AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 27, 1999
REGISTRATION NO. ____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
New World Coffee - Manhattan Bagel, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3690261
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
246 Industrial Way West
Eatontown, New Jersey 07724
(732) 544 0155
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
R. Ramin Kamfar
Chief Executive Officer
246 Industrial Way West
Eatontown, New Jersey 07724
(732) 544 0155
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Stuart M. Sieger, Esq.
Seth I. Rubin, Esq.
Ruskin, Moscou, Evans & Faltischek, P.C.
170 Old Country Road
Mineola, NY 11501
(516) 663-6600
<PAGE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: FROM TIME TO
TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX.[ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(b) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(c)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
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
UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX. [ ]
CALCULATION OF REGISTRATION FEES
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- ------------------------------ ----------------------------- ----------------------------- -----------------------------
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Title of each class of Amount to be registered Proposed maximum offering Proposed maximum aggregate
securities to be registered price per share (1) offering price (1)
- ------------------------------ ----------------------------- ----------------------------- -----------------------------
Common Stock, $0.001 par 500,000 shares $1.9375 $270
value
- ------------------------------ ----------------------------- ----------------------------- -----------------------------
</TABLE>
(1) Estimated solely for purpose of calculating the registration fee
pursuant to Rule 457(c) on the basis of the closing price per share of the
Common Stock reported on the NASDAQ-NMS on August 24, 1999, which was $1.9375.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
<PAGE>
NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
Cross Reference Sheet Showing Location
in Prospectus of Information
Required by Items of Form S-3
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Item and Heading Location in Prospectus
---------------- ----------------------
<S> <C> <C>
1. Forepart of the Registration Statement and Outside Front Cover Page
Outside Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of Inside Front and Outside Back Cover Pages of
Prospectus Prospectus
3. Summary Information, Risk Factors and Ratio of Summary of Prospectus; Risk Factors
Earnings to Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Outside Front Cover Page
6. Dilution Not Applicable
7. Registering Stockholders Registering Stockholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Registered Description of Capital Stock
10. Interest of Named Experts and Counsel Legal Matters; Experts
11. Material Changes
12. Incorporation of Certain Information Incorporation of Certain Information by Reference
13. Disclosure of Commission Position on Disclosure of Commission Position on
Indemnification for Securities Act Liabilities Indemnification for Securities Act Liabilities
14. Other Expenses of Issuance and Distribution Other Expenses of Issuance and Distribution
15. Indemnification of Officers and Directors Indemnification of Directors and Officers
16. Exhibits Exhibits
17. Undertakings Undertakings
</TABLE>
<PAGE>
SUBJECT TO COMPLETION, DATED AUGUST ___, 1999
PROSPECTUS
NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
500,000 SHARES OF COMMON STOCK OFFERED BY REGISTERING STOCKHOLDERS
This is an offering of up to 500,000 shares of Common Stock of New World
Coffee - Manhattan Bagel, Inc.(the "Company") solely by the Registering
Stockholders named heretofore issued to them. The Registering Stockholders may
be deemed to be underwriters when they sell their shares. See "Plan of
Distribution."
The Company will pay certain costs and expenses incurred in connection with
the registration of the shares of Common Stock ("Shares") offered hereby, but
the Registering Stockholders shall be responsible for all selling commissions,
transfer taxes and related charges in connection with the offer and sale of such
Shares. See "Plan of Distribution." The Company anticipates incurring expenses
totaling approximately $10,000 payable in connection with the registration of
the shares.
The Common Stock of the Company, par value $.001 per share, is traded on
the NASDAQ National Market System ("NASDAQ-NMS") under the symbol NWCI. On
August 24, 1999 the closing sale price of the Company's Common Stock on the
NASDAQ-NMS was $1.9375 per share. The Registering Stockholders may sell all or a
portion of the Shares offered hereby in private transactions or in the
over-the-counter market at prices related to the prevailing prices of the Shares
on the NASDAQ-NMS at the time of sale. Any securities covered by this Prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act may be sold
by a Registering Stockholders under Rule 144 rather than pursuant to this
Prospectus. See "Plan of Distribution."
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
THE DATE OF THIS PROSPECTUS IS _________.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements, and other information with the
Securities and Exchange Commission (the "Commission" or "SEC"). Such reports,
proxy statements, and other information filed by the Company can be inspected
and copied, at the prescribed rates, 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 Northeast Regional Office of the Commission at Seven
World Trade Center, Suite 1300, New York, New York 10048 and at the Midwest
Regional Office of the Commission at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies may be obtained at prescribed
rates from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding the
Company that is filed electronically with the Commission and the address of such
Web site is www.sec.gov.
The Company has filed with the Commission in Washington, D.C. a
Registration Statement on Form S-3 (together with all amendments thereto, the
"Registration Statement"), under the Securities Act, with respect to the shares
of Common Stock offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement and the exhibits and
schedules filed therewith, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock offered hereby,
reference is hereby made to the Registration Statement and to the exhibits and
schedules filed therewith. Statements contained in this Prospectus regarding the
contents of any contract or other document referred to are not necessarily
complete and, in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each such
statement being deemed to be qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company that have been filed with the
Commission are hereby incorporated by reference in this Prospectus: (a) Annual
Report on Form 10-KSB for the fiscal year ended December 25, 1998; (b) Quarterly
Report on Form 10-QSB for the quarters ended March 28, 1999 and June 27, 1999;
(c) Report on Form 8-K dated February 8, 1999 and June 14, 1999 and (d) all
documents subsequently filed by the Registrant (see below).
All documents filed by the Company pursuant to Section 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 Common Stock offered hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part
thereof from the respective dates of filing such documents. Any statement
contained in a document incorporated by reference shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement in
this Prospectus or in any subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person who receives this
Prospectus, upon written or oral request of such person, a copy of any of the
information that was incorporated by reference in this Prospectus (not including
exhibits to the information that is incorporated by reference unless the
exhibits are themselves specifically incorporated by reference). Such requests
should be made to Mr. Jerold Novack, Chief Financial Officer, at New World
Coffee - Manhattan Bagel, Inc., 246 Industrial Way West, Eatontown, New Jersey
07724, (732) 544-0155.
FORWARD-LOOKING STATEMENTS
Certain statements in this Prospectus constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Reform Act"). The words "forecast", "estimate", "project",
"intent", "expect", "should", and similar expressions are intended to identify
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance, or achievements of New World Coffee - Manhattan Bagel,
Inc. ("New World" or the "Company") to be materially different from any future
results, performance or achievements, expressed or implied by such
forward-looking statements.
The Company is dependent upon the success of existing and new franchised
and Company-owned stores and alternative distribution outlets; the success of
the Company and its master franchisees in getting new stores or other retail
locations opened; the ability of the Company and its master franchisees to
attract new qualified franchisees; of which there can be no assurance, and such
other factors as competition, commodity pricing and economic conditions.
The opening and success of stores will depend on various factors, including
the availability of suitable store sites and the negotiation of acceptable lease
terms for new locations, the ability of the Company or its franchisees to obtain
construction and other necessary permits in a timely manner, the ability to meet
construction schedules, the financial and other capabilities of the Company's
franchisees and master franchisees, competition and general economic and
business conditions. The Company's business is subject to changes in consumer
taste, national, regional and local economic conditions, demographic trends and
the type, number and location of competing businesses. Competition is increasing
significantly with an increasing number of national, regional and local stores
competing for franchisees and store locations as well as customers.
The Company's future results may also be negatively impacted by future
pricing of the key ingredients for its frozen bagel dough, cream cheeses and
coffee beverages. The success of sales units in alternative distribution
locations, including convenience stores, supermarkets, military bases and other
non-traditional locations, will depend, in addition to the factors affecting
traditional franchisee and Company-owned stores, on the consumer traffic at the
locations in which they are located.
The opening and remodeling of stores, as well as opening of sales units
within alternative locations, may be subject to potential delays caused by,
among other things, permits, weather, the delivery of equipment and materials,
and the availability of labor.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus.
The Company
The Company is the one of the largest franchisers of coffee bars and bagel
bakeries in the United States. It operates and franchises coffee bars, bagel
bakeries and integrated coffee bar/bagel bakeries in 18 states in the
Northeastern, Southeastern and Southwestern United States and internationally.
The first Company-owned New World Coffee store opened in 1993 and the first
franchised New World Coffee store opened in 1997. At June 27, 1999, the
Company's retail system consisted of approximately ____ stores, including ___
Company-owned and ___ franchised and licensed stores. The Company acquired the
stock of Manhattan Bagel Company, Inc. - Debtor in Possession on November 24,
1998, resulting in the addition of 6 Company-owned and 285 franchised and
licensed Manhattan Bagel stores.
The Company is vertically integrated with bagel dough and cream cheese
manufacturing plants in Eatontown, NJ and Los Angeles, CA, and a coffee roasting
plant in Branford, CT. The Company's products are sold to franchised, licensed
and Company-owned stores as well as to wholesale, supermarket and
non-traditional outlets.
The Company is a Delaware corporation and was organized in November 1992.
The Offering
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<S> <C>
Securities Offered.......................... ------------------ shares of Common Stock solely
by the Registering Stockholders
Shares to be outstanding after the offering. ------------------ shares
NASDAQ/NMS Symbol........................... NWCI
Risk Factors................................ See "Risk Factors" below
</TABLE>
<PAGE>
RISK FACTORS
Each prospective investor should carefully consider, in addition to the
other information contained in this Prospectus, the following information in
evaluating the Company and its business before making an investment decision.
1. HISTORY OF OPERATING LOSSES. The Company has been in existence since
October 1992 and opened its first specialty coffee cafe in February 1993. To
date, the Company has not had net income for any fiscal year. For the fiscal
year ended December 25, 1998, the Company had a net loss of $7,491,610. At
December 28, 1998, the Company had an accumulated deficit of $24,770,496. The
Company has reported earnings for the six months ended June 27, 1999. There can
be no assurance that the Company will continue to be profitable in the future.
The securities offered hereby are highly speculative and should be purchased
only by persons who can afford to lose their investment.
2. NEED FOR ADDITIONAL FINANCING. In order to achieve and maintain the
Company's anticipated growth rate, including acquisitions, geographic expansions
and in order to make future debt payments, the Company believes that it will,
from time to time, have to obtain bank financing or sell additional debt or
equity (or hybrid) securities in public and private financings. Any such
financing could dilute the interests of investors in this offering. There can be
no assurance that any such additional financing will be available or, if it is
available, that it will be in such amounts and on such terms as will be
satisfactory to the Company. The Company has no present lines of credit or bank
financing.
3. GROWTH THROUGH FRANCHISING. The Company is committed to grow through
franchising. As of June 28, 1999 there were ___ Company-owned and ____
franchised stores in operation. Achievement of the Company's expansion plans
will depend upon its ability to: (i) select, and compete successfully in, new
markets; (ii) obtain suitable sites at acceptable costs in highly competitive
real estate markets; (iii) hire, train, and retain qualified personnel; (iv)
attract and retain qualified franchisees; (iv) integrate new stores into
existing distribution, inventory control, and information systems; and (v)
maintain quality control. The Company will incur start-up costs in connection
with entering new markets, primarily associated with recruiting and training new
regional management and their support staff. In addition, the opening of
additional stores in current markets could have the effect of adversely
impacting sales at certain of the Company's existing stores. There can be no
assurance that the Company will achieve its planned expansion goals, manage its
growth effectively, or operate its existing and new stores profitably. The
failure of the Company to achieve its expansion goals on a timely basis, if at
all, manage its growth effectively or operate existing or any new stores
profitably would have a material adverse effect on the Company's results of
operations and financial position.
The Company will rely in part upon its franchisees and the manner in which
they operate their stores to develop and promote the Company's business.
Although the Company has developed criteria to evaluate and screen prospective
franchisees, there can be no assurance that franchisees will have the business
acumen or financial resources necessary to operate successful franchises of the
Company in their franchise areas. The failure of franchisees to operate
franchises successfully could have a material adverse effect on the Company, its
reputation, the Company's name and its other prospective franchisees.
4. RELIANCE ON KEY PERSONNEL. The Company's success will depend to a large
degree upon the efforts and abilities of its officers and key management
employees, particularly R. Ramin Kamfar, the Company's Chief Executive Officer,
Sanford Nacht, the Company's President and Jerold E. Novack, the Company's Chief
Financial Officer. The loss of the services of one or more of its key employees
could have a material adverse effect on the Company's business prospects and/or
potential earning capacity. The Company has entered into employment and
non-competition agreements with each of its executive officers.
5. COMPETITION. The market for specialty coffees is fragmented and highly
competitive, and competition is increasing substantially. The Company's coffee
beverages compete directly against all restaurant and beverage outlets that
serve coffee and a growing number of espresso stands, carts, and stores. The
Company's whole bean coffees compete directly against specialty coffees sold at
retail through supermarkets and a growing number of specialty coffee stores.
Both the Company's whole bean coffees and its coffee beverages compete
indirectly against all other brands on the market. The coffee industry is
dominated by several large companies such as Kraft General Foods, Inc., Proctor
& Gamble Co., and Nestle, S.A., many of which have begun marketing gourmet
coffee products. While the market for specialty gourmet coffee stores remains
fragmented, the Company competes directly with the market leader, Starbucks,
among others. Starbucks is rapidly expanding geographically and has
substantially greater financial, marketing and other resources than the Company.
Other competitors, some of which may have greater financial and other resources
than the Company, may also enter the markets in which the Company currently
operates or intends to expand.
The Company's bagel products compete directly against all bakery and
restaurant outlets that serve bagels, including the bakery section of
supermarkets, and a growing number of bagel bakeries. Although competition in
the bagel market is fragmented, the Company competes and, in the future will
increasingly compete with Einstein/Noah Bagel Corp., a Colorado based retailer
with over 530 stores, and Bruegger's Bagels, a Vermont based retailer with over
300 stores. In addition to current competitors, one or more new major
competitors with substantially greater financial, marketing, and operating
resources than the Company could enter the market at any time and compete
directly against the Company. In addition, in virtually every major metropolitan
area in which the Company operates or expects to enter, local or regional
competitors already exist.
The Company competes against other specialty retailers and restaurants for
store sites, and there can be no assurance that management will be able to
continue to secure adequate sites at acceptable rent levels. The Company will
also face competition from franchisors in its industry and other industries for
the sale of franchises, many of which have substantially greater financial and
technical resources, marketing capabilities and experience than the Company.
There can be no assurance that the Company will be able to compete successfully
against these competitors in securing desirable franchisees.
6. GEOGRAPHIC CONCENTRATION; FLUCTUATIONS IN REGIONAL ECONOMIC CONDITIONS.
Even following the acquisition by the Company of Manhattan Bagel Company, Inc.,
many of the Company's stores are currently located in the northeastern United
States. As a result, the Company's success will depend, among other matters,
upon factors affecting general economic conditions and discretionary consumer
spending in this region. Any economic downturn or reduction in consumer spending
in this region could have a material adverse effect on the Company.
7. SEASONAL FLUCTUATIONS AND QUARTERLY OPERATING RESULTS. Historically, the
Company's operations have been seasonal, with the lowest sales and profitability
occurring in the first quarter, reflecting decreased traffic as a result of
inhospitable winter weather and fewer daylight hours. The Company's results of
operations may also fluctuate from quarter to quarter in the future as a result
of the amount and timing of sales contributed by new and acquired stores and the
integration of new stores into the operations of the Company, as well as other
factors including marketing programs. The addition of a large number of MBC
stores may significantly affect results of operations on a quarter by quarter
basis.
8. FLUCTUATIONS IN AVAILABILITY AND COST OF GREEN COFFEE. The Company
depends upon both its outside brokers and its direct contacts with exporters in
countries of origin for the supply of a primary raw material, green coffee.
Coffee is the world's second largest traded commodity and its supply and price
are subject to volatility beyond the control or influence of the Company.
Although most coffee trades in the commodity market, coffee of the quality
sought by the Company tends to trade on a negotiated basis at a substantial
premium above commodity coffee pricing, depending upon the supply and demand at
the time of purchase. Supply and price can be affected by multiple factors in
the producing countries, including weather, political, and economic conditions.
In addition, green coffee prices have been affected in the past, and may be
affected in the future, by the actions of certain organizations and
associations, such as the International Coffee Organization or the Association
of Coffee Producing Countries, that have historically attempted to establish
commodity prices of green coffee through agreements creating export quotas or
restricting coffee supplies worldwide. No assurance can be given that such
organizations (or others) will not succeed in raising green coffee prices, or
that, if so, the Company will be able to maintain its gross margins by raising
its prices to its customers. Increases in the price of green coffees, or the
unavailability of adequate supplies of green coffees of the quality sought by
the Company, whether due to the failure of its suppliers to perform, conditions
in the coffee-producing countries, or otherwise, could have a material adverse
effect on the Company's results of operations.
To mitigate the risks associated with increases in coffee prices and to
allow greater predictability in the prices the Company pays for its coffees over
extended periods of time, the Company typically enters into fixed-price purchase
commitments for a portion of its green coffee requirements. There can be no
assurance that these activities will successfully protect the Company against
the risks of increases in coffee prices or that they will not result in the
Company's payment of substantially more for its supply of coffee than it would
have been required to pay absent such activities.
9. AUTHORIZATION OF PREFERRED STOCK. The Company's Certificate of
Incorporation authorizes the issuance of preferred stock with such designations,
rights and preferences as may be determined from time to time by the Company's
Board of Directors. Accordingly, the Board of Directors is empowered, without
stockholder approval, to issue preferred stock with dividend, liquidation,
conversion, voting or other rights which could adversely affect the voting power
or other rights of the holders of the Common Stock. Pursuant thereto, the
Company, at June 27, 1999, had ____ shares of Series B Preferred Stock
outstanding. Issuance of the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. Although the Company has no present intention to issue
additional new shares of its preferred stock, there can be no assurance that the
Company will not do so in the future.
10. ABSENCE OF CASH DIVIDENDS. The Company has paid no cash dividends on
any of its shares of capital stock since its inception and at the present time
does not anticipate paying dividends on the Common Stock in the foreseeable
future. Any future dividends will depend on the earnings, if any, of the
Company, its financial requirements, contractual commitments and other factors.
11. IMPACT OF GOVERNMENTAL REGULATION ON THE COMPANY'S OPERATIONS. The
Company's operations and properties are subject to regulation by various
federal, state, and local government entities and agencies. The operations of
the Company's facilities are subject to various federal, state, and local
environmental laws and workplace regulations, including but not limited to the
Occupational Safety and Health Act, the Fair Labor Standards Act, the Clean Air
Act, and the Clean Water Act. The Company believes that its current legal and
environmental compliance controls adequately address such concerns and that it
is in substantial compliance with applicable laws and regulations. However,
compliance with, or violation of, current and future laws or regulations could
require material expenditures by the Company or otherwise adversely affect the
Company's business or financial results.
12. PRODUCT LIABILITY; PRODUCT RECALLS. The Company may be liable if the
consumption of any of its products causes injury, illness or death. The
Company's current management is not aware of any material product liability
judgment against the Company. However, a product liability judgment against the
Company could have a material adverse effect on the Company's business or
financial results.
13. TRADEMARKS AND OTHER PROPRIETARY RIGHTS. The Company believes that its
trademarks and other proprietary rights are important to its success and its
competitive position. Accordingly, the Company devotes substantial resources to
the establishment and protection of its trademarks and proprietary rights.
However, the actions taken by the Company may be inadequate to prevent imitation
of its products by others or to prevent others from claiming violations of their
trademarks and proprietary rights by the Company. In addition, others may assert
rights in the Company's trademarks and other proprietary rights.
14. SHARES ELIGIBLE FOR FUTURE SALE. Sales of a substantial number of
shares of Common Stock into the public market following the date of this
Prospectus could materially adversely affect the prevailing market price for the
Common Stock. As of the date of this prospectus, there will be ________ shares
of Common Stock outstanding. Excluding the 500,000 shares being registered
hereby for sale by the Registering Stockholders, ________ of such shares are
"restricted securities" ("Restricted Shares") pursuant to Rule 144 promulgated
under the Securities Act of 1933, as amended (the "Securities Act"). Absent
registration under the Securities Act, the sale of such shares is subject to
Rule 144, as promulgated under the Securities Act. In general, under Rule 144,
subject to satisfaction of certain other conditions, a person, including an
affiliate of the Company, who has beneficially owned Restricted Shares of Common
Stock for at least one year is entitled to sell, within any three-month period,
a number of shares that does not exceed the greater of 1% of the total number of
outstanding shares of the same class, or if the Common Stock is quoted on
NASDAQ, the average weekly trading volume during the four calendar weeks
preceding the sale. A person who has not been an affiliate of the Company for at
least three months immediately preceding the sale and who has beneficially owned
the shares of Common Stock for at least two years is entitled to sell such
shares under Rule 144 without regard to any of the volume limitations described
above.
15. LISTING AND QUALIFICATION ON NASDAQ. The Common Stock of the Company is
currently traded in the NASDAQ National Market and is quoted on the NASDAQ
System under symbol "NWCI." Continuation of quotations on NASDAQ is subject to
continued compliance with requirements imposed by NASDAQ. If the Company's
Common Stock is no longer quoted on National Market, the liquidity of the Common
Stock offered hereby would be adversely affected.
<PAGE>
THE COMPANY
The Company is the one of the largest franchisers of coffee bars and bagel
bakeries in the United States. It operates and franchises coffee bars, bagel
bakeries and integrated coffee bar/bagel bakeries in 18 states in the
Northeastern, Southeastern and Southwestern United States and internationally.
The first Company-owned New World Coffee store opened in 1993 and the first
franchised New World Coffee store opened in 1997. At June 27, 1999, the
Company's retail system consisted of approximately ____ stores, including ___
Company-owned and ____ franchised and licensed stores. The Company acquired the
stock of Manhattan Bagel Company, Inc. - Debtor in Possession on November 24,
1998, resulting in the addition of 6 Company-owned and 285 franchised and
licensed Manhattan Bagel stores.
The Company is vertically integrated with bagel dough and cream cheese
manufacturing plants in Eatontown, NJ and Los Angeles, CA, and a coffee roasting
plant in Branford, CT. The Company's products are sold to franchised, licensed
and Company-owned stores as well as to wholesale, supermarket and
non-traditional outlets.
The Company is a Delaware corporation and was organized in November 1992.
Industry Overview
The US market for specialty coffee is large, fragmented and growing.
According to the National Coffee Association's 1998 National Coffee Drinking
Trends report, approximately 65% of all consumers (age 10+) drink coffee on a
weekly basis, they drink an average of 3.0 cups per day, and the overall number
of coffee drinkers has grown from approximately 140 million in 1990 to
approximately 168 million in 1999. The gourmet coffee segment of the industry
has experienced strong growth over the past decade and is expected to continue
to grow through the end of the century. Research from CREST, a market research
firm, indicates specialty coffee shop category traffic growth increased by 49%,
11%, 19% and 16%, annually, from 1995 through 1998.
The US market for bagels is also large, fragmented and growing. According
to the American Bagel Association sale of bagels has grown rapidly, from $429
million in 1993 to $2.3 billion in 1996. According to CREST, bagel shop category
traffic increased by 10%, 29%, 29% and 18%, annually, from 1995 through 1998.
Management believes this growth has been driven by (i) greater consumer
awareness and appreciation of gourmet coffee, specialty drinks and fresh baked
bagels as a result of their increasing availability, (ii) increasing demand for
all fresh premium food products where the differential in price from the
commercial brands is small compared to the improvement in product quality and
taste, (iii) a switch by consumers to low fat baked items such as bagels from
high fat fried alternatives, and (iv) the popularity of coffee bars and bagel
stores as gathering places.
Chesapeake Bagel Acquisition
On July 27, 1999, the Company entered into an agreement with AFC
Enterprises to purchase its Chesapeake Bagel Bakery franchisee operations,
consisting of approximately 90 franchise locations, including the following
states where the Company does not now have a presence: Arizona, Colorado,
Illinois, Kansas, Louisiana, Minnesota, Missouri, Utah, West Virginia and
Wyoming. The transaction is expected to close in the third fiscal quarter. The
closing is subject to a number of conditions and there can be no assurance of
the same.
Business Strategy
The Company's objective is to be a leading coffee cafe chain and bagel
bakery chain in each market in which it operates, and to support and extend its
consumer brands and leverage its manufacturing infrastructure through alternate
distribution channels. The key elements of this strategy include:
Differentiated Retail Brands. The Company's strategy is to differentiate
and reinforce its retail brands in a way that will engender customer loyalty and
position the Company as a leading specialty retailer in each of its markets. The
New World Coffee brand is differentiated from competitors by the Company's
roasting style, which management believes delivers a more full flavored, less
bitter coffee. In addition, as a coffee cafe (versus a coffee bar) the stores
offer a broader and deeper selection of high quality food items throughout the
day. The Company's Manhattan Bagel brand is positioned as a purveyor of
authentic "New York style" boiled and baked bagels, and of breakfast and lunch
sandwiches. The Company is expanding this positioning to include a selection of
specialty coffees, and a menu of cool blended drinks.
Quality Products. The Company's strategy is to provide the consumer with
superior quality products, primarily coffee, bagels and cream cheeses which it
believes is a primary factor in a consumer's decision to patronize its stores,
and enables it to build a high quality brand identity. The Company's vertically
integrated strategy enables it to supply its stores with high quality specialty
coffees, frozen bagel dough and cream cheeses, and to control the quality of
product sold in the stores. The Company's coffee and bagel products have won a
number of quality and "Best of" awards, which assists the Company in developing
its high quality brand identity.
Growth Through Franchising. The Company's strategy is to grow through
franchising to secure a leading position in its markets. The Company believes
that it can grow more rapidly through franchising than through Company-owned
operations due to lower financial and human resource constraints. The Company is
committed to maintaining a strong franchise system by attracting qualified
operators, expanding in a controlled manner and ensuring that franchisees adhere
to the Company's high standards. The Company's franchising efforts are focused
on attracting new franchisees, adding additional locations with existing
franchisees, and developing co-branding opportunities with other complementary
retailers. The Company devotes significant resources to provide franchisees with
assistance in site selection, store design, training and store marketing.
Efficient Production System. The Company's strategy is to leverage its
manufacturing and distribution systems to deliver lower operating costs and
improved product quality. The Company believes that its centralized production
of bagel, cream cheese, and coffee products allows for more consistent, superior
products, better quality control and more rapid development, production and
deployment of new products into stores systemwide. In addition, the system
significantly simplifies store level operations, and eliminates the need for
franchisees to commit substantial capital and labor to raw material procurement
or production.
Inviting Stores. The Company's strategy is to deliver a store environment
for each concept which is conducive to capturing important day parts. The
Company's objective is a comfortable and inviting store with layouts designed to
process a large volume of transactions during the time critical day parts. The
Company is making an investment in upgrading the design of both its Manhattan
Bagel and New World Coffee stores in 1999.
Training and Development. The Company's strategy is to place strong
emphasis on identifying and retaining qualified franchisees and employees, and
invest substantial resources in training them in customer service, beverage and
food preparation, and sales skills. The Company believes that the friendliness,
speed and consistency of service and the product knowledge of the Company's
franchisees and employees are critical factors in developing the Company's
quality brand identity and to building a loyal customer base.
Wholesale Sales. The Company's strategy is to leverage its efficient
manufacturing systems, quality products and brand names in developing a
significant wholesale business. The Company believes that food distributors,
chain grocery stores, food service outlets and similar customers offer the
Company opportunity to maximize its production capacity and distribute product
through many more outlets than its franchised and Company-owned stores.
<PAGE>
Expansion
A total of 18 franchised stores were opened during 1998. The Company plans
to open approximately ___ franchised stores in 1999, primarily in existing
markets. The Company has adopted a policy of not developing stores for its own
operation and is in the process of franchising all stores currently operated by
the Company.
The ability of the Company's franchisees to open new stores is affected by
a number of factors. These factors include, among other things, selection and
availability of suitable store locations, negotiation of suitable lease or
financing terms, constraints on permitting and construction of stores and the
hiring, training and retention of management and other personnel. Accordingly,
there can be no assurance that the Company's franchisees will be able to meet
planned growth targets.
The Company's expansion strategy is to cluster stores in targeted markets,
thereby increasing consumer awareness and enabling the Company to take advantage
of operational, distribution and advertising efficiencies. The Company believes
that market penetration through the opening of multiple stores within a
particular market should result in increased average store sales in that market.
In determining which new markets to develop, the Company considers many factors,
including its existing store base, the size of the market, demographic and
population trends, competition, availability and cost of real estate, and the
ability to supply product efficiently.
REGISTERING STOCKHOLDERS
The following table sets forth the number of shares of Common Stock
beneficially owned by each of the Registering Stockholders as of the date of
this Prospectus, the number of shares (the "Shares") covered by this Prospectus
and the amount and percentage ownership of the Registering Stockholders after
the offering assuming all the shares covered by this Prospectus are sold by the
Registering Stockholders.
<TABLE>
<CAPTION>
- ----------------------- ------------------------------------- ------------------- --------------------------------------
<S> <C> <C> <C>
NAME OF REGISTERING SHARES PRESENTLY OWNED SHARES BEING SHARES NOT BEING REGISTERED
STOCKHOLDER REGISTERED
- ----------------------- ------------------------------------- ------------------- --------------------------------------
NUMBER PERCENT NUMBER PERCENT
- ----------------------- ------------------ ------------------ ------------------- ------------------ -------------------
*
- ----------------------- ------------------ ------------------ ------------------- ------------------ -------------------
- ----------------------- ------------------ ------------------ ------------------- ------------------ -------------------
- ----------------------- ------------------ ------------------ ------------------- ------------------ -------------------
- ----------------------------------
<FN>
* Any position held by a Registering Stockholder with the Company are as follows: _______________.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
The sale of Shares by the Registering Stockholders may be effected from
time to time in private transactions or in the over-the-counter market at prices
related to the prevailing prices of the Shares on the NASDAQ-NMS at the time of
the sale or at negotiated prices. The Registering Stockholders may effect such
transactions by selling to or through one or more broker-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Registering Stockholders. The Registering
Stockholders and any broker-dealers that participate in the distribution may
under certain circumstances be deemed to be "underwriters" within the meaning of
the Securities Act, and any commissions received by such broker-dealers and any
profits realized on the resale of Shares by them may be deemed to be
underwriting discounts and commissions under the Securities Act. The Company and
the Registering Stockholders may agree to indemnify such broker-dealers against
certain liabilities, including liabilities under the Securities Act. In
addition, the Company has agreed to indemnify certain of the Registering
Stockholders with respect to the Shares of Common Stock offered hereby against
certain liabilities, including certain liabilities under the Securities Act.
To the extent required under the Securities Act, a supplemental Prospectus
will be filed, disclosing (a) the name of any such broker-dealers, (b) the
number of shares involved, (c) the price at which such shares are to be sold,
(d) the commissions paid or discounts or concessions allowed to such
broker-dealers, where applicable, (e) that such broker-dealers did not conduct
any investigation to verify the information set out or incorporated by reference
in this Prospectus, as supplemented, and (f) other facts material to the
transaction.
Each Registering Stockholder may be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including, without
limitation, Regulation M, which provisions may limit the timing of purchases of
any of the securities by the Registering Stockholders.
There is no assurance that any of the Registering Stockholders will sell
any of the Shares.
The Company has agreed to pay certain costs and expenses incurred in
connection with the registration of the Shares offered hereby, except that the
Registering Stockholders shall be responsible for all selling commissions,
transfer taxes and related charges in connection with the offer and sale of such
Shares.
The Company proposes to keep the registration statement relating to the
offering and sale by the Registering Stockholders of the Shares continuously
effective until such date as such Shares may be resold without registration
under the provisions of the Securities Act, under Rule 144 thereof or otherwise,
but the Company may, at such time as it determines, file an amendment to remove
any unsold Shares.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 50,000,000 shares
of Common Stock, $0.001 par value, and 2,000,000 shares of Preferred Stock,
$0.001 par value. As of August 24, 1999, 10,242,523 shares of Common Stock, and
43.5 shares of Series B Preferred Stock were outstanding. The outstanding Common
Stock was reduced by a 1 for 2 Common Stock combination effective August 24,
1999.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share on all
matters to be voted on by stockholders and are entitled to receive such
dividends, if any, as may be declared from time-to-time by the Board of
Directors from funds legally available therefor, subject to the dividend
preferences of the Preferred Stock, if any. The Board of Directors is
classified, with only one third of the Board of Directors elected annually. In
general, this will result in each Director being elected for a three year term,
and two annual elections are necessary to affect a change in a majority of the
Board of Directors. Since the classified Board of Directors was approved by the
stockholders in August 1999, and since there were five members of the Board of
Directors elected in August 1999, two Directors were elected to a term of three
years, two Directors were elected to a term of two years and one Director was
elected to a term of one year. Each person nominated for election as a Director
in 2000 or thereafter will, if elected, be elected to a three year term.
Upon liquidation or dissolution of the Company, the holders of Common Stock
are entitled to share ratably in all assets available for distribution after
payment of liabilities and liquidation preferences of the Preferred Stock, if
any. Holders of Common Stock have no preemptive rights, no cumulative voting
rights and no rights to convert their Common Stock into any other securities.
Any action taken by holders of Common Stock must be taken at an annual or
special meeting and may not be taken by written consent. The outstanding shares
of Common Stock are, and the shares of Common Stock to be outstanding upon the
completion of the offering will be, fully paid and nonassessable.
PREFERRED STOCK
The Company's authorized capital stock includes 2,000,000 shares of
Preferred Stock, $.001 par value per share. As of June 28, 1999, the Company had
no shares of Preferred Stock outstanding except for 43.5 shares of Series B
Preferred Stock described below. The Board of Directors of the Company has the
authority, without shareholder approval, to issue the Preferred Stock in one or
more series and to fix the relative rights and preferences thereof. The terms of
such Preferred Stock could include the right to vote, separately or with any
other series of Preferred Stock, on any proposed amendment to the Company's
Certificate of Incorporation or any other proposed corporate action, including
business combinations and other transactions. Such rights could adversely affect
the voting power of the holders of Common Stock. In addition, the ability of the
Company to issue the authorized but unissued shares of Preferred Stock could be
utilized to impede a change in control of the Company.
Series B Preferred Stock
The Series B Preferred Stock ranks: (i) junior to any other class or series
of capital stock of the Company hereafter created specifically ranking by its
terms senior to the Series B Preferred Stock (collectively, the "Senior B
Securities"); (ii) prior to all the Common Stock; (iii) prior to any class or
series of capital stock of the Company hereafter created not specifically
ranking by its terms senior to or on parity with any Series B Preferred Stock
(collectively with the Common Stock, "Junior B Securities"); (iv) on parity with
any class or series of capital stock of the Company hereafter created
specifically ranking by its terms on parity with the Series B Preferred Stock
("Parity B Securities") in each case as to distributions of assets upon
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary.
The Series B Preferred Stock bears no dividends and the holders of shares
of Series B Preferred Stock shall not be entitled to receive dividends on the
Series B Preferred Stock.
In the event of any liquidation, dissolution or winding up of the Company,
either voluntary or involuntary, the Holders of Series B Preferred Stock shall
be entitled to receive, immediately after any distributions to the Senior B
Securities required by the Company's Certificate of Incorporation or any
certificate of designation, and prior in preference to any distribution to
Junior B Securities but in parity with any distribution to Parity B Securities,
an amount per share equal to the sum of (i) $11,800 (the "Original Series B
Issue Price") for each outstanding share of Series B Preferred Stock and (ii) an
amount equal to eight percent (8%) of the Original Series B Issue Price per
annum (the "Series B Premium") for the period that has passed since the date of
issuance (the "Issue Date") of Series B Preferred Stock by the Company.
Each record Holder of Series B Preferred Stock shall be entitled (at the
times and in the amounts set forth below) and subject to the Company's right of
redemption under certain circumstances to convert whole or (if necessary to
convert the maximum amount allowable) fractional shares of Series B Preferred
Stock as follows. Beginning on the first day following the termination of a
six-month lock-up period (the "Initial Conversion Gate"), each Holder accrued
the right to convert into Common Stock up to 20% of the aggregate number of
shares of Series B Preferred Stock issued to such Holder, and for each month
that expires thereafter, Holder shall accrue (the "Accrual Rate") the right to
convert an additional 20% of the shares of the Series B Preferred Stock issued
to such Holder (the number of shares that may be converted at any time, in the
aggregate, is herein referred to as the "Conversion Quota"), all at the Series B
Conversion Rate (as defined below). In the event that Holder elects not to
convert its full Conversion Quota during any month, the unconverted amount shall
be carried forward and added to the Conversion Quota. Each Holder may, from time
to time, convert any portion of the Conversion Quota; provided, however, that in
no event shall Holder convert during any month more than 25% of the shares of
Series B Preferred Stock issued to Holder. The Initial Conversion Gate and each
subsequent one month period referenced above are hereinafter referred to
singularly as a Conversion Gate. At the applicable Conversion Gate and at any
time thereafter, the percentage of Series B Preferred Stock issued to such
Holder which is available for conversion as set forth above is convertible into
that number of fully-paid and non-assessable shares of Common Stock of the
Company calculated in accordance with a formula set forth in the Certificate of
Designation of Series B Preferred Stock (the "Series B Conversion Rate").
The Holders of the Series B Preferred Stock have no voting power
whatsoever, except as provided by Delaware Law.
Series A Junior Participating Preferred Stock
The Board of Directors has designed 700,000 shares of Preferred Stock as
Series A Junior Participating Preferred Stock ("Series A Stock"). The Series A
Stock would be issued upon the exercise of rights which have been distributed to
common stock holders in connection with the adoption of the Board of Directors
of the stockholders rights plan. The Series A Stock may be converted into common
stock at 50% of the market value of the common stock on the date the rights
become effective. No shares of Series A Stock are now outstanding.
WARRANTS
As of June 28, 1999, the Company had _______ warrants outstanding to
purchase Common Stock. These warrants have exercise prices ranging from $__ -
$__ per share and have terms ranging from __ to __ years.
TRANSFER AGENT
The transfer agent for the Common Stock is American Stock Transfer & Trust
Company. The address and telephone number of the transfer agent are: American
Stock Transfer & Trust Company, 40 Wall Street, New York, NY 10005, (718)
921-8261.
<PAGE>
LEGAL MATTERS
Certain legal matters in connection with the sale of the Common Stock
offered hereby will be passed upon for the Company by Ruskin, Moscou, Evans &
Faltischek, P.C.
EXPERTS
The financial statements of the Company for the years ended December 28,
1997 and December 25, 1998 incorporated in this Prospectus by reference from the
Company's Form 10-KSB, as filed with the SEC on April 12, 1999, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report with respect thereto, and are incorporated herein in reliance upon
the authority of said firm as experts in accounting and auditing in giving said
report.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The Company's Certificate of Incorporation limits, to the maximum extent
permitted by Delaware Law, the personal liability of directors for monetary
damages for breach of their fiduciary duties as directors (other than
liabilities arising from acts or omissions which involve intentional misconduct,
fraud or knowing violations of law or the payment of distributions in violation
of Delaware Law). The Certificate of Incorporation provides further that the
Company shall indemnify to the fullest extent permitted by Delaware Law any
person made a party to an action or proceeding by reason of the fact that such
person was a director, officer, employee or agent of the Company. Subject to the
Company's Certificate of Incorporation, the Bylaws provide that the Company
shall indemnify directors and officers for all costs reasonably incurred in
connection with any action, suit or proceeding in which such director or officer
is made a party by virtue of his or her being an officer or director of the
Company except where such director or officer is finally adjudged to have been
derelict in the performance of his or her duties as such director or officer.
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.
<PAGE>
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and, if given or made, such information or representations must not
be relied on as having been authorized by the Company. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy, by any person
in any jurisdiction in which it is unlawful for such person to make such offer
or solicitation. Neither the delivery of this Prospectus nor any offer,
solicitation or sale made hereunder, shall under any circumstances create an
implication that the information herein is correct as of any time subsequent to
the date of the Prospectus.
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 2
FORWARD-LOOKING STATEMENTS 3
PROSPECTUS SUMMARY 3
RISK FACTORS 5
THE COMPANY 8
REGISTERING STOCKHOLDERS 11
PLAN OF DISTRIBUTION 11
DESCRIPTION OF CAPITAL STOCK 12
WARRANTS 14
TRANSFER AGENT 14
LEGAL MATTERS 15
EXPERTS 15
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES 15
NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
______________ Shares of Common Stock
offered by Registering Stockholder
-----------------
PROSPECTUS
-----------------
-------------- , 1999
Until __________, 1999 (40 days from the date of this Prospectus), all
dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, payable in
connection with the sale of the Common Stock being registered hereby, which
shall be borne by the Registrant. Except for the SEC registration fee, all
expenses are estimated.
<TABLE>
<CAPTION>
ITEM AMOUNT*
------------------------------------------------------------------- -----------------------------
<S> <C>
SEC registration fee 270
Printing and engraving expenses 1,730
Legal fees and expenses 4,000
Auditors' accounting fees and expenses 2,000
Miscellaneous expenses
Total 10,000
- ------------------
<FN>
* Estimated for filing purposes.
</FN>
</TABLE>
The Registering Stockholders will be responsible for all selling
commissions, transfer taxes and related charges in connection with the offer and
sale of the Shares offered hereby.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation limits, to the maximum extent
permitted by the General Corporation Law of the State of Delaware ("Delaware
Law"), the personal liability of directors for monetary damages for breach of
their fiduciary duties as directors (other than liabilities arising from acts or
omissions which involve intentional misconduct, fraud or knowing violations of
law or the payment of distributions in violation of Delaware Law). The
Certificate of Incorporation provides further that the Company shall indemnify
to the fullest extent permitted by Delaware Law any person made a party to an
action or proceeding by reason of the fact that such person was a director,
officer, employee or agent of the Company. Subject to the Company's Certificate
of Incorporation, the Bylaws provide that the Company shall indemnify directors
and officers for all costs reasonably incurred in connection with any action,
suit or proceeding in which such director or officer is made a party by virtue
of his or her being an officer or director of the Company except where such
director or officer is finally adjudged to have been derelict in the performance
of his or her duties as such director or officer.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit Number Description of Document
- -------------- -----------------------
<S> <C>
3.1 Restated Certificate of Incorporation/+/
3.2 By-Laws/(1)/
4.1 Specimen Common Stock Certificate of Registrant/(1)/
4.2 Form of Representatives' Warrant Agreement, including form of Representatives'
Warrant/(1)/
4.3 Certificate of Designation of Series B Preferred Stock/(3)/
4.4 Registration Rights Agreement by and among the Registrant, Barry H. Levine and Robert
B. Williams/(4)/
4.5 Promissory Note by and between the Registrant and Robert B. Williams/(4)/
4.6 Promissory Note by and between the Registrant and Barry H. Levine/(4)/
5.1 Opinion of Ruskin, Moscou, Evans & Faltischek, P.C. /+/
10.1 1994 Stock Plan /(2)/
10.2 Employment Agreement by and between the Registrant and Barry H. Levine /(4)/
10.3 Employment Agreement by and between Registrant and Robert B. Williams /(4)/
10.4 Employment Agreement with Ramin Kamfar /(5)/
10.5 Employment Agreement with Jerold Novack /(5)/
10.6 Stock Purchase Agreement by and among Barry H. Levine, Robert B. Williams and
Willoughby's Incorporated and the Registrant /(4)/
10.7 Agreement with Willoughby's Incorporated /(2)/
10.7a Amendment to Willoughby's Agreement /(6)/
10.8 Investor Rights Agreement /(2)/
10.9 Directors' Option Plan /(2)/
10.10 Form of Franchise Agreement /(6)/
10.11 Form of Store Franchise Sale Agreement /(6)/
10.12 Acquisition Agreement by and between Registrant and Manhattan Bagel Company, Inc. /(7)/
23.1 Consent of Arthur Andersen LLP /+/
23.2 Consent of Ruskin, Moscou, Evans & Faltischek, P.C. (included as part of Exhibit 5.1)
- ---------------------
<FN>
+ To be filed by amendment.
(1) Incorporated by reference to Registrant's Registration Statement on
Form SB-2 (33-95764).
(2) Incorporated by reference to Registrant's Current Report on Form 8-K
dated July 12, 1996.
(3) Incorporated by reference to Registrant's Annual Report on Form
10-KSB/A for fiscal year ended December 29, 1996.
(4) Incorporated by reference to Registrant's Report on Form 8-K dated
November 12, 1996.
(5) Incorporated by reference from Registrant's Report on Form 10-KSB, for
the Fiscal Year Ended December 29, 1996.
(6) Incorporated by reference from Registrant's Report on Form 10-KSB, for
the Fiscal Year Ended December 28, 1997.
(7) Incorporated by reference from Registrant's Report on Form 8-K dated
December 7, 1998.
</FN>
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(i) Include any Prospectus required by Section 10(a)(3) of the Securities
Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the Prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement;
(iii) To include any additional or changed material information on the plan
of distribution; provided, however, that paragraph 1(i) and 1(ii) do not apply
if the information required in a post-effective amendment is contained in a
periodic report filed by the Company pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in this registration statement.
2. That, for the purpose of determining liability under the Securities Act,
it shall treat each post-effective amendment as a new registration statement of
the securities offered, and treat the offering of the securities at that time as
an initial bona fide offering.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes, that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions described in Item 15, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company 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 Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all 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 27th day of
August, 1999.
NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
By: /s/ R. Ramin Kamfar
-------------------
R. Ramin Kamfar
Chief Executive Officer,
President and Director
By: /s/ Jerold E. Novack
--------------------
Jerold E. Novack
Chief Financial Officer
In accordance with the Securities Act of 1933,this registration
statement has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
By: /s/ R. Ramin Kamfar Date: August 27, 1999
---------------------------
R. Ramin Kamfar
Director
By: /s/ Keith Barket Date: August 27, 1999
---------------------------
Keith Barket
Director
By: /s/ Karen Hogan Date: August 27, 1999
---------------------------
Karen Hogan
Director
By: /s/ Leonard Tannenbaum Date: August 27, 1999
---------------------------
Leonard Tannenbaum
Director
By: /s/ Edward McCabe Date: August 27, 1999
---------------------------
Edward McCabe
Director
