AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 21, 2004
REGISTRATION NO. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CANDIE'S, INC.
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(Exact name of registrant as specified in its charter)
Delaware 11-2481903
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation)
215 West 40th Street
New York, New York 10018
(212) 730-0030
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(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
Neil Cole, Chief Executive Officer
Candie's, Inc.
215 West 40th Street
New York, New York 10018
(212) 730-0030
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(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies to:
Robert J. Mittman, Esq.
Ethan Seer, Esq.
Blank Rome LLP
405 Lexington Avenue
New York, New York 10174
Telephone (212 885-5000
Facsimile: (212) 885-5001
Approximate date of proposed commencement of sale to public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. |X|
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier 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 for the same
offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [_]
Calculation of Fee
----------------------------- ------------------- --------------------------- --------------------------- -------------------
Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered registered aggregate price per unit aggregate offering price registration fee
----------------------------- ------------------- --------------------------- --------------------------- -------------------
Common Stock $.001 1,000,000 (3) $ 2.67 (4) $ 2,670,000 (4) $ 338.29
par value (1)(2)
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(1) Represents shares to be sold by the selling stockholders.
(2) Includes preferred share purchase rights. Prior to the occurrence of
certain events, the preferred share purchase rights will not be
evidenced separately from the Common Stock.
(3) Pursuant to Rule 416 of the Securities Act of 1933, there are also
being registered such additional shares as may be offered or issued to
the selling stockholders to prevent dilution resulting from stock
dividends, stock splits or similar transactions.
(4) Estimated solely for purpose of calculating the registration fee.
Pursuant to Rule 457(c) of the Securities Act of 1933, as amended, the
registration fee has been calculated based upon the average of the high
and low prices, as reported by Nasdaq, for the registrant's Common
Stock as of June 15, 2004.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, 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
CANDIE'S, INC.
1,000,000 shares of Common Stock
The selling stockholders listed on page 9 of this prospectus are
offering for resale up to 1,000,000 shares of common stock beneficially owned by
them. The common stock may be offered from time to time by the selling
stockholders through ordinary brokerage transactions in the over-the-counter
markets, in negotiated transactions or otherwise, at market prices prevailing at
the time of sale or at negotiated prices and in other ways as described in the
"Plan of Distribution".
We will not receive any of the proceeds from the sale of the shares by
the selling stockholders.
Our common stock is listed on the Nasdaq National Market under the
symbol "CAND" On June 17, 2004, the last sale price of our common stock as
reported by Nasdaq was $2.88 per share.
Investing in our common stock involves a high degree of risk. For more
information, see "Risk Factors" beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is __________, 2004
Table of Contents
Page
Forward-looking Statements....................................................3
The Company...................................................................3
Risk Factors..................................................................3
Use of Proceeds...............................................................9
Selling Stockholders..........................................................9
Plan of Distribution..........................................................10
Legal Matters.................................................................12
Experts.......................................................................12
Where You Can Find More Information...........................................12
Incorporation of Certain Documents by Reference...............................13
2
Forward-looking Statements
Certain statements in this Registration Statement or the documents
incorporated by reference in this Registration Statement constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Candie's, Inc. to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
those set forth under the caption "Risk Factors." The words "believe," "expect,"
"anticipate," "intend," and "plan" and similar expressions identify
forward-looking statements. Readers are cautioned not to place undue reliance on
any of these forward-looking statements, which speak only as of the date of the
statement was made. Candie's undertakes no obligation to update any
forward-looking statement.
The Company
Candie's is in the business of licensing the CANDIE'S(R) and BONGO(R)
names on a variety of young women's footwear, apparel and fashion products, and
is a leading designer, distributor and marketer of jeans wear under the BONGO
brand through its wholly owned subsidiary, Unzipped Apparel, LLC, referred to as
Unzipped. Through its wholly owned subsidiary, Bright Star Footwear, LLC,
Candie's arranges for the manufacture of private label men's footwear products
for mass market and discount retailers.
On June 9, 2004, Candie's entered into an agreement with TKO Apparel
Licensing, Inc. ("TKO") under which TKO has agreed to purchase all of the
membership interests in Unzipped from Candie's on or before February 1, 2005 for
a purchase price based upon the tangible net worth of Unzipped at the closing.
Candie's also entered into a long-term licensing agreement with TKO, which will
commence on August 2, 2004, pursuant to which TKO, through Unzipped, will sell
design, manufacture and sell BONGO jeans throughout the United States.
Candie's was incorporated under the laws of the State of Delaware in
1978. Its principal executive offices are located at 215 West 40th Street, New
York, New York 10018, and its telephone number is (212) 730-0300.
Unless the context requires otherwise, reference in this prospectus to
"we", "us" ,"our", "Candie's", or "Company" refers to Candie's, Inc. and its
subsidiaries.
Risk Factors
We operate in a changing environment that involves numerous known and
unknown risks and uncertainties that could materially adversely affect our
operations. The following highlights some of the factors that have affected, and
in the future could affect, our operations.
We have incurred losses during recent fiscal years and future losses could
negatively affect our cash flows and business operations.
In the fiscal year ended January 31, 2004, we sustained net losses of $
11.3 million, and net losses of $3.9 million, $2.3 million and $8.2 million
during our fiscal years ended January 31, 2003, 2002 and 2001, respectively. We
cannot guarantee that we will not incur losses in the future.
3
We are no longer engaged in the design, manufacture, distribution or sale of
CANDIE'S or BONGO branded footwear products, and commencing in August 2004, we
will no longer be engaged in the design, manufacture, distribution or sale of
BONGO branded jeans wear in the United States and, consequently, our revenues
are, or will be, dependent on the success of certain licensees of those rights.
Although the licensing agreement for our CANDIE'S and BONGO branded
footwear and the licensing agreement with TKO for the BONGO branded jeans wear
required the advance payment to us of certain fees and provide for certain
guaranteed minimum royalty payments to us, the failure by the licensees to
satisfy their obligations under the agreements may result in the termination of
the license agreements. Moreover, during the terms of the license agreements, we
will be substantially dependent upon the abilities of the licensees to maintain
the quality, marketability and consumer recognition of footwear products bearing
the CANDIE'S and BONGO brands and jeans wear bearing the BONGO brand. In
addition, failure by the licensees to meet their production, manufacturing or
distribution requirements with respect to the CANDIE'S or BONGO branded footwear
products or BONGO branded jeans wear products could negatively impact their
sales and resulting royalty payments to us which, in turn would materially
adversely affect our revenues and business operations. Moreover, the failure by
licensees to meet their financial obligations to us could jeopardize our ability
to meet the debt service coverage ratio in connection with our asset-backed
notes, which were issued by one of our subsidiaries. This would give the note
holders the right to foreclose on our trademarks, which are the security for the
debt, and which are our principal assets.
Our business is dependent on continued market acceptance of our products, the
products of our licensees that bear our trademarks, and of the CANDIE'S and
BONGO trademarks.
Our ability to achieve continued market acceptance of our existing
products, products of our licensees utilizing the CANDIE'S and BONGO trademarks
and any future products that may be offered by us or by our licensees that bear
our trademarks, is subject to a high degree of uncertainty. Our ability, or the
ability of our licensees, to achieve market acceptance of these products by new
customers or continued market acceptance by existing or past customers will
require substantial additional marketing efforts and the expenditure of
significant funds by us to create a demand for such products. Moreover,
additional marketing efforts and expenditures may not result in either increased
market acceptance of our products or the products of our licensees or increased
sales of such products. We are materially dependent on the sale of products
bearing the CANDIE'S and BONGO trademarks, including products designed, produced
and distributed by our licensees, for a significant portion of our revenues. A
failure of our CANDIE'S or BONGO trademarks or products to achieve or maintain
market acceptance could reduce our sales and licensing revenues, thereby
negatively impacting cash flows.
4
We had a working capital deficit at April 30, 2004, have incurred a substantial
amount of indebtedness, and to the extent that cash flow from our continuing
operations is insufficient to meet the our debt obligations, we may be required
to seek additional financing to satisfy our obligations.
With respect to the operations of Unzipped, there was outstanding at
June 16, 2004 approximately $9.3 million on a credit facility with GE Capital
Commercial Services, Inc., referred to as either "GECCS", or "Lender". There is
also approximately $20.5 million of principal and interest outstanding as of
June 16, 2004 on seven-year asset backed notes issued by one of our subsidiaries
in August 2002. In addition, in connection with our acquisition in April 2002
from Sweet Sportswear, Inc., referred to as "Sweet", of the remaining 50%
interest in Unzipped that we did not already own, we issued to Sweet $11.0
million principal amount of senior subordinated notes. The principal amount of
these notes has been reduced to approximately $8.4 million as a result of
certain shortfalls in the net income of Unzipped that Sweet guaranteed under the
terms of the agreement under which it manages Unzipped. These notes will mature
in 2012. Moreover, we had a working capital deficit of approximately $2.9
million at April 30, 2004. In the event that projected cash flow or any
borrowing availability under any credit facilities that may be available to us
in the future, proves to be insufficient to satisfy our cash requirements,
including our debt obligations, we may be required to seek additional funds
through, among other means, public or private equity or debt financing, which
may result in dilution to our stockholders. Our failure to obtain any required
additional financing on terms acceptable to us, or at all, could result in the
acceleration of the payment obligations of certain of our indebtedness that
could materially adversely affect our business operations and financial
position.
Unzipped is in default of certain covenants under its credit facility.
Unzipped is in default of certain covenants under its credit facility
with GECCS, including the tangible net worth covenant. Unzipped has not obtained
a waiver for these defaults and there can be no assurance that it will be able
to do so. As a result, GECCS could, in addition to other possible remedies,
reduce the advance rates, cease advancing funds, or demand immediate repayment
of the outstanding loan amount (which was approximately $10.3 million as of
April 30, 2004), any of which could negatively impact the operations and
financial condition of Unzipped. While we believe that it is unlikely that the
Lender would accelerate Unzipped's obligations under the credit facility,
however, if it did so and Unzipped could not immediately repay the existing loan
balance, it could result in the Lender foreclosing on Unzipped's assets, among
other remedies.
In the event that the Lender forecloses on the credit facility with
Unzipped, we believe, based on Unzipped's current financial condition, that
Unzipped would have sufficient assets and net worth to allow the Lender to
recoup its entire loan, although there can be no assurance that it will be able
to do so. An acceleration of the Unzipped credit facility would impact the
operating results and financial condition of Unzipped in the fiscal year ending
January 31, 2005 (including a possible write-off or impairment of assets), which
could result in a reduction in our consolidated revenues in Fiscal 2005. Sweet,
the Manager of Unzipped, has guaranteed that Unzipped will have net income (as
defined in the management agreement pursuant to which Sweet operates Unzipped),
of no less than $1.7 million in Fiscal 2005, and we believe that this guarantee
is enforceable even in the event of foreclosure or acceleration of the Unzipped
credit facility. Additionally, Candie's, the parent of Unzipped, is not a
signatory or a guarantor of the Unzipped credit facility and would not be liable
for Unzipped's obligations thereunder, however, there is no assurance that
disputes will not arise as to the enforceability of the guarantee and Candie's
liability.
5
Notwithstanding the foregoing, we believe, although there can be no
assurance, that we have sufficient liquidity from revenues generated from our
licensing and men's private label activity, which are separate from Unzipped, as
well as from the additional borrowing obtained under the bond financing by our
subsidiary, to satisfy our anticipated working capital requirements for the
foreseeable future. In addition, in June 2004 we licensed the rights to Bongo
jeans wear in the United States to a third party licensee, which is required to
provide us with licensing revenues in connection with the signing of the
licensing agreement. Unzipped currently has a royalty free non-exclusive
sublicense for Bongo jeans wear.
A recession in the fashion industry or rapidly changing fashion trends could
harm our operating results.
The fashion industry is cyclical, with purchases of apparel and related
goods tending to decline during recessionary periods when disposable income is
low. A poor general economic climate could have a negative impact on our ability
to compete for limited consumer resources. Moreover, our future success depends
in substantial part on our ability to anticipate and respond to changing
consumer demands and fashion trends in a timely manner. The footwear and wearing
apparel industries are generally subject to constantly changing fashion trends,
which is particularly so when the customer is junior, as is the targeted
customer for both CANDIE's and BONGO. If we or our licensees misjudge the market
for a particular product or product line, it may result in an increased
inventory of unsold and outdated finished goods, which could increase our
operating costs without a corresponding increase in revenues.
With respect to Unzipped and the BONGO jeans wear business, we currently rely on
unaffiliated manufacturers and suppliers and our licensees may also rely on
unaffiliated manufacturers and suppliers to produce for them the products sold
under our trademarks and brand names and, therefore, we and our licensees may be
subject to timing or production problems that are beyond our respective
controls.
We do not own or operate any manufacturing facilities. All of our BONGO
jeans wear products are manufactured to our specifications by third party
suppliers (either directly or through third party manufacturers on a subcontract
basis). The manufacturers of our products have limited production capacity and
may not, in all instances, have the capability to satisfy our manufacturing
requirements. In such event, the capacity of alternative manufacturing sources
may not be available to us on a cost effective basis. Accordingly, our
dependence upon third parties for the manufacture of our products could have an
adverse effect on our ability to deliver products on a timely and competitive
basis and could have an adverse effect on our revenues and cash flows. Moreover,
we operate under substantial time constraints which require us to have
production orders in place at specified times in advance of our customers'
retail selling seasons. If our suppliers fail to meet their delivery date
requirements pursuant to purchase orders with us, we will be unable to meet our
delivery date requirements pursuant to purchase orders with our customers. This
could result in the cancellation of purchase orders both by us and our
customers, having an adverse effect on our revenues and earnings.
6
Some or all of our licensees face similar manufacturing risks with
respect to products sold by them under our trademarks or brand names we license
to them. If they are unable to deliver product timely, and risk cancellation of
orders, it could affect their ability to generate revenues, and our ability to
collect royalties, thereby adversely affecting our revenues and earnings.
We and our licensees are subject to risks and uncertainties of foreign
manufacturing that could interrupt our operations or increase our operating
costs.
Substantially all of our products and the products sold by our
licensees are manufactured overseas. We and our licensees are subject to various
risks inherent in foreign manufacturing, including:
- increased credit risks;
- fluctuations in foreign currency exchange rates;
- shipping delays; and
- international political, regulatory and economic developments, all of
which can have a significant impact on our operating costs and
consequently, our earnings.
We and our licensees import certain finished products and assume all
risk of loss and damage once our suppliers ship these goods. If these goods are
destroyed or damaged during shipment it could increase our operating costs and
the operating costs of our licensees, and negatively impact our revenues as a
result of the delays in delivering finished products to our customers or the
customers of our licensees.
Because of the intense competition in our markets and the strength of our
competitors, we and our licensees may not be able to continue to compete
successfully.
The footwear and apparel industries are extremely competitive in the
United States and we and our licensees face intense and substantial competition
for our product lines. In general, competitive factors include quality, price,
style, name recognition and service. In addition, the presence in the
marketplace of various fads and the limited availability of shelf space can
affect competition. Many of our competitors have greater financial,
distribution, marketing and other resources than we have and have achieved
significant name recognition for their brand names. In addition, since we
license our brands, our licensees need to achieve a higher margin to enable them
to pay the royalty. As a result, we may not be able to continue to compete
successfully in the market for our apparel products and, with respect to the
licensing arrangements for CANDIES and BONGO footwear products and BONGO jeans
wear, our licensees may be unable to successfully compete in the markets for
such products.
7
We may not be able to protect our proprietary rights or avoid claims that we
infringe on the proprietary rights of others.
We own federal trademark registrations for CANDIE'S and BONGO, among
others, and believe that our CANDIE'S trademark and our BONGO trademark have
significant value and are important to the marketing of our products. To the
extent that the CANDIE'S, BONGO or other trademarks owned or used by us are
deemed to violate the proprietary rights of others, or in the event that these
trademarks would not be upheld if challenged, we would, in either such event, be
prevented from using the trademarks, which could have an adverse effect on us.
In addition, we may not have the financial resources necessary to enforce or
defend trademarks owned or used by us.
We are dependent upon our key executives and other personnel, whose loss would
adversely impact our business.
Our success is largely dependent upon the efforts of Neil Cole, our
President, Chief Executive Officer and Chairman. Although we have entered into
an employment agreement with Mr. Cole, expiring in January 2005, the loss of his
services would have a material adverse effect on our business and prospects. Our
success is also dependent upon our ability to hire and retain additional
qualified management and marketing personnel in connection with the design,
marketing and distribution of our products, as well as our ability to hire and
retain financial and administrative personnel. We may not be able to hire or
retain such necessary personnel, or may not have the financial resources to
attract the kind of talent required for our business.
Provisions in our charter and share purchase rights plan may prevent an
acquisition of Candie's.
Certain provisions of our Certificate of Incorporation and our Share
Purchase Rights Plan could have the effect, either alone or in combination with
each other, of making more difficult, or discouraging an acquisition of our
company deemed undesirable by our Board of Directors. Our Certificate of
Incorporation provides for the issuance of up to 75,000,000 shares of common
stock and 5,000,000 shares of preferred stock. As of the date of this Prospectus
there were approximately 27,100,000 shares of our common stock and no shares of
preferred stock outstanding. Additional shares of our common stock and preferred
stock are therefore available for future issuance without stockholder approval.
The Share Purchase Rights Plan, commonly known as a "poison pill," states that,
in the event than an individual or entity acquires 15% of the outstanding shares
of our stockholders other than the acquirer may purchase additional shares of
our common stock for a fixed price. The existence of authorized but un-issued
capital stock, together with the existence of the Share Purchase Rights Plan,
could have the effect of discouraging an acquisition of us.
We are subject to certain litigation that could harm us.
We are currently a defendant in a breach of contract action commenced
against us by one of our former buying agents that also supplied us with certain
footwear. Our financial condition could be harmed if we were required to pay the
monetary damages sought by the plaintiff.
8
We do not expect to pay dividends on our common stock.
We have not paid any cash dividends on our common stock to date and do
not expect to pay dividends for the foreseeable future.
The market price of our common stock may be volatile.
The market price of our common stock may be highly volatile.
Disclosures of, among other things, our operating results, announcements of
various events by us or our competitors and the development and marketing of new
products affecting our industry may cause the market price of our common stock
to change significantly over short periods of time. Sales of shares under this
prospectus may have a depressive effect on the market price of our common stock.
Future sales of shares of our common stock could affect the market price of our
common stock and our ability to raise additional capital.
We have previously issued a substantial number of shares of common
stock, which are eligible for resale under Rule 144 of the Securities Act of
1933, and may become freely tradable. We have also registered a substantial
number of shares of common stock that are issuable upon the exercise of options
and warrants and have registered for resale restricted shares of common stock
held by certain selling stockholders, including shares previously issued to
Sweet and the shares being offered under this prospectus by the selling
stockholders. If holders of options or warrants choose to exercise their
purchase rights and sell shares of common stock in the public market, or if
holders of currently restricted shares or the shares previously issued in
connection with the settlement of prior litigation choose to sell such shares in
the public market under Rule 144 or otherwise, the prevailing market price for
the common stock may decline. Future public sales of shares of common stock may
adversely affect the market price of our common stock or our future ability to
raise capital by offering equity securities.
Use of Proceeds
We will not receive any proceeds from the sale by the selling
stockholders named in this prospectus.
We have agreed to pay expenses in connection with the registration of
the shares being offered by the selling stockholders.
9
Selling Stockholders
Based on information provided by the selling stockholders, the
following table sets forth certain information regarding the selling
stockholders:
The table below assumes for calculating each selling stockholder's
beneficial and percentage ownership that options, warrants or convertible
securities that are held by such stockholder (but not held by any other person)
and are exercisable within 60 days from the date this prospectus have been
exercised and converted. The table also assumes the sale of all of the shares
being offered.
Common Stock Beneficially
Owned After the Offering
Number of Shares of
Common Stock Percent of
Beneficially Owned Shares Number Outstanding
Selling Security Holder Prior to the Offering Being Offered of Shares Shares
----------------------- --------------------- ------------- --------- ------
J. Kenneth Tate 284,000 284,000 0 0
James D. Tate 284,000 284,000 0 0
Stanley G. Tate 284,000 284,000 0 0
Barry E. Somerstein 55,000 55,000 0 0
Javier J. Holtz 25,000 25,000 0 0
Abel Holtz 25,000 25,000 0 0
Mark K. Somerstein 25,000 25,000 0 0
Linda Tate-Best 15,000 15,000 0 0
Richard Kohn 3,000 3,000 0 0
All of the selling stockholders are designees of TKO and Messrs. J. Kenneth
Tate, James D. Tate and Barry E. Somerstein are officers and stockholders of the
parent company of TKO and Mark K. Somerstein and Linda Tate-Best are
stockholders of the parent company of TKO.
Plan of Distribution
We have been advised that the selling stockholders, which may include
pledgees, donees, transferees or other successors-in-interest who have received
shares from a selling stockholder after the date of this prospectus, may from
time to time, sell all or a portion of the shares in privately negotiated
transactions or otherwise, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to these market prices or at
negotiated prices.
All costs, expenses and fees in connection with the registration of the
shares offered by this prospectus shall be borne by us. Brokerage costs, if any,
attributable to the sale of shares will be borne by the selling stockholders.
10
The shares may be sold by the selling stockholders by one or more of
the following methods:
- block trades in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and
resell a portion of the shares as principal to facilitate
the transaction;
- purchases by a broker or dealer as principal and resale by
such broker dealer for its account pursuant to this
prospectus;
- an exchange distribution in accordance with the rules of
the applicable exchange;
- ordinary brokerage transactions and transactions in which
the broker solicits purchasers;
- through put and call options relating to the shares;
- negotiated transactions;
- a combination of any such methods of sale at market prices
prevailing at the time of the sale or at negotiated
prices; and
- any other method permitted pursuant to applicable law.
The transactions described above may or may not involve brokers or
dealers.
A selling stockholder will not be restricted as to the price or prices
at which the selling stockholder may sell his or her shares. Sales of shares by
the selling stockholders may depress the market price of our common stock since
the aggregate number of shares which may be sold by the selling stockholders is
relatively large. Accordingly, if the selling stockholders were to sell, or
attempt to sell, all of such shares at once or during a short time period, we
believe such a transaction could adversely affect the market price of our common
stock.
From time to time a selling stockholder may pledge its shares under
margin provisions of customer agreements with its brokers or under loans with
third parties. Upon a default by the selling stockholder, the broker or such
third party may offer and sell any pledged shares from time to time.
In effecting sales, brokers and dealers engaged by a selling
stockholder may arrange for other brokers or dealers to participate in the sales
as agents or principals. Brokers or dealers may receive commissions or discounts
from the selling stockholders or, if the broker-dealer acts as agent for the
purchaser of such shares, from the purchaser in amounts to be negotiated, which
compensation as to a particular broker dealer might be in excess of customary
commissions which are not expected to exceed those customary in the types of
transactions involved. Broker-dealers may agree with the selling stockholders to
sell a specified number of such shares at a stipulated price per share, and to
the extent the broker-dealer is unable to do so acting as agent for a selling
stockholders, to purchase as principal any unsold shares at the price required
to fulfill the broker-dealer commitment to the selling stockholders.
Broker-dealers who acquire shares as principal may then resell those shares from
time to time in transactions
11
- in the over-the counter market or otherwise;
- at prices and on terms prevailing at the time of sale;
- at prices related to the then-current market price; or
- in negotiated transactions.
These resales may involve block transactions or sales to and through
other broker-dealers, including any of the transactions described above. In
connection with these sales, these broker-dealers may pay to or receive from the
purchasers of those shares commissions as described above. The selling
stockholders may also sell the shares in open market transactions under Rule 144
under the Securities Act, rather than under this prospectus.
The selling stockholders and any broker-dealers or agents that
participate with the selling stockholders in sales of the shares may be deemed
to be "underwriters" within the meaning of the Securities Act in connection with
these sales. In this event, any commissions received by these broker-dealers or
agents and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
The selling stockholders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the shares
against certain liabilities, including liabilities arising under the Securities
Act.
The selling stockholders are subject to applicable provisions of the
Securities Exchange Act of 1934 and the SEC's rules and regulations, including
Regulation M, which provisions may limit the timing of purchases and sales of
the shares by the selling stockholders.
In order to comply with certain states' securities laws, if applicable,
the shares may be sold in those jurisdictions only through registered or
licensed brokers or dealers. In certain states the shares may not be sold unless
the shares have been registered or qualified for sale in such state, or unless
an exemption from registration or qualification is available and is obtained.
Legal Matters
Blank Rome LLP of New York, New York will pass upon the validity of the
shares of common stock being offered by this prospectus.
Experts
The financial statements and schedule of Candie's, Inc.
incorporated in this prospectus by reference from Candie's, Inc.'s Annual Report
on Form 10-K for the year ended January 31, 2004 have been audited by BDO
Seidman, LLP, independent certified public accountants. The financial statements
and schedule referred to above have been so incorporated by reference herein in
reliance upon the reports of such firm given upon its authority as experts in
auditing and accounting.
12
Where You Can Find More Information
We are subject to the informational requirements of the Securities
Exchange Act of 1934 and we file reports and other information with the SEC.
You can read reports and other information filed by us with the SEC
without charge and copy such reports and information at the public reference
facilities maintained by the SEC at the following address:
- Chicago Regional Office, 500 West Madison Street, Suite 1400, Chicago,
60661-2511.
You may read and copy any of the reports, statements, or other
information we file with the SEC at the SEC's Public Reference Section at 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Information on
the operation of the Public Reference Room may be obtained by calling the SEC at
1-800-SEC-0330. The SEC maintains a Web site at http://www.sec.gov that contains
reports, proxy statements and other information regarding issuers that file
electronically with the SEC. The Nasdaq Stock Market maintains a Web site at
http://www.nasdaq.com that contains reports, proxy statements and other
information filed by us.
Our common stock is listed on The Nasdaq National Market under the
symbol "CAND".
Incorporation of Certain Documents By Reference
We have filed with the SEC, Washington, D.C., a registration statement
on Form S-3 under the Securities Act, covering the securities offered by this
prospectus. This prospectus does not contain all of the information that you can
find in our registration statement and the exhibits to the registration
statement. Statements contained in this prospectus as to the contents of any
contract or other document referred to are not necessarily complete and in each
instance such statement is qualified by reference to each such contract or
document filed or incorporated by reference as an exhibit to the registration
statement.
The SEC allows us to "incorporate by reference" the information we file
with them. This means that we can disclose important information to you by
referring you to other documents that are legally considered to be part of this
prospectus, and later information that we file with the SEC will automatically
update and supersede the information in this prospectus and the documents listed
below. We incorporate by reference the documents listed below, and any future
filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until the selling stockholders sell all the
shares.
1. Our Annual Report on Form 10-K for the fiscal year ended January 31,
2004;
2. Our Quarterly Report on Form 10-Q for the quarter ended April 30, 2004;
13
3. Our Current Report on Form 8-K for the event dated April 23, 2002 as
amended by Amendment No. 1 to such Report;
4. The description of our common stock and our preferred share purchase
rights contained in our registration statements on Form 8-A filed with
the SEC and any amendments thereto; and
5. All documents filed by us pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 subsequent to the date of
this prospectus and prior to the termination of this offering, except
the Report on Executive Compensation and the performance graph included
in any Proxy Statement filed by us pursuant to Section 14 of the
Exchange Act.
You may request a copy of these filings, other than the exhibits, by
writing or telephoning us at Candie's, Inc., 215 West 40th Street, New York, New
York 10018, telephone number (212) 730-0030.
We have not authorized anyone else to provide you with information
different from that contained or incorporated by reference in this prospectus.
This prospectus is not an offer to sell nor is it a solicitation of an offer to
buy any security in any jurisdiction where the offer or sale is not permitted.
Neither the delivery of this prospectus nor any sale made under this prospectus
shall, under any circumstances, imply that there has been no change in our
affairs since the date of this prospectus or that the information contained in
this prospectus or incorporated by reference herein is correct as of any time
subsequent to its date.
14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses payable by the Registrant in connection with the issuance
and distribution of the securities being registered (estimated except for the
SEC Registration fee) are as follows:
SEC Registration Fee $ 338.29
Accounting Fees and Expenses $ 7,500.00
Legal Fees and Expenses $ 10,000.00
Miscellaneous Expenses $ 5,161.71
Total $ 23,000.00
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
("GCL") provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorizes Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director.
Section 102(b) of the GCL permits a corporation, by so providing in its
certificate of incorporation, to eliminate or limit director's liability to the
corporation and its shareholders for monetary damages arising out of certain
alleged breaches of their fiduciary duty. Section 102(b)(7) of the GCL provides
that no such limitation of liability may affect a director's liability with
respect to any of the following: (i) breaches of the director's duty of loyalty
to the corporation or its shareholders; (ii) acts or omissions not made in good
faith or which involve intentional misconduct of knowing violations of law;
(iii) liability for dividends paid or stock repurchased or redeemed in violation
of the GCL; or (iv) any transaction from which the director derived an improper
personal benefit. Section 102(b)(7) does not authorize any limitation on the
ability of the corporation or its shareholders to obtain injunctive relief,
specific performance or other equitable relief against directors.
Article Ninth of the registrant's Certificate of Incorporation and the
registrant's By-laws provide that all persons who the registrant is empowered to
indemnify pursuant to the provisions of Section 145 of the GCL (or any similar
provision or provisions of applicable law at the time in effect), shall be
indemnified by the registrant to the full extent permitted thereby. The
foregoing right of indemnification shall not be deemed to be exclusive of any
other rights to which those seeking indemnification may be entitled under any
by-law, agreement, vote of shareholders or disinterested directors, or
otherwise.
Article Tenth of the registrant's Certificate of Incorporation provides
that no director of the registrant shall be personally liable to the registrant
or its stockholders for any monetary damages for breaches of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the registrant or its stockholders; (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law; (iii) under Section 174 of the GCL; or (iv) for any transaction from which
the director derived an improper personal benefit.
The registrant's employment agreements with Mr. Neil Cole, the
registrant's Chief Executive Officer and Ms. Deborah Sorell Stehr, the
registrant's Senior Vice President and General Counsel provide that the
registrant shall indemnify each of them for the consequences of all acts and
decisions made by such person while performing services for the registrant.
These agreements also require the registrant to use its best efforts to obtain
directors' and officers' liability insurance for such persons.
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 Securities Act
and is, therefore, unenforceable.
Item 16. Exhibits.
5 Opinion of Blank Rome LLP
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Blank Rome LLP (included in Exhibit 5)
24 Power of Attorney (included on the signature page of the
Registration Statement)
Item 17. Undertakings
Undertaking Required by Regulation S-K, Item 512(a).
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
i. To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended
(the "Securities Act");
ii. To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
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;
provided, however, that clauses (i) and (ii) do not apply if the Registration
Statement is on Form S-3, Form S-8 or Form F-3, and the information required to
be included in a post-effective amendment by such clauses is contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Undertaking Required by Regulation S-K, Item 512(b).
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 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 initial bona fide offering thereof.
Undertaking required by Regulation S-K, Item 512(h).
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or controlling persons 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 Securities 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 Securities 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 City of New York, State of New York, on the 18th day of June
2004.
CANDIE'S, INC.
By:/s/ Neil Cole
-------------------------------------
Neil Cole
President and Chief Executive Officer
Each person whose signature appears below authorizes each of Neil Cole
and Richard Danderline, or either of them acting individually, as his true and
lawful attorney-in-fact, each with full power of substitution, to sign the
Registration Statement on Form S-3 of Candie's, Inc., including any and all
pre-effective and post-effective amendments, in the name and on behalf of each
such person, individually and in each capacity stated below, and to file the
same, with exhibits thereto and other documents in connection therewith with the
Securities and Exchange Commission.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following person in the capacities and
on the dates stated.
Signature Title Date
--------- ----- ----
/s/ Neil Cole Chief Executive Officer, President and June 18, 2004
--------------------------- Director (Principal Executive Officer)
Neil Cole
/s/ Richard Danderline
--------------------------- Executive Vice President - Finance and June 18, 2004
Richard Danderline Operations (Principal Financial and
Accounting Officer)
/s/ Barry Emanuel Director June 18, 2004
---------------------------
Barry Emanuel
/s/ Steven Mendelow Director June 18, 2004
---------------------------
Steven Mendelow
Director June 18, 2004
---------------------------
Ann Iverson
/s/ Robert D'Loren Director June 18, 2004
---------------------------
Robert D'Loren
/s/ Michael Caruso Director June 18, 2004
---------------------------
Michael Caruso
/s/ Michael Groveman Director June 18, 2004
---------------------------
Michael Groveman
/s/ Drew Cohen Director June 18, 2004
---------------------------
Drew Cohen