AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 6, 2000
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>
THIS PROSPECTUS IS BEING FILED PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF
1933 AND RELATES TO THE S-3 REGISTRATION STATEMENT FILED BY THE REGISTRANT ON
SEPTEMBER 8, 2000, REGISTRATION NO. 333-43906 WHICH WAS DECLARED EFFECTIVE
SEPTEMBER 11, 2000.
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. [ ]
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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<S> <C> <C> <C> <C>
Title of each class of Amount to be Proposed maximum offering Proposed maximum aggregate Registration Fee
securities to be registered registered (2) price per share (1)(2) offering price (1)(2) (2)
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Common Stock, $0.001 par value 2,143,472 shares $1.688 $3,618,181 $956
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<FN>
(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 September 29, 2000, which was
$1.688.
(2) Please note that 2,106,511 shares were previously registered in the S-3
Registration Statement filed by the registrant on September 8, 2000, which was
declared effective September 11, 2000, Registration No. 333-43906 for which a fee
of $1,113 was paid by the registrant. The 2,106,511 shares are being carried
forward in this Registration Statement pursuant to Rule 429 of the Securities
Act of 1933. As a result, a total of 4,249,983 shares are covered by this
registration.
</FN>
</TABLE>
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
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<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 Summary of Prospectus; Risk Factors
of 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 Indemnification for Securities Act Liabilities
Indemnification for Securities Act 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>
PROSPECTUS
NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
2,143,472 SHARES OF COMMON STOCK OFFERED BY REGISTERING STOCKHOLDERS
This is an offering of up to 2,143,472 shares of Common Stock of New World
Coffee - Manhattan Bagel, Inc. 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."
We 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." We anticipate incurring expenses totaling
approximately $15,000 payable in connection with the registration of the shares.
Our Common Stock, par value $.001 per share, is traded on the NASDAQ
National Market System ("NASDAQ-NMS") under the symbol NWCI. On September 29,
2000 the closing sale price of our Common Stock on the NASDAQ-NMS was $1.688 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 OCTOBER 6, 2000.
<PAGE>
AVAILABLE INFORMATION
We are 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"). Our reports, proxy statements,
and other information filed by us 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 our reports, proxy and
information statements and other information that is filed electronically with
the Commission and the address of such Web site is www.sec.gov.
We have 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 about us 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 filed by us with the Commission are hereby
incorporated by reference in this Prospectus: (a) Annual Report on Form 10-KSB
for the fiscal year ended December 26, 1999; (b) Quarterly Reports on Form
10-QSB for the quarters ended March 26, 2000 and June 25, 2000; and (c) all
documents subsequently filed by the Registrant (see below).
All documents filed by us 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.
We 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.
We are dependent upon the success of existing and new franchised and
Company-owned stores and alternative distribution outlets; our success and that
of our master franchisees in getting new stores or other retail locations
opened; our ability of and that of our 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 to obtain construction and other necessary
permits in a timely manner, the ability to meet construction schedules, the
financial and other capabilities of our franchisees and master franchisees,
competition and general economic and business conditions. Our 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.
Our future results may also be negatively impacted by future pricing of the
key ingredients for our 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.
<PAGE>
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
We are the largest franchisor of coffee bars and bagel bakeries in the
United States. We operate and franchise coffee bars, bagel bakeries and
integrated coffee bar/bagel bakeries in 26 states throughout the United States
and the District of Columbia. The first Company-owned New World Coffee store
opened in 1993 and the first franchised New World Coffee store opened in 1997.
We 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. On August 31, 1999, we acquired
the assets of Chesapeake Bagel Bakery ("CBB") resulting in the addition of 80
franchised and licensed Chesapeake Bagel Bakery stores. In June 2000, we
acquired 13 stores in the Buffalo, New York area from a former franchisee. At
June 25, 2000, our retail system consisted of 368 stores, including 29
Company-owned and 339 franchised and licensed stores.
We are 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. Our products are sold to franchised, licensed and
Company-owned stores as well as to wholesale, supermarket and non-traditional
outlets.
We are a Delaware corporation, organized in November 1992.
The Offering
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<S> <C>
Securities Offered 2,143,472 shares of Common Stock solely by the Registering
Stockholders
Shares to be outstanding after the offering. 15,637,921 shares (not including shares issuable under options and
warrant but including 1,332,570 shares of common stock into which the
outstanding shares of Series C Preferred Stock of the Company will
be convertible upon effectiveness of the registration statement of
which this Prospectus is a part).
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 our business before making an investment decision.
1. HISTORY OF OPERATING LOSSES. We have been in existence since October
1992 and opened our first specialty coffee cafe in February 1993. To date, we
have not had net income for any fiscal year other than 1999, for which fiscal
year we had a net income of $2,424,098. At December 26, 1999, we had an
accumulated deficit of $24,770,496. We have reported earnings of $1,818,823 for
the six months ended June 25, 2000. There can be no assurance that we 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 our
anticipated growth rate, including acquisitions, geographic expansions and in
order to make future debt payments, we believe 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 us.
3. GROWTH THROUGH FRANCHISING. We are committed to grow through
franchising. As of June 25, 2000 there were 29 Company-owned and 339 franchised
stores in operation. Achievement of our expansion plans will depend upon our
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. We
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 our existing
stores. There can be no assurance that we will achieve our planned expansion
goals, manage growth effectively, or operate all existing and new stores
profitably. Our failure to achieve its expansion goals on a timely basis, if at
all, manage all growth effectively or operate existing or any new stores
profitably would have a material adverse effect on our results of operations and
financial position.
4. RELIANCE ON OUR FRANCHISEES. We will rely in part upon our franchisees
and the manner in which they operate their stores to develop and promote our
business. Although we have 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 our successful franchises in
their franchise areas. The failure of franchisees to operate franchises
successfully could have a material adverse effect on us, our reputation, our
name and our other prospective franchisees.
5. RELIANCE ON KEY PERSONNEL. Our success will depend to a large degree
upon the efforts and abilities of our officers and key management employees,
particularly R. Ramin Kamfar, the Company's Chief Executive Officer, William
Rianhard, the Company's President and Chief Operating Officer and Jerold E.
Novack, the Company's Chief Financial Officer. The loss of the services of one
or more of our key employees could have a material adverse effect on our
business prospects and/or potential earning capacity. We have entered into
employment and non-competition agreements with each of our executive officers.
6. COMPETITION. The market for specialty coffees is fragmented and highly
competitive, and competition is increasing substantially. Our coffee beverages
compete directly against all restaurant and beverage outlets that serve coffee
and a growing number of espresso stands, carts, and stores. Our whole bean
coffees compete directly against specialty coffees sold at retail through
supermarkets and a growing number of specialty coffee stores. Both our whole
bean coffees and our 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, we compete
directly with the market leader, Starbucks, among others. Starbucks is rapidly
expanding geographically and has substantially greater financial, marketing and
other resources than we have. Other competitors, some of which may have greater
financial and other resources than we have, may also enter the markets in which
we currently operates or intends to expand.
Our 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, we compete and, in the future, will increasingly compete with
Einstein/Noah Bagel Corp., a Colorado based retailer with over 450 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 we have could enter
the market at any time and compete directly against us. In addition, in
virtually every major metropolitan area in which we operate or expect to enter,
local or regional competitors already exist.
We compete 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. We will also face competition
from franchisors in our industry and other industries for the sale of
franchises, many of which have substantially greater financial and technical
resources, marketing capabilities and experience than we have. There can be no
assurance that we will be able to compete successfully against these competitors
in securing desirable franchisees.
7. GEOGRAPHIC CONCENTRATION; FLUCTUATIONS IN REGIONAL ECONOMIC CONDITIONS.
Even following our acquisition of Manhattan Bagel Company, Inc., and Chesapeake
Bagel Bakery stores, many of our stores are currently located in the
northeastern United States. As a result, our 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 us.
8. SEASONAL FLUCTUATIONS AND QUARTERLY OPERATING RESULTS. Historically, our
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. Our 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 our operations, as well as other factors including marketing
programs.
9. FLUCTUATIONS IN AVAILABILITY AND COST OF GREEN COFFEE. We depend upon
both our outside brokers and our 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 our control or influence. Although most coffee trades in the
commodity market, coffee of the quality we seek 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, we will be able to maintain our gross margins by raising our
prices to our customers. Increases in the price of green coffees, or the
unavailability of adequate supplies of green coffees of the quality we seek,
whether due to the failure of our suppliers to perform, conditions in the
coffee-producing countries, or otherwise, could have a material adverse effect
on our results of operations.
To mitigate the risks associated with increases in coffee prices and to
allow greater predictability in the prices we pay for our coffees over extended
periods of time, we typically enter into fixed-price purchase commitments for a
portion of our green coffee requirements. There can be no assurance that these
activities will successfully protect us against the risks of increases in coffee
prices or that they will not result in our payment of substantially more for its
supply of coffee than we would have been required to pay absent such activities.
10. AUTHORIZATION OF PREFERRED STOCK. Our Certificate of Incorporation
authorizes the issuance of preferred stock with such designations, rights and
preferences as may be determined from time to time by our 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, at July 1, 2000, we had 444,190
shares of Series C 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 we have no
present intention to issue additional new shares of its preferred stock, there
can be no assurance that we will not do so in the future.
11. STOCKHOLDER RIGHTS PLAN. We have in effect a Stockholder Rights Plan.
In the event that a person or persons not authorized by the Board of Directors
acquires or tenders for 15% or more to the outstanding common stock, certain
mechanisms are activated which will make larger amounts of common stock
available to all of the stockholders (other than the acquirors) at reduced
prices. One effect of the rights plan is to discourage unsolicited takeovers.
12. CLASSIFIED BOARD OF DIRECTORS. We have amended our certificate of
incorporation to provide for a classified Board of Directors. This means that no
more than one-third of the Board of Directors is elected each year. Accordingly,
a person desiring to replace a majority of the Board of Directors would have to
obtain successful votes for its nominees in two successive years. One effect of
the classified Board of Directors may be to discourage unsolicited takeovers.
13. ABSENCE OF CASH DIVIDENDS. We have paid no cash dividends on any of our
shares of capital stock since our inception and at the present time we do not
anticipate paying dividends on the Common Stock in the foreseeable future. Any
future dividends will depend on our earnings, if any, our financial
requirements, contractual commitments and other factors. Our present bank credit
agreement does not allow the payment of cash dividends.
14. IMPACT OF GOVERNMENTAL REGULATION ON THE COMPANY'S OPERATIONS. Our
operations and properties are subject to regulation by various federal, state,
and local government entities and agencies. Our operations 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.
We believe that our current legal and environmental compliance controls
adequately address such concerns and that we are 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 us
or otherwise adversely affect our business or financial results.
15. PRODUCT LIABILITY; PRODUCT RECALLS. We may be liable if the consumption
of any of our products causes injury, illness or death. Our current management
is not aware of any material product liability judgment against us. However, a
product liability judgment against us could have a material adverse effect on
our business or financial results.
16. TRADEMARKS AND OTHER PROPRIETARY RIGHTS. We believe that our trademarks
and other proprietary rights are important to our success and our competitive
position. Accordingly, we devote substantial resources to the establishment and
protection of our trademarks and proprietary rights. However, the actions taken
by us may be inadequate to prevent imitation of our products by others or to
prevent others from claiming violations of their trademarks and proprietary
rights by us. In addition, others may assert rights in our trademarks and other
proprietary rights.
17. 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 September 20, 2000, there are 15,637,921 shares of Common
Stock outstanding. Excluding the 2,143,472 shares being registered hereby for
sale by the Registering Stockholders, 4,646,749 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
ours, 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 ours 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.
18. LISTING AND QUALIFICATION ON NASDAQ. Our Common Stock 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 our Common Stock is no longer
quoted on National Market, the liquidity of the Common Stock offered hereby
would be adversely affected.
THE COMPANY
We are one of the largest franchisors of coffee bars and bagel bakeries in
the United States. We operate and franchise coffee bars, bagel bakeries and
integrated coffee bar/bagel bakeries in 28 states throughout the United States
and the District of Columbia. The first Company-owned New World Coffee store
opened in 1993 and the first franchised New World Coffee store opened in 1997.
We 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. On August 31, 1999, we acquired
the assets of Chesapeake Bagel Bakery ("CBB") resulting in the addition of 80
franchised and licensed Chesapeake Bagel Bakery stores. At June 25, 2000, our
retail system consisted of approximately 368 stores, including 29 Company-owned
and 339 franchised and licensed stores.
We are 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. Our products are sold to franchised, licensed and
Company-owned stores as well as to wholesale, supermarket and non-traditional
outlets.
We are 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 1999 National Coffee Drinking
Trends report, approximately 62% of all consumers (age 10+) drink coffee on a
weekly basis, they drink an average of 3.5 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. From 1997 to 1999 the percentage of the U.S. population that drank a
gourmet coffee beverage increased 40%.
The US market for bagels is also large, fragmented and growing. According
to CREST, a market research firm, household expenditures in the bagel bakery
category increased by 40% 1996 through 1999. 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.
Business Strategy
Our objective is to be a leading bagel bakery and coffee cafe franchisor in
each market in which we operate, and to support and extend its consumer brands
and leverage its manufacturing infrastructure through alternative distribution
channels. The key elements of this strategy include:
Industry Consolidation. Our strategy is to be the consolidator of the bagel
bakery industry. The industry is currently fragmented with many small to
medium-sized chains operating unprofitably or at marginally profitable levels.
We believe that the current industry environment will allow us to acquire
additional stores through acquisition of smaller competitors or of a major
competitor which is experiencing financial problems. The acquisitions, with
subsequent conversion to one of our core brands will create financial synergies
our current plant capacity is utilized to supply new product sales to acquired
units which is a principal source of our profits. In addition, we will be able
to leverage our investment in administrative infrastructure realizing additional
profits from these acquisitions.
Differentiated Retail Brands. Our strategy is to differentiate and
reinforce our retail brands in a way that will engender customer loyalty and
position us as a leading specialty retailer in each of our markets. Our
Manhattan Bagel and Chesapeake Bagel Bakery brands are positioned as purveyors
of authentic "New York style" boiled and baked bagels, and of breakfast and
lunch sandwiches. We are expanding this positioning to include a selection of
specialty coffees, and a menu of cool blended drinks. The New World Coffee brand
is differentiated from competitors by our 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.
Quality Products. Our strategy is to provide the consumer with superior
quality products, primary coffee, bagels and cream cheeses which we believe is a
primary factor in a consumer's decision to patronize its stores, and enables us
to build a high quality brand identity. Our vertically integrated strategy
enables us to supply our stores with high quality specialty coffees, frozen
bagel dough and cream cheeses, and to control the quality of product sold in the
stores. Our coffee and bagel product have won a number of quality and "Best of"
awards, which assists us in developing our high quality brand identity.
Growth Through Franchising. Our strategy is to grow through franchising to
secure a leading position in our markets. We believe that we can grow more
rapidly through franchising than through Company-owned operations due to lower
financial and human resource constraints. We are committed to maintaining a
strong franchise system by attracting qualified operators, expanding in a
controlled manner and ensuring that franchisees adhere to our high standards.
Our franchising efforts are focused on attracting new franchisees, adding
additional locations with existing franchisees, and developing co-branding
opportunities with other complementary retailers. We devote significant
resources to provide franchisees with assistance in site selection, store
design, training and store marketing.
Efficient Production System. Our strategy is to leverage our manufacturing
and distribution systems to deliver lower operating costs and improved product
quality. We believe that our 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. We have made
improvements in our coffee packaging system and continues to evaluate our
production process to take advantage of additional production efficiencies.
Inviting Stores. Our strategy is to deliver a store environment for each
concept which is conducive to capturing important day parts. Our objective is a
comfortable and inviting store with layouts designed to process a large volume
of transactions during the time critical day parts. During 1999, we completed a
redesign of our Manhattan Bagel Store design. The new design, to be utilized in
stores opening in the year 2000, will more effectively promote our product
offerings and will allow more prominent display of seasonal product selections.
Training and Development. Our 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. We believe that the friendliness, speed and
consistency of service and the product knowledge of our franchisees and
employees are critical factors in developing our quality brand identity and to
building a loyal customer base.
Wholesale Product Sales. Our strategy is to leverage our efficient
manufacturing systems, quality products and brand names in developing a
significant wholesale business. We believe that food distributors, chain grocery
stores, food service outlets and similar customers offer us opportunity to
maximize our production capacity and distribute product through many more
outlets than we have franchised and Company-owned stores. During 1999, we
established a wholesale sales department and added significant new business in
the convenience store and supermarket areas.
Expansion
A total of 14 franchised stores were opened during 1999. We plan to open
approximately 40 franchised stores in 2000, primarily in existing markets. We
have adopted a policy of not developing stores for our own operation and we are
in the process of selling and franchising substantially all of the stores
currently owned and operated by us.
The ability of our 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 construction of stores and the
hiring, training and retention of management and other personnel. Accordingly,
there can be no assurance that our franchisees will be able to meet planned
growth targets.
Our expansion strategy is to cluster stores in targeted markets, thereby
increasing consumer awareness and enabling us to take advantage of operational,
distribution and advertising efficiencies. We believe 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, we consider many factors, including our 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.
We have received interest from the international business community for
foreign franchising opportunities with both the Manhattan Bagel and New World
Coffee Brands. During 1999, we licensed our first franchisee in Iceland.
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>
Name of Registering Stockholder Shares Presently Owned Shares Not Being Registered
------------------------------- ---------------------- ---------------------------
Shares Being
Number Percent Registered Number Percent
------ ------- ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Adelman, Marc 18,750 * 9,000 9,750 *
Allen, Timothy J. 15,625 * 7,500 8,125 *
Anthony Gardocki Trust 10,000 * 10,000 0 *
Art Jenkins Trust 40,000 * 15,000 25,000 *
Barnett Family Partnership II 31,250 * 15,000 16,250 *
Beel, Joseph C. and Madelyn 8,850 * 4,500 4,350 *
Berger, Valery 17,700 * 9,000 8,700 *
Bergh, Gerald K. 22,130 * 9,000 13,130 *
Berkley, Bill D. and Claudio J. 15,625 * 7,500 8,125 *
Bindseil, Edwin R. 15,000 * 7,500 7,500 *
Bisnoff, Alvan and Claude 25,000 * 12,000 13,000 *
BNB Investments Assoc., L.P. 88,500 * 45,000 43,500 *
Bollag, Ben 25,000 * 25,000 0 *
Bollag, Michael 163,184 1.2% 45,000 118,184 *
Braccini, Stephen 31,250 * 15,000 16,250 *
Cameron, Jr., Walter F. 15,625 * 7,500 8,125 *
Car Cap Co., LLC 29,500 * 15,000 14,500 *
Carroll, Barbara A. 18,750 * 9,000 9,750 *
Casari, Richard C. 18,750 * 9,000 9,750 *
CCJ Trust 90,000 * 45,000 45,000 *
Charles A. Leonelli, III IRA 46,800 * 23,400 23,400 *
Cheong, Francis 9,375 * 4,500 4,875 *
Cipriani Family Trust 15,000 * 7,500 7,500 *
Clifford A. Falkenau Trust 7,813 * 3,750 4,063 *
Cohen, Robert 25,000 * 25,000 0 *
Coleman, Thomas C. 30,000 * 15,000 15,000 *
Corman, James F. 28,550 * 15,000 13,550 *
Crenshaw, Randall W. 6,250 * 3,000 3,250 *
Cress, Jonathan 7,500 * 3,750 3,750 *
Crocitto, Jr., Vinnie F. 21,090 * 10,545 10,545 *
Cuda, William K., Jr. 15,000 * 7,500 7,500 *
Cyndel & Co., Inc. 59,000 * 30,000 29,000 *
David L. Ivers IRA Rollover 12,000 * 6,000 6,000 *
David L. Schotterback Trust, 35,625 * 7,500 28,125 *
4-9-93
Desmond, Dennis 15,625 * 7,500 8,125 *
Dick, George R. 31,250 * 15,000 16,250 *
Dr. Richard Bowe IRA 15,625 * 7,500 8,125 *
Dungan, Ronald S., Deed of 15,625 * 7,500 8,125 *
Trust
Dweck, Naomi 11,250 * 5,400 5,850 *
End Loan Venture 18,000 * 9,000 9,000 *
Erb, James A. 15,625 * 7,500 8,125 *
Esses, Isaac 15,625 * 7,500 8,125 *
Estreichert, Michael & 12,000 * 6,000 6,000 *
Shoshanna
Ethington, Robert S. 9,375 * 4,500 4,875 *
Feinblatt, Jack and Dale S. 25,625 * 7,500 18,125 *
Feldman, Mitchell & Janet 24,000 * 12,000 12,000 *
Fight, Kevan A. 16,650 * 8,325 8,325 *
Frank, Donald 15,625 * 7,500 8,125 *
Friedman, Dr. Ronald 15,625 * 7,500 8,125 *
Gerzof, Richard E. 25,000 * 12,000 13,000 *
Gindin, Joshua and Meryl D. 11,250 * 5,400 5,850 *
Greene, Sean J. 15,625 * 7,500 8,125 *
J. Mark McDonald IRA 15,000 * 7,500 7,500 *
Jonathan E. Plate Trust 15,000 * 7,500 7,500 *
KSH Strategic Investment Fund, L.P. 100,000 * 100,000 0 *
Kabat, Ruth 9,375 * 4,500 4,875 *
Kachel Spiller & Co. 15,000 * 7,500 7,500 *
Kandel, Richard 29,500 * 15,000 14,500 *
Kantor, Robert 25,000 * 12,000 13,000 *
Kohn Family Trust 25,000 * 12,000 13,000 *
Kohn, Helen 287,151 2.2% 287,151 0 *
Kohn, Martha 12,000 * 6,000 6,000 *
Kohn, Michael 2,900 * 2,900 0 *
Kohn, Stuart 2,900 * 2,900 0 *
Konviser, Estelle 9,375 * 4,500 4,875 *
Korets, Lyudmila 14,750 * 7,500 7,250 *
Krathen, David & Fran 42,825 * 22,500 20,325 *
Krenek, Alan and Seippel, 15,625 * 7,500 8,125 *
William H.
L.W. Majac, LLC 62,500 * 30,000 32,500 *
Landsman, Emanuel E. 25,625 * 7,500 18,125 *
Lauren A. Daman, M.D., P.C. 15,625 * 7,500 8,125 *
Money Purchase Pension Plan
Levine, Joseph H. 15,625 * 7,500 8,125 *
Libs Revocable Trust 24,000 * 12,000 12,000 *
Linn, Robert 18,750 * 9,000 9,750 *
Mack, Stephen P. 18,000 * 9,000 9,000 *
Madorsky, Martin & Richard, 62,500 * 30,000 32,500 *
Judith
Martens, James A. 21,000 * 10,500 10,500 *
McLaughlin, Shane D. 15,625 * 7,500 8,125 *
Milgard, James A. 123,846 * 60,000 63,846 *
Morris, J. Larry, D.M.D. 12,000 * 6,000 6,000 *
MRDJ Partners 14,275 * 7,500 6,775 *
Myerson, James P. 15,625 * 7,500 8,125 *
Ness, Jules M. 11,420 * 6,000 5,420 *
Nichter, Harold 31,250 * 15,000 16,250 *
Nochenson, Alvin and Irene 19,985 * 10,500 9,485 *
O'Brien, Gregg and Tamma 14,275 * 7,500 6,775 *
O'Neill, Peter 65,000 * 65,000 0 *
Ostrander, Robert G. 18,750 * 9,000 9,750 *
Pallugna, Gene P. 8,850 * 4,500 4,350 *
Petterson, David S. 11,420 * 6,000 5,420 *
Restful Furniture Corp. 15,625 * 7,500 8,125 *
Robert and Barbara Myerson 15,038 * 7,500 7,538 *
Trust
Ronald Sumner IRA 28,550 * 15,000 13,550 *
Scalzo, Harry W. and Sandra J. 15,625 * 7,500 8,125 *
Schiro, Charles 14,750 * 7,500 7,250 *
Schoenfeld, Joel 31,250 * 15,000 16,250 *
Schultz, Theodore J. and Karen 14,275 * 7,500 6,775 *
A.
Shapiro, Alan and Bassin, Jerry 59,000 * 30,000 29,000 *
Shapiro, Judy M. 156,250 1.1% 75,000 81,250 *
Shapiro, Ronald and Susan 15,000 * 7,500 7,500 *
Sherri Ocner IRA 25,000 * 12,000 13,000 *
Silverstein, Jerome & Marian 18,750 * 9,000 9,750 *
Smith Teitelbaum Chiropractic 18,000 * 9,000 9,000 *
Profit Sharing Plan
Smith, Phillip L. 15,625 * 7,500 8,125 *
Sokol, Elena 8,565 * 4,500 4,065 *
Spears, Glenn H. 30,000 * 15,000 15,000 *
Stanley Goldberg Revocable 85,650 * 45,000 40,650 *
Trust
Sucoff, Ronit 292,951 2.2% 292,951 0 *
Taylor, Trude C. 175,017 1.4% 60,000 115,017 *
Williams, Stanton N. and 96,250 * 30,000 66,250 *
Jennifer A.
Zapis, Leon 15,000 * 7,500 7,500 *
<FN>
* Indicates less than a one (1%) percent ownership interest in the Company.
</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 at their
customary commission rates, and such broker-dealers may, in certain cases,
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. We and the
Registering Stockholders may agree to indemnify such broker-dealers against
certain liabilities, including liabilities under the Securities Act. In
addition, we have 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.
We have 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 of their selling commissions, transfer
taxes and related charges in connection with the offer and sale of such Shares.
The Registering Stockholders shall receive any proceeds due from sale of the
Shares.
We propose 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 we may, at such
time as it determines, file an amendment to remove any unsold Shares.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock 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 September 20, 2000, 15,637,921 shares of Common Stock, and 444,190 shares of
Series C Preferred Stock were outstanding. The Series C Preferred Stock will be
automatically converted into 1,332,570 shares of Common Stock upon the
effectiveness of the Registration Statement of which this Prospectus is a part.
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 not more than 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 our liquidation or dissolution, 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 non-assessable.
PREFERRED STOCK
Our authorized capital stock includes 2,000,000 shares of Preferred Stock,
$.001 par value per share. As of September 8, 2000, we had 444,190 shares of
Series C Preferred Stock outstanding. Upon the effective of the registration
statement of which this Prospectus is a part, such Series C Preferred stock
shall be automatically converted into 1,332,570 shares of Common Stock.
Our Board of Directors 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 our 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, our ability to issue the authorized but unissued shares of
Preferred Stock could be utilized to impede a change in control of the Company.
WARRANTS
As of September 20, 2000, we had outstanding options and warrants to
purchase 3,688,974 shares of Common Stock. These options and warrants have
exercise prices ranging from $.02 - $18.16 per share and have terms ranging from
5 to 10 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.
LEGAL MATTERS
Certain legal matters in connection with the sale of the Common Stock
offered hereby will be passed upon for us by Ruskin, Moscou, Evans & Faltischek,
P.C.
EXPERTS
Our financial statements for the years ended December 25, 1998 and December
26, 1999 incorporated in this Prospectus by reference from our Form 10-KSB, as
filed with the SEC on March 27, 2000, 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
Our 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 we 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 our Certificate of Incorporation,
the Bylaws provide that we 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 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 our directors, officers and controlling persons pursuant to
the foregoing provisions, or otherwise, we have 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.
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 us. 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
<TABLE>
<CAPTION>
PAGE
<S> <C>
AVAILABLE INFORMATION.............................................................................................. 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.................................................................... 1
FORWARD-LOOKING STATEMENTS......................................................................................... 2
PROSPECTUS SUMMARY................................................................................................. 3
RISK FACTORS....................................................................................................... 4
THE COMPANY........................................................................................................ 9
REGISTERING STOCKHOLDERS........................................................................................... 12
PLAN OF DISTRIBUTION............................................................................................... 12
DESCRIPTION OF CAPITAL STOCK....................................................................................... 13
WARRANTS........................................................................................................... 14
TRANSFER AGENT..................................................................................................... 15
LEGAL MATTERS...................................................................................................... 15
EXPERTS............................................................................................................ 15
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES..................................................................................... 15
</TABLE>
NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
2,143,472 Shares of Common Stock
offered by Registering Stockholder
-----------------
PROSPECTUS
-----------------
October 6, 2000
Until November 15, 2000 (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.
ITEM AMOUNT*
---- -------
SEC registration fee $ 956
Printing and engraving expenses $ 2,000
Legal fees and expenses $ 7,500
Auditors' accounting fees and expenses $ 2,000
Miscellaneous expenses $ 2,544
-------
TOTAL $15,000
* Estimated for filing purposes.
The Registering Stockholders will be responsible for all selling
commissions, transfer taxes and related charges incurred by them in connection
with the offer and sale of the Shares offered hereby.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our 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 we 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 our Certificate of Incorporation,
the Bylaws provide that we 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 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/8/
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)/
4.4.1 Certificate of Designation, Preferences and Rights of Series D Preferred Stock /(9)/
4.4.2 Certificate of Correction of Certificate of Designations, Preferences and Rights of Series D Preferred
Stock
5.1 Opinion of Ruskin, Moscou, Evans & Faltischek, P.C.
10.1 1994 Stock Plan /(2)/
10.2 Employment Agreement with Ramin Kamfar /(5)/
10.3 Employment Agreement with Jerold Novack /(5)/
10.4 Investor Rights Agreement /(2)/
10.5 Directors' Option Plan /(2)/
10.6 Form of Franchise Agreement /(6)/
10.7 Form of Store Franchise Sale Agreement /(6)/
10.8 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>
(1) Incorporated by reference to Registrant's Registration Statement on
Form SB-2 (33-95764).
(2) Incorporated by reference to Registrant's 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.
(8) Incorporated by reference from Registrant's Report on
Form 8-K dated September 7, 1999.
(9) Incorporated by reference from Registant's Report on Form 8-K dated
September 1, 2000.
</FN>
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) We hereby undertake:
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 us 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 our 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 pursuant to
the provisions described in Item 15, or otherwise, we have 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 us of expenses incurred or paid by a
director, officer or controlling person 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, we 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 6th day of
October, 2000.
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 their signatures set forth below, each
person hereby designates R. Ramin Kamfar and Jerold E. Novack, acting
separately, as their attorney in fact to execute any amendment and
post-effective amendment to this Registration Statement.
By: /s/ R. Ramin Kamfar Date: October 6, 2000
-------------------
R. Ramin Kamfar
By: /s/ Keith Barket Date: October 6, 2000
----------------
Keith Barket
Director
By: /s/ Karen Hogan Date: October 6, 2000
---------------
Karen Hogan
Director
By: /s/ Leonard Tannenbaum Date: October 6, 2000
----------------------
Leonard Tannenbaum
Director
By: Date:
-----------------
Edward McCabe
Director
By: /s/ Eve Trkla Date: October 6, 2000
-----------------
Eve Trkla
Director
