Unassociated Document
As
filed with the Securities and Exchange Commision on April 13, 2010
Registration No.
333-_______
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
________________
FORM
S-3
REGISTRATION
STATEMENT UNDER
THE
SECURITIES ACT OF 1933
________________
FREDERICK’S
OF HOLLYWOOD GROUP INC.
(Exact
name of registrant as specified in its charter)
|
New
York
|
13-5651322
|
|
(State
or Other Jurisdiction of Incorporation or
Organization)
|
(I.R.S.
Employer Identification Number)
|
1115
Broadway
New
York, New York 10010
(212)
798-4700
(Address,
Including Zip Code, and Telephone Number, Including Area Code, of Registrant's
Principal Executive Office)
Thomas
J. Lynch
Chairman
of the Board and Chief Executive Officer
Frederick’s
of Hollywood Group Inc.
1115
Broadway
New
York, New York 10010
(212)
798-4700
(Name,
Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent
for Service)
Copies to:
David
Alan Miller, Esq.
Jeffrey
M . Gallant, Esq.
Graubard
Miller
405
Lexington Avenue, 19th
Floor
New
York, New York 10174
Telephone:
(212) 818-8800
Fax:
(212) 818-8881
Approximate
date of commencement of proposed sale to the public: From time to time 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, other than securities offered only in
connection with 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 check the
following box. ý
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. ¨
If this
Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. ¨
¨ Large accelerated
filer
¨ Accelerated
filer
¨ Non-accelerated filer
(do not check if a smaller reporting company)
ý Smaller reporting
company
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Title
of each class of securities to
be
registered
|
Amount
to be
Registered(1)
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Proposed
Maximum
Offering
Price
Per
Security(2)
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Proposed
Maximum
Aggregate
Offering
Price
|
Amount
of
Registration
Fee
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|
Common
Stock, par value $0.01
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5,450,721
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$1.18
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$6,431,850.78
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$458.59
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Total
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|
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$6,431,850.78
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$458.59
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(1)
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In
the event of a stock split, reverse stock split, stock dividend or similar
transaction involving our common stock, the number of shares registered
shall automatically be adjusted to cover the additional shares of common
stock issuable pursuant to Rule 416 under the Securities Act of 1933, as
amended.
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|
(2)
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Estimated
solely for purposes of calculating the registration fee in accordance with
Rule 457(c) under the Securities Act of 1933, using the average of the
high and low prices as reported on the NYSE Amex on April 8, 2010, which
was $1.18 per share.
|
The
registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Subject
to Completion, Dated April 13, 2010
FREDERICK’S
OF HOLLYWOOD GROUP INC.
5,450,721
Shares of Common Stock
This
prospectus relates to the resale of up to 5,450,721 shares of our common stock
by the selling shareholders set forth in this prospectus under the heading
“Selling Shareholders” beginning on page 9 of this prospectus.
We will
not receive any proceeds from the sale of our shares by the selling
shareholders; however, we may receive payment in cash upon exercise of warrants
held by such selling shareholders.
The
securities are being registered to permit the selling shareholders to sell the
securities from time to time in the public market. The selling
shareholders may sell the securities through ordinary brokerage transactions or
through any other means described under the heading “Plan of Distribution”
beginning on page 11. We do not know when or in what amount the
selling shareholders may offer the securities for sale. The selling
shareholders may sell any, all or none of the securities offered by this
prospectus.
Our
common stock is traded on the NYSE Amex under the symbol “FOH.” The
last reported sale price of our common stock on the NYSE Amex on April 8, 2010
was $1.19 per share.
Investing
in our common stock involves a high degree of risk.
See
the section titled “Risk Factors,” beginning on page 3.
We
may amend or supplement this prospectus from time to time by filing amendments
or supplements as required. You should read the entire prospectus and any
amendments or supplements carefully before you make your investment
decision.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date
of this prospectus is _______ ___, 2010.
FREDERICK’S
OF HOLLYWOOD GROUP INC.
TABLE
OF CONTENTS
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PROSPECTUS
SUMMARY
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1
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RISK
FACTORS
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3
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FORWARD-LOOKING
STATEMENTS
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8
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USE
OF PROCEEDS
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8
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SELLING
SHAREHOLDERS
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9
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PLAN
OF DISTRIBUTION
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11
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LEGAL
MATTERS
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12
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INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRMS
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13
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WHERE
YOU CAN FIND MORE INFORMATION
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13
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______________________
You may
only rely on the information contained in this prospectus or that we have
referred you to. We have not authorized anyone to provide you with different
information. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the common stock
offered by this prospectus. This prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any common stock in any circumstances in
which such offer or solicitation is unlawful. Neither the delivery of this
prospectus nor any sale made in connection with this prospectus shall, under any
circumstances, create any implication that there has been no change in our
affairs since the date of this prospectus or that the information contained by
reference to this prospectus is correct as of any time after its date. In this
prospectus, references to “Frederick’s of Hollywood Group Inc.,” “the Company,”
“we,” “us,” and “our,” refer to Frederick’s of Hollywood Group Inc., a New York
corporation, and its subsidiaries.
Overview
Frederick’s
of Hollywood Group Inc. is a New York corporation incorporated on April 10,
1935. On January 28, 2008, we consummated a merger with FOH Holdings, Inc., a
privately-held Delaware corporation (“FOH Holdings”). As a result of the
transaction, FOH Holdings became our wholly-owned subsidiary. FOH Holdings is
the parent company of Frederick’s of Hollywood, Inc. Upon consummation of the
merger, we changed our name from Movie Star, Inc. to Frederick’s of Hollywood
Group Inc.
As a
merged company, we conduct our business through two operating divisions that
represent two distinct business reporting segments: the multi-channel
retail division and the wholesale division. We believe this method of
segment reporting reflects both the way our business segments are managed and
the way each segment’s performance is evaluated. The retail segment
includes our retail stores, catalog and website operations. The
wholesale segment includes our wholesale operations in the United States and
Canada.
Through
our multi-channel retail division, we sell women’s intimate apparel and related
products under our proprietary Frederick’s of Hollywood® brand
exclusively through our predominantly mall-based specialty retail stores in the
United States, which we refer to as “Stores,” and through our catalog and
website at www.fredericks.com, which we refer to collectively as
“Direct.” As of January 23, 2010, we operated 132 Frederick’s of
Hollywood stores nationwide. Through our wholesale division, we
design, manufacture, source, distribute and sell women’s intimate apparel to
mass merchandisers, specialty and department stores, discount retailers,
national and regional chains, and direct mail catalog marketers throughout the
United States and Canada.
Recent
Events
Debt
Exchange and Preferred Stock Conversion Agreement
On
February 1, 2010, we entered into a Debt Exchange and Preferred Stock Conversion
Agreement (“Exchange and Conversion Agreement”) with Fursa Capital Partners LP,
Fursa Master Rediscovered Opportunities L.P., Blackfriars Master Vehicle LLC –
Series 2, and Fursa Master Global Event Driven Fund L.P (collectively, “Fursa”),
the holders of approximately $14.3 million principal amount of our long term
debt outstanding including accrued interest (the “Tranche C debt”) and
approximately $8.8 million of our Series A preferred stock including accrued
dividends (“Series A Preferred Stock”). Pursuant to the Exchange and
Conversion Agreement, Fursa agreed to exchange and convert the entire $14.3
million principal amount and accrued interest of the Tranche C debt and all $8.8
million of their outstanding shares of Series A Preferred Stock and accrued
dividends into shares of our common stock at an effective price of approximately
$2.66 per share. Upon the closing of the transaction, we will also
issue to Fursa three, five and seven-year warrants, each to purchase 500,000
shares of common stock (for an aggregate of 1,500,000 shares of common
stock).
The
consummation of the transaction is subject to shareholder approval at our annual
meeting of shareholders to be held on May 12, 2010. We expect to
consummate the transaction as soon as practicable once shareholder approval is
obtained. Pursuant to the Exchange and Conversion Agreement, Fursa
has agreed to “sterilize” their vote by committing to vote the shares of our
common stock and Series A Preferred Stock held by Fursa on the date of the
Agreement in accordance with the vote of a majority of votes cast at the
meeting, excluding the shares held by Fursa. Additionally, as
described below, on March 16, 2010, we issued an aggregate of 2,907,051 shares
of our common stock in a private placement to accredited investors pursuant to
the terms of a securities purchase agreement. These investors agreed
to appoint Thomas J. Lynch, our Chairman and Chief Executive Officer, or Thomas
Rende, our Chief Financial Officer, to vote their shares purchased in the
private placement at the meeting in connection with the Exchange and Conversion
Agreement. Messrs. Lynch and Rende intend to vote these shares in
favor of approval of the Exchange and Conversion Agreement.
Assuming
the consummation of the transaction contemplated by the Exchange and Conversion
Agreement occurs on May 18, 2010, the principal amount and accrued interest of
the Tranche C debt and the outstanding shares of Series A Preferred Stock and
accrued dividends will be converted into an aggregate of 8,664,373 shares of our
common stock and we will issue Fursa immediately exercisable warrants to
purchase an aggregate of 1,500,000 shares of our common
stock. Accordingly, Fursa’s beneficial ownership of our common stock
will increase from approximately 33.0% to approximately 47.4%.
Pursuant
to the Exchange and Conversion Agreement, we agreed to register for re-sale the
shares of common stock (including those underlying the warrants) that Fursa will
receive as a result of the transaction. Those shares are registered
for resale on a different prospectus.
Private
Placement
On March
16, 2010, we completed a private placement of 2,907,051 shares of our common
stock at $1.05 per share, raising total gross proceeds of approximately
$3,050,000 (the “Private Placement”). The investors in the Private
Placement also received two-and-a-half year Series A warrants to purchase up to
an aggregate of 1,162,820 shares of common stock at an exercise price of $1.25
per share, and five-year Series B warrants to purchase up to an aggregate of
1,162,820 shares of common stock at an exercise price of $1.55 per
share.
Avalon
Securities Ltd. (“Avalon”) acted as placement agent in the Private
Placement. Upon the closing of the Private Placement, we paid Avalon
approximately $198,000 in cash commissions and issued to Avalon and its
designees warrants to purchase an aggregate of 218,030 shares of common stock at
an exercise price of $1.21 per share. Except for the exercise price,
these warrants are identical to the Series B warrants issued to investors in the
Private Placement.
We agreed
to register for re-sale the shares of common stock received or to be received by
the investors in the Private Placement, as well as Avalon and its designees.
Accordingly, we are registering for resale under this prospectus the shares of
common stock on behalf of the investors, Avalon and its designees.
Corporate
Information
Our
principal executive offices are located at 1115 Broadway, New York, New York
10010 and our telephone number is (212) 798-4700. Our retail division corporate
office is located at 6255 Sunset Boulevard, Los Angeles, California 90028 and
its telephone number is (323) 466-5151. Our retail website is www.fredericks.com
and our corporate website is www.fohgroup.com. We
do not intend for information contained in our websites to be a part of this
prospectus.
You
should carefully consider the risks described below as well as other information
provided to you in this document, including information in the section of this
document entitled “Forward Looking Statements.” The risks and
uncertainties described below are not the only ones facing
us. Additional risks and uncertainties not presently known to us or
that we currently believe are immaterial may also impair our business
operations. If any of the following risks actually occur, our
business, financial condition or results of operations could be materially
adversely affected, the value of our common stock could decline, and you may
lose all or part of your investment.
Risks
Relating to Our Business
General
economic conditions, including continued weakening of the economy, may affect
consumer purchases of discretionary items, which could adversely affect our
sales.
The intimate apparel industry
historically has been subject to cyclical variations, recessions in the general
economy and future economic outlook. Throughout fiscal year 2009 and
the first six months of fiscal 2010, there was significant deterioration in the
global financial markets and economic environment, which we believe negatively
impacted consumer spending at many retailers, including us. Our
results are dependent on a number of factors impacting consumer spending,
including general economic and business conditions; consumer confidence; wages
and employment levels; the housing market; consumer debt levels; availability of
consumer credit; credit and interest rates; fuel and energy costs; energy
shortages; taxes; general political conditions, both domestic and abroad; and
the level of customer traffic within department stores, malls and other shopping
and selling environments. Consumer purchases of discretionary items,
including our products, may decline during recessionary periods and at other
times when disposable income is lower. A continued or incremental
downturn in the U.S. economy, an uncertain economic outlook or an expanded
credit crisis could continue to adversely affect our business and our revenues
and profits.
If
we cannot compete effectively in the retail and wholesale apparel industries,
our business, financial condition and results of operations may be adversely
affected.
The intimate apparel industry is highly
competitive, both on the retail and wholesale levels. Our retail
division competes with a variety of retailers, including national department
store chains, national and international specialty apparel chains, apparel
catalog businesses and online apparel businesses that sell similar lines of
merchandise. Many of Frederick’s of Hollywood’s competitors have
greater financial, distribution, logistics, marketing and other resources
available to them and may be able to adapt to changes in customer requirements
more quickly, devote greater resources to the design, sourcing, distribution,
marketing and sale of their products, generate greater national brand
recognition or adopt more aggressive pricing policies. If we are
unable to overcome these potential competitive disadvantages, such factors could
have an adverse effect on our business, financial condition and results of
operations.
The wholesale industry is characterized
by a large number of small companies manufacturing and selling unbranded
merchandise, and by several large companies which have developed widespread
consumer recognition of the brand names associated with merchandise manufactured
and sold by these companies. In addition, some of the larger
retailers to whom our wholesale division has historically sold its products have
sought to expand the development and marketing of their own brands and to obtain
intimate apparel products directly from the same or similar sources from which
our wholesale division obtains its products. Many of these companies
have greater financial, technical and sourcing capabilities than we
do. If our wholesale division does not continue to provide high
quality products and reliable services on a timely basis at competitive prices,
we may not be able to continue to compete in the wholesale intimate apparel
industry. If we are unable to compete successfully, we could lose one
or more of our significant customers which, if not replaced, could negatively
impact sales and have an adverse effect on our business, financial condition and
results of operations.
The
failure to successfully order and manage inventory to reflect customer demand
and anticipate changing consumer preferences and buying trends may adversely
affect our revenue and profitability.
Our success depends, in part, on
management’s ability to anticipate and respond effectively to rapidly changing
fashion trends and consumer tastes and to translate market trends into
appropriate, saleable product offerings. Generally, merchandise must
be ordered well in advance of the applicable selling season and the extended
lead times may make it difficult to respond rapidly to new or changing product
trends or price changes. If we are unable to successfully anticipate,
identify or react to changing styles or trends and we misjudge the market for
our products or our customers’ purchasing habits, then our product offerings may
be poorly received by the ultimate consumer and may require substantial
discounts to sell, which would reduce sales revenue and lower profit
margins. In addition, we will incur additional costs if we need to
redesign our product offerings. Brand image also may suffer if
customers believe that we are unable to offer innovative products, respond to
the latest fashion trends, or maintain product quality.
Our
inability to consummate a financing for the amount and within the time period
required under our financing agreement with our senior lender, absent a waiver
of such requirement, will constitute an event of default under our senior
revolving credit facility.
In September and October 2009, we
amended our revolving credit facility with our senior lender to provide for a
$2.0 million bridge facility to be repaid upon the earlier of August 1, 2010 and
the consummation of a financing in which we receive net proceeds of at least
$4.4 million. We did not receive that amount in the Private
Placement. Unless we receive the amount of proceeds required by our
credit facility by August 1, 2010, we will be in violation of a covenant under
our credit facility. If such violation is not waived by our senior
lender, it will constitute an event of default.
We
are required to raise additional financing under our senior revolving credit
facility and may not be able to obtain it on favorable terms, or at all, which,
in addition to violating a covenant under our credit facility, could limit our
ability to operate and dilute the ownership interests of existing
shareholders.
Since the Private Placement did not
yield net proceeds of at least $4.4 million, we are required to raise additional
funds under our senior credit facility. We cannot be certain that we
will be able to obtain such additional financing on favorable terms, or at
all. Further, if we obtain additional funding through the issuance of
equity, shareholders may experience dilution or the new equity securities may
have rights, preferences or privileges senior to those of existing holders of
common stock. Future financings may place restrictions on how we
operate our business. If we cannot raise funds on acceptable terms,
if and when needed, we may be required to curtail our operations significantly,
which could adversely affect our business.
We
depend on key personnel and we may not be able to operate and grow the business
effectively if we lose the services of any key personnel or are unable to
attract qualified personnel in the future.
We are dependent upon the continuing
service of key personnel and the hiring of other qualified
employees. In particular, we are dependent upon the management and
leadership of Thomas J. Lynch, our Chairman and Chief Executive Officer, Linda
LoRe, our President, and Thomas Rende, our Chief Financial Officer. The loss of
any of them or other key personnel could affect our ability to operate the
business effectively.
Our
retail division historically has depended on a high volume of mall traffic, the
lack of which would hurt our business.
Most Frederick’s of Hollywood stores
are located in shopping malls. Sales at these stores are influenced, in
part, by the volume of mall traffic. Frederick’s of Hollywood stores
benefit from the ability of the malls’ “anchor” tenants, generally large
department stores, and other area attractions to generate customer traffic in
the vicinity of its stores and the continuing popularity of malls as shopping
destinations. A decline in the desirability of the shopping environment of
a particular mall, whether due to the closing of an anchor tenant or competition
from non-mall retailers, or recessionary economic conditions that consumers have
been experiencing, could reduce the volume of mall traffic, which could have an
adverse effect on our business, financial condition and results of
operations.
If
leases for Frederick’s of Hollywood stores cannot be negotiated on reasonable
terms, our growth and profitability could be harmed.
The growth in our retail division’s
sales is significantly dependent on management’s ability to operate retail
stores in desirable locations with capital investments and lease costs that
allow for the opportunity to earn a reasonable return. Desirable locations and
configurations may not be available at a reasonable cost, or at all. If we
are unable to renew or replace our store leases or enter into leases for new
stores on favorable terms, our growth and profitability could be
harmed.
Our
wholesale business historically has been concentrated on one key customer,
and a significant decrease in business from or the loss of this key customer
could substantially reduce revenues.
Sales to Walmart accounted for
approximately 32% of wholesale sales for the fiscal year ended July 25, 2009 and
approximately 2% of wholesale sales for the six months ended January 23,
2010. We do not have a long-term contract with Walmart and,
therefore, our wholesale business is subject to significant unpredictable
increases and decreases in sales depending upon the size and number of orders we
receive from Walmart. We experienced a significant decrease in
Walmart business during fiscal year 2009 and the first half of fiscal year 2010,
which impacted our revenues. Our inability to increase our Walmart
orders during the remainder of fiscal year 2010 and beyond could have a material
adverse effect on our business, financial condition and results of
operations.
The
extent of our foreign sourcing and manufacturing may adversely affect our
business, financial condition and results of operations.
Substantially all of our products are
manufactured outside the United States. As a result of the magnitude
of foreign sourcing and manufacturing, our retail and wholesale businesses are
subject to the following risks:
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political
and economic instability in foreign countries, including heightened
terrorism and other security concerns, which could subject imported or
exported goods to additional or more frequent inspections, leading to
delays in deliveries or impoundment of goods, or to an increase in
transportation costs of raw materials or finished
product;
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the
imposition of regulations and quotas relating to imports, including quotas
imposed by bilateral textile agreements between the United States and
foreign countries, including China, where we conduct
business;
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the
imposition of duties, taxes and other charges on
imports;
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significant
fluctuation of the value of the U.S. dollar against foreign
currencies;
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restrictions
on the transfer of funds to or from foreign countries;
and
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violations
by foreign contractors of labor and wage standards and resulting adverse
publicity.
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If these
risks limit or prevent us from selling, manufacturing or acquiring products from
foreign suppliers, our operations could be disrupted until alternative suppliers
are found, which could negatively impact our business, financial condition and
results of operations.
Our
wholesale business operates on very tight delivery schedules. If
there are delays and expected delivery dates cannot be met, it could negatively
affect our profitability.
If there is a delay in the delivery of
goods and delivery schedules cannot be met, then our wholesale customers may
cancel their orders or request a reduced price for the delivery of their
orders. If orders are canceled, it would result in an
over-inventoried position and require the sale of inventory at low or negative
gross profits, which would reduce our profitability. We may also
incur extra costs to meet customer delivery dates, which would also reduce our
profitability.
Any
disruptions at our distribution centers could materially affect our ability to
distribute products, which could lead to a reduction in our revenue and/or
profits.
Our distribution centers in Phoenix, AZ
and Poplarville, MS serve our retail and wholesale customers. There is no backup
facility or any alternate distribution arrangements in place. If we
experience disruptions at either of our distribution centers that impede the
timeliness or fulfillment of the products to be distributed, or either
distribution center is partially or completely destroyed, becomes inaccessible,
or is otherwise not fully usable, whether due to unexpected circumstances such
as weather conditions or disruption of the transportation systems or
uncontrollable factors such as terrorism and war, it would have a material
adverse effect on our ability to distribute products, which in turn would have a
material adverse effect on our business, financial condition and results of
operations.
The
failure to upgrade information technology systems as necessary could have an
adverse effect on our operations.
Some of
our information technology systems, which are primarily utilized to manage
information necessary to price and ship products, manage production and
inventory and generate reports to evaluate business operations, are dated and
are comprised of multiple applications, rather than one overarching
state-of-the-art system. Modifications involve replacing legacy
systems with successor systems, making changes to legacy systems or acquiring
new systems with new functionality. If we are unable to effectively
implement these systems and update them where necessary, this could have a
material adverse effect on our business, financial condition and results of
operations.
The
processing, storage and use of personal data could give rise to liabilities as a
result of governmental regulation, conflicting legal requirements or differing
views of personal privacy rights.
The collection of data and processing
of transactions through our Frederick’s of Hollywood e-commerce website and call
centers require us to receive and store a large amount of personally
identifiable data. This type of data is subject to legislation and
regulation in various jurisdictions. We may become exposed to
potential liabilities with respect to the data that we collect, manage and
process, and may incur legal costs if our information security policies and
procedures are not effective or if we are required to defend our methods of
collection, processing and storage of personal data. Future
investigations, lawsuits or adverse publicity relating to our methods of
handling personal data could adversely affect our business, financial condition
and results of operations due to the costs and negative market reaction relating
to such developments.
Our
collection and remittance of sales and use tax may be subject to audit and may
expose us to liabilities for unpaid sales or use taxes, interest and penalties
on past sales.
We sell Frederick’s of Hollywood
products through three channels: retail specialty stores, mail order catalogs
and our e-commerce website. We have historically operated these
channels separately and account for sales and use tax
separately. Currently, our mail order and e-commerce subsidiaries
collect and pay sales tax to the relevant state taxing authority on sales made
to residents in any state in which we have a physical presence. Our
retail subsidiaries are periodically audited by state government
authorities. It is possible that one or more states may disagree with
our method of assessing and remitting these taxes, including sales tax on
catalog and e-commerce sales. We expect to challenge any and all
future assertions by state governmental authorities or private litigants that we
owe sales or use tax, but we may not prevail. If we do not prevail,
we could be held liable for additional sales and use taxes, interest and
penalties which could have an adverse effect on our profitability.
We could be sued
for trademark infringement, which could force us to incur substantial costs and
devote significant resources to defend the litigation.
We use many trademarks and product
designs in our businesses and believe these trademarks and product designs are
important to our business, competitive position and success. As
appropriate, we rely on trademark and copyright laws to protect these designs
even if not formally registered as marks, copyrights or
designs. Third parties may sue us for alleged infringement of their
proprietary rights. The party claiming infringement might have
greater resources than us to pursue its claims, and we could be forced to incur
substantial costs and devote significant management resources to defend the
litigation. Moreover, if the party claiming infringement were to
prevail, we could be forced to discontinue the use of the related trademark,
patent or design and/or pay significant damages, or to enter into expensive
royalty or licensing arrangements with the prevailing party, assuming these
royalty or licensing arrangements are available at all on an economically
feasible basis, which they may not be.
If
we cannot protect our trademarks and other proprietary intellectual property
rights, our business may be adversely affected.
We may experience difficulty in
effectively limiting unauthorized use of our trademarks and product designs
worldwide, which may cause significant damage to our brand name and our ability
to effectively represent ourselves to our agents, suppliers, vendors and/or
customers. We may not be successful in enforcing our trademark and
other proprietary rights and there can be no assurance that we will be
adequately protected in all countries or that we will prevail when defending our
trademark and proprietary rights.
Our
stock price has been highly volatile.
The trading price of our common stock
has been highly volatile. During the quarter ended January 23, 2010,
the closing sale prices of our common stock on the NYSE Amex ranged from $1.08
to $1.56 per share and the closing sale price of our common stock on April 8,
2010 was $1.19 per share. Since the closing date of the merger on
January 28, 2008, our stock price closed at a high of $4.10 on January 29, 2008
and a low of $0.14 on March 3, 2009. Our stock price is subject to
wide fluctuations in response to a variety of factors, including:
|
|
·
|
quarterly
variations in operating results;
|
|
|
·
|
general
economic conditions;
|
|
|
·
|
sales
of a substantial amount of our common stock;
and
|
|
|
·
|
other
events or factors that are beyond our
control.
|
Any negative change in the public’s
perception of the prospects of the retail industry could further depress our
stock price regardless of our results. Other broad market
fluctuations may lower the trading price of our common
stock. Following significant declines in the market price of a
company’s securities, securities class action litigation may be instituted
against that company. Litigation could result in substantial costs
and a diversion of management’s attention and resources.
There
will be a significant number of shares of common stock eligible for sale, which
could depress the market price of our stock.
Following
the effective date of the registration statements covering the shares of common
stock issued in the Private Placement and pursuant to the Exchange and
Conversion Agreement, a large number of shares of common stock will be available
for sale in the public market. This could harm the market price of
our stock. Further, shares may be offered from time to time in the open market
pursuant to Rule 144 under the Securities Act of 1933, as amended (“Securities
Act”), and these sales may depress the market for our common stock.
When used
in this prospectus, the words or phrases “will likely result,” “management
expects” or “we expect,” “will continue,” “is anticipated,” “estimated,”
“believes,” “could,” “possibly,” “probably,” “anticipates,” “projects,” “may,”
or “should” or other variations or similar words are intended to identify
“forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. Readers are cautioned not to place
undue reliance on any such forward-looking statements. No assurances
can be given that the future results anticipated by the forward-looking
statements will be achieved.
Such
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and those presently
anticipated or projected. In assessing forward-looking statements
contained herein, readers are urged to carefully read those
statements. Among the factors that could cause actual results to
differ materially are: competition; business conditions and industry growth;
rapidly changing consumer preferences and trends; general economic conditions;
large variations in sales volume with significant customers; addition or loss of
significant customers; continued compliance with government regulations; loss of
key personnel; labor practices; product development; management of growth;
increases of costs of operations or inability to meet efficiency or cost
reduction objectives; timing of orders and deliveries of products; and foreign
government regulations and risks of doing business abroad.
A
description of key factors that have a direct bearing on our results of
operations is provided above under “Risk Factors” beginning on page 3 of this
Prospectus.
All
shares of our common stock offered by this prospectus are being registered for
the account of the selling shareholders. We will not receive any of the proceeds
from the sale of these shares; however, we may receive payment in cash upon
exercise of warrants held by such selling shareholders. We expect to use any
cash proceeds received from the exercise of the warrants, if any, for general
working capital purposes.
The
following table provides certain information with respect to the selling
shareholders’ beneficial ownership of our common stock as of April 8, 2010 and
as adjusted to give effect to the sale of all of the shares offered by this
prospectus. Except as otherwise indicated, the number of shares
reflected in the table has been determined in accordance with Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (“Exchange
Act”). Under this rule, each selling shareholder is deemed to
beneficially own the number of shares issuable upon exercise or conversion of
warrants, options or other convertible securities it holds that are exercisable
or convertible within 60 days from the date of this
prospectus. However, for purposes of presentation, we have included
the full amount of the shares being registered by this prospectus, including the
shares underlying warrants, in the number of shares beneficially owned by the
entity or individual even though the warrants may not be exercisable within 60
days. Unless otherwise indicated, each of the selling shareholders
possesses sole voting and investment power with respect to the securities
shown.
The
percentage of beneficial ownership before the offering indicated below is based
on 29,336,709 shares of our common stock outstanding on April 8,
2010.
|
|
Beneficial
Ownership Before
Offering
|
Shares
Offered
|
Beneficial
Ownership After
Offering
|
|
|
|
|
|
|
|
|
Carpe
Diem Partners LLC(1)
|
428,571(2)
|
1.5%
|
428,571(2)
|
0
|
0%
|
|
CCM
Partners Fund, LP(3)
|
514,286(4)
|
1.7%
|
514,286(4)
|
0
|
0%
|
|
Cranshire
Capital LP(5)
|
171,432(6)
|
*
|
171,432(6)
|
0
|
0%
|
|
Seth
H. Fischer
|
428,571(2)
|
1.5%
|
428,571(2)
|
0
|
0%
|
|
Fairfield
Investment Group LLC(7)
|
428,400(8)
|
1.5%
|
428,400(8)
|
0
|
0%
|
|
Micro
PIPE Fund I, LLC(9)
|
257,143(10)
|
*
|
257,143(10)
|
0
|
0%
|
|
Arlene
Paul Caitung
|
214,286(11)
|
*
|
214,286(11)
|
0
|
0%
|
|
Jeffrey
Grodko
|
214,286(11)
|
*
|
214,286(11)
|
0
|
0%
|
|
Steven
Grodko
|
238,840(12)
|
*
|
238,840(12)
|
0
|
0%
|
|
Phil
Lifschitz
|
428,571(2)
|
1.5%
|
428,571(2)
|
0
|
0%
|
|
Bruce
H. Paul
|
428,571(2)
|
1.5%
|
428,571(2)
|
0
|
0%
|
|
Cosmetics
on Madison Corp.(13)
|
214,286(11)
|
*
|
214,286(11)
|
0
|
0%
|
|
Howard
Sorkin
|
214,286(11)
|
*
|
214,286(11)
|
0
|
0%
|
|
Hillel
Weinberger
|
428,571(2)
|
1.5%
|
428,571(2)
|
0
|
0%
|
|
Adam
Mahfouda
|
42,858(14)
|
*
|
42,858(14)
|
0
|
0%
|
|
Richard
Molinsky
|
90,000(15)
|
*
|
90,000(15)
|
0
|
0%
|
|
Edward
Nusblatt
|
42,858(14)
|
*
|
42,858(14)
|
0
|
0%
|
|
Patricof
Family Ltd. Partnership(16)
|
428,571(2)
|
1.5%
|
428,571(2)
|
0
|
0%
|
|
George
Kaufman
|
42,858(14)
|
*
|
42,858(14)
|
0
|
0%
|
|
Oppenheimer
& Co, Inc.(17)
|
24,554(18)
|
*
|
24,554(18)
|
0
|
0%
|
|
Ethan
Keswin
|
2,679(18)
|
*
|
2,679(18)
|
0
|
0%
|
|
Avalon
Group Limited(19)
|
34,246(18)
|
*
|
34,246(18)
|
0
|
0%
|
|
Ariel
Imas
|
39,566(18)
|
*
|
39,566(18)
|
0
|
0%
|
|
Braden
Ferrari
|
39,566(18)
|
*
|
39,566(18)
|
0
|
0%
|
|
Lynda
Davey
|
34,246(18)
|
*
|
34,246(18)
|
0
|
0%
|
|
Yolanda
Wardowski
|
4,655(18)
|
*
|
4,655(18)
|
0
|
0%
|
|
Evan
Babazadeh
|
4,655(18)
|
*
|
4,655(18)
|
0
|
0%
|
|
Karen
Sterling
|
4,655(18)
|
*
|
4,655(18)
|
0
|
0%
|
|
Jason
Gorsuch
|
2,327(18)
|
*
|
2,327(18)
|
0
|
0%
|
|
Ali
Sajadian
|
2,327(18)
|
*
|
2,327(18)
|
0
|
0%
|
____________________________
* Less
than 1%.
|
(1)
|
John
Ziegelman is the investment manager of Carpe Diem Partners LLC and is the
president of Carpe Diem Capital Management LLC and as such has voting and
dispositive power over the securities held by Carpe Diem Partners
LLC.
|
|
(2)
|
Includes
95,238 shares of common stock issuable upon exercise of Series A warrants
and 95,238 shares of common stock issuable upon exercise of Series B
warrants.
|
|
(3)
|
Louis
Rabman is the president of CCM Partners Fund, LP and as such has voting
and dispositive power over the securities held by CCM Partners Fund,
LP.
|
|
(4)
|
Includes
114,286 shares of common stock issuable upon exercise of Series A warrants
and 114,286 shares of common stock issuable upon exercise of Series B
warrants.
|
|
(5)
|
Downsview
Capital, Inc. (“Downsview”) is the general partner of Cranshire Capital LP
and as such has voting and dispositive power over the securities held by
Cranshire Capital LP. Mitchell P. Kopin, president of
Downsview, has voting control over
Downsview.
|
|
(6)
|
Includes
38,096 shares of common stock issuable upon exercise of Series A warrants
and 38,096 shares of common stock issuable upon exercise of Series B
warrants.
|
|
(7)
|
Mark
Schalles is the chief financial officer of Fairfield Investment Group LLC
and as such has voting and dispositive power over the securities held by
Fairfield Investment Group LLC.
|
|
(8)
|
Includes
95,200 shares of common stock issuable upon exercise of Series A warrants
and 95,200 shares of common stock issuable upon exercise of Series B
warrants.
|
|
(9)
|
David
Mickeson is the managing member of Micro PIPE Fund I, LLC and as such has
voting and dispositive power over the securities held by Micro PIPE Fund
I, LLC.
|
|
(10)
|
Includes
57,143 shares of common stock issuable upon exercise of Series A warrants
and 57,143 shares of common stock issuable upon exercise of Series B
warrants.
|
|
(11)
|
Includes
47,619 shares of common stock issuable upon exercise of Series A warrants
and 47,619 shares of common stock issuable upon exercise of Series B
warrants.
|
|
(12)
|
Includes
47,619 shares of common stock issuable upon exercise of Series A warrants,
47,619 shares of common stock issuable upon exercise of Series B warrants
and 24,554 shares of common stock issuable upon exercise of placement
agent warrants.
|
|
(13)
|
Kenneth
Schwartz is the president of Cosmetics on Madison Corp. and as such has
voting and dispositive power over the securities held by Cosmetics on
Madison Corp.
|
|
(14)
|
Includes
9,524 shares of common stock issuable upon exercise of Series A warrants
and 9,524 shares of common stock issuable upon exercise of Series B
warrants.
|
|
(15)
|
Includes
20,000 shares of common stock issuable upon exercise of Series A warrants
and 20,000 shares of common stock issuable upon exercise of Series B
warrants.
|
|
(16)
|
Jules
Patricof is a partner of the Patricof Family Ltd. Partnership and as such
has voting and dispositive power over the securities held by Patricof
Family Ltd. Partnership.
|
|
(17)
|
Albert
G. Lowenthal is the chairman and chief executive officer of Oppenheimer
& Co, Inc. and as such has voting and dispositive power over the
securities held by Oppenheimer & Co,
Inc.
|
|
(18)
|
Represents
shares issuable upon exercise of placement agent
warrants.
|
|
(19)
|
Lynda
Davey is the chief executive officer of Avalon Group Limited and as such
has voting and dispositive power over the securities held by Avalon Group
Limited.
|
Each
selling shareholder provided us with information with respect to its share
ownership. Because the selling shareholders may sell all, part or
none of their shares, we are unable to estimate the number of shares that will
be held by each selling shareholder upon resale of shares of common stock being
registered hereby. We have, therefore, assumed for the purposes of
the registration statement related to this prospectus that the selling
shareholders will sell all of their shares. See “Plan of
Distribution.”
On March
16, 2010, we completed the Private Placement of 2,907,051 shares of our common
stock at $1.05 per share raising total gross proceeds of approximately
$3,050,000. The investors in the Private Placement also received
two-and-a-half year Series A warrants to purchase up to an aggregate of
1,162,820 shares of common stock at an exercise price of $1.25 per share, and
five-year Series B warrants to purchase up to an aggregate of 1,162,820 shares
of common stock at an exercise price of $1.55 per share.
Avalon
acted as placement agent in the Private Placement. Upon the closing
of the Private Placement, we paid Avalon approximately $198,000 in cash
commissions and issued to Avalon and its designees warrants to purchase an
aggregate of 218,030 shares of common stock at an exercise price of $1.21 per
share. Except for the exercise price, these warrants are identical to
the Series B warrants issued to investors in the Private Placement.
In
connection with the consummation of the Private Placement, we entered into a
registration rights agreement with the investors pursuant to which we agreed to
register for re-sale the shares of common stock received or to be by the
investors in the Private Placement. Accordingly, we are registering
for resale under this prospectus the shares of common stock on behalf of the
investors. We also agreed to register the resale of the shares of
common stock issuable upon exercise of warrants issued to Avalon and its
designees for acting as placement agent in connection with the Private
Placement.
We are registering the shares of common
stock previously issued and the shares of common stock issuable upon exercise of
the warrants to permit the resale of these shares of common stock by the holders
from time to time after the date of this prospectus.
The selling shareholders may sell all
or a portion of the shares of common stock beneficially owned by them and
offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of common stock are sold
through underwriters or broker-dealers, the selling shareholders will be
responsible for underwriting discounts or commissions or agent’s
commissions. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated
prices. These sales may be effected in transactions, which may
involve crosses or block transactions,
|
|
·
|
on
any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of
sale;
|
|
|
·
|
in
the over-the-counter market;
|
|
|
·
|
in
transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
|
|
|
·
|
through
the writing of options, whether such options are listed on an options
exchange or otherwise;
|
|
|
·
|
in
ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
|
|
|
·
|
through
block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
|
·
|
in
purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
|
|
|
·
|
on
an exchange distribution in accordance with the rules of the applicable
exchange;
|
|
|
·
|
in
privately negotiated transactions;
|
|
|
·
|
in
sales pursuant to Rule 144;
|
|
|
·
|
by
broker-dealers that may agree with the selling shareholders to sell a
specified number of such shares at a stipulated price per
share;
|
|
|
·
|
in
a combination of any such methods of sale;
and
|
|
|
·
|
by
any other method permitted pursuant to applicable
law.
|
If the selling shareholders effect such
transactions by selling shares of common stock to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions from
the selling shareholders or commissions from purchasers of the shares of common
stock for whom they may act as agent or to whom they may sell as principal
(which discounts, concessions or commissions as to particular underwriters,
broker-dealers or agents may be in excess of those customary in the types of
transactions involved). In connection with sales of the shares of
common stock or otherwise, the selling shareholders may enter into hedging
transactions with broker-dealers, which may in turn engage in short sales of the
shares of common stock in the course of hedging in positions they
assume. The selling shareholders may also sell shares of common stock
short and deliver shares of common stock covered by this prospectus to close out
short positions and to return borrowed shares in connection with such short
sales. The selling shareholders may also loan or pledge shares of
common stock to broker-dealers that in turn may sell such shares.
The selling shareholders may pledge or
grant a security interest in some or all of the warrants or shares of common
stock owned by them and, if they default in the performance of their secured
obligations, the pledgees or secured parties may offer and sell the shares of
common stock from time to time pursuant to this prospectus or any amendment to
this prospectus under Rule 424(b)(3) or other applicable provision of the
Securities Act, amending, if necessary, the list of selling shareholders to
include the pledgee, transferee or other successors in interest as selling
shareholders under this prospectus. The selling shareholders also may
transfer and donate the shares of common stock in other circumstances in which
case the transferees, donees, pledgees or other successors in interest will be
the selling shareholders for purposes of this prospectus.
The selling shareholders and any
broker-dealer participating in the distribution of the shares of common stock
may be deemed to be “underwriters” within the meaning of the Securities Act, and
any commission paid, or any discounts or concessions allowed to, any such
broker-dealer may be deemed to be underwriting commissions or discounts under
the Securities Act. At the time a particular offering of the shares
of common stock is made, a prospectus supplement, if required, will be
distributed which will set forth the aggregate amount of shares of common stock
being offered and the terms of the offering, including the name or names of any
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling shareholders and any discounts,
commissions or concessions allowed or reallowed or paid to
broker-dealers.
Under the securities laws of some
states, the shares of common stock may be sold in such states only through
registered or licensed brokers or dealers. In addition, in some
states the shares of common stock may not be sold unless such shares have been
registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.
There can be no assurance that any
selling shareholder will sell any or all of the shares of common stock
registered pursuant to the registration statement, of which this prospectus
forms a part.
The selling shareholders and any other
person participating in such distribution will be subject to applicable
provisions of the Exchange Act, and the rules and regulations thereunder,
including, without limitation, Regulation M of the Exchange Act, which may limit
the timing of purchases and sales of any of the shares of common stock by the
selling shareholders and any other participating person. Regulation M
may also restrict the ability of any person engaged in the distribution of the
shares of common stock to engage in market-making activities with respect to the
shares of common stock. All of the foregoing may affect the
marketability of the shares of common stock and the ability of any person or
entity to engage in market-making activities with respect to the shares of
common stock.
We will pay all expenses of the
registration of the shares of common stock pursuant to the registration rights
agreement, including, without limitation, Securities and Exchange Commission
filing fees and expenses of compliance with state securities or “blue sky” laws;
provided, however, that a selling shareholder will pay all underwriting
discounts and selling commissions, if any. We have agreed to
indemnify the selling shareholders against liabilities, including some
liabilities under the Securities Act, in accordance with the registration rights
agreement, or the selling shareholders will be entitled to
contribution. We may be indemnified by the selling shareholders
against civil liabilities, including liabilities under the Securities Act, that
may arise from any written information furnished to us by the selling
shareholder specifically for use in this prospectus, in accordance with the
registration rights agreement, or we may be entitled to
contribution.
Once sold under the registration
statement, of which this prospectus forms a part, the shares of common stock
will be freely tradable in the hands of persons other than our
affiliates.
The
legality of the common stock offered by this prospectus has been passed upon by
Graubard Miller, New York, New York.
We file
annual, quarterly and current reports, proxy statements and other information
with the SEC. Our SEC filings are available to the public over the
Internet at the SEC’s web site at http://www.sec.gov. You may also
read and copy any document we file at the SEC’s public reference room at 100 F
Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information about the public reference room. In addition, we
make available on or through our corporate web site copies of these reports as
soon as reasonably practicable after we electronically file or furnish them to
the SEC. Our corporate web site can be found at www.fohgroup.com.
The SEC
allows us to incorporate by reference the information we file with it, which
means that we can disclose important information to you by referring you to
those documents. 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 modifies or
supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this prospectus. Any information that we file after the date of
this prospectus with the SEC will automatically update and supersede the
information contained in this prospectus. This prospectus incorporates by
reference our documents listed below and any future filings we make with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until all of the
securities are sold:
|
|
·
|
our
Annual Report on Form 10-K for the fiscal year ended July 25,
2009;
|
|
|
·
|
Amendment
No. 1 to our Annual Report on Form 10-K on Form 10-K/A for the year ended
July 25, 2009;
|
|
|
·
|
our
Quarterly Report on Form 10-Q for the fiscal quarter ended October 24,
2009;
|
|
|
·
|
our
Quarterly Report on Form 10-Q for the fiscal quarter ended January 23,
2010;
|
|
|
·
|
our
Current Report on Form 8-K dated October 23,
2009;
|
|
|
·
|
our
Current Report on Form 8-K dated November 25,
2009;
|
|
|
·
|
our
Current Report on Form 8-K dated December 8,
2009;
|
|
|
·
|
our
Current Report on Form 8-K dated February 1,
2010;
|
|
|
·
|
our
Current Report on Form 8-K dated March 9,
2010;
|
|
|
·
|
our
Current Report on Form 8-K dated March 16,
2010;
|
|
|
·
|
our
Definitive Proxy Statement on Schedule 14A dated April 6, 2010;
and
|
|
|
·
|
the
description of our common stock contained in our Registration Statement on
Form S-14 (File No. 2-70365), filed with the SEC pursuant to Section 12(b)
of the Exchange Act, including any amendment(s) or report(s) filed for the
purpose of updating such
description.
|
Potential
investors may obtain a copy of our SEC filings without charge by written or oral
request directed to Frederick’s of Hollywood Group Inc., Attention: Thomas
Rende, 1115 Broadway, New York, New York 10010, (212) 798-4700.
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
|
ITEM 14.
|
OTHER
EXPENSES OF ISSUANCE AND
DISTRIBUTION
|
The
following table sets forth the fees and expenses incurred or expected to be
incurred by Frederick’s of Hollywood Group Inc. in connection with the issuance
and distribution of the securities being registered hereby. All of the amounts
shown are estimated except the SEC registration fee. Estimated fees and expenses
can only reflect information that is known at the time of filing this
registration statement and are subject to future contingencies, including
additional expenses for future offerings.
|
|
|
$ |
459 |
|
|
Legal
fees and
expenses
|
|
|
10,000 |
|
|
Accounting
fees and
expenses
|
|
|
2,000 |
|
|
Miscellaneous
expenses
|
|
|
2,541 |
|
|
Total
|
|
$ |
15,000.00 |
|
|
|
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
|
Our
certificate of incorporation provides that we shall, to the fullest extent
permitted by Article 7 of the New York Business Corporation Law (“NYBCL”),
indemnify any and all persons whom we shall have power to indemnify under said
Article.
Section
722(a) of the NYBCL provides that a corporation may indemnify any person made,
or threatened to be made, a party to any action or proceeding (other than one by
or in the right of the corporation to procure a judgment in its favor), whether
civil or criminal, including an action by or in the right of any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise, which any director or officer of the corporation served in any
capacity at the request of the corporation, by reason of the fact that he, his
testator or intestate, was a director or officer of the corporation, or served
such other corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise in any capacity, against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorney’s fees actually and
necessarily incurred as a result of such action or proceeding, or any appeal
therein, if such director or officer acted in good faith, for a purpose which he
reasonably believed to be in, or, in the case of service for any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise, not opposed to, the best interests of the corporation, and, in
criminal actions or proceedings, in addition, had no reasonable cause to believe
that his conduct was unlawful.
Section
722(c) of the NYBCL provides that a corporation may indemnify its directors and
officers in relation to an action by or in the right of the corporation to
procure a judgment in its favor in similar circumstances to those described in
the preceding paragraph against amounts paid in settlement and reasonable
expenses, including attorney’s fees, actually and necessarily incurred by him or
her in connection with the defense or settlement of such action, except that no
indemnification shall be made in respect of a threatened action, or a pending
action which is settled or otherwise disposed of, or any claim, issue or matter
as to which such person is adjudged liable to the corporation unless a court
determines that an indemnity is proper in the circumstances of the
case.
Section
721 of the NYBCL provides that, in addition to indemnification provided in
Article 7 of the NYBCL, a corporation may indemnify a director or officer by a
provision contained in the certificate of incorporation or by-laws or by a duly
authorized resolution of its shareholders or directors or by agreement, provided
that no indemnification may be made to or on behalf of any director or officer
if a judgment or other final adjudication adverse to the director or officer
establishes that his acts were committed in bad faith or were the result of
active and deliberate dishonesty and were material to the cause of action, or
that such director or officer personally gained in fact a financial profit or
other advantage to which he was not legally entitled.
Section
723 of the NYBCL specifies the manner in which payment of indemnification under
Sections 722 and 721 of the NYBCL may be authorized by the corporation. It
provides that a corporation shall indemnify a person who has been successful, on
the merits or otherwise, in defending an action described in Section 722. In
other circumstances, unless ordered by a court upon application of a director or
officer under Section 724 of the NYBCL, indemnification as described above may
only be made if it is authorized in each specific case. The board of directors
can authorize indemnification, either acting as a quorum of disinterested
directors based upon a determination that the applicable standard of conduct has
been met or that indemnification is proper under the NYBCL, or based upon an
opinion by independent legal counsel that indemnification is proper in the
circumstances because the applicable standard of conduct has been met, or if the
shareholders find that the applicable standard of conduct has been
met.
Section
726 of the NYBCL permits the purchase and maintenance of insurance to indemnify
(1) the corporation for any obligation which it incurs as a result of the
indemnification of directors and officers under sections outlined above, (2)
directors and officers in instances in which they may be indemnified by the
corporation under such sections, and (3) directors and officers in instances in
which they may not otherwise be indemnified by the corporation under such
sections, provided the contract of insurance covering such directors and
officers provides, in a manner acceptable to the New York State superintendent
of insurance, for a retention amount and for co-insurance.
In
addition, Section 402(b) of the NYBCL provides that a corporation’s Certificate
of Incorporation may include a provision eliminating or limiting the personal
liability of its directors to the corporation or its shareholders for damages
for any breach of duty in such capacity, except liability if a judgment or final
adjudication establishes that the director’s acts or omissions were in bad faith
or involved intentional misconduct or a knowing violation of law or that he
personally gained in fact a financial profit or other advantage to which he was
not legally entitled or that his acts violated Section 719 of the NYBCL or
liability if the act or omission occurred prior to the adoption of a provision
authorized by this section. Our certificate of incorporation contains a
provision explicitly authorizing a limitation on such liabilities as permitted
by Section 402(b).
Pursuant
to employment agreements with certain of our executives, we are obligated to
indemnify each executive and hold the executive harmless against all costs,
expenses (including, without limitation, fines, excise taxes and reasonable
attorneys’ fees) and liabilities (other than settlements to which we do not
consent, which consent shall not be unreasonably withheld) (collectively,
“Losses”) reasonably incurred by the executive in connection with any claim,
action, proceeding or investigation brought against or involving the executive
with respect to, arising out of or in any way relating to the executive’s
employment with us or service as an officer; provided, however, that we are not
required to indemnify the executive for Losses incurred as a result of the
executive’s intentional misconduct or gross negligence (other than matters where
the executive acted in good faith and in a manner the executive reasonably
believed to be in and not opposed to our best interests). We also
agreed to advance any and all expenses (including, without limitation, the fees
and expenses of counsel) reasonably incurred by the executive in connection with
any such claim, action, proceeding or investigation, provided the executive
first enters into an appropriate agreement for repayment of such advances if
indemnification is found not to have been available.
We
maintain a directors’ and officers’ insurance policy. The policy insures
directors and officers against unindemnified losses arising from certain
wrongful acts in their capacities as directors and officers and reimburses us
for those losses for which we have lawfully indemnified the directors and
officers. The policy contains various exclusions, none of which apply to this
offering.
A list of
exhibits filed herewith is contained in the exhibit index that immediately
precedes such exhibits and is incorporated herein by reference.
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;
(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. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the
effective 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 paragraphs
(a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the
registration statement is on Form S-3 or Form F-3 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement, or is contained in a
form of prospectus filed pursuant to Rule 424(b) that is part of 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 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.
(5) That,
for the purpose of determining liability under the Securities Act to any
purchaser:
(i) If
the registrant is relying on Rule 430B:
(A) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to
be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as
part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act shall
be deemed to be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after effectiveness or
the date of the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date shall be
deemed to be a new effective date of the registration statement relating to the
securities in the registration statement to which that prospectus relates, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such effective
date, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such effective date; or
(ii) If
the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule
424(b) as part of a registration statement relating to an offering, other than
registration statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such date of first use.
(6) That,
for purposes of determining liability of the undersigned registrant under the
Securities Act to any purchaser in the initial distribution of the securities,
the registrant undertakes that in a primary offering of securities of the
registrant pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the registrant will be a seller to the purchaser and
will be considered to offer or sell such securities to such
purchaser:
(i) Any
preliminary prospectus or prospectus of the registrant relating to the offering
required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the
registrant or used or referred to by the undersigned registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the registrant or its securities provided by or on
behalf of the registrant; and
(iv) Any
other communication that is an offer in the offering made by the registrant to
the purchaser.
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 Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan’s annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar
as indemnification for liabilities arising under the Securities Act 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. 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.
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, hereunto duly authorized, in New York, New York on April 13,
2010.
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FREDERICK’S
OF HOLLYWOOD GROUP, INC
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By:
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/s/ Thomas J.
Lynch
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Name:
Thomas J. Lynch
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Title: Chairman
and Chief Executive Officer
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KNOW ALL
MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Thomas J. Lynch and Thomas Rende, and each of them,
with full power to act without the other, such person’s true and lawful
attorneys-in-fact and agents, with full power of substitution and
re-substitution, for him and in his name, place and stead, in any and all
capacities, to sign this Registration Statement, any and all amendments thereto
(including post-effective amendments), any subsequent Registration Statements
pursuant to Rule 462 of the Securities Act of 1933, as amended, and any
amendments thereto and to file the same, with exhibits and schedules thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
necessary or desirable to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully 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 by the following persons in the capacities and on the dates
indicated.
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By:/s/Thomas
J. Lynch
Thomas J. Lynch
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Chairman
of the Board and Chief Executive Officer
(Principal
Executive Officer
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April
13, 2010
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By:/s/ Thomas
Rende
Thomas Rende
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Chief
Financial Officer (Principal Financial Officer
and
Principal Accounting Officer)
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April
13, 2010
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By:
/s/ Linda
LoRe
Linda LoRe
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President
and Director
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April
13, 2010
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By:/s/ Peter
Cole
Peter Cole
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Director
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April
13, 2010
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By:/s/ John
Eisel
John Eisel
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Director
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April
13, 2010
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By:/s/ William F.
Harley
William F. Harley
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Director
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April
13, 2010
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By:/s/ Michael
Salberg
Michael Salberg
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Director
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April
13, 2010
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By:/s/ Joel
Simon
Joel Simon
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Director
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April
13, 2010
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By:/s/ Milton J.
Walters
Milton J. Walters
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Director
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April
13, 2010
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Opinion
of Graubard Miller.*
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10.1
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Form
of Securities Purchase Agreement (incorporated by reference to Exhibit
10.1 of the Issuer’s Form 8-K filed on March 22, 2010).
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10.2
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Form
of Registration Rights Agreement (incorporated by reference to Exhibit
10.2 of the Issuer’s Form 8-K filed on March 22, 2010).
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10.3
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Form
of Series A warrant (incorporated by reference to Exhibit 10.3 of the
Issuer’s Form 8-K filed on March 22, 2010).
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10.4
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Form
of Series B warrant (incorporated by reference to Exhibit 10.4 of the
Issuer’s Form 8-K filed on March 22, 2010).
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23.1
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Consent
of MHM Mahoney Cohen CPAs (The New York Practice of Mayer Hoffman McCann
P.C.).*
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23.2
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Consent
of 25 MAD LIQUIDATION CPA, P.C. (formerly known as Mahoney Cohen &
Company, CPA, P.C.)*
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23.3
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Consent
of Graubard Miller (included in Exhibit 5.1).*
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24.1
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Power
of Attorney (included on the signature page to the registration
statement).*
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_____________________
* Filed
herewith