As filed with the Securities and Exchange Commission on December __, 1998.
Registration No. 33-98682
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
POST EFFECTIVE AMENDMENT NO. 1
ON FORM S-3
TO FORM SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
JD AMERICAN WORKWEAR, INC.
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(Exact name of issuer as specified in its charter)
Delaware 05-0460102
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
46 Old Flat River Road, Coventry, Rhode Island 02816
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(Address of Principal Executive Offices) (Zip Code)
David N. DeBaene, 46 Old Flat River Road, Coventry, Rhode Island 02816
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(Name and address of agent for service)
(401) 397-6800
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(Telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: As soon as
practicable after 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]
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. [X] 33-98682
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If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
The registration fee for the securities registered hereunder was
previously paid by JD American Workwear, Inc. (the "Company") in connection
with the Company's Registration Statement on Form SB-2 filed with the
Commission and declared effective on January 11, 1996. No other shares of
the Company's common stock, $.002 par value, other than those accounted for
in the previous registration statement, are being registered pursuant to
this post-effective amendment No. 1 on Form S-3 to Form SB-2 (the
"Registration Statement").
The Company shall amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Company
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a) may determine.
PROSPECTUS
JD AMERICAN WORKWEAR, INC.
919,820 Shares
Common Stock ($.002 par value)
____________
This Prospectus is being used in connection with the issuance of a
maximum of 919,820 shares of common stock of JD American Workwear, Inc. (the
"Company"), $.002 par value, (the "Common Stock") issuable upon the exercise
of the redeemable Class A Common Stock Purchase Warrants ("Class A
Warrants") and redeemable Class B Common Stock Purchase Warrants ("Class B
Warrants") issued by the Company in 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"). Each Unit consisted of one (1) share of Common Stock
and one (1) Class A Warrant. The Company's Common Stock and Class A
Warrants trade on the National Association of Securities Dealers' OTC
Bulletin Board under the symbols JDAW and JDAWW, respectively.
As of the date of this Prospectus, each Class A Warrant entitles the
holder ("Holder") to receive a unit of securities of the Company consisting
of one (1) share of Common Stock and one (1) Class B Warrant. The exercise
price of the Class A Warrants is $4.99 per unit, subject to adjustment, and
$5.70 per share with respect to the Class B Warrants, subject to adjustment.
The Class A Warrants and the Class B Warrants (collectively the "Warrants")
expire on January 10, 2001. The Class A Warrants are subject to redemption
by the Company upon thirty (30) days written notice at $.02 per Warrant, if
the average of the closing bid prices for the Common Stock on the OTC
Bulletin Board or Nasdaq, as applicable, exceeds $5.70 per share for twenty
consecutive trading days ending within fifteen (15) days of the date of
notice of redemption.
The bid and asked prices of the Company's Common Stock on December __,
1998 as reported by the NASD's OTC Bulletin Board was $_____ and $____,
respectively.
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND SHOULD NOT BE PURCHASED BY INVESTORS WHO CANNOT AFFORD THE LOSS OF
THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" ON PAGE 11.
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 date of this Prospectus is December __, 1998.
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 (the
"Commission"), a Registration Statement on Form S-3 under the Securities Act
of 1933, as amended (the "Act"), 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. Statements
contained in this Prospectus as to the contents of any contract or other
documents referred to are not necessarily complete, and are qualified in all
respects by such reference.
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 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 Commission
maintains a website that contains reports, proxy and information statements
and other information regarding registrants, such as the Company, that file
electronically with the Commission. The Commission's website is
http://www.sec.gov.
The Common Stock of the Company is listed for quotation on the NASD's
OTC 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 the NASD OTC Bulletin Board, 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 28, 1998, as filed and as amended from time to
time.
2. The Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended May 31, 1998, as filed and as amended from time to
time.
3. The Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended August 31, 1998, as filed and as amended from time
to time.
4. All other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Exchange Act since October 20, 1998.
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 P.
Santucci, Chief Financial Officer, JD American Workwear, Inc., 46 Old Flat
River Road, Coventry, Rhode Island 02816, telephone: (401) 397-6800.
SPECIAL NOTE REGARDING 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 and Section 21E of the Exchange
Act 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.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
more detailed information and financial statements, including the notes
thereto, appearing elsewhere in or incorporated by reference into this
Prospectus. Each prospective investor is urged to read this Prospectus in
its entirety.
THE COMPANY
Recent Developments
Private Placement of Series A Preferred Stock. In December, 1997, the
Company completed a private placement of $782,500 of Series A 10%
Manditorily Convertible Preferred Stock, $.001 par value (the "Series A
Preferred Stock"). The Series A Preferred Stock is convertible, at the
option of the holder, into shares of the Company's Common Stock at
conversion rate equal to 1,295 shares of Common Stock for each share of
Series A Preferred Stock (representing a conversion price of $1.93 per share
of Common Stock) after giving effect to antidilution adjustments resulting
from the April 9, 1998 private placement of Series B Preferred Stock
described below under "Recent Developments -- Private Placement of Series B
Preferred Stock." A significant portion of the proceeds of the Series A
Preferred Stock private placement were used to increase production of
finished goods inventory, repay principal and accrued interest on
outstanding short term borrowings, fund marketing and sales programs, settle
overdue accounts payable and accrued liabilities, and for general working
capital purposes.
The Series A Preferred Stock entitles the holders thereof to receive,
when and as declared by the Company's Board of Directors (the "Board"),
cumulative cash dividends in preference to the payment of dividends on all
other shares of capital stock of the Company; however, the Company has the
option of making payment of the semi-annual dividends on the Series A
Preferred Stock either in cash or by issuing additional shares of Series A
Preferred Stock. The Series A Preferred Stock has a liquidation of
preference $2,500 per share. Each holder of Series A Preferred Stock is
entitled to vote on all Company matters and is entitled to the number of
votes equal to the largest number of full shares of Common Stock into which
such shares of Series A Preferred Stock are convertible, which at the date
of this Prospectus is approximately 405,440 shares of Common Stock, without
regard to accrued dividends.
The Company has agreed to file a registration statement to register
the public resale of the Common Stock issuable upon conversion of the Series
A Preferred Stock. At the time that registration statement is declared
effective by the Commission, the Series A Preferred Stock will automatically
convert into Common Stock. The Company has agreed to maintain the
effectiveness of this registration statement until March 15, 1999.
Private Placement of Series B Preferred Stock. On April 9, 1998, the
Company entered into a Securities Purchase Agreement (the "Purchase
Agreement") with The Union Labor Life Insurance Company, a Maryland
corporation ("ULLICO"), and certain additional agreements related to the
Purchase Agreement. Pursuant to the terms of the Purchase Agreement, the
Company issued to ULLICO 2,500 shares of Series B 12% Cumulative Convertible
Preferred Stock, $.001 par value (the "Series B Preferred Stock"). As a
part of the issuance of the Series B Preferred Stock, the Company also
issued to ULLICO a detached ten-year stock purchase warrant to purchase
799,000 shares of Common Stock at an exercise price of $.01 per share (the
"Investor Warrant"). The aggregate purchase price for the Series B
Preferred Stock and the Investor Warrant was $2,500,000. The Company will
use the net proceeds to facilitate and expand a program of union labor
manufacturing of its products, to repay certain notes payable and long-term
debt, and for sales and administrative salaries, product development, sales
and marketing expense, and other general corporate purposes.
The Series B Preferred Stock is convertible, at the option of the
holder, into the number of shares of Common Stock which results from
dividing the conversion price into $1,000 for each share of Series B
Preferred Stock being converted. The initial conversion price is $5.00,
subject to adjustment.
The Series B Preferred Stock entitles ULLICO to receive, when and as
declared by the Company's Board, cumulative cash dividends in preference to
the payment of dividends on all other shares of capital stock of the
Company. The Company has the option of making payment of the semi-annual
dividends on the Series B Preferred Stock either in cash or by issuing
additional shares ("payment in kind" or "PIK") of Series B Preferred Stock
("PIK Dividends") during the two-year period following issuance of the
Series B Preferred Stock (the "PIK Period"). In the event the Company elects
to pay dividends in shares of Series B Preferred Stock, the Company is
required to issue additional detached ten-year dividend warrants (the
"Dividend Warrants") to purchase 54,000 shares of Common Stock at an
exercise price of $.01 per share for each semi-annual dividend period that
PIK Dividends are paid. During the PIK Period the Company may not pay or
declare cash dividends on any stock other than the Series B Preferred Stock.
Unless full dividends on the Series B Preferred Stock for all past dividend
periods and the then current period shall have been paid or declared and a
sufficient sum for the payment thereof set aside in trust for the Series B
Preferred Stock Holders, no dividend (other than a dividend payable solely
in Common Stock) shall be paid or declared, and no distribution made, on any
other shares of stock.
The Company may, at its own option and at any time after the third
anniversary of the original issuance of the Series B Preferred Stock, redeem
the Series B Preferred Stock, in whole but not in part. In such event, the
Company is obligated to pay holders of the Series B Preferred Stock the
investment value per share, which is the sum of (i) the per share amount of
$1,000 plus (ii) the amount of any unpaid dividends on such share, plus a
redemption premium equal to a 20% internal rate of return on the investment
value. A mandatory redemption of 1,250 shares of Series B Preferred Stock
is required on each of the first business days of April 2004 and 2005.
Each holder of Series B Preferred Stock is entitled to vote on all
Company matters and is entitled to the number of votes equal to the largest
number of full shares of Common Stock into which such shares of Series B
Preferred Stock are convertible. The Series B Preferred Stock holders shall
be entitled to elect one director out of the seven authorized directors of
the Company's board and one director out of the three directors comprising
the Company's Compensation Committee. If certain events occur or do not
occur, such as the failure to pay either a PIK Dividend or cash dividend to
the Series B Preferred Stock holders, the holders of the Series B Preferred
Stock shall be entitled, immediately upon giving written notice, to elect
the smallest number of directors that will constitute a majority of the
authorized number of directors.
The Company and ULLICO entered into a registration rights agreement
dated April 9, 1998 (the "Registration Rights Agreement") which requires the
Company, upon written request, to file a registration statement for the
public resale of the Common Stock issued on conversion of the Series B
Preferred Stock. The Company is required to file and cause to become
effective a maximum of two registration statements, excluding registration
statements on Form S-3. The Company shall not be obligated to effect more
than one registration on Form S-3 during any six-month period and shall be
obligated to file and cause to become effective no more than six
registration statements on Form S-3. No registration statement is required
to be filed unless the proposed public offering price of the securities
under such registration shall be at least $5 million (prior to deducting
underwriting discounts and commissions). The Registration Rights Agreement
also provides for incidental registration.
Amendments to the Certificate of Incorporation and 1995 Stock Option
Plan. At the annual meeting of shareholders held on April 15, 1998 (the
"Annual Meeting"), the shareholders of the Company approved an amendment to
the Company's Certificate of Incorporation that increased the number of
authorized shares of Common Stock of the Company from 4,500,000 shares to
7,500,000 shares. In January 1998, the Board voted to amend the Company's
1995 Stock Option Plan to reserve for issuance under the Plan an additional
500,000 shares, for a total of 750,000 shares, which amendment was ratified
by the stockholders of the Company at the Annual Meeting.
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 Jeans") and cotton\poly blend
uniform-style Safety Work Pants ("JD Safety Uniform Pants"). 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 (U.S. Patent No. 5,038,408), was designed and
patented by David N. DeBaene, the Company's founder and President. In June
1997, the Company was granted U.S. Patent No. 5,634,215 covering certain
functional features of its JD Safety Uniform Pants. This patent will expire
in the year 2008. The Company also developed the JD Safety Pant with
Detachable Back Brace for which a patent is pending.
Historically, the Company had a manufacturing arrangement with Reed
Manufacturing Co., Inc. ("Reed") pursuant to which Reed manufactured both
the JD Safety Work Jeans and JD Safety Uniform Pants to the Company's
specifications. In December 1997 the Company began producing JD Safety Work
Jeans and JD Safety Work Uniform Pants in contractor facilities covered by
collective bargaining agreements. As a result, the Company has established
manufacturing relationships with Fine Vines, Inc. ("FVI") and East Texas
Sportswear, Inc. ("East Texas"). The Company has arrangements with several
suppliers, including Reed, FVI and East Texas, pursuant to which such
companies supply, under the Company's own label, a complete line of uniform
workwear to complement its proprietary safety products. The Company
advertises and markets its products through direct mailings, participation
and exhibition of products at industrial trade shows, personal solicitations
at businesses which have been identified as likely purchasers and industry
referrals. The Company's products are sold to several catalog merchants and
distributors for resale to customers. The Company sells through its own
employees and additionally through a team of independent sales
representatives, regional sales directors and sales agents.
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 (401) 397-6800.
THE OFFERING
<TABLE>
<S> <C>
Common Stock outstanding prior
to exercise of the Warrants 2,125,468 shares(1)
Common Stock to be outstanding after
the exercise of the Warrants 3,045,288 shares(2)
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<F1> Does not include approximately (i) 405,440 shares issuable upon the
conversion of the Series A Preferred Stock; (ii) 500,000 shares
issuable upon the conversion of the Series B Preferred Stock and
associated warrants to purchase 799,000 shares; (iii) 124,760 shares
underlying the underwriter's unit purchase option granted in
connection with the Public Offering; (iv) shares underlying options
granted under the Company's 1995 Stock Option Plan; (v) 68,550 shares
underlying warrants issued in connection with the January 1995 private
placement of 12% Subordinated Notes; (vi) 157,343 shares underlying
warrants issued in connection with the August 1995 private placement
of 11% Convertible Subordinated Notes; and (vii) 452,409 shares
underlying certain time and performance warrants issued to a former
director and certain consultants.
<F2> Assumes the exercise of all outstanding Class A Warrants and Class B
Warrants.
</TABLE>
Use of Proceeds Any proceeds received by the Company from time
to time upon the exercise of the Warrants owned
by the Holders will be used for working capital
and general corporate purposes.
Risk Factors The securities offered hereby involve a high
degree of risk. See "Risk Factors".
OTCBB Symbol Common Stock - JDAW
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 28, 1998 of $4,496,566 and incurred a net loss of $1,162,109 for
the fiscal year ended February 28, 1998. At August 31, 1998, the accumulated
deficit was $5,140,348 and the Company's net loss for the six months then
ended was $643,782. Because the Company is attempting to scale up its
operations, it is expected that the Company will continue to sustain losses
for part if not all of the fiscal year ended February 28, 1999, and perhaps
thereafter. The Company had significant negative cash flow from operations
during each of fiscal 1996, 1997 and 1998 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 reports of the
Company's auditors concerning the Company's financial statements for each of
the two years ended February 28, 1998 include 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. In the event that 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, the Company may be required to seek
additional financing. 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 has recently entered into
manufacturing arrangements with FVI and East Texas, difficulties such as
production delays and quality control problems may be encountered. The
Company has switched manufacturers on three occasions, once because of the
Company's capital constraints in meeting minimum production levels, once
because of the manufacturer's quality control problems and most recently in
contemplation of the Company's transaction with ULLICO. Two of these past
incidents caused an inventory shortage which adversely affected the
Company's operations. 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.
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.
Sales and Marketing. The Company has a network of non-exclusive
independent 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.
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. Neither Mr. Lisi nor Mr.
Santucci are required to 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 additional
accounting or other administrative personnel or a full time senior sales
executive or additional sales personnel.
Control by Current Management. Management and affiliates of the
Company currently beneficially own (including shares they have the right to
acquire) approximately 39.74% of the outstanding Common Stock.(3) 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.
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(3) Does not include shares of Common Stock issuable upon conversion of
Series B Preferred Stock or shares of Common Stock issuable upon
exercise of outstanding warrants owned of record by ULLICO, of which
Mr. Canapary, an outside Director of the Company and member of the
Compensation Committee, serves as Vice President-Investments.
Possible Change in Control. Pursuant to its agreements with ULLICO,
the Series B Preferred Stock holders shall be entitled to elect one director
out of the seven authorized directors of the Company's board and one
director out of the three directors comprising the Company's Compensation
Committee. If certain events occur or do not occur, such as the failure to
pay either a PIK Dividend or cash dividend to the Series B Preferred Stock
holders, the holders of the Series B Preferred Stock shall be entitled,
immediately upon giving written notice, to elect the smallest number of
directors that will constitute a majority of the authorized number of
directors. Moreover, ULLICO holds Series B Preferred Stock which is
currently convertible into 500,000 shares of Common Stock, and holds
warrants to purchase 799,000 shares of Common Stock. Pursuant to its
agreements with ULLICO, in the event the Company does not reach certain
performance milestones, the Series B Preferred Stock held by ULLICO may be
converted into a greater number of shares of the Company's Common Stock than
provided for upon conversion if the performance targets are met. As a
result, ULLICO could potentially obtain a substantial controlling interest
in the Company. There can be no assurance that the Company will be able to
meet the performance targets set forth in the applicable agreements and,
therefore, avoid a possible change in control of the Company's capital
stock. Such a change in control may result in fundamental changes to the
management of the Company and the character of its business.
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.
Limited Proprietary Protection. The Company holds patents issued by
the United States Patent and Trademark Office ("PTO") on two of its
proprietary products - JD Safety Work Jeans and JD Safety Uniform Pants. No
assurance can be given that these patents will provide any meaningful
protection. The Company also has registered trademarks in the United States
on the aforementioned products as well as 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 an
application with the PTO to register that name. The Company regards any
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 Company's January 11, 1996 initial public
offering, the Company issued to the sole 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 157,343 warrants
issued to investors in connection with the Company's 11% Convertible
Subordinated Notes, 68,550 warrants issued to investors in connection with
the Company's 12% Convertible Subordinated Notes (collectively, the
"Placement Warrants"), 70,093 warrants issued to a former outside Director,
and an aggregate of 382,316 (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 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; Exercise of Convertible Securities.
The Company has reserved 750,000 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, as amended (hereinafter
the "Plan"). At the date hereof, stock grants covering 137,500 shares and
options to purchase an aggregate of 462,500 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.
Non-Registration in Certain Jurisdictions of the Common Stock
Underlying the Warrants. The Class A Warrants were not sold to purchasers
in jurisdictions in which the securities were not registered or otherwise
qualified for sale. However, purchasers who bought or buy Class A Warrants
in the aftermarket may reside or may move to jurisdictions in which the
shares issuable upon exercise of the Warrants are not so registered or
qualified. In this event, the Company would be unable to issue shares of
Common Stock to the holder desiring to exercise the Warrant unless the
shares could be registered or otherwise qualified for sale in the
jurisdiction in which such purchaser resides, or an exemption from such
registration or qualification exists in such jurisdiction. No assurance can
be given that the Company will be able to effect any required registration
or qualification. In connection with the Public Offering, the Company
qualified or registered such shares in the following states: Arizona,
California Colorado, Connecticut, Florida, Georgia, Maine, Maryland,
Massachusetts, Mississippi, New Hampshire, New Jersey, New York, Ohio,
Pennsylvania, Rhode Island, Texas, and Washington.
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 other parties,
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. In the event that all of the shares issued
pursuant to the cash exercise terms of the Warrants held by the Holders, the
Company could realize up to approximately $4,916,520 in gross proceeds. The
net proceeds of such issuances will be considered as uncommitted funds and
my be used by the Company for, among other things, working capital and
general corporate purposes. No assurance can be given, however, as to when
or if any or all of the Warrants will be exercised. All expenses of the
registration and issuance of the Shares will be paid for by the Company.
See "Plan of Distribution" and "Use of Proceeds."
Possible Future Sales of Shares by the Warrant Holders. Subject to
the restrictions described under "Risk Factors -- Shares Eligible for Future
Sale" and applicable law, the Warrant Holders, subsequent to exercise of the
Class A Warrants, 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 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 the current 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 2,125,468 shares of Common
Stock currently issued and outstanding. Shares eligible for sale in the
public market include the 327,768 shares sold in the Company's initial
public offering, approximately 450,301 shares publicly resold under Rule 144
(including shares issued upon conversion of debt), approximately 287,500
shares issued under the 1995 Plan and the 919,820 shares of Common Stock
issuable hereunder (upon the exercise of the Warrants by the Holders) and
offered hereby. 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 the 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 Commission 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 listed on certain national securities exchanges or designated for
quotation on the Nasdaq system). The penny stock rules require a broker-
dealer to (i) deliver a standardized risk disclosure document required by
the SEC, (ii) provide the customer with (a) current bid and offer quotations
for the penny stock, (b) the compensation of the broker-dealer and its
salesperson in the transaction, and (c) monthly account statements showing
the market value of each penny stock held in the customer's account, (iii)
make a special written determination that the penny stock is a suitable
investment for the purchaser, and (iv) 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 Warrant Holders who exercise the Warrants
pursuant to this Registration Statement 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
additional shares of its preferred stock, there can be no assurance that the
Company will not do so in the future. There are presently two classes of
preferred stock outstanding: 313 shares of Series A Preferred Stock and
2,500 shares of Series B Preferred Stock. See "Recent Developments -
Private Placement of Series A Preferred Stock" and "Recent Developments -
Private Placement of Series B Preferred Stock."
Registration Rights of Preferred Stockholders. Pursuant to the
Registration Rights Agreement, the Company, upon written request, is
required to file a registration statement for the public resale of the
Common Stock issued on conversion of the Series B Preferred Stock. The
Company is not obligated to prepare, file and cause to become effective more
than two registration statements, excluding registration statements on Form
S-3. The Company is not obligated to effect more than one registration on
Form S-3 during any six-month period, nor is it obligated to prepare, file
and cause to become effective more than six registration statements on Form
S-3. The Company is not required to effect a registration pursuant to any
registration statement, other than on Form S-3, unless the proposed public
offering price of the securities to be included in such registration shall
be at least $5 million (before deducting underwriting discounts and
commissions). The Registration Rights Agreement also provides for
incidental registration of the Company's Common Stock. The Company has also
agreed to file, no later than July 15, 1998, a registration statement to
register the public resale of the Common Stock issuable upon conversion of
the Series A Preferred Stock, which will automatically convert into Common
Stock at the time the registration statement is declared effective by the
SEC.
Conversion of Preferred Shares. The Series A Preferred Stock and the
Series B Preferred Stock are convertible into Common Stock. Either event of
conversion will increase the total number of outstanding shares of Common
Stock and reduce the percentage of Common Stock held by public stockholders,
thereby diluting their holdings.
USE OF PROCEEDS
In the event that all of the shares are issued pursuant to the cash
exercise terms of the Warrants held by the Holders, the Company could
realize up to approximately $4,916,520 in gross proceeds. The net proceeds
of such issuances will be considered as uncommitted funds and may be used by
the Company for, among other things, working capital and general corporate
purposes. No assurance can be given, however, as to when or if any or all
of the Warrants will be exercised. All expenses of the registration and
issuance of the Shares will be paid for by the Company. See "Plan of
Distribution."
PLAN OF DISTRIBUTION
An aggregate of up to 919,820 shares of Common Stock may be offered
and sold pursuant to this Prospectus upon the exercise of the Class A
Warrants and/or Class B Warrants by the respective Warrant Holders. The
securities covered by this Prospectus may be issued from time to time by the
Company to the Holders, or to pledgees, transferees or other successors in
interest, upon such Holder's exercise of the Class A Warrants and Class B
Warrants. There can be no assurance that the Holders will exercise any or
all of the Warrants.
DESCRIPTION OF SECURITIES
General
The Company is authorized to issue 7,500,000 shares of Common Stock,
$.002 par value per share and 1,000,000 shares of Preferred Stock, $.001 par
value per share. As of the date of this Prospectus, there are 2,125,468
shares of Common Stock outstanding, 313 shares of Series A Preferred Stock
outstanding and 2,500 shares of Series B Preferred Stock outstanding. See
"Recent Developments" for a description of the transactions in which shares
of the Series A Preferred Stock and Series B Preferred Stock were issued.
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.
INTERESTS OF NAMED EXPERTS AND COUNSEL
The balance sheet of the Company as of February 28, 1997 and the
statements of operations, changes in stockholders' equity and cash flows for
year ended February 28, 1997, incorporated by reference in this Registration
Statement, have been audited by Richard A. Eisner & Company, LLP,
independent auditors. The balance sheet of the Company as of February 28,
1998 and the statements of operations, changes in stockholders' equity and
cash flows for year ended February 28, 1998, incorporated by reference in
this Registration Statement, have been audited by BDO Seidman, LLP,
independent auditors. Richard A. Eisner & Company, LLP's report on the
aforesaid financial statements dated May 30, 1997 is included in the
Company's Annual Report on Form 10-KSB for the year ended February 28, 1997.
BDO Seidman, LLP's report dated May 20, 1998 (June 12, 1998, as to notes 1
and 10), is included in the Company's Annual Report on Form 10-KSB for the
year ended February 28, 1998 (the "1998 Annual Report"). These financial
statements have been incorporated herein by reference in reliance upon the
reports of Richard A. Eisner & Company, LLP and BDO Seidman, LLP, and upon
their authority as experts in accounting and auditing.
The legality of the Common Stock to be issued hereunder has been
passed upon for the Company by Reed Smith Shaw & McClay LLP. Gerard S.
DiFiore, a member of the firm, holds a warrant to purchase shares of Common
Stock.
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.
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 14: OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses payable in connection with the issuance and distribution of
the securities being registered (estimated) are as follows:
<TABLE>
<S> <C>
Registration Fees $ -
Transfer Agent Fees $ 1,500
Printing and Engraving Costs $ 3,000
Legal Fees $12,000
Accounting Fees $ 3,500
-----------------------------------------
Total $20,000
</TABLE>
ITEM 15: INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the General Corporation Law of the State of Delaware
(the "General Corporation Law") provides, in general, that a corporation
shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit, or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation),
by reason of the fact that he is or was a director or officer of the
corporation. Such indemnity may be against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with such action, suit or proceeding, if
the indemnitee acted in good faith and in a manner reasonably believed to be
in or not opposed to the best interests of the corporation and with respect
to any criminal action or proceeding, the indemnitee must not have had
reasonable cause to believe his conduct was unlawful.
Section 145(b) of the General Corporation Law provides, in general,
that a corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director or
officer of the corporation (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interest of the corporation.
Section 145(g) of the General Corporation Law provides in general that
a corporation shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director or officer of the corporation
against any liability asserted against him or incurred by him in any
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under the provisions of the law.
The Company's By-laws and Certificate of Incorporation provide that
the Company will indemnify its officers, directors, employees and agents to
the fullest extent permitted by the General Corporation Law.
Section 102(b) of the GCL permits a Delaware corporation, by so
providing in its Certificate of Incorporation, to eliminate or limit the
personal liability of a director to the corporation for damages arising out
of certain alleged breaches of the director's duties to the corporation.
The GCL, however, provides that no such limitation of liability may effect a
director's liability with respect to any of the following: (i) for breach
of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for unlawful payment of
dividends or unlawful purchase or redemption of its capital stock, or (iv)
for any transaction from which the director derived an improper personal
benefit.
The Company's Certificate of Incorporation eliminates the personal
liability of the directors to the fullest extent permitted by Section 102(b)
of the GCL.
ITEM 16: 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 28, 1998, as filed and as amended from time to
time.
2. The Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended May 31, 1998, as filed and as amended from time to
time.
3. The Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended August 31, 1998, as filed and as amended from time
to time.
4. All other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Exchange Act since October 20, 1998.
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 16: EXHIBITS
<TABLE>
<CAPTION>
Number Description
- ------ -----------
<S> <C>
5.1 Opinion of Reed Smith Shaw & McClay LLP.
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Richard A. Eisner & Co., LLP
23.3 Consent of Reed Smith Shaw & McClay LLP (included in
Exhibit 5.1)
</TABLE>
ITEM 17: UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) Not Applicable
(ii) Not Applicable
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) 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.
(3) Not Applicable
(4) 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.
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 Town of Coventry, State of Rhode Island, on December 10,
1998.
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 Post Effective
Amendment No. 1 on Form S-3 to Form SB-2 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.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ David N. DeBaene Chairman of the Board, President December 10, 1998
- -------------------- and Chief Executive Officer
David N. DeBaene (Principal Executive Officer)
/s/ Anthony Santucci Chief Financial Officer, Secretary December 10, 1998
- -------------------- and Director
Anthony Santucci (Principal Financial Officer)
/s/ Thomas A. Lisi Director December 10, 1998
- ------------------
Thomas A. Lisi
/s/ Herbert C. Canapary Director December 10, 1998
- -----------------------
Herbert C. Canapary
/s/ Elizabeth Cotter Director December 10, 1998
- --------------------
Elizabeth Cotter
/s/ Dean M. Denuccio Director December 10, 1998
- --------------------
Dean M. Denuccio
/s/ Steev Panneton Director December 10, 1998
- ------------------
Steev Panneton
</TABLE>
[FORM OF LETTERHEAD OF REED SMITH SHAW & MCCLAY LLP]
December 10, 1998
JD American Workwear, Inc.
46 Old Flat River Road
Coventry, Rhode Island 02816
Attention: Board of Directors
RE: JD American Workwear, Inc.
Post-Effective Amendment No. 1 on Form S-3 to Form SB-2
Registration Statement for 919,820 Shares of Common Stock;
Effective Date of Initial Registration Statement: January 11, 1996;
Securities and Exchange Commission File No. 33-98682
Gentlemen:
This opinion is delivered to you in our capacity as special counsel
for JD American Workwear, Inc., a Delaware corporation (the "Company"), in
connection with the preparation and filing by the Company of a registration
statement on Form S-3 filed under the Securities Act of 1933, as amended
(the "Act") (the "Registration Statement") relating to the issuance, of up
to 919,820 shares of the Company's common stock, $.002 par value (the
"Common Stock"). The Registration Statement, which will be filed on or
about December 10, 1998, is post-effective amendment No. 1 to the Company's
registration statement on Form SB-2, originally filed with the Securities
and Exchange Commission (the "Commission") on October 8, 1995 and declared
effective by the Commission on January 11, 1996, bearing Commission File No.
33-98682. All of the shares registered under the Registration Statement
(the "Warrant Shares") are issuable upon the exercise of redeemable Class A
Common Stock Purchase Warrants ("Class A Warrants") and redeemable Class B
Common Stock Purchase Warrants ("Class B Warrants") issued in the Company's
public offering pursuant to the registration statement on Forms SB-2. Each
Class A Warrant evidences the right to purchase one (1) share of Common
Stock and one (1) Class B Warrant. Each Class B Warrant evidences the right
to purchase one (1) share of Common Stock.
In that connection, we have examined the Articles of Incorporation and
By-laws of the Company; the Registration Statement; the minutes of the
various meetings and consents of the Board of Directors of the Company;
certificates representing the Class A Warrants; the Class B Warrants; the
warrant agreement (a form of which is filed as an exhibit to the
Registration Statement) among the Company, the Underwriter, and Jersey
Transfer and Trust Co., as warrant agent (the "Warrant Agreement"),
originals or copies of all such records of the Company; agreements;
certificates of public officials; certificates of officers and
representatives of the Company and others; and such other documents,
certificates, records, authorizations, proceedings, statutes and judicial
decisions as we have deemed necessary to form the basis of the opinion
expressed below. In all such examinations, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, the conformity to the originals thereof of all documents
submitted to us as certified or photostatic copies, and the authenticity of
the originals of such latter documents. As to any fact material to any such
opinion, we have relied, to the extent that relevant facts are not
independently established by us, and to the extent we deemed reliance
proper, on certificates of public officials and certificates, oaths and
declarations of officers and other representatives of the Company.
Based upon the foregoing, we are of the opinion that:
1. The Company has been duly organized and is validly existing as a
corporation under the laws of the State of Delaware.
2. The maximum of 919,820 shares of Common Stock issuable upon
exercise of the Class A Warrants and the Class B Warrants, when issued in
accordance with the terms and conditions of the Warrant Agreement will, when
issued pursuant to the Registration Statement and the Resolutions of the
Board of Directors of the Company authorizing same, be legally issued, fully
paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the caption
"Interests of Named Experts and Counsel" in the Prospectus comprising a part
of the Registration Statement.
By giving the foregoing consent, we do not admit that we come within
the category of persons whose consent is required under Section 7 of the
Act.
This opinion is rendered to the Company and no other person may rely
on it without our written consent.
Very truly yours,
/s/ REED SMITH SHAW & McCLAY LLP
REED SMITH SHAW & McCLAY LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
JD American Workwear, Inc.
Coventry, Rhode Island
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Post Effective Amendment No. 1 on Form S-3 to the
Registration Statement on Form SB-2 of our report dated May 20, 1998 (June
12, 1998, as to notes 1 and 10), relating to our audit of the financial
statements of JD American Workwear, Inc. appearing in the Company's Annual
Report on Form 10-KSB as of and for the year ended February 28, 1998.
We also consent to the reference to our firm under the caption
"Interests of Named Experts and Counsel" included in the Prospectus.
BDO Seidman, LLP
Boston, Massachusetts
December 9, 1998
EXHIBIT 23.2
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
JD American Workwear, Inc.
Coventry, Rhode Island
We consent to the incorporation by reference in this Post Effective
Amendment No. 1 on Form S-3 to the Form SB-2 Registration Statement of
JD American Workwear, Inc. (the "Company") of our report dated May 30, 1997
on the financial statements of the Company for the year ended February 28,
1997 appearing in the Company's Annual Report on Form 10-KSB for its fiscal
year ended February 28, 1998.
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
New York, New York
December 7, 1998
