10.25 $2,987,875 $1,030.31(2)
par value 50,000 $ 8.375 $ 418,750 $ 126.90(3)
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(c), the offering price and amount of registration
fee have been calculated based upon the last sale price of the Registrant's
Common Stock as reported on the Nasdaq National Market on October 31, 1996 with
respect to the 291,500 shares and on January 29, 1997 with respect to the 50,000
shares.
(2) Paid with initial filing
(3) Paid in connection with filing of Amendment No. 1
----------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
MANHATTAN BAGEL COMPANY, INC.
Cross-Reference Sheet Pursuant to Rule 404(a)
and Item 501(b) of Regulation S-K
Form S-3 Item Number and Caption Caption in Prospectus
-------------------------------- ---------------------
1. Forepart of the Registration Statement Cover Page
and Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Cover Inside Front and Outside Back
Pages of Prospectus Cover Pages of Prospectus;
Available Information
3. Summary Information, Risk Factors Prospectus Summary; The Company;
and Ratio of Earnings to Fixed Risk Factors
Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Dilution
7. Selling Security Holders Selling Shareholders
8. Plan of Distribution Cover Page; Plan of Distribution;
Selling Shareholder
9. Description of Securities to be Cover Page; Description of
Registered Securities
10. Interests of Named Experts and Legal Matters
Counsel
11. Material Changes Not Applicable
12. Incorporation of Certain Information Incorporation of Certain
by Reference Information by Reference
13. Disclosure of Commission Position on Not Applicable
Indemnification
<PAGE>
Subject to Completion, dated February 4, 1997
PROSPECTUS
MANHATTAN BAGEL COMPANY, INC.
341,500 SHARES OF COMMON STOCK
This Prospectus relates to 341,500 shares of Common Stock, no par value per
share (the "Shares"), of Manhattan Bagel Company, Inc., a New Jersey corporation
(the "Company"), which may be sold from time to time by the entitles listed as
Selling Shareholders herein (the "Selling Shareholders"). The Company will not
receive any proceeds from the sale of the Shares by the Selling Shareholders to
the public.
The Company will pay all the expenses, estimated to be approximately
$5,000, in connection with this offering, other than underwriting commissions
and discounts and counsel fees and expenses of the Selling Shareholders.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------
The Company's Common Stock is traded in the over-the-counter market and
included in the Nasdaq National Market under the symbol BGLS. The last reported
sale price of the Common Stock reported in the Nasdaq National Market on
January 29, 1997 was $8 3/8 per share.
The date of this Prospectus is February ___, 1997
1
<PAGE>
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION ..................................................... 2
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE ......................... 3
THE COMPANY ............................................................... 4
RISK FACTORS .............................................................. 5
PLAN OF DISTRIBUTION ...................................................... 9
USE OF PROCEEDS ........................................................... 10
SELLING SHAREHOLDERS ...................................................... 11
DESCRIPTION OF SECURITIES ................................................. 12
LEGAL MATTERS ............................................................. 13
EXPERTS ................................................................... 13
---------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION TO ANY
PERSON TO WHOM SUCH OFFER WOULD BE UNLAWFUL OR AN OFFERING OF ANY SECURITIES
OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER AT ANY TIME SHALL IMPLY
THAT THE INFORMATION PROVIDED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
AVAILABLE INFORMATION
This Prospectus does not contain all of the information set forth in the
Registration Statement of which this Prospectus is a part and which is filed
with the Securities and Exchange Commission (the "Commission"). The Company is
subject to the informational requirements of the Securities Exchange Act of 1934
(the "Exchange Act") and, in accordance therewith, files reports, proxy
statements and other information with the Commission. For further information
with respect to the Company, reference is made to such Registration Statement
and the exhibits thereto, and to such reports, proxy statements and other
information filed with the Commission.
2
<PAGE>
Such Registration Statement, reports, proxy statements and other information can
be inspected and copied at the public reference facilities of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the Commission's Regional Offices located at Room 1400, 75 Park Place, New
York, New York 10007 and Suite 1400, Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60661.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1995.
2. The Company's Quarterly Report on Form 10-QSB for the three month
period ended March 31, 1996, as amended.
3. The Company's Quarterly Report on Form 10-QSB for the three month
period ended June 30, 1996.
4. The Company's Quarterly Report on Form 10-QSB for the three month
period ended September 30, 1996, as amended.
5. The Company's Current Report on Form 8-K, dated January 9, 1996, as
amended.
6. The Company's Current Report on Form 8-K, dated January 17, 1996, as
amended.
7. The Company's definitive proxy statement filed pursuant to Section 14
of the Exchange Act in connection with the 1996 Annual Meeting of Shareholders
and any definitive proxy statements or information statements so filed in
connection with any subsequent meetings of shareholders.
8. The Company's Current Report on Form 8-K, dated May 23, 1996, as
amended.
9. The Company's Current Report on Form 8-K, dated June 20, 1996.
All documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Shares shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any 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.
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<PAGE>
Copies of any and all documents that have been incorporated by reference
herein, other than exhibits to such documents, may be obtained upon request
without charge from the Company's Corporate Secretary, Manhattan Bagel Company,
Inc., 246 Industrial Way West, Eatontown, New Jersey 07724, telephone number
(908) 544-0155. Please specify the information desired when making such request.
THE COMPANY
Manhattan Bagel Company, Inc. (the "Company") manufactures bagel dough and
blends a wide variety of cream cheese spreads that are distributed to its
franchised, licensed and Company- owned stores. The bagels sold by the stores
are first boiled and then baked in the traditional "New York" style. The
Company's objective is to become one of the leading producers of fresh bagels
and bagel dough nationally, utilizing the strength of its stores and brand names
to create demand for the Company's products.
The Company believes that controlling the manufacture and distribution of
bagels and cream cheese spreads is key to ensuring product quality and
maximizing profitability. The Company operates two manufacturing plants in
Eatontown, New Jersey, including a state-of-the-art manufacturing facility which
commenced operations in April 1996. The Company also has manufacturing and
distribution facilities in Moorestown, New Jersey, Greenville, South Carolina
and Calgary, Alberta, Canada and additional distribution facilities in Richmond,
Virginia, Los Angeles, California, Longwood, Florida, West Hartford, Connecticut
and Houston, Texas. The Company plans to continue expanding and improving
manufacturing capacity by investing in systems and equipment that improve
productivity and efficiency to respond to what it expects will be steadily
increasing demand. The Company's manufacturing facilities will provide the
Company with the capacity to supply up to 425 stores at current store sales
levels. As the Company expands its store network, the Company expects to open
additional regional bagel manufacturing facilities or local distribution
facilities.
The Company also intends to expand its business through sales to sites
other than its presently existing franchised and Company-owned stores. This
marketing effort will involve co-branding of the Company's products with
national or regional chain stores, including stand-alone Company- owned or
franchised stores and in-store kiosks and other formats which offer the sale of
the Company's products at various third-party retail locations.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Prospectus, particularly statements about the
Company's business in the Company's various filings referenced under
Incorporation of Certain Information by Reference, and information under "The
Company", constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any future
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<PAGE>
results, performance or achievements, expressed or implied by such
forward-looking statements. Readers of this Prospectus are directed to "Risk
Factors" for a discussion of such factors.
RISK FACTORS
IN EVALUATING AN INVESTMENT IN THE COMPANY, PROSPECTIVE INVESTORS SHOULD
CAREFULLY CONSIDER THE FOLLOWING CONSIDERATIONS IN ADDITION TO THE OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS.
Expansion
As of December 31, 1996 there were 294 Manhattan Bagel Company stores open
with over 100 additional stores in various stages of development. The opening
and success of Manhattan Bagel Company stores will depend on various factors,
including the availability of suitable sites and the negotiation of acceptable
lease terms for new locations; the ability to obtain construction and any other
necessary permits in a timely manner; the ability to meet construction
schedules; the financial and other capabilities of the Company's master
franchisees and area developers; the ability of the Company to manage the
anticipated expansion and to hire and train personnel, and general economic and
business conditions. Not all of the foregoing factors are within the control of
the Company, master franchisees, or area developers.
The Company's proposed expansion will also require the implementation of
enhanced operational and financial systems and will require additional
management, operational, and financial resources. Failure to implement these
systems and add these resources could have a material adverse effect on the
Company's results of operations and financial condition. There can be no
assurance that the Company will be able to manage its expanding operations
effectively or that it will be able to maintain or accelerate its growth. In
addition, there can be no assurance of the viability of the Manhattan Bagel
concept in new geographic regions or particular local markets.
Based upon the results of a recent review of its West Coast operations, the
Company decided to close its bagel production facility in Los Angeles and to
temporarily supply its West Coast operations from Eatontown to assure product
quality. The Company also decided to sell, franchise or close the San Francisco
locations acquired in January 1996 operating under the name Holey Bagel. As a
result of these decisions, the Company wrote off $3,010,000, comprising goodwill
($1,711,000), fixed assets ($874,000) and other assets ($425,000), relating to
assets acquired in the Holey Bagel acquisition and the sale or closure of the
Holey Bagel locations, and the Company's Los Angeles commissary acquired in June
1995. The amount of goodwill was reflective of the price of the Company's common
stock at the time of the acquisitions. The write-off was reflected in the
results of operations for the three months and nine months ended September 30,
1996.
Dependence on Franchises
The Company realizes a substantial portion of its revenues from sales of
frozen raw bagel dough and cream cheese spreads to franchisees, initial
franchise and master franchise fees, area developer fees and continuing royalty
payments from its franchisees. The Company is therefore substantially dependent
upon its ability to attract, retain and contract with suitable franchisees and
the ability of these franchisees to open and operate their stores successfully.
Should the Company experience difficulty in attracting qualified franchisees, or
the Company's franchisees encounter business or operational difficulties, the
Company's revenues will be adversely affected. Such reduction in revenues may
also negatively impact the Company's ability to sell new franchises.
Consequently, the Company's financial prospects are directly related to the
success of its franchisees in promoting the Manhattan Bagel Company concept and
the success of each Manhattan Bagel Company store, over which the Company has no
direct control. There can be no assurance that the
5
<PAGE>
Company or its master franchisees or area developers will be able to
successfully develop new franchises or that the Company's franchisees will be
able to successfully develop and operate Manhattan Bagel Company stores.
Food Service Industry
Food service businesses are often affected by changes in consumer tastes;
national, regional, and local economic conditions; demographic trends; traffic
patterns; and the type, number, and location of competing businesses. Multi-unit
food service chains such as the Company can also be substantially adversely
affected by publicity resulting from food quality, illness, injury, or other
health concerns or operating issues stemming from one store or a limited number
of stores. In addition, factors such as inflation, increased food, labor, and
employee benefits costs, regional weather conditions, and the unavailability of
experienced management and hourly employees may also adversely affect the food
service industry in general and the Company's results of operations and
financial condition in particular.
Seasonal and Quarterly Fluctuations
The Company's quarterly results of operations may be affected by the timing
of the opening of new stores, receipt of master franchise fee and area
development fee income and seasonal factors. In addition, the Company's
quarterly results could also be affected by expenses associated with the
Company's expansion.
Competition; Ease of Entry into Business
The food service industry, in general, and the take out sector, in
particular, are intensely competitive. The Company competes and can be
anticipated to compete against well established food service companies with
greater product and name recognition and with larger financial, marketing and
distribution capabilities than the Company's, as well as innumerable local food
establishments that offer similar products. In addition, Management believes
that the start-up costs associated with opening a retail food establishment
offering similar products on a stand-along basis are competitive with the
start-up costs associated with commencing a Manhattan Bagel Company store and
accordingly, such start-up costs are not an impediment to entry into the retail
bagel business. There can be no assurance that the Company can compete
successfully in this complex market.
Future Capital Requirements; Possible Inability to Obtain Additional Financing
The Company's goal is to expand its network of owned and franchised bagel
stores and to set up additional bagel manufacturing and distribution facilities
to service stores in new geographical areas and supply new outlets for
distribution. Although the Company believes that the proceeds of the Company's
November 1995 offering together with cash flow from current operations will be
sufficient to fund the Company's operations for the foreseable future and to
continue its planned expansion, the Company may require additional financing to
achieve this goal. The Company
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anticipates obtaining such financing through bank borrowing and debt or equity
financing. There can be no assurance that it will be successful in obtaining
additional financing in amounts or on terms acceptable to the Company. The
failure to obtain such financing could have a material adverse effect on the
Company's operations and its ability to accomplish the proposed expansion of its
business.
Dependence on Key Personnel
The Company is substantially dependent upon the personal efforts and
abilities of its senior management. The loss of any of the Company's senior
management personnel could adversely affect the Company until a suitable
replacement is found. The Company'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 personnel. Competition for such
personnel is intense and there can be no assurance that the Company will be able
to attract and retain such personnel.
Government Regulation
The Company's franchise operations are subject to regulation by the Federal
Trade Commission ("FTC") in compliance with the Uniform Franchise Act which
requires, among other things, that the Company prepare and update a
comprehensive disclosure document in connection with the sale and operation of
its franchises. The Company and its franchisees must also comply with state
franchising laws and a wide range of other state and local rules and regulations
applicable to their business. Continued compliance with this broad federal,
state and local regulatory network is essential and costly and the failure to
comply with such regulations may have an adverse effect on the Company and its
franchisees. Violations of franchising laws and/or state laws and regulations
regulating substantive aspects of doing business in a particular state could
subject the Company and its affiliates to rescission offers, monetary damages,
penalties, imprisonment and/or injunctive proceedings. In addition, under court
decisions in certain states absolute vicarious liability may be imposed upon
franchisors based upon claims made against franchisees. Even if the Company is
able to obtain coverage for such claims, there can be no assurance that such
insurance will be sufficient to cover potential claims against the Company.
Control by Management
As of the date of this Prospectus, Messrs. Jack Grumet, Jason Gennusa and
Andrew Gennusa own beneficially an aggregate of 1,996,900 shares of Common Stock
representing approximately 28.3% of the Company's outstanding stock. The
Company's By-laws do not provide for cumulative voting. Accordingly, Messrs.
Grumet, J. Gennusa and A. Gennusa together, even though owning less than a
majority of the Company's Common Stock, in all likelihood will be able to
control the affairs of the Company.
7
<PAGE>
Shares Eligible for Future Sale
Of the 7,453,822 shares of Common Stock of the Company currently
outstanding, 2,332,400 shares of Common Stock, including 1,996,900 shares owned
by insiders, officers and directors, will be deemed "restricted securities" as
that term is defined under the Securities Act of 1933, as amended (the
"Securities Act"), and in the future may be sold under Rule 144, which provides
that a person holding restricted securities for a period of two years may sell
every three months, in brokerage transactions or market maker transactions, an
amount equal to the greater of (a) one percent of the Company's issued and
outstanding Common Stock (approximately 74,538) or (b) the average weekly
trading volume of Common Stock during the four calendar weeks prior to such
sale. Rule 144 also permits, under certain circumstances, the sale of shares
without any quantity limitation by a person who is not an affiliate of the
Company and who has satisfied a three year holding period. All of the 1,996,100
shares of Common Stock beneficially owned by Jack Grumet, Jason Gennusa and
Andrew Gennusa may be sold under Rule 144 as of the date of this Prospectus,
subject to the volume limitations and other restrictions set forth above. Of the
remaining shares of Common Stock which are restricted securities, 137,500 shares
of Common Stock held by former stockholders of DAB upon completion of this
Offering become eligible for sale under Rule 144 on June 29, 1997 (of which
12,500 shares are subject to being sold pursuant to a currently effective
registration statement and the balance of 125,000 are the subject of this
prospectus), 65,500 shares owned by certain Selling Stockholders (including the
shares which are the subject of this prospectus) become eligible for sale under
Rule 144 commencing January 9, 1998, and 132,500 shares issued by certain
Selling Stockholders (including the shares which are the subject of this
prospectus) become eligible for sale under Rule 144 commencing on May 23, 1998.
Issuance of Additional Stock; Antitakeover Provisions
The Company's Restated Articles of Incorporation authorize the issuance of
2,000,000 shares of Preferred Stock with such designation, rights and
preferences as may be determined from time to time by the Board of Directors.
Accordingly, the Board of Directors is empowered, without obtaining shareholder
approval, to issue Preferred Stock with dividend, liquidation, conversion,
voting or other rights that could adversely affect the voting power or other
rights of the holders of the Common Stock. In addition, the Company has
16,280,772 shares of Common Stock which are authorized and not issued, or
reserved for issuance pursuant to outstanding agreements or upon exercise of
options which have been or may be granted under the Company's 1994 Stock Option
Plan, 1996 Stock Option Plan or outstanding options or warrants. In the event of
issuance, the Preferred Stock and Common Stock could be utilized, under certain
circumstances, as a method of discouraging, delaying, or preventing a change in
the control of the Company.
Conflicts of Interest
Messrs. Jack Grumet, Jason Gennusa and Andrew Gennusa, principal
shareholders, officers and directors of the Company, and members of their
families, have been parties to several transactions in which such individuals
have loaned money to certain franchisees to finance a portion of the start-up
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costs associated with opening Manhattan Bagel Company stores. Should any such
franchisees default on the repayment of such loans, the interests of the Company
in respect of such franchisees could potentially differ from the interests of
such principal shareholders and their families. The Company currently has no
policy to reconcile conflicts which may actually arise.
Shareholder Lawsuits
On June 20, 1996, the Company announced that following the installation of
new management at its I&J West Coast subsidiary, the Company had uncovered
certain improper bookkeeping and accounting practices at the Los Angeles
subsidiary, that it would be restating its first quarter 1996 statement of
operations to account for these improper practices and that it expected the Los
Angeles subsidiary would operate at a close to break-even level for the
remainder of 1996. As a result, the Board of Directors of the Company authorized
a full investigation into the accounting practices at the Los Angeles subsidiary
and retained special counsel to assist in the investigation. Based on the
conclusion of that investigation, the Company restated its first quarter 1996
statement of operations to reduce revenues $90,000 and record additional
expenses of $290,000. The Company has since centralized the accounting for all
operations in the corporate offices in order to better control operations.
On the day following the announcement, the stock price of the Company's
Common Stock declined from a closing price of $21.25 on June 20, 1996 to a
closing price of $13.75 on June 21, 1996. As a result, certain class action
lawsuits have been filed claiming violation of the Federal securities laws,
specifically Rule 10b-5 under the Securities Exchange Act of 1934. These
lawsuits have now been consolidated into one class action lawsuit in the Federal
District Court in New Jersey, with the time for the Company to answer or move
for dismissal not yet expired. There also remains an additional action filed
under California State law and removed to the Federal Court in New Jersey
purporting to be on behalf of a class of plaintiffs, the status of which in
relation to the class action lawsuits referred to above is unsettled. The
plaintiffs in these actions seek unspecified money damages. Discovery is in the
preliminary stage. Although the Company believes it has acted properly and has
adequate defenses to such actions, no assessment of the amount or range of any
loss that might be incurred by, or the effects thereof on, the Company should it
be found to have violated any law, can be made at this time. In addition, no
estimates can reasonably be made at this time of the costs of defense of the
actions.
Other Litigation
The Company is a defendant in a lawsuit recently filed by Jeffrey Boren,
Rochelle Boren and the trustees of the JMB Irrevocable Trust, each of whom is a
selling shareholder under this Prospectus. The Plaintiffs claim that the Company
failed to comply with contractual obligations under the Agreement and Plan of
Merger dated as of May 10, 1995, as amended, by and between the Company, DAB
Acquisition Corp., DAB Industries, Inc. and Allan Boren, with respect to the
obligations of the COmpany to register shares owned by the Plaintiffs for public
sale by them. The Plaintiffs are seeking damages in unspecified amounts. The
time to respond to the complaint has not yet expired. The Company is currently
evaluating the merits of the claims, and is unable to assess the effect on the
financial condition of the Company should there be an adverse determination of
this lawsuit.
PLAN OF DISTRIBUTION
This Prospectus relates to the sale by the Selling Shareholders of the
Shares. The Shares may be sold from time to time, in whole or in part, by the
Selling Shareholders, or their pledgees, donees, transferees, or other
successors in interest, in the over-the-counter market at then prevailing market
prices or in privately negotiated transactions. Although the Company ultimately
expects that all Shares may be sold, the actual number of Shares that will be
sold cannot be determined.
In offering the Shares, the Selling Shareholders and any selling broker or
dealer may be deemed to be statutory "underwriters" within the meaning of
Section 2(11) of the Securities Act in connection with such sales.
The Company has advised the Selling Shareholders that they, because they
may be deemed to be statutory underwriters, will be subject to the Prospectus
delivery requirements under the Securities Act. The Company has also advised the
Selling Shareholders that in the event of a "distribution" of their shares, such
Selling Shareholders, any selling broker or dealer and any "affiliated
purchasers" may be subject to Rule 10b-6 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), until its participation in that
distribution is completed. A "distribution" is defined in Rule 10b-6(c)(5) as an
offering of securities "that is distinguished from ordinary trading transactions
by the magnitude of the offering and the presence of special selling efforts and
selling methods." The Company has also advised the Selling Shareholders that
Rule 10b-7
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under the Exchange Act prohibits any "stabilizing bid" or "stabilizing purchase"
for the purpose of pegging, fixing or stabilizing the price of Common Stock in
connection with this offering.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Shareholders to the public.
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SELLING SHAREHOLDERS
The following table sets forth the number of shares of Common Stock of the
Company beneficially owned by the Selling Shareholders on December 31, 1996, the
number of Shares covered by this Prospectus and the amount and percentage
ownership by the Selling Shareholders after the offering. All shares are
beneficially owned and the sole voting and investment power is held by the
person named.
Number of Shares
Beneficially Number of Shares Number of Shares
Owned on Covered by to be
Name December 31, 1996 this Prospectus Retained
- --------------------------------------------------------------------------------
Gary Goldstein 32,750 20,000 12,750
Scott Kronenberg 32,750 14,000 18,750
Jeffrey and Rochelle 45,000 35,000 - 0 - (2)
Boren (1)
Naftalie Deutsch, as 90,000 90,000 - 0 -
Trustee, the JMB
Irrevocable Trust
dated June 4, 1979
Rocco Fiorentino 55,491 55,491 - 0 -
John Gerber 34,768 34,768 - 0 -
Frank S. Guglielmo 42,241 42,241 - 0 -
Bagel Brothers Maple, Inc. 50,000 50,000 - 0 -
(1) Jeffrey and Rochelle Boren are husband and wife and own the shares as
community property.
(2) The balance of the shares owned by Jeffrey and Rochelle Boren are
registered for sale by them in a separate Registration Statement of the
Company (Reg. No. 33-97054).
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DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issued 25,000,000 shares of Common Stock, no
par value. Holders of the Common Stock are entitled to one vote for each share
held of record on all matters submitted to a meeting of the stockholders.
Holders of Common Stock are entitled to share in such dividends as the Board of
Directors, in its sole discretion, may declare from time to time from funds
legally available. In the event of liquidation, each outstanding shares entitles
its holder to participate ratably in the assets remaining after payment of
liabilities. Stockholders have no preemptive rights or other rights to subscribe
or purchase additional shares of any class of stock or of any other securities
of the Company, and there are no redemptive or sinking fund provisions with
regard to the Common Stock. All outstanding shares of Common Stock are fully
paid and non-assessable. Stockholders do not have cumulative voting rights.
Preferred Stock
The Board of Directors is authorized to issue 2,000,000 shares of Preferred
Stock in one or more series and to fix the rights, preferences, privileges, and
restrictions, including the dividend rights, conversion rights, voting rights,
rights and terms of redemption, redemption price or prices, liquidation
preferences, and the number of shares constituting any series or the
designations of such series, without any further vote or action by the
stockholders. The issuance of Preferred Stock may have the effect of delaying,
deferring, or preventing a change in control of the Company without further
actions of the stockholders. The issuance of Preferred Stock with conversion
rights may adversely affect the voting power of the holders of Common Stock,
including the loss of voting control to others.
Article 7 of the Restated Certificate of Incorporation of the Company,
provides for the elimination of the personal liability of directors and officers
to the Company or its stockholders for monetary damages for breach of any duty
owed to the Company or its stockholders, provided that a director or officer
shall not be relieved from liability for any breach of duty based upon any act
or omission (a) in breach of such person's duty of loyalty to the Company or its
stockholders, (b) not in good faith or involving a knowing violation of law, or
(c) resulting in receipt by such person of an improper personal benefit. In
addition, Article 8 of the Company's Restated Certificate of Incorporation
provides for the Company to indemnify its directors and officers against certain
liabilities incurred with their service in such capacities to the fullest extent
permitted under New Jersey law.
Stock Transfer Agent
The Transfer Agent of the Common Stock is Continental Stock Transfer &
Trust Company.
12
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LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Morrison Cohen Singer & Weinstein, LLP, 750 Lexington Avenue, New
York, New York 10022. Jack Levy, a director of the Company is a member of that
firm. Mr. Levy owns options issued under the Company's 1994 Stock Option Plan to
purchase 9,000 shares of the Company's Common Stock, of which 6,000 are
currently exercisable or exercisable within 60 days of the date of this
Prospectus, and options issued under the Company's 1996 Stock Option Plan to
purchase 10,000 shares of the Company's Common Stock, of which 3,334 are
exercisable or exercisable within 60 days of the date of this Prospectus.
EXPERTS
The consolidated financial statements of the Company for the year ended
December 31, 1995 appearing in the Company's Annual Report on Form 10-KSB filed
for the year ended December 31, 1995 incorporated herein by reference have been
audited by Ernst & Young LLP, independent auditors as set forth in their report
thereon, and the consolidated financial statements of the Company dated December
31, 1995 appearing in its Current Report on Form 8-K dated May 23, 1996, as
amended, which reflects the pooling-of-interest transaction with Specialty
Bakeries, Inc. incorporated herein by reference have been audited by Ernst &
Young LLP, independent auditors as set forth in their report thereon which is
based in part on the report of Rainer & Company, independent auditors, and are
included in reliance upon such reports given upon the authority of such firms as
experts in accounting and auditing.
The consolidated financial statements for the year ended December 31, 1994
incorporated by reference herein have been audited by Amper, Politziner &
Mattia, Singer Lewak Greenbaum & Goldstein LLP, and Rainer & Company,
independent auditors, as set forth in their respective reports thereon appearing
in the 1995 Form 10-KSB and appearing in its Current Report on Form 8-K dated
May 23, 1996, as amended, and are included in reliance upon such reports given
upon the authority of such firms as experts in accounting and auditing.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Securities and Exchange Commission
Registration Fee .......................... $ 1,157.21
Legal Fees and Expenses ..................... $ 2,500.00
Accountant's Fees ........................... $ 1,000.00
Miscellaneous ............................... $ 342.19
Total Expenses .............................. $ 5,000.00
Estimated. ============
- ------------
All expenses incurred in connection with this registration will be borne by
the registrant. The Selling Shareholders shall be responsible for their
underwriting commissions and discounts and counsel fees and expenses.
Item 15. Indemnification of Directors and Officers.
The Company's Restated Certificate of Incorporation provides that the
Company shall indemnify, to the fullest extent permitted under New Jersey law,
its directors and officers against certain liabilities incurred with their
service in such capacities. In addition, the Restated Certificate of
Incorporation provides that the personal liability of directors and officers to
the Company and its stockholders for monetary damages will be limited.
Item 16. Exhibits.
5.1 Opinion of Morrison Cohen Singer & Weinstein, LLP
23.1 Consent of Morrison Cohen Singer & Weinstein, LLP
(Included in its opinion filed as Exhibit 5.1 hereto).
23.2 Consent of Amper, Politziner & Mattia.
23.3 Consent of Singer Lewak Greenbaum & Goldstein LLP
23.4 Consent of Ernst & Young LLP
14
<PAGE>
23.5 Consent of Rainer & Company
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offering 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 Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Security Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities and Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Acto f 1934) 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 the time shall be deemed to be the initial bona fide offering thereof.
15
<PAGE>
(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 against public policy as expressed in the Act will be
governed by the final adjudication of such issue.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Eatontown, New Jersey, on February 3, 1997.
MANHATTAN BAGEL COMPANY, INC.
By: /s/ Jack Grumet
------------------------
Jack Grumet
Chairman and Chief
Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Andrew Gennusa, Jason Gennusa, Jack Grumet, and
Leonard R. Johnson, and each of them, his true and lawful attorneys-in-fact and
agents with full power of substitution and re-substitution for him and in his
name, place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents and each of them full power and authority, to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, to all intents and purposes and as fully as they might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitutes may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated.
Signature and Title Date
- ------------------- ----
ANDREW GENNUSA February 3, 1997
- ------------------------------
Andrew Gennusa
Vice President and Director
JASON GENNUSA February 3, 1997
- ------------------------------
Jason Gennusa
President and Chief Operating
Officer and Director
DAVID GOLDSMITH February 3, 1997
- ------------------------------
David Goldsmith
Vice Chairman and Director
JACK GRUMET February 3, 1997
- ------------------------------
Jack Grumet
Chairman of the Board and
Chief Executive Officer
(Principal Executive and Financial Officer)
17
<PAGE>
WALTER CRUICKSHANK February 3, 1997
- -----------------------------
Walter Cruickshank
(Principal Accounting Officer)
February 3, 1997
- -----------------------------
Julia Heckman
Director
JACK LEVY February 3, 1997
- -----------------------------
Jack Levy
Director
18
EXHIBIT 5.1
February 3, 1997
Manhattan Bagel Company, Inc.
246 Industrial Way West
Eatontown, NJ 07724
Dear Sirs:
We have acted as counsel for Manhattan Bagel Company, Inc., a New Jersey
corporation (the "Corporation"), in connection with the 341,500 shares (the
"Shares") of common stock, no par value per share, being registered for sale by
certain selling stockholders.
In so acting, we have participated in the preparation of the Registration
Statement. We have also made such investigation and have examined and relied
upon originals or copies, certified or otherwise identified to our satisfaction,
of such records, documents, certificates and other instruments and such factual
information otherwise supplied to us by the Company as in our judgment are
necessary or appropriate to enable us to render the opinion expressed below.
We are of the opinion that the Shares are legally issued, fully paid and
nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to us under "Legal Matters" therein.
Very truly yours,
/s/ Morrison Cohen Singer & Weinstein, LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Manhattan Bagel Company, Inc.
and Subsidiaries
We hereby consent to the references to our firm under the caption "Experts" in
the Registration Statement on Form S-3, No. 333-15587 of Manhattan Bagel
Company, Inc. for the registration of 341,500 shares of its Common Stock and to
the incorporation by reference therein of our reports (a) dated September 8,
1995, with respect to the 1994 consolidated financial statements of Manhattan
Bagel Company, Inc. incorporated by reference in its Annual Report (Form 10-KSB)
for the year ended December 31, 1995, and (b) dated September 8, 1995, except
for Note 1 as to which the date is October 31, 1996, with respect to the
financial statements of Manhattan Bagel Company, Inc. included in its Current
Report on Form 8-K dated May 23, 1996, as amended, both filed with the
Securities and Exchange Commission.
/s/ AMPER, POLITZINER & MATTIA
AMPER, POLITZINER & MATTIA
February 3, 1997
Edison, New Jersey
EXHIBIT 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated June 16, 1995 accompanying the financial
statements of DAB Industries, Inc. included in the current Report of Manhattan
Bagel Company, Inc. on Form 8-K dated May 23, 1996, as amended. We consent to
the incorporation by reference in the Registration Statement (Form S-3 No.
333-15587) of the aforementioned report and to the use of our name as it appears
under the caption "Experts."
/s/ SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
February 3, 1997
EXHIBIT 23.4
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
Pre-effective Amendment No. 1 to the Registration Statement (Form S-3 No.
333-15587) and related prospectus of Manhattan Bagel Company, Inc. for the
registration of 341,500 shares of its common stock and to the incorporation by
reference therein of our reports (a) dated February 14, 1996 with respect to the
consolidated financial statements for the year ended December 31, 1995 of
Manhattan Bagel Company, Inc. included in its Annual Report (Form 10-KSB) and
(b) dated October 30, 1996 with respect to the consolidated financial statements
for the year ended December 31, 1995 of Manhattan Bagel Company Inc. which
reflects the pooling- of-interest transaction with Specialty Bakeries, Inc.
included in its Current Report on Form 8-K dated May 23, 1996, as amended, filed
with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Princeton, New Jersey
February 3, 1997
EXHIBIT 23.5
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Manhattan Bagel Company, Inc.
246 Industrial Way West
Eatontown, NJ 07724
Gentlemen:
We consent to the reference to our firm under the caption "Experts" in
Pre-effective Amendment No. 1 to the Registration Statement (Form S-3, No.
333-15587) and related prospectus of Manhattan Bagel Company, Inc. for the
registration of 341,500 shares of its common stock. We consent to the
incorporation by reference in the Registration Statement of our report dated
February 2, 1996 with respect to the financial statements for the years ended
December 31, 1995 and 1994 of Specialty Bakeries, Inc., included in the Current
Report on Form 8-K dated May 23, 1996, as amended, of Manhattan Bagel Company,
Inc., filed with the Securities and Exchange Commission.
/s/ Rainer & Company
Rainer & Company
Newton Square, Pennsylvania
February 3, 1997
