As filed with the Securities and Exchange Commission on April 24, 1997.
Registration No. 333-
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-8 AND FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
JD AMERICAN WORKWEAR, INC.
--------------------------
(Exact name of issuer as specified in its charter)
Delaware 05-0460102
- ------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
46 Old Flat River Road, Coventry, Rhode Island 02816
- ---------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
JD AMERICAN WORKWEAR, INC. 1995 Stock Option Plan
-------------------------------------------------
(Full title of the plan)
David N. DeBaene, 46 Old Flat River Road, Coventry, Rhode Island 02816
----------------------------------------------------------------------
(Name and address of agent for service)
(401) 397-6800
-----------------------------------
(Telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: Upon
exercise of the options granted under the Stock Option Plan, but in no event
prior to the effective date of this Registration Statement.
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]
CALCULATION OF REGISTRATION FEE
==========================================================================
<TABLE>
<CAPTION>
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering Registration
registered registered(1) share price Fee(2)
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
$.002 par value 250,000 $5.75 $1,437,500 $435.61
==========================================================================
<F1> The aggregate amount of securities registered hereunder is 250,000
shares of Common Stock. Pursuant to Rule 416 promulgated under the
Securities Act of 1933, as amended, this Registration Statement covers
such additional shares of Common Stock to be offered or issued to
prevent dilution as a result of future stock splits, stock dividends
or similar transactions.
<F2> The fee with respect to these shares has been calculated pursuant to
paragraphs (h) and (c) of Rule 457 upon the basis of $5.75, the average
of the bid and asked price per share of the Registrant's Common Stock on
April 22, 1997, a date within five (5) business days prior to the date of
filing of this Registration Statement, as reported by the OTC Bulletin
Board ("OTCBB") of the National Association of Securities Dealers'
Automated Quotation System.
</TABLE>
EXPLANATORY NOTE
This Registration Statement contains two parts. The first part
contains a prospectus pursuant to Form S-3 (in accordance with Section C of
the General Instructions to Form S-8) which covers reoffers and resales by
affiliates and non-affiliates of JD American Workwear, Inc. (the
"Registrant") of shares of Common Stock of the Registrant to be issued upon
exercise of options granted pursuant to the Registrant's 1995 Stock Option
Plan. The second part contains Information Required in the Registration
Statement pursuant to Part II of Form S-8 and certain items from Information
Not Required in the Prospectus pursuant to Part II of Form S-3. Pursuant to
the introductory Note to Part I of Form S-8, the Plan Information specified
by Part I is not being filed with the Securities and Exchange Commission.
============================================================================
PROSPECTUS
(Form S-3)
JD AMERICAN WORKWEAR, INC.
250,000 Shares
Common Stock ($.002 par value)
------------
JD American Workwear, Inc. 1995 Stock Option Plan
------------
This Prospectus is being used in connection with the offering from
time to time by certain shareholders (the "Selling Shareholders") of JD
American Workwear, Inc. (the "Company") or their successors in interest of
shares of the Common Stock ($.002 par value) of the Company ("Common Stock")
which have been issued under, or may be acquired upon the exercise of, stock
options pursuant to the Company's 1995 Stock Option Plan (the "Plan").
The Common Stock may be sold from time to time by the Selling
Shareholders or by their pledgees, donees, transferees or other successors
in interest. Such sales may be made in the over-the-counter market or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The Common Stock
may be sold by one or more of the following: (a) block trades in which the
broker or dealer so engaged will attempt to sell the shares as agent but may
position and resell portions of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus; (c) an
exchange distribution in accordance with the rules of such exchange; and (d)
ordinary brokerage transactions and transactions in which the broker
solicits purchases. In effecting sales, brokers or dealers engaged by the
Selling Shareholders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions or discounts from
Selling Shareholders in amounts to be negotiated immediately prior to the
sale. Such brokers or dealers and any other participating brokers or
dealers may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Act") in connection with such
sales. In addition, any securities covered by this Prospectus which qualify
for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus. The Company will not receive any of the
proceeds from the sale of these shares, although it has paid the expenses of
preparing this Prospectus and the related Registration Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The bid and asked prices of the Company's Common Stock on April 22,
1997 as reported by the NASD's OTC Bulletin Board was $5.50 and $6.00,
respectively.
The date of this Prospectus is April 24, 1997.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN AS CONTAINED HEREIN, IN CONNECTION WITH THE
OFFER MADE IN THE PROSPECTUS, AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY.
------------
The Company has filed with the Securities and Exchange Commission, a
Registration Statement under the Securities Act of 1933, as amended, with
respect to the securities offered by this Prospectus. This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Additional information concerning the
securities offered hereby is to be found in the Registration Statement
including various exhibits thereto, which may be inspected at the
Commission's office in Washington, D.C.
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"). Such
reports, proxy statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
the Commission's regional offices located at Seven World Trade Center, Suite
1300, New York, New York 10048; and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511, and copies of such material can be obtained
from the Public Reference Section of the Commission, Washington, D.C. 20549
at prescribed rates.
The Common Stock of the Company is listed for quotation on the NASD's
Over The Counter Bulletin Board ("OTCBB") and is traded under the Symbol
"JDAW". Reports, proxy statements and other information filed by the
Company can be inspected at the offices of OTCBB, 1735 "K" Street, N.W.,
Washington, D.C. 20006.
------------
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the Commission (File No. 33-98682)
pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year
ended February 29, 1996, as filed and as amended from time to time.
2. The Company's Quarterly Report on Form 10-QSB for the quarter
ended May 31, 1996.
3. The Company's Quarterly Report on Form 10-QSB for the six months
ended August 31, 1996.
4. The Company's Quarterly Report on Form 10-QSB for the nine months
ended November 30, 1996.
5. All other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Exchange Act since January 14, 1997.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of
this offering shall be deemed to be incorporated by reference in this
Prospectus and to be a part of this Prospectus from the date of filing
thereof.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of that person, a copy
of all documents incorporated by reference into the Registration Statement
of which this Prospectus is a part, other than exhibits to those documents
(unless such exhibits are specifically incorporated by reference into such
documents). Requests for such documents should be directed to Anthony
Santucci, Chief Financial Officer, JD American Workwear, Inc., 46 Old Flat
River Road, Coventry, Rhode Island 02816, telephone: (401) 397-6800.
THE COMPANY
Recent Developments
On April 10, 1996, the second closing was held for the Company's
initial public offering (the "Public Offering") which was made pursuant to a
Registration Statement filed with the Commission and declared effective on
January 11, 1996. Pursuant to the Public Offering, the Company sold an
aggregate of 327,768 units (the "Units"). The Public Offering was
underwritten on a best efforts basis by Merit Capital Associates, Inc.,
Westport, Connecticut. Each Unit consisted of one (1) share of Common Stock
and one (1) redeemable Class A Common Stock Purchase Warrant ("Class A
Warrant"). Each Class A Warrant entitles the holder to receive a unit of
securities of the Company consisting of one (1) share of Common Stock and
one (1) redeemable Class B Common Stock Purchase Warrant ("Class B
Warrant"). The exercise price of the Class A Warrants is $7.00 per unit,
subject to adjustment, and $8.00 per share with respect to the Class B
Warrants, subject to adjustment. The Class A Warrants and the Class B
Warrants expire on January 10, 2001 and are subject to redemption under
certain conditions. Pursuant to the Public Offering, the Company received
gross offering proceeds of approximately $2,050,000. Following the second
closing of the Public Offering, the Company's Common Stock and Class A
Warrants commenced trading on the National Association of Securities
Dealers' OTC Bulletin Board under the symbols JDAW and JDAWW.
In addition, in connection with the Public Offering, holders of
various classes of the Company's debt agreed to convert the principal and
accrued interest of such indebtedness into shares of Common Stock of the
Company. Pursuant to these agreements (collectively the "Conversion
Agreements"), an aggregate of 349,225 shares of Common Stock were issued in
respect of approximately $943,575 aggregate principal and approximately
$190,425 of accrued interest. In addition, approximately $300,000 of the
proceeds of the offering were used to repay holders of classes of the
Company's indebtedness who did not agree to full conversion.
On July 1, 1996, holders of the Company's 15% Purchase Order Financing
Notes agreed to convert the principal of $195,511 and all accrued interest
thereon of $58,250 into Common Stock at a conversion price of $4.00 per
share, or in aggregate of 63,440 shares of Common Stock.
In December 1996 and March 1997 the Company issued to two accredited
investors an aggregate of $200,000 principal amount 10% Secured Convertible
Notes due April 30, 1998 in order to meet the Company's continuing need for
capital.
Company Background
JD American Workwear, Inc. designs, markets and sells commercial and
industrial workwear highlighted by its two key proprietary safety products,
denim safety work jeans ("JD Safety Work JeansT") and cotton\poly blend
uniform style Safety Work Pants ("JD Safety Uniform PantsT"). The Company
is a party to various supply agreements that will enable it to offer a
complete line of commercial and industrial footwear and workwear to
complement its JD Safety Work Jeans and JD Safety Uniform Pants. The
Company's initial product, JD Safety Work Jeans, was designed and patented
by David N. DeBaene, the Company's founder and President, and the Company
has recently received from the Patent and Trademark Office a Notice of
Allowance with respect to its patent application for its Safety Uniform
Pants. The Company expects this patent to issue in May or June 1997.
The Company has a manufacturing arrangement with Reed Manufacturing
Co., Inc. ("Reed") pursuant to which Reed manufactures both the JD Safety
Work Jeans and JD Safety Uniform Pants to the Company's specifications. The
Company also has an arrangement pursuant to which Reed supplies, under the
Company's own label, a complete line of uniform workwear to complement its
proprietary safety products. The Company has a similar supply arrangement
with Mason Shoe of Chippewa Falls, Wisconsin, an established maker of
commercial and industrial footwear.
The Company was incorporated in Rhode Island in 1991 under the name
Jaque Dubois, Inc. and in 1994 changed its state of incorporation to
Delaware. In July 1995, the Company's name was changed to JD American
Workwear, Inc. The Company's business address is 46 Old Flat River Road,
Coventry, Rhode Island 02816, and its telephone number is (800) 43-JEANS
(435-3267).
FORWARD LOOKING STATEMENTS
When used in this Prospectus, the words "may," "will," "expect,"
"anticipate," "continue," "estimate," "project," "intend" and similar
expressions are intended to identify forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 regarding events, conditions and financial
trends that may affect the Company's future plans of operations, business
strategy, operating results and financial position. Prospective investors
are cautioned that any forward-looking statements are not guarantees of
future performance and are subject to risks and uncertainties and that
actual results may differ materially from those included within the forward-
looking statements as a result of various factors. Such factors are
described in the Company's Exchange Act reports under the headings
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "The Company," "Business" and in the Risk Factors set forth
below.
RISK FACTORS
All prospective investors should carefully consider, among other
things, the following factors before purchasing any securities offered
hereby:
Accumulated Deficit and Operating Losses and Anticipated Continuing
Losses; Explanatory Language in Auditor's Report Regarding Ability to
Continue as Going Concern. The Company had an accumulated deficit at
February 29, 1996 of $2,530,249 and incurred a net loss of $1,171,988 for
the fiscal year ended February 29, 1996. At November 30, 1996, the
accumulated deficit was $3,059,004 and the Company's net loss for the nine
months then ended was $528,755. Because the Company has recently emerged
from the development stage and is attempting to scale up its operations, it
is expected that the Company will continue to sustain losses for the fiscal
year ended February 28, 1997, for part if not all of the fiscal year ending
February 28, 1998, and perhaps thereafter. The Company had significant
negative cash flow from operations during each of fiscal 1995, 1996 and 1997
and the Company continues to experience negative cash flow as it builds
inventory to be in a position to aggressively pursue market opportunities.
Additionally, the Company's financial statements are presented on the basis
that the Company is a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the ordinary course of
business. The report of the Company's auditors concerning the Company's
financial statements for the two years ended February 29, 1996 includes an
explanatory paragraph expressing substantial doubt with respect to the
Company's ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Need for Additional Financing. The Company will be required to seek
additional financing if adequate levels of revenue are not realized, if
higher than anticipated costs are incurred in the expansion of the Company's
manufacturing and marketing activities, or if product demand exceeds
expected levels. There can be no assurance that any additional financing
thereby necessitated will be available on acceptable terms to the Company,
if at all.
Manufacturing, Distribution and Scale Up Risks. Although the Company
has established numerous customer relationships as well as relationships
with suppliers and manufacturers to conduct operations at higher unit
volumes, difficulties may be experienced in inventory management, product
distribution and other areas until the Company's operations have been scaled
up for some period of time. Since the Company's manufacturing arrangement
with Reed Manufacturing Co., Inc. is relatively new, difficulties such as
production delays and quality control problems may be encountered. In the
past, the Company switched manufacturers on two occasions, once because of
the Company's capital constraints in meeting minimum production levels and
once because of the manufacturer's quality control problems. These past
incidents caused an inventory shortage which adversely affected the
Company's operations. During a portion of fiscal 1997, the Company was
unable, due to capital constraints, to maintain its production schedule with
Reed, and thereby incurred production surcharges of approximately $30,000.
This could recur if the Company does not obtain additional capital.
Stockholders should be aware that unanticipated problems, many of which may
be beyond the Company's control, could be encountered. These include, but
are not limited to, product development, marketing and customer support
problems, increased competition, new manufacturer learning curve, and lack
of credibility with suppliers and customers. There can be no assurance that
the Company's products will achieve broad based market acceptance or that in
view of the extensive manufacturing, sales and marketing and general
overhead costs expected to be incurred by the Company, that any sales will
result in positive cash flow or profitable operations.
Dependence on Limited Management; Part Time Chief Financial Officer.
The success of the Company is substantially dependent on the efforts and
abilities of its founder and President, David N. DeBaene, Thomas A. Lisi,
its Executive Vice President of Sales and Marketing, and Anthony Santucci,
its Chief Financial Officer. Decisions concerning the Company's business
and its management are and will continue to be made or significantly
influenced by Messrs. DeBaene, Lisi and Santucci. The loss or interruption
of their continued services would have a materially adverse effect on the
Company's business operations and prospects. Mr. Santucci is not required
to devote, and does not devote, full time to the Company. Mr. Santucci's
oral agreement with the Company does not require him to devote any minimum
amount of time to the Company's business, although it does require him to
perform activities related to his office as he shall be reasonably directed
and use his best efforts, skills and abilities to promote the best interests
of the Company. In the event that the Company's growth is rapid and
sustained, the Company may be forced to seek the services of a full time
Chief Financial Officer if Mr. Santucci is not in a position to render such
services to the Company.
Control by Current Stockholders, Officers and Directors. Management
and affiliates of the Company currently beneficially own (including shares
they have the right to acquire) approximately 41% of the outstanding Common
Stock. These persons are and will continue to be able to exercise control
over the election of the Company's directors and the appointment of
officers.
Limited Customer Base; Seasonality. A significant amount of the
Company's past sales have been derived from a relatively small number of
customers. Failure of the Company to expand its customer base could have
a material adverse effect on the Company's results of operations. The
Company's business has been subject to seasonal trends based upon climate,
because the highly durable denim in JD Safety Work Jeans is heavier (and
consequently warmer) than the materials used in conventional work jeans.
Sales volume for JD Safety Work Jeans is higher during the fall and winter
seasons and declines to lower levels during the spring and summer seasons.
The Company believes that sales of JD Safety Uniform Pants and the
conventional workwear now offered by the Company will be somewhat less
sensitive to the seasonal trends which affect JD Safety Work Jeans. The
Company believes, therefore, that as its revenue mix changes to include
greater uniform sales volume, overall seasonality will be reduced, but not
eliminated.
Dividend Policy. The Company has never declared or paid a dividend on
its Common Stock, and management expects that a substantial portion of any
future earnings will be retained for expansion or development of the
Company's business. The decision to pay dividends, if any, in the future is
within the discretion of the Board of Directors and will depend upon the
Company's earnings, capital requirements, financial condition and other
relevant factors such as contractual obligations. Management, therefore,
does not anticipate that the Company will pay dividends on the Common Stock
in the foreseeable future.
Significant Competition. The work clothing industry is highly
competitive and dominated by several large companies with substantially
greater financial resources and name recognition than the Company. Many of
these companies are well established and possess substantially greater
financial, technological and personnel resources than the Company. The
Company's ability to compete with such competition will depend on the
features, quality and price of its products, customer service, effective
sales and marketing programs and upon its ability to design innovative
products which meet the needs of the marketplace. No assurances can be
given that the Company will be able to compete successfully.
Sales and Marketing. The Company has a network of non-exclusive sales
representatives. The Company's future growth and profitability will depend
in part, on the expansion of this representative network and later, if
business conditions dictate, upon the building of an internal sales force,
the hiring of a sufficient number of qualified sales agents and upon their
ability to develop and continue relationships with commercial accounts.
Limited Proprietary Protection. The Company holds a patent issued by
the United States Patent and Trademark Office ("PTO") on one of its
proprietary products - JD Safety Work Jeans. In addition, the Company has
received from the PTO a Notice of Allowance on its patent application for
its uniform style JD Safety Uniform Pants. The Company expects this patent
to issue in May or June 1997. No assurance can be given that this patent,
if issued, or the patent on the JD Safety Work Jeans, will provide any
meaningful protection. The Company also has registered trademarks in the
United States on the names Jaque Dubois(R), The Original Jaque Dubois
Carpenter Jean(R) and The Original Jaque Dubois Construction Jean(R) which the
Company is in the process of discontinuing because of its name change. The
Company does not currently have any registered trademarks for the name JD
American Workwear, but has filed applications with the PTO to register that
name and certain proprietary trademarks that are currently and will in the
future be used to identify the Company's principal products. The Company
regards the non-patented and the non-copyrighted technology and know-how
related to its products as proprietary trade secrets and attempts to protect
them with confidentiality agreements and confidentiality provisions in its
employee handbook and in its various agreements. Confidentiality
agreements, however, may be difficult to enforce, and, despite the
precautions the Company has taken, it may be possible for third parties to
copy aspects of the Company's products or, without authorization, to obtain
and use information which the Company regards as proprietary.
Underwriter's Unit Purchase Option and Additional Options and
Warrants. In connection with the Public Offering the Company issued to the
Underwriter an option to purchase 32,777 Units exercisable at $8.4375 per
unit for a term of three years commencing January 11, 1996 (the "Unit
Purchase Option"). In addition, the Company has reserved shares of its
Common Stock for issuance upon exercise of common stock purchase warrants,
including approximately 181,000 warrants issued to investors in connection
with the Company's 1995 private placements (collectively, the "Placement
Warrants"), 50,000 warrants issued to an outside Director, and an aggregate
of 469,648 (such amount being subject to certain vesting conditions) warrants
issued to two outside consultants of the Company associated with the
Underwriter. None of these warrants are subject to the Plan, and they are
not covered by the Registration Statement of which this Prospectus forms a
part. None of the Placement Warrants or other warrants have been exercised.
The holders of the Placement Warrants and certain of the other warrants have
certain registration rights with respect to the public resale of the Common
Stock underlying the Placement Warrants. In addition, the Company has agreed
with the Underwriter, under certain circumstances, to register the Shares and
Class A Warrants subject to the Unit Purchase Option for distribution to the
public. Exercise of these registration rights could involve a substantial
expense to the Company and could prove a hindrance to future financings.
Shares Under Stock Option Plan. The Company has reserved 250,000
shares of its Common Stock for issuance upon exercise of stock options or
similar awards which may be granted pursuant to the Company's 1995 Stock
Option Plan (hereinafter the "Plan"). At the date hereof, restricted stock
grants covering 28,000 shares and options to purchase an aggregate of
212,500 shares have been issued under the Plan. Exercise of the Unit
Purchase Option, the Placement Warrants, the outstanding warrants and stock
options, and those which have been or may be granted under the Plan
(collectively, the "Convertible Securities"), will reduce the percentage of
Common Stock held by the public stockholders. Further, the terms on which
the Company could obtain additional capital during the life of the
Convertible Securities may be adversely affected, and it should be expected
that the holders of the Convertible Securities would exercise them at a time
when the Company would be able to obtain equity capital on terms more
favorable than those provided for by such Convertible Securities.
OTC Bulletin Board; Volatility of Price. Currently, the Common Stock
is quoted on the OTC Bulletin Board. The OTC Bulletin Board offers less
trading liquidity than Nasdaq. Quotes for securities traded on the OTC
Bulletin Board are not as widely available in newspapers as are those for
Nasdaq. Therefore, this lack of readily available price information may
impair the ability of purchasers of the Common Stock to resell the
securities offered hereby at or near their purchase price or at any price.
Furthermore, it is unlikely that a lending institution will accept the
Company's securities as pledged collateral for loans even if a regular
trading market develops. The trading price of the Common Stock could be
subject to wide fluctuations in response to quarterly variations in the
Company's operating results, announcements by the Company or others,
developments affecting the Company, and other events or factors. In
addition, the stock market has experienced extreme price and volume
fluctuations in recent years. These fluctuations have had a substantial
effect on the market price for many companies, often unrelated to the
operating performance of such companies and may adversely affect the market
price of the Common Stock.
Proceeds of the Offering. The Company will not receive any of the
proceeds of this offering. All of the proceeds of this offering will be
received by the Selling Security Holders. However, the Company will
receive the consideration necessary for the exercise of outstanding options
issued under the Plan, if and when such options are exercised. See "Use of
Proceeds."
Possible Future Sales of Shares by the Selling Security Holders.
Subject to the restrictions described under "Risk Factors -- Shares Eligible
for Future Sale" and applicable law, the Selling Security Holders could
cause the sale of any or all the shares of Common Stock they own upon the
effectiveness of the Registration Statement of which this Prospectus forms a
part. The Selling Security Holders may determine to sell shares of Common
Stock from time to time for any reason. Although the Company can make no
prediction as to the effect, if any, that sales of shares of Common Stock
owned by Selling Security Holders would have on the market price prevailing
from time to time, sales of substantial amounts of Common Stock, or the
availability of such shares for sale in the public market, could adversely
affect prevailing market prices of Common Stock.
Shares Eligible for Future Sale. There are 1,736,433 shares of Common
Stock currently outstanding. To the extent they are not held by
"affiliates," the 327,768 shares sold in the Company's initial public
offering, approximately 106,000 shares publicly resold under Rule 144, and
the shares of Common Stock offered hereby are eligible for sale in the
public market. All of the remaining issued and outstanding shares of Common
Stock are currently "restricted securities" for purposes of the Act.
Although the Company can make no prediction as to the effect, if any, that
sales of the shares of Common Stock referred to above would have on the
market price prevailing from time to time, sales of substantial amounts of
Common Stock, or the availability of such shares for sale in the public
market could adversely affect prevailing prices of the Common Stock.
Potential Effect of Penny Stock Rules on Liquidity of Common Stock.
If the Company's securities are not listed on NASDAQ SmallCap market or
certain other national securities exchanges and the price thereof falls
below $5.00, then subsequent purchases of such securities will be subject to
the requirements of the penny stock rules absent the availability of another
exemption. The Securities and Exchange Commission ("SEC") has adopted rules
that regulate broker-dealer practices in connection with transactions in
"penny stocks." Penny stocks generally are equity securities with a price
of less than $5.00 (other than securities registered on certain national
securities exchanges or quoted on the Nasdaq system). The penny stock rules
require a broker-dealer to deliver a standardized risk disclosure document
required by the SEC, to provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and
its salesperson in the transaction, monthly account statements showing the
market value of each penny stock held in the customer's account, to make a
special written determination that the penny stock is a suitable investment
for the purchaser and receive the purchaser's written agreement to the
transaction. These disclosure requirements may have the effect of reducing
the level of trading activity in the secondary market for a stock that
becomes subject to the penny stock rules. If the Company's securities
become subject to the penny stock rules, stockholders may find it more
difficult to sell their securities. If the Company's securities were
subject to the existing or proposed regulations on penny stocks, the market
liquidity for the Company's securities could be severely and adversely
affected by limits on the ability of broker/dealers to sell the Company's
securities and the ability of purchasers in this offering to sell their
securities in the secondary market.
Limitation on Directors' Liabilities under Delaware Law. Pursuant to
the Company's Certificate of Incorporation and under Delaware law, directors
of the Company are not liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty, except for liability in
connection with a breach of duty of loyalty, for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, for dividend payments or stock repurchases illegal under Delaware law
or any transaction in which a director has derived an improper personal
benefit.
Authorization and Discretionary Issuance of Preferred Stock. The
Company's Certificate of Incorporation authorizes the issuance of "blank
check" preferred stock with such designations, rights and preferences as may
be determined from time to time by the Board of Directors. Accordingly, the
Board of Directors is empowered, without stockholder approval, to issue
preferred stock with dividends, liquidation, conversion, voting or other
rights which could adversely affect the relative voting power or other
rights of the holders of the Company's Common Stock. In the event of
issuance, the preferred stock could be used, under certain circumstances, as
a method of discouraging, delaying or preventing a change in control of the
Company, which could have the effect of discouraging bids for the Company
and thereby prevent stockholders from receiving the maximum value for their
shares. Although the Company has no present intention to issue any shares
of its preferred stock, there can be no assurance that the Company will not
do so in the future.
USE OF PROCEEDS
The shares which may be sold under this Prospectus will be sold for
the respective accounts of each of the Selling Stockholders. Accordingly,
the Company will not realize any proceeds from the sale of the shares,
except that the Company will derive net proceeds of approximately $575,000
if all of the options currently outstanding are exercised. Such funds will
be available to the Company for working capital and general corporate
purposes. No assurance can be given, however, as to when or if any or all
of the options will be exercised. All expenses of the registration of the
Shares will be paid for by the Company. See "Selling Shareholders" and
"Plan of Distribution."
SELLING SHAREHOLDERS
The following table sets forth the name and relationship to the
Company of each Selling Shareholder and the number of shares of Common Stock
which each Selling Shareholder (1) owned of record as of April 21, 1997; (2)
may acquire pursuant to the exercise of a previously granted option or
options which hereafter may be granted under the Plan, all of which Shares
may be sold pursuant to this Prospectus; and (3) the amount of Common Stock
to be owned by each Selling Shareholder assuming the grant of the maximum
number of shares issuable under the Plan, the exercise of all options
granted under the Plan, and the sale of all shares acquired upon exercise of
such options.
<TABLE>
<CAPTION>
Expected to Acquire Amount of Common Percentage of
Pursuant to the Plans Stock to be Owned Common Stock
Name and Relationship Owned as of and Offered Pursuant After Exercise and Owned After Exercise
to the Company April 21, 1997 Hereto(1) Sales and Sales
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mission Bay Consulting, Inc.
(Consultant) 28,000 200,000 0 0%
- --------------------
<F1> Includes shares that may be acquired within 180 days upon exercise of
options, subject to certain vesting conditions.
</TABLE>
PLAN OF DISTRIBUTION
The securities covered by this Prospectus (the "Securities") may be
sold from time to time by the Selling Security Holders, or by pledgees,
transferees or other successors in interest, on the NASD's OTC Bulletin
Board (or such other exchange on which the Securities are listed at the time
of sale), in the over-the-counter market or otherwise, at prices and at
terms then prevailing or at prices related to the then current market price,
or in privately negotiated transactions. The Securities may be sold by
various methods, including, but not limited to one or more of the following;
(a) directly in a privately negotiated transaction; (b) a block trade in
which the broker or dealer so engaged will attempt to sell the Securities as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (c) purchased by a broker or dealer as principal
and resale by such broker or dealer for its own account pursuant to this
Prospectus; (d) an exchange transaction in accordance with the rules of such
exchange; and (e) ordinary brokers transactions and transactions in which
the broker solicits purchasers. In effecting sales, brokers or dealers
engaged by the Selling Security Holders may arrange for other brokers or
dealers to participate. Alternatively, the Selling Security Holders may
from time to time offer the Securities through underwriters, dealers or
agents who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Security Holders and/or the
purchasers of Securities for whom they may act as agents. In addition any
of the Securities which qualify for sale pursuant to Rule 144 under the Act,
or otherwise pursuant to an applicable exemption under the Act, may be sold
other than pursuant to this Prospectus.
The Selling Security Holders and any such underwriters, dealers or
agents that participate in the distribution of Securities may be deemed to
be underwriters, and any profit on the sale of the Securities by them and
any discounts, commissions or concessions received by them may be deemed to
be underwriting discounts and commissions under the Act. The Securities may
be sold from time to time in one or more transactions at a fixed offering
price, which may be changed, or at varying prices determined at the time of
sale or at negotiated prices. Such prices will be determined by the Selling
Security Holders or by an agreement between the Selling Security Holders and
underwriters or dealers. Brokers or dealers acting in connection with the
sale of the Securities contemplated by this Prospectus may receive fees or
commissions in connection therewith.
At the time a particular offer of Securities is made, to the extent
required, a supplement to this Prospectus will be distributed which will
identify and set forth the aggregate amount of Securities being offered and
the terms of the offering, including the name or names of any underwriters,
dealers or agents, the purchase price paid by any underwriter for Securities
purchased from the Selling Security Holders, any discounts, commissions and
other items constituting compensation from the Selling Security Holders
and/or the Company and any discounts, commissions or concessions allowed or
reallowed or paid to dealers, including the proposed selling price to the
public. Such supplement to this Prospectus and, if necessary, a post-
effective amendment to the Registration Statement of which this Prospectus
is a part, will be filed with the Commission to reflect the disclosure of
additional information with respect to the distribution of the Securities.
The Company will pay all of the expenses incident to the registration and
certain other expenses related to this offering with respect to Securities,
other than underwriting commissions and discounts, normal commission
expenses and brokerage fees, applicable transfer taxes and attorney's fees
of Selling Security Holders' counsel.
Upon the Company's being notified by any Selling Stockholder that any
material arrangement has been entered into with a broker-dealer for the sale
of Securities through a cross or block trade, a supplemental prospectus will
be filed under Rule 424(c) under the Securities Act, setting forth the name
of the participating broker-dealer(s), the number of shares involved, the
price at which such shares were sold by the Selling Stockholder, the
commissions paid or discounts or concessions allowed by the Selling
Shareholder to such broker-dealer(s), and where applicable, that such
broker-dealer(s) did not conduct any investigation to verify the information
set out in this Prospectus.
Any Securities covered by this Prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under that Rule
rather than pursuant to this Prospectus.
The Selling Security Holders have entered into indemnification
agreements with the Company pursuant to which the Company will be
indemnified against failure by the Selling Security Holders to deliver a
Prospectus if required, as well as against certain civil liabilities,
including liabilities under the Act or the Exchange Act, incurred in
connection with any untrue (or alleged untrue) statement of a material fact
or omission of a material fact in this Registration Statement to the extent
such liability relates to information supplied by the Selling Security
Holder for inclusion in the Registration Statement or Prospectus.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Securities may not enter bids to
purchase, purchase or engage in similar trading or market making activities
with respect to the Securities for a period commencing nine business days
prior to the commencement of such distribution and ending with the
completion of such distribution. In addition, and without limiting the
foregoing, the Selling Security Holders and any person participating in the
distribution of the Securities will 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
and sales of the Securities by the Selling Security Holders. All of the
foregoing may affect the marketability of the Securities.
In order to comply with certain states' securities laws, if
applicable, the Securities will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states the Securities
may not be sold unless the Securities have been registered or qualified for
sale in such state, or unless an exemption from registration or
qualification is available and is obtained.
There can be no assurance that the Selling Security Holders will sell
any or all of the Securities offered by them hereby.
PART II
-------
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3 (FORM S-8): DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the Commission (File No. 33-98682)
pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year
ended February 29, 1996, as filed and as amended from time to
time.
2. The Company's Quarterly Report on Form 10-QSB for the quarter
ended May 31, 1996.
3. The Company's Quarterly Report on Form 10-QSB for the six months
ended August 31, 1996.
4. The Company's Quarterly Report on Form 10-QSB for the nine months
ended November 30, 1996.
5. All other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Exchange Act since January 14, 1997.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of
this offering shall be deemed to be incorporated by reference in this
Prospectus and to be a part of this Prospectus from the date of filing
thereof.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute part of this Prospectus.
ITEM 4 (FORM S-8): DESCRIPTION OF SECURITIES
The Common Stock
Each holder of Common Stock is entitled to one vote per share in the
election of directors and on all other matters submitted to a vote of
stockholders. The Common Stock has no cumulative voting rights. The
holders of shares of Common Stock have no preemptive rights and are entitled
to share ratably in any dividends when, as and if declared by the Board of
Directors out of funds legally available therefor. In the event of a
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in all assets remaining available for
distribution to them after payment of liabilities and after provision is
made for each class of stock, if any, having preference over the Common
Stock. There are no pre-emptive or conversion rights, and the shares are
not subject to redemption. All shares of Common Stock now outstanding and
shares to be outstanding upon completion of this Offering are, and will be,
fully paid and non-assessable.
The Company's by-laws which govern the rights of stockholders of the
Company in accordance with statutory guidelines set forth under the General
Corporation Law of the State of Delaware, provide that such by-laws may be
amended by a majority vote of the stockholders or by a majority vote of the
Board of Directors. Any amendment of the by-laws by action of the Board of
Directors is subject to further amendment or repeal by a majority vote of
the stockholders.
Stockholders do not have cumulative voting rights for the election of
directors. Therefore, the holders of more than 50% of the shares voting for
the election of directors could, if they chose to do so, elect all of the
directors, and in such event, the holders of the remaining shares would not
be able to elect any directors.
The Company has not paid any dividends since its organization. While
the payment of dividends rests within the discretion of the Board of
Directors, the Company presently intends to retain all earnings, if any, in
the foreseeable future for use in the development of its business. It is
not anticipated that dividends will be paid in the foreseeable future.
Moreover, there can be no assurance that dividends can or will ever be paid.
There are no provisions discriminating against any existing or
prospective holder of the Company's Common Stock as a result of such holder
owning a substantial amount of the Company's Common Stock.
With the exception of the authorized and unissued Preferred Stock,
there is no provision in the Company's charter or by-laws that would have
the effect of delaying, deferring or preventing a change in control in the
Company or that would operate only with respect to an extraordinary
corporate transaction involving the Company, such as a merger,
reorganization, tender offer, sale or transfer of substantially all of the
Company's assets, or liquidation. The Company, in its original Certificate
of Incorporation, opted out of the provisions of Section 203 of the Delaware
General Corporation Law relating to certain business combination
transactions.
Transfer Agent
The Transfer Agent for the Company's Common Stock is Jersey Transfer
and Trust Co., 201 Bloomfield Ave., P.O. Box 36, Verona, NJ 07044.
ITEM 5 (FORM S-8): INTERESTS OF NAMED EXPERTS AND COUNSEL
The balance sheet of the Company as of February 29, 1996 and the
statements of operations, changes in capital deficiency and cash flows for
each of the years in the two-year period ended February 29, 1996,
incorporated by reference in this Registration Statement have been audited
by Richard A. Eisner & Company, LLP., independent auditors, whose report
thereon, dated May 23, 1996, is included in the Company's Annual Report on
Form 10-KSB for the year ended February 29, 1996 (the "1996 Annual Report").
These financial statements have been incorporated herein by reference in
reliance upon the report of Richard A. Eisner & Company, LLP, and upon their
authority as experts in accounting and auditing.
The legality of the Common Stock to be offered hereby has been passed
upon for the Company by Herten, Burstein, Sheridan, Cevasco, Bottinelli &
Litt, 25 Main St., Court Plaza North, Hackensack, NJ 07601. Gerard S.
DiFiore, a member of the firm, holds a warrant to purchase 50,000 shares of
Common Stock.
ITEM 6 (FORM S-8) AND ITEM 15 (FORM S-3): INDEMNIFICATION OF DIRECTORS AND
OFFICERS
The Company is permitted by Delaware law and required by its
Certificate of Incorporation and By-Laws to indemnify any present or former
director, officer, employee or agent against all expenses and liabilities
reasonably incurred by him in connection with any legal action in which such
person is involved by reason of his position with the Company unless he is
adjudged liable for negligence or misconduct in the performance of his
duties as a director, officer, employee or agent.
In addition to such other rights of indemnification as they may have
as directors or as members of the committee (the "Committee") administering
the Company's 1995 Stock Option Plan (the "Plan"), under the terms of the
Plan the members of the Committee shall be indemnified by the Company
against the reasonable expenses, including attorney's fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any
of them may be a party by reason of any action taken or failure to act under
or in connection with the Plan or any option granted thereunder, and against
all amounts paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such
action, suit or proceeding that such Board member is liable for negligence
or misconduct in the performance of his duties.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company
has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
ITEM 7 (FORM S-8): EXEMPTION FROM REGISTRATION CLAIMED
The 28,000 shares of Common Stock issued under the Plan were issued in
a transaction not involving a public offering and such offer and sale were
therefore exempt pursuant to the provision of Section 4(2) under the Act.
ITEM 20 (FORM S-8) AND ITEM 16 (FORM S-3): EXHIBITS
<TABLE>
<CAPTION>
Number Description
- ------ -----------
<S> <C>
1 Registrant's Certificate of Incorporation*
2 Registrant's By-Laws*
4.1 Registrant's 1995 Stock Option Plan*
5.1 Opinion of Herten, Burstein, Sheridan, Cevasco, Bottinelli & Litt, LLC.
23.1 Consent of Richard A. Eisner & Company, LLP (included on page II-6)
23.2 Consent of Herten, Burstein, Sheridan, Cevasco, Bottinelli & Litt,
LLC. (included in Exhibit 5.1)
24.1 Powers of Attorney, included on the signature page of the Registration
Statement filed April 24, 1997.
- --------------------
* Incorporated by reference to the Registrant's Form SB-2 Registration
Statement No. 33-98682 filed on October 29, 1995.
</TABLE>
ITEM 21 (FORM S-8) AND ITEM 17 (FORM S-3): UNDERTAKINGS
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement of JD American Workwear, Inc. (the "Company") on Form S-8 and Form
S-3 of our report dated May 23, 1996 on the financial statements of the
Company as at February 29, 1996 and for each of the years in the two-year
period ended February 29, 1996 appearing in the Company's annual report on
Form 10-KSB for its fiscal year ended February 29, 1996. We also consent to
the reference to our firm under the caption "Interests of Named Experts and
Counsel" included in the Registration Statement.
Richard A. Eisner & Company, LLP
Cambridge, Massachusetts
April 23, 1997
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-8/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 Coventry, State of Rhode Island,
on April 22, 1997.
JD AMERICAN WORKWEAR, INC.
By: /s/ DAVID N. DEBAENE
David N. DeBaene, President
Know all persons by these presents, that each person whose signature
appears below, constitutes and appoints David N. DeBaene and, jointly and
severally, his attorneys-in-fact, each with the power of substitution, for
him in any and all capacities, to sign any amendment to this Registration
Statement on Forms S-8/S-3 and to file the same with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said attorneys-
in-fact, or his substitute or substitutes, may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
/s/ DAVID N. DEBANE Chairman of the Board, President April 22, 1997
David N. DeBaene and Chief Executive Officer
(Principal Executive Officer)
/s/ ANTHONY SANTUCCI Chief Financial Officer
Anthony Santucci (Principal Financial Officer) April 22, 1997
/s/ THOMAS A. LISI Executive Vice President of Sales April 22, 1997
Thomas A. Lisi and Marketing and Director
/s/ GERARD S. DIFIORE Assistant Secretary and Director April 23, 1997
Gerard S. DiFiore
/s/ ELIZABETH COTTER Director April 22, 1997
Elizabeth Cotter
/s/ DEAN M. DENUCCIO Director April 22, 1997
Dean M. Denuccio
April 24, 1997
Board of Directors
JD American Workwear, Inc.
46 Old Flat River Road
Coventry, Rhode Island 02816
RE: Registration Statement on Form S-3/S-8 with Respect to
JD American Workwear, Inc. 1995 Stock Option Plan
Ladies and Gentlemen:
This opinion is delivered to you in connection with the Registration
Statement on Form S-8/S-3 (the "Registration Statement"), which will be
filed on or about April 24, 1997 by JD American Workwear, Inc. (the
"Company") under the Securities Act of 1933, as amended (the "Act") for
registration under the Act of 250,000 shares (the "S-8 Shares") of Common
Stock, $.002 par value, of the Company to be sold and issued by the Company
pursuant to its 1995 Stock Option Plan (the "Plan") and, for resale only, of
28,000 shares (the "S-3 Shares") of Common Stock, $.002 par value, of the
Company previously issued pursuant to the Plan.
We are familiar with the Certificate of Incorporation, the corporate
minute book and the Bylaws of the Company, the Plan and the Registration
Statement. We have examined the proceedings taken and proposed to be taken
in connection with the issuance, sale and payment of consideration for the
S-8 Shares; the proceedings taken in connection with the issuance, sale and
payment of consideration for Common Stock previously issued under the Plan;
and the steps taken and proposed to be taken in connection with the resale
of the S-3 Shares originally issued pursuant to the Plan. We have also
examined such other documents, records and certificates and made such
further investigation as we have deemed necessary for the purposes of this
opinion.
Based upon and subject to the foregoing, we are of the opinion that
upon completion of the proceedings being taken or contemplated by us, as
your counsel, to be taken prior to the issuance of the S-8 Shares pursuant
to the S-8 Prospectus contained in the Registration Statement, and to be
taken prior to the resale of the S-3 Shares pursuant to the S-3 Prospectus
contained in the Registration Statement, and upon completion of the
proceedings being taken to permit such transactions to be carried out in
accordance with the securities laws of the various states where required,
the S-8 Shares will be legally issued, fully paid and nonassessable, and the
S-3 Shares are now, and when resold in accordance with Rule 144(e) of the
Securities Act of 1933, as amended, and in the manner referred to in the
Registration Statement will remain, legally issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the reference to our firm in
the Prospectus under the caption "Legal Opinion and Experts."
Very truly yours,
/s/ HERTEN, BURSTEIN, SHERIDAN, CEVASCO,
BOTTINELLI & LITT, LLC
HERTEN, BURSTEIN, SHERIDAN, CEVASCO,
BOTTINELLI & LITT, LLC
