As filed with the Securities and Exchange Commission on March 4, 1998
Registration No. 33-81026
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM SB-2
ON
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE SOLOMON-PAGE GROUP LTD.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
51-0353012
(I.R.S. Employer
Identification Number)
1140 Avenue of the Americas, 9th Floor
New York, New York 10036
(212) 764-9200
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
Lloyd Solomon
Vice Chairman of the Board and Chief Executive Officer
The Solomon-Page Group Ltd.
1140 Avenue of the Americas
New York, New York 10036
(212) 764-9200
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
------------------------------------
Copy to:
David J. Adler, Esq.
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
(212) 755-1467 (Facsimile)
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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, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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. / /
<PAGE>
PROSPECTUS
2,050,000 Shares of Common Stock
THE SOLOMON-PAGE GROUP LTD.
The Solomon-Page Group Ltd. (the "Company"), a Delaware corporation, is
offering (i) 1,675,000 shares of common stock, $.001 par value (the "Common
Stock"), which are issuable upon the exercise of 1,675,000 redeemable Class A
common stock purchase warrants of the Company (the "Class A Warrants"); (ii)
200,000 shares of Common Stock issuable to Stratton Oakmont, Inc., the
underwriter in the Company's initial public offering in October 1994 (the
"Underwriter") upon exercise of a purchase option (the "Purchase Option")
received by the Underwriter as partial consideration for its services in such
capacity; and (iii) an aggregate of 175,000 shares of Common Stock issuable to
the bridge lenders named below upon exercise of certain purchase options (the
"Bridge Options") issued in 1994. Of the 1,675,000 shares of Common Stock
underlying the Class A Warrants, 200,000 shares are issuable upon the exercise
of the Purchase Option and 175,000 shares are issuable upon exercise of the
Bridge Options, issued to four bridge lenders, Harvey Bibicoff, Steven Madden,
Calvin Caldwell and Lester Garrett. The Purchase Option is exercisable until
October 20, 1999 at a price of $6.60 per unit, each such unit consisting of a
share of Common Stock and a Class A Warrant. The Company has been advised that
the Underwriter is currently in liquidation and is being managed by a Securities
Investor Protection Corporation ("SIPC") Trustee. The SIPC Trustee has advised
the Company that it is the holder of the Purchase Option and is challenging the
validly and authenticity of a possible assignment of the Purchase Option to a
former principal of the Underwriter.
If the Class A Warrants (including those issuable upon exercise of the
Purchase Option and Bridge Options) are exercised in full at $4.50 per share of
Common Stock the Company would receive gross proceeds of approximately
$7,537,500. No discount or commission is payable in connection with any such
exercise. The Company will not receive any of the proceeds from any subsequent
resales of shares of Common Stock acquired upon any such exercise.
Each Class A Warrant entitles the holder to purchase one share of
Common Stock, for a price of $4.50 per share, until October 20, 1999. The Class
A Warrants are redeemable by the Company for $.05 per Warrant, upon thirty (30)
days' prior written notice, if the average closing price or bid price of the
Common Stock, as reported by the principal exchange on which the Common Stock is
quoted, equals or exceeds $9.00 per share for any twenty (20) trading days
within a period of thirty (30) consecutive trading days ending ten (10) days
prior to the date of the notice of redemption. Upon thirty (30) days' written
notice to all holders of the Class A Warrants, the Company shall have the right
to reduce the exercise price and/or extend the term of the Class A Warrants.
The Common Stock and the Class A Warrants are quoted on the Nasdaq
SmallCap Market under the symbols, SOLP and SOLPW, respectively. On February 27,
1998, the closing prices of the Common Stock and the Class A Warrants were 3
3/16 and 11/16, respectively.
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE
OF RISK AND SHOULD ONLY BE MADE BY INVESTORS WHO CAN AFFORD THE RISK OF LOSS OF
THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS
PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS _________, 1998
<PAGE>
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK. PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT DECISION, SHOULD
CAREFULLY READ THIS PROSPECTUS AND CONSIDER, ALONG WITH OTHER MATTERS
REFERRED TO HEREIN, THE FOLLOWING RISK FACTORS:
INTENSE COMPETITION IN THE COMPANY'S BUSINESSES. Competition in the recruitment
and placement, personnel consulting and temporary personnel industries is
intense. The Company is in competition with numerous firms, many of which have
far greater financial resources and more extensive industry relationships than
the Company. In addition, many of such organizations have longer operating
histories, which may afford these firms significant advantages in obtaining
future clients, arranging financing and attracting skilled personnel. The
Company competes on the basis of client service and responsiveness. There can be
no assurance that this strategy can continue to be successfully implemented.
SIGNIFICANT DEPENDENCE ON MAJOR CUSTOMER; POTENTIAL ADVERSE EFFECT OF LOSS OF
MAJOR CUSTOMER OR CUSTOMERS. Fifteen percent of the Company's revenues for
Fiscal 1996 came from, and a significant portion of the Company's resources have
been devoted to, its largest customer, AT&T Corp. The loss of this customer or a
substantial reduction in its hiring activities through the Company would have a
material adverse effect on the Company's financial performance. In addition, the
termination of the employees who have a strong relationship with the Company by
this customer could also adversely affect the Company's financial performance.
Further, there is no assurance that the Company will not continue to be
dependent upon one or a small number of major customers for a significant
portion of its revenues and earnings.
DEPENDENCE ON KEY PERSONNEL. The Company's operations are dependent upon the
continued efforts of senior management. While the Company has entered into
employment agreements with Herbert Solomon, Lloyd Solomon and Scott Page, the
Company's principal executive officers, the Company does not have
non-competition agreements or other restrictive covenants in any employment
agreements with any of its other officers or key employees. Should any of the
members of the Company's senior management be unable or unwilling to continue in
their present roles or should such persons determine to enter into competition
with the Company, the Company's prospects could be adversely affected.
DEPENDENCE ON RECRUITMENT AND PLACEMENT COUNSELORS. The Company's revenues and
future success also are materially dependent on the skills of the Company's
recruitment and placement counselors in attracting clients, matching their needs
to appropriate candidates in each recruiting opportunity and in establishing
successful long-term relationships with such clients. The failure to attract and
retain qualified recruitment and placement counselors, or the failure of
recruitment and placement counselors to effectively perform these tasks, may
have a material adverse effect on the Company's revenues, profitability and
growth. The Company generally does not have non-competition agreements or other
restrictive covenants with its recruitment and placement counselors.
The Company often attracts qualified recruitment and placement counselors from
its competitors. In several instances, these competitors have instituted or
threatened to institute legal proceedings seeking to enforce non-competition
agreements with, or to prevent the disclosure of trade secrets by, these
recruitment and placement counselors. To date, these litigations, singly or in
the aggregate, have not had a material adverse effect on the Company's financial
position, results of operations or liquidity. While the Company believes that
any similar future litigations will also not have any such effect, no assurance
can be given in this regard.
CONTROL OF THE COMPANY BY MANAGEMENT. Officers and directors of the Company,
specifically, Messrs. Herbert and Lloyd Solomon, Scott Page and Eric M. Davis
(the "Management Group"), own an aggregate of approximately 39.2% of the issued
and outstanding shares of Common Stock. Stockholders of the Company do not have
cumulative voting rights and, accordingly, each stockholder is entitled to cast
one vote per share held on all matters submitted to a vote of stockholders,
including the election of directors. As a result, the Management Group has
effective
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<PAGE>
control over the Company. Moreover, such effective control could serve to
perpetuate current management and could make the Company less attractive to
potential acquirors.
RELATED PARTY TRANSACTIONS AND POSSIBLE CONFLICTS OF INTEREST. The Company has
been controlled, and may in the future be controlled, by the Management Group
and has from time to time engaged in transactions with members of the Management
Group. The Company previously borrowed funds from Herbert Solomon to fund its
operations. While the Company has agreed that no future transactions will be
entered into between the Company and its officers, directors or more than 5%
shareholders unless such transactions are on terms no less favorable to the
Company than could be obtained from unaffiliated third parties, any current or
future transactions between the Company and such affiliates may involve possible
conflicts of interest.
POSSIBLE ADVERSE EFFECT OF EXISTENCE OF CLASS A WARRANTS AND PURCHASE OPTION ON
THE MARKET FOR THE COMMON STOCK. The Class A Warrants and the Purchase Option
are exercisable until October 20, 1999 at an exercise price of $4.50 per Class A
Warrant and $6.60 per unit, respectively. For the life of the Class A Warrants
and the Purchase Option, the holders thereof will be given the opportunity to
profit from a rise in the market price of the Common Stock and the units with a
resulting dilution in the interest of the Company's other stockholders. The
terms on which the Company could obtain additional capital during the life of
the Warrants and the Purchase Option may be adversely affected because the
holders of the Class A Warrants and the Purchase Options might be expected to
exercise them if the Company were able to obtain any needed additional capital
in a new offering of securities at a price greater than the exercise price of
the Class A Warrants or the Purchase Option.
POSSIBLE ADVERSE EFFECT OF RAPID GROWTH AND BUSINESS EXPANSION. The Company is
expanding its current retained executive search, contingency recruitment and
professional temporary staffing business divisions through the retention of its
existing staff of experienced personnel counselors as well as the addition of
new counselors with placement experience, who will complement the Company's
current scope of business. Also, the Company aggressively pursues opportunities
to attract highly skilled staffing industry professionals in new areas of
retained executive search, contingency recruitment and professional flexible
staffing on an ongoing proactive basis. There can be no assurance that the
Company will successively achieve its planned growth. Accomplishing the
Company's planned growth will depend upon a number of factors, including the
Company's ability to secure additional clients and hire and train additional
recruitment and placement professionals. In addition, the Company may incur
start-up, acquisition or expansion costs that represent a higher percentage of
total revenues than larger or more established companies, which may adversely
affect the Company's results of operations. There can be no assurance that the
Company will be able to obtain additional clients and recruitment and placement
counselors in the future or that the Company's strategy of increasing revenues
and net income through such additions will be successful.
LIMITED DURATION OF CREDIT FACILITY. In February 1997, the Company entered into
a one year $4,000,000 demand line of credit facility agreement with The Dime
Savings Bank which is collateralized by all the Company's assets. The agreement
provides for borrowings at the Dime Reference Rate + 1% (as of December 31,
1997, the Dime Reference Rate + 1% was 9.5%) in amounts not exceeding 80% of
eligible accounts receivable (as defined therein) and expires on February 28,
1998, on which date the outstanding principal amount is required to be repaid.
At December 31, 1997, the Company had borrowed $1,400,000 under this facility.
The Company is currently in negotiations with The Dime Savings Bank to extend
this facility on substantially the same terms as are currently in effect for an
additional one year period. If the Company is unable to extend such facility,
the Company believes that an alternative facility can be obtained on
substantially similar terms, although there can be no assurance in this regard.
EFFECT OF ADVERSE ECONOMIC CONDITIONS. The Company's revenues are directly
dependent on the hiring activities of its clients. Under generally adverse
economic conditions or if economic conditions in its clients' industries
deteriorate, these clients' hiring needs may decline and this could have an
adverse effect on the Company's financial performance by reducing the number of
positions the Company has an opportunity to fill, forcing the Company to accept
lower commissions on its placements, or both.
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POSSIBLE ISSUANCE OF SUBSTANTIAL AMOUNTS OF ADDITIONAL SHARES WITHOUT
STOCKHOLDER APPROVAL. There are an aggregate of 9,220,715 shares of Common Stock
authorized but unissued and not reserved for specific purposes and an additional
5,650,000 shares of Common Stock unissued but reserved for issuance pursuant to
(i) the Company's 1993 Long Term Incentive Plan, 1995 Directors' Stock Option
Plan and 1996 Stock Option Plan, (ii) exercise of the Class A Warrants, (iii)
the exercise of the Company's redeemable Class B common stock purchase warrants
and (iv) the Purchase Option. All of such shares may be issued without any
action or approval by holders of Common Stock. Although there are no other
present plans, agreements, commitments or undertakings with respect to the
issuance of additional shares of Common Stock, or securities convertible into
any such shares by the Company, the 14,870,715 shares referred to above and any
other shares issued would further dilute the percentage ownership of the Company
by its public stockholders.
POSSIBLE ISSUANCE OF PREFERRED STOCK AND ITS POTENTIAL ADVERSE EFFECT ON HOLDERS
OF COMMON STOCK. The Company is authorized to issue up to 2,000,000 shares of
Preferred Stock, upon terms to be fixed by the Company's Board of Directors with
preferential voting, dividend or other rights. The Company presently has no
issued and outstanding shares of Preferred Stock. While the Company has no
present plans to issue any shares of Preferred Stock, the issuance of Preferred
Stock, depending upon the rights, preferences and designations thereof, could
have an adverse effect on the holders of Common Stock by (i) delaying, deterring
or preventing a change in control of the Company, (ii) restricting dividends on
the Common Stock, (iii) diluting the voting power of the Company Stock and/or
(iv) impairing the liquidation rights of the holders of Common Stock.
POSSIBLE ADVERSE EFFECT OF ANTI-TAKEOVER PROVISIONS. The Company's Certificate
of Incorporation and By-Laws include provisions that may delay, discourage or
prevent a change of control of the Company. These provisions include
classification of the Board of Directors into three classes and Board of
Directors authorization to issue preferred stock in one or more series with such
rights, obligations and preferences as the Board of Directors may provide. The
employment agreements with the Company's three executive officers require
substantial payments to such officers in the event of a change in control (as
defined) of the Company. Section 203 of the Delaware General Corporation Law,
which prohibits business combination transactions with certain stockholders for
a period of three years after the person becomes such a stockholder without
prescribed approval may also delay, discourage or prevent a change of control of
the Company.
POSSIBLE ADVERSE MARKET EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE. Currently,
2,435,715 shares of the Company's Common Stock are "restricted securities" as
that term is defined under Rule 144 promulgated under the Securities Act of
1933, as amended (the "Act"), and may only be sold pursuant to a registered
offering or in accordance with applicable exemptions from the registration
requirements of the Act. Rule 144 provides for the sale of limited quantities of
restricted securities without registration under the Act. In general, under Rule
144, a person (or persons whose shares are aggregated) who has satisfied a
one-year holding period may, under certain circumstances, sell within any
three-month period, a number of shares that does not exceed the greater of 1% of
the then outstanding shares of common stock or the average weekly trading volume
during the four calendar weeks prior to such sale. Rule 144(k) 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
two-year holding period. The Company is unable to predict the effect that future
sales under Rule 144 may have on the then prevailing market price of Common
Stock. It can be expected, however, that the sale of any substantial number of
shares of Common Stock will have a depressive effect on the market price of the
Common Stock. As of the date of this Prospectus, all restricted securities
issued by the Company are eligible for resale under Rule 144. Any such sale,
particularly if large in volume, could have a material adverse effect on the
market for and price of shares of Common stock.
NO DIVIDENDS. The Company has not declared or paid and does not anticipate
declaring or paying in the foreseeable future, any cash dividends on its Common
Stock. The Company's ability to pay dividends is dependent upon, among other
things, future earnings, the operating and financial condition of the Company,
its capital requirements, general business conditions and other pertinent
factors, and is subject to the discretion of the Board of Directors.
Accordingly, there can be no assurance that any dividends will ever be paid on
the Common Stock.
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SUBJECTIVE FACTORS IN DETERMINATION OF OFFERING AND EXERCISE PRICE. The exercise
price of the Class A Warrants as well as the offering price of the Units of
which all but 175,000 of the Class A Warrants were a part, were determined in
negotiations between the Company and the Underwriter. At the time of such
negotiations, there was no market for these securities. Accordingly, among the
factors considered in determining the price of the Units and the exercise price
of the Class A Warrants were the history of and prospects for the industry in
which the Company competed in 1994, estimates of the business potential of the
Company, the then current state of the development of the Company's business, an
assessment of the Company's management, the general condition of the securities
markets at the time of the Company's initial public offering, and the then
current demand for similar securities of comparable companies. There was,
however, no relationship whatsoever at that time between the offering price of
the Units and the exercise price of the Class A Warrants on the one hand and the
Company's net worth, book value, or any other objective criteria of value on the
other.
DEPENDENCE OF WARRANT HOLDERS ON MAINTENANCE OF CURRENT REGISTRATION STATEMENT;
POSSIBLE LOSS OF VALUE OF WARRANTS. In order for holders of the Class A Warrants
to exercise such warrants there must be a current registration statement (or an
exemption from the registration requirements of the Act) in effect with the
Commission and with the various state securities authorities in the states where
warrant holders reside. The Company has undertaken to use its best efforts to
keep (and intends to keep) the registration statement effective with respect to
the warrants for as long as the warrants remain exercisable. However,
maintenance of an effective registration statement will subject the Company to
substantial continuing expenses for legal and accounting fees, and there can be
no assurance that the Company will be able to maintain a current registration
statement throughout the period during which the warrants remain exercisable.
The warrants may become unexercisable and deprived of value by the Company's
inability to maintain an effective registration statement (or an exemption
therefrom) with respect to the underlying shares or by the non-qualification of
the underlying shares in the jurisdiction of such holder's residence.
POTENTIAL ADVERSE EFFECT OF REDEMPTION OF CLASS A WARRANTS. The Class A Warrants
may be redeemed by the Company at a price of $.05 per warrant, at any time on
thirty days' prior written notice provided that the closing or bid price of the
Common Stock for a period of any twenty (20) consecutive trading days in a
thirty (30) consecutive trading day period ending ten (10) days prior to the
notice of redemption equals or exceeds $9.00. Redemption of the Class A Warrants
could force the Class A Warrant holders to exercise the Class A Warrants (and
the Underwriter to exercise the Purchase Option) earlier than they would
otherwise have exercised them or at a time when it may be disadvantageous for
the holders to do so or to sell the Class A Warrants at their then current
market price when the holders might otherwise wish to hold the warrants for
possible appreciation. Alternatively, the holders may accept the redemption
price, when it is likely to be substantially less than the market value of the
Class A Warrants at the time of redemption. Any holders who do not exercise
Class A Warrants prior to their expiration or redemption, as the case may be,
will forfeit the right to purchase the shares of Common Stock underlying the
Class A Warrants.
"PENNY STOCK" REGULATIONS MAY IMPOSE CERTAIN RESTRICTIONS ON MARKETABILITY OF
SECURITIES. The Commission has adopted regulations that generally define "penny
stock" to be any equity security that has a market price (as defined) of less
than $5.00 per share or an exercise price of less than $5.00 per share, subject
to certain exceptions. As the securities offered hereby are currently authorized
for quotation on the Nasdaq SmallCap Market, they are exempt from the "penny
stock" regulations. If such securities are for any reason no longer authorized
for quotation on the Nasdaq SmallCap Market or on another securities exchange or
automated quotation system referred to in the penny stock regulations, the
Company's securities may become subject to rules that impose additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors (generally those with
assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000
together with their spouses). For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchase of
such securities and must have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior to the
transaction, of a risk disclosure document mandated by the Commission relating
to the penny stock market. The broker-dealer also must disclose the commission
payable to both the broker-
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dealer and the registered representative, current quotations for the securities
and, if the broker-dealer is the sole market-maker, the broker-dealer must
disclose this fact and the broker-dealer's presumed control over the market.
Finally, monthly statements must be sent disclosing recent price information for
the penny stock held in the account and information on the limited market in
penny stocks. Consequently, the "penny stock" rules may restrict the ability of
broker-dealers to sell the Company's securities and may affect the ability of
purchasers of Common Stock to resell the Common Stock in the secondary market.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS. Certain forward-looking
statements, including statements regarding the Company's expected financial
position, business and financing plans are contained in or are incorporated by
reference in this Prospectus. These forward-looking statements reflect the
Company's views with respect to future events and financial performance. The
words, "believe," "expect," "plans" and "anticipate" and similar expressions
identify forward-looking statements. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from such
expectations (the "Cautionary Statements") are disclosed in this Prospectus or
the documents incorporated therein by reference, including, without limitation,
under "Risk Factors." All subsequent written and oral forward-looking statements
attributable to the Company, its subsidiaries or persons acting on the Company's
behalf are expressly qualified in their entirety by the Cautionary Statements.
Readers are cautioned not to place undue reliance on these forward- looking
statements, which speak only as of their dates. The Company undertakes no
obligations to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
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THE COMPANY
The Company is a specialty niche provider of staffing services
organized into two primary operating divisions: executive search/full time
contingency recruitment and temporary staffing and consulting. The executive
search/full time contingency recruitment division comprises eight lines of
business, including four industry (capital markets, publishing and new media,
healthcare and fashion services), and four functional (information technology,
accounting, human resources and legal). The executive search and full time
contingency recruitment division generated approximately 50% of the Company's
revenue for the fiscal year ended September 30, 1997. The flexible staffing and
consulting division, which provides services to all companies seeking personnel
in the information technology, accounting and human resources areas, generated
the remainder of the Company's revenue for the fiscal year ended September 30,
1997.
In the executive search and full time contingency recruitment division
of the Company's business, fees usually range between 20% and 33% of the
guaranteed first year's compensation payable to a placed employee. In the
executive search sector, the Company generally obtains a non-refundable retainer
of approximately one-third of the estimated fee at the inception of an
engagement, with the balance of the fee payable on terms negotiated with the
client. A substantial portion of the deferred payment is usually contingent on
the successful completion of the placement and, in certain circumstances, no
retainer is obtained and the entire fee is contingent on a successful placement.
In the full time contingency recruitment sector, the entire fee is usually
contingent upon successful completion of the placement, although under certain
circumstances a non-refundable retainer payment of a portion of the fee may be
received at the outset. In the temporary staffing and consulting division, the
Company is compensated by its clients for services provided by temporary
employees on a time and materials basis. The Company's primary costs, in
addition to its fixed costs such as rental expense, salaries of administrative
personnel and advertising, are the variable costs attributable to payroll
relating to temporary staffing requirements, commissions of sales and recruiting
personnel and employee benefits.
The Company's executive offices are located at 1140 Avenue of the
Americas, 9th Floor, New York, New York 10036. The telephone number of the
Company at that address is (212) 764-9200.
MATERIAL CHANGES
On October 31, 1997, the Company announced that its Board of Directors
had authorized the repurchase of up to 1,000,000 of the Class A Warrants.
Thereafter, purchases were made from time to time on the Nasdaq Small Cap market
or otherwise at prevailing market prices and in privately negotiated
transactions. On February 10, 1998, the Company announced that it had completed
the repurchase of an aggregate of 1,000,000 Class A Warrants for an aggregate
purchase price of $1,053,997.
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USE OF PROCEEDS
If the Class A Warrants (including those issuable upon exercise of the
Purchase Option and Bridge Options) are exercised in full at $4.50 per share of
Common Stock, the Company would receive gross proceeds of approximately
$7,537,500. No discount or commission is payable in connection with any such
exercise. However, there can be no assurance that all or any portion of the
Class A Warrants will be exercised. The funds, if any, received upon exercise of
the Class A Warrants will be retained and used for working capital and other
general corporate purposes.
The Company will not receive any of the proceeds from any subsequent
resales of shares of Common Stock acquired upon the exercise of Class A
Warrants.
TRANSFER AGENT, WARRANT AGENT AND REGISTRAR
The transfer agent, warrant agent and registrar for the Common Stock
and Class A Warrants is American Stock Transfer & Trust Company, New York, New
York.
PLAN OF DISTRIBUTION
This offering is self-underwritten; the Company has not employed an
underwriter for the issuance of the Common Stock upon the exercise of the Class
A Warrants and will bear all expenses of the offering. The Company previously
agreed to pay to the Underwriter a commission equal to 4% of the exercise price
of the Class A Warrants, which amount was paid concurrently with the initial
public offering in 1994.
The Class A Warrants may be exercised, at the discretion of the holder,
by the delivery to American Stock Transfer & Trust Company (the "Warrant Agent")
at 40 Wall Street, New York, New York 10005 of the Warrant certificate (the
"Warrant Certificate") accompanied by an election of exercise and payment of the
warrant exercise price for each share of Common Stock purchased in accordance
with the terms of such warrant. Payment must be made in the form of cash or a
cashier's or certified check payable to the order of the Company. Delivery of
the certificates representing the Common Stock issuable therefor will be made
upon receipt of a certificate representing the underlying stock purchase rights,
duly executed for transfer together with payment for the exercise price thereof.
If fewer than all Class A Warrants are exercised, a new Warrant Certificate
evidencing the Class A Warrants remaining unexercised will be issued to the
warrantholder.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby
previously has been passed upon for the Company by the law firm of Blau, Kramer,
Wachtlar & Lieberman, P.C., Jericho, New York.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
As permitted by the Delaware General Corporation Law ("DGCL"), the
Company's Certificate of Incorporation, as amended, limits the personal
liability of a director or officer to the Company for monetary damages for
breach of fiduciary duty of care as a director. Liability is not eliminated for
(i) any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) unlawful payment of
dividends or stock purchases or redemptions pursuant to Section 174 of the DGCL,
or (iv) any transaction from which the director derived an improper personal
benefit.
The Company's by-laws provide that the Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the
-8-
<PAGE>
fact that he is or was a director, officer, employee or an agent of the Company
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with the defense or settlement of such action, suit or proceeding, to
the fullest extent and in the manner set forth in and permitted by the General
Corporation Law of the State of Delaware, as from time to time in effect, and
any other applicable law, as from time to time in effect. Such right of
indemnification is not be deemed exclusive of any other rights to which such
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of each such person.
The Company has entered into indemnity agreements with its directors
and executive officers. The indemnity agreements provide that the Company shall
indemnify such directors and executive officers from and against any and all
liabilities, costs and expenses, amounts of judgments, fines, penalties and
amounts paid in settlement of or incurred in defense of any settlement in
connection with any threatened, pending or completed claim, action, suit or
proceeding in which such persons are a party (other than a proceeding or action
by or in the right of the Company to procure a judgment in its favor), or which
may be asserted against them by reason of their being or having been an officer
or director of the Company (the "Losses"), unless it is determined that such
directors and executive officers did not act in good faith and for a purpose
which they reasonably believed to be in, or in the case of service to an entity
related to the Company, not opposed to, the best interests of the Company and,
in the case of a criminal proceeding or action, that they had reasonable cause
to believe that their conduct was unlawful. The indemnity agreements also
provide that the Company shall indemnify such directors and executive officers
from and against any and all Losses that they may incur if they are a party to
or threatened to be made a party to any proceeding or action by or in the right
of the Company to procure a judgment in its favor, unless it is determined that
they did not act in good faith and for a purpose that they reasonably believed
to be in, or, in the case of service to an entity related to the Company, not
opposed to, the best interests of the Company, except that no indemnification
for Losses shall be made in respect of (i) any claim, issue or matter as to
which they shall have been adjudged to be liable to the Company or (ii) any
threatened or pending action to which they are a party or are threatened to be
made a party that is settled or otherwise disposed of, unless and only to the
extent that any court in which such action or proceeding was brought determines
upon application that, in view of all the circumstances of the matter, they are
fairly and reasonably entitled to indemnity for such expenses as such court
shall deem proper. Such indemnification is in addition to any other rights to
which such officers or directors may be entitled under any law, charter
provision, by-law, agreement, vote of shareholders or otherwise.
The Company maintains a directors liability insurance policy providing
for $1,000,000 of coverage.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company 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.
EXPERTS
The consolidated financial statements of the Company as of September
30, 1997, and for the years ended September 30, 1995 and 1996, included in the
Company's Form 10-KSB for the fiscal year ended September 30, 1997, as amended,
which is incorporated herein by reference, have been audited by Moore Stephens,
P.C., independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in accounting and auditing.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates in this Prospectus by reference the
following documents which have been filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"): (i) the Company's Annual Report on Form 10-KSB
and Form 10-KSB/A for the fiscal year ended September 30, 1997 ("Fiscal 1997");
(ii) the Company's Quarterly Report on Form 10-QSB for the quarter ended
December 31, 1997 and (iii) the description of the Company's Common Stock
contained in the Company's Registration Statement on Form 8-A filed with the
Commission on October 18, 1994.
The Shares of Common Stock which are being offered in this Prospectus
have been registered on the Company's Registration Statement on Form SB-2, file
number 033-81026 filed with the Commission on July 1, 1994, as amended.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of this offering 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.
Any person receiving a copy of this Prospectus may obtain without
charge, upon written or oral request, a copy of any of the documents
incorporated by reference herein, except for the exhibits to such documents
(unless such exhibits are specifically incorporated by reference in such
documents). Such requests should be directed to The Solomon-Page Group Ltd.,
1140 Avenue of the Americas, New York, New York 10036, Attention: Eric Davis,
Secretary, telephone number (212) 764-9200.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Exchange Act and, in accordance therewith, files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, DC 20549, as well as at the following regional offices: 7
World Trade Center, Suite 1300, New York, New York 10048, Suite 788 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 upon payment of the fees
prescribed by the Commission. Also, copies of such material can be obtained from
the Public Reference Section of the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, DC 20549, upon payment of the fees
prescribed by the Commission. Such material may also be accessed electronically
by means of the Commission's home page on the Internet at http://www.sec.gov. In
addition, reports, proxy statements and other information concerning the Company
can be inspected and copied at the offices of the Nasdaq Stock Market, 1735 K
Street, N.W., Washington, DC 20006.
The Company has filed with the Commission a Registration Statement on
Form SB-2, as amended by Post- Effective Amendment on Form S-3 (together with
all further amendments and all exhibits thereto, the "Registration Statement")
under the Securities Act with respect to the securities offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is made to the
Registration Statement, copies of which may be obtained from the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, DC 20549, upon payment of the fees prescribed by the
Commission. This document may also be accessed electronically by means of the
Commission's home page on the Internet at http://www.sec.gov.
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<PAGE>
No dealer, salesman or any other person is authorized to give any information or
to make any representations in connection with this offering not contained in
this Prospectus and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company or any other person.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any security other than the Securities offered by this Prospectus
or an offer by any person in any jurisdiction where such an offer or
solicitation is not authorized or is unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that information herein is correct as of any time subsequent to
its date.
TABLE OF CONTENTS
PAGE
----
The Company............................................7
Material Changes.......................................7
Risk Factors.......................................... 2
Use of Proceeds....................................... 8
Transfer Agent, Warrant Agent and Registrar........... 8
Plan of Distribution.................................. 8
Legal Matters......................................... 8
Indemnification for Securities Act Liabilities........ 8
Experts............................................... 9
Incorporation of Certain Documents
by Reference........................................10
Available Information.................................10
THE SOLOMON-PAGE GROUP LTD.
2,050,000 SHARES OF COMMON STOCK
PROSPECTUS
, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses (other than
underwriting discounts and commissions) which will be paid by the Registrant in
connection with the issuance and distribution of the securities being
registered. With the exception of the SEC registration fee and the NASD filing
fee, all amounts shown are estimates.
SEC Registration Fee................................. $9,371.00(1)
NASD Filing Fee...................................... 2,789.75(1)
Nasdaq Fee........................................... 11,000.00(1)
Blue Sky Fees and Expenses........................... 40,000.00(1)
Printing and Engraving............................... 70,000.00(1)
Transfer Agent Fees.................................. 10,000.00(1)
Accounting Fees and Expenses......................... 35,000.00(2)
Legal Fees and Expenses.............................. 120,000.00(3)
Underwriter's Non-Accountable Expense Allowance...... 240,000.00(1)
Miscellaneous expenses............................... 1,839.25(1)
----------
Total................................................ $540,000.00(4)
===========
- -----------------------
(1) Estimated expenses as previously set forth in the earlier effective
registration statement for the same offering.
(2) $25,000 of which comprised estimated expenses set forth in the earlier
effective registration statement.
(3) $100,000 of which comprised estimated expenses set forth in the earlier
effective registration statement.
(4) $510,000 of which comprised estimated expenses set forth in the earlier
effective registration statement.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Delaware General Corporation Law ("DGCL"), the
Company's Certificate of Incorporation, as amended, limits the personal
liability of a director or officer to the Company for monetary damages for
breach of fiduciary duty of care as a director. Liability is not eliminated for
(i) any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) unlawful payment of
dividends or stock purchases or redemptions pursuant to Section 174 of the DGCL,
or (iv) any transaction from which the director derived an improper personal
benefit.
The Company's by-laws provide that the Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the
fact that he is or was a director, officer, employee or an agent of the Company
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with the defense or settlement of such action, suit or proceeding, to
the fullest extent and in the manner set forth in and permitted by the General
Corporation Law of the State of Delaware, as from time to time in effect, and
any other applicable law, as from time to time in effect. Such right of
indemnification is not be deemed exclusive of any other rights to which such
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of each such person.
The Company has entered into indemnity agreements with its directors
and executive officers. The indemnity agreements provide that the Company shall
indemnify such directors and executive officers from and against any and all
liabilities, costs and expenses, amounts of judgments, fines, penalties and
amounts paid in settlement of or incurred in defense of any settlement in
connection with any threatened, pending or completed claim,
II-1
<PAGE>
action, suit or proceeding in which such persons are a party (other than a
proceeding or action by or in the right of the Company to procure a judgment in
its favor), or which may be asserted against them by reason of their being or
having been an officer or director of the Company (the "Losses"), unless it is
determined that such directors and executive officers did not act in good faith
and for a purpose which they reasonably believed to be in, or in the case of
service to an entity related to the Company, not opposed to, the best interests
of the Company and, in the case of a criminal proceeding or action, that they
had reasonable cause to believe that their conduct was unlawful. The indemnity
agreements also provide that the Company shall indemnify such directors and
executive officers from and against any and all Losses that they may incur if
they are a party to or threatened to be made a party to any proceeding or action
by or in the right of the Company to procure a judgment in its favor, unless it
is determined that they did not act in good faith and for a purpose that they
reasonably believed to be in, or, in the case of service to an entity related to
the Company, not opposed to, the best interests of the Company, except that no
indemnification for Losses shall be made in respect of (i) any claim, issue or
matter as to which they shall have been adjudged to be liable to the Company or
(ii) any threatened or pending action to which they are a party or are
threatened to be made a party that is settled or otherwise disposed of, unless
and only to the extent that any court in which such action or proceeding was
brought determines upon application that, in view of all the circumstances of
the matter, they are fairly and reasonably entitled to indemnity for such
expenses as such court shall deem proper. Such indemnification is in addition to
any other rights to which such officers or directors may be entitled under any
law, charter provision, by-law, agreement, vote of shareholders or otherwise.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits:
EXHIBIT NO.
4.1 Specimen Common Stock Certificate*
4.2 Specimen Warrant Certificates*
4.3 Form of Warrant Agreement*
4.4 Form of Underwriter's Purchase Option Agreement*
5.1 Opinion of Blau, Kramer, Wachtlar & Lieberman, P.C., regarding
the legality of the securities being registered*
10.7 Form of Bridge Loan Agreement*
23.1 Consent of Blau, Kramer, Wachtlar & Lieberman, P.C. (included
in Exhibit 5.1)*
23.2 Consent of Moore Stephens, P.C.**
24 Powers of Attorney*
- ----------------------
* Previously filed.
** Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) 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 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 Act and will
be governed by the final adjudication of such issue.
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<PAGE>
(b) The undersigned Registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to include
any additional or changed material information on the plan of distribution.
(2) For determining any liability under the Securities Act,
treat each post-effective amendment as a new registration statement for the
securities offered, and the offering of the securities at that time to be the
initial BONA FIDE offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
II-3
<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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York on the 2nd day of March,
1998.
THE SOLOMON-PAGE GROUP LTD.
By: /S/ LLOYD SOLOMON
-------------------------------
Lloyd Solomon
Vice Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY AND SIGNATORIES
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.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ HERBERT SOLOMON Chairman of the Board March 2, 1998
- ------------------------
Herbert Solomon
/S/ LLOYD SOLOMON Vice Chairman of the Board and March 2, 1998
- ------------------------ Director (Principal Executive
Lloyd Solomon Officer)
/S/ SCOTT PAGE President and Director March 2, 1998
- ------------------------
Scott Page
/S/ ERIC M. DAVIS Vice President - Finance, Chief March 2, 1998
- ------------------------ Financial Officer and Director
Eric M. Davis (Principal Financial
and Accounting Officer)
* /S/ EDWARD EHRENBERG
- ------------------------
Edward Ehrenberg Director March 2, 1998
* /S/ JOEL A. KLARREICH Director March 2, 1998
- ------------------------
Joel A. Klarreich
* By: /S/ ERIC M. DAVIS
-----------------
Eric M. Davis
Attorney-in-Fact
II-4
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to incorporation by reference in the Registration
Statement on Forms S-3 [File Number 033-81026] and S-8 [File Number 333-32293]
of The Solomon-Page Group Ltd. and its subsidiary of our report dated December
18, 1997, except as to Note 14 for which the date is December 31, 1997, relating
to the consolidated balance sheet of The Solomon Page Group Ltd. and its
subsidiary as of September 30, 1997, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the two fiscal
years in the period ended September 30, 1997 which report appears in the
September 30, 1997 annual report on Form 10-KSB of The Solomon-Page Group Ltd.
/S/MOORE STEPHENS
----------------------------
MOORE STEPHENS, P.C.
Certified Public Accountants
Cranford, New Jersey
February 24, 1998
