-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MTFLVGplEve2ntDjyuUDWw26mvEm5e9EGD7BmEX0H/Kdhx5wINHEl0ylSdH9WwgT kJV30qO+rxuk7Wk0O62cUg== 0000857737-04-000041.txt : 20041117 0000857737-04-000041.hdr.sgml : 20041117 20041117172458 ACCESSION NUMBER: 0000857737-04-000041 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20041117 DATE AS OF CHANGE: 20041117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CANDIES INC CENTRAL INDEX KEY: 0000857737 STANDARD INDUSTRIAL CLASSIFICATION: FOOTWEAR, (NO RUBBER) [3140] IRS NUMBER: 112481903 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-120581 FILM NUMBER: 041153015 BUSINESS ADDRESS: STREET 1: 215 W. 40TH STREET, 6TH FL. CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 212-730-0030 MAIL ADDRESS: STREET 1: 215 W. 40TH STREET, 6TH FL. CITY: NEW YORK STATE: NY ZIP: 10018 FORMER COMPANY: FORMER CONFORMED NAME: MILLFELD TRADING CO INC DATE OF NAME CHANGE: 19920703 S-3 1 cand_s3111604.txt REGISTRATION STATEMENT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 17, 2004 REGISTRATION NO. 333- ==================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CANDIE'S, INC. ---------------------------- (Exact name of registrant as specified in its charter) Delaware 11-2481903 - -------------------------------- ---------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) Incorporation) 215 West 40th Street New York, New York 10018 (212) 730-0030 - -------------------------------------------------------------------------------- (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 - -------------------------------------------------------------------------------- (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 $.001 314,981 (3) $ 5.79 (4) $1,823,740 (4) $231.07 par value (1)(2) - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------------------------------
(1) Represents: (i) 214, 981 shares of the registrant's common stock to be sold by the selling stockholder that were issued to the selling stockholder by the registrant pursuant to an Asset Purchase Agreement and (ii) an additional 100,000 shares of common stock which represents the registrant's good faith estimate of the maximum amount of additional shares of its common stock that may be issued to the selling stockholder pursuant to a provision in the Asset Purchase Agreement that provides, under certain circumstances, for an upward adjustment in the number of shares of the registrant's common stock issued to the selling stockholder. (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 stockholder 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 November 10, 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. 214,981 shares of Common Stock The selling stockholder listed on page 9 of this prospectus is offering for resale up to 214, 981 shares of common stock beneficially owned by it. The common stock may be offered from time to time by the selling stockholder 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 stockholder. Our common stock is listed on the Nasdaq National Market under the symbol "CAND" On November 15, 2004, the last sale price of our common stock as reported by Nasdaq was $6.11 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 Recent Developments............................................................3 Risk Factors...................................................................4 Use of Proceeds................................................................8 Selling Stockholder............................................................9 Plan of Distribution...........................................................9 Legal Matters.................................................................11 Experts.......................................................................11 Where You Can Find More Information...........................................12 Incorporation of Certain Documents by Reference...............................12 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. Through its wholly owned subsidiary, Bright Star Footwear, LLC, the Company also arranges for the manufacture of private label men's footwear products for mass market and discount retailers. Candie's had been 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. On June 9, 2004, Candie's entered into an agreement with TKO Apparel Licensing, Inc., referred to as TKO, under which TKO has agreed to purchase certain assets of Unzipped from Candie's on or before February 1, 2005 for a purchase price to be determined at the closing. Candie's also entered into a long-term licensing agreement with TKO, which commenced in August 2004, pursuant to which TKO, through Unzipped, designs, manufactures and sells 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. Recent Developments On October 29, 2004 (the "Closing Date"), Candie's, through a wholly-owned subsidiary, acquired from B.E.M. Enterprise, Ltd., referred to as "B.E.M.", which is the selling stockholder under this prospectus, its principal assets (the "Purchased Assets") for the designer business "Badgley Mischka", and the assumption of two existing licenses with Pronovias USA for bridal gowns (which expires on December 31, 2005) and BC International for fur coats (which expires on January 30, 2005). Additionally, the Company acquired the rights to operate the Badgley Mischka retail store located on Rodeo Drive in Beverly Hills, California effective January 1, 2005 at which time the lease for such premises is to be assumed by Candie's. Moreover, a subsidiary of Candie's entered into employment agreements with Mark Badgley and James Mischka. 3 The purchase price for the Purchased Assets was paid by the issuance of 214,981 shares of Candie's common stock, $.001 par value (the "Shares"). The purchase price of the Purchased Assets is subject to an upward adjustment in the event that the closing sale price of the Candie's common stock on the date which is 180 days after the Closing Date is less than the closing sale price on the Closing Date. Any such adjustment will also be paid in shares of Candie's common stock (the "Additional Shares"). The Shares and the Additional Shares, if any, have been registered for sale by B.E.M. pursuant to this prospectus. 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. We are no longer engaged in the design, manufacture, distribution or sale of CANDIE'S or BONGO branded footwear products or 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 agreements for our CANDIE'S and BONGO branded footwear and the licensing agreement with TKO for the BONGO branded jeans wear require 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 could result in the termination of the license agreements and an interruption in the royalty stream. Moreover, during the terms of the license agreements, we are substantially dependent upon the abilities of the licensees to maintain the quality, marketability and consumer recognition of footwear products bearing either of the CANDIE'S or 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 the asset-backed notes issued by one of our subsidiaries which would give the note holders the right to foreclose on our trademarks and other related intellectual property assets, which are the security for the debt. 4 Our business is dependent on continued market acceptance of 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 as well as market acceptance of 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 for our licensees to achieve market acceptance 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. Additional marketing efforts and expenditures may not result in increased market acceptance of 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 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 licensing revenues, thereby negatively impacting cash flows. We had a working capital deficit at July 31, 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. As of the date of this prospectus there is approximately $18.9 million principal outstanding 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. of the joint venture formed with Sweet, we issued to Sweet $11.0 million principal amount of senior subordinated notes the amount of which have been reduced to approximately $7.8 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 managed Unzipped, although it may be furthered reduced by offset of additional losses. These notes will mature in 2012. Moreover, we had a working capital deficit of approximately $754,000 at July 31, 2004. In the event that projected cash flow 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. 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 and our licensees' ability to compete for limited consumer resources. Moreover, our future success depends in substantial part on our and our licensees' ability to anticipate and respond to changing consumer demands and fashion trends in a timely manner and for us to create effective marketing for those products. The footwear and wearing apparel industries are generally subject to constantly changing fashion trends. If we or our licensees misjudge the market for a particular product or product line, it may result in a decrease in the amount of revenue we realize from our licenses. 5 All of our licensees rely on unaffiliated manufacturers and suppliers and, therefore, may be subject to timing or production problems that are beyond their control. Our licensees do not own or operate any manufacturing facilities The manufacturers of our licensed products have limited production capacity and may not, in all instances, have the capability to satisfy our licensees manufacturing requirements. In such event, the capacity of alternative manufacturing sources may not be available to our licensees on a cost effective basis. Accordingly, our licensees' dependence upon third parties for the manufacture of our licensed products could have an adverse effect on their ability to deliver products on a timely and competitive basis and could have an adverse effect on our revenues and cash flows from the licenses. Moreover, our licensees operate under substantial time constraints which require them to have production orders in place at specified times in advance of the customers' retail selling seasons. If the suppliers fail to meet their delivery date requirements pursuant to purchase orders with the licensees, they will be unable to meet our delivery date requirements pursuant to purchase orders with their customers. This could result in the cancellation of purchase orders both by our licensees and their customers, having an adverse effect on our licensing revenues and earnings. Our licensees are subject to risks and uncertainties of foreign manufacturing that could reduce our licensing revenues. Substantially all of the products sold by our licensees are manufactured overseas. Our licensees are subject to various risks inherent in foreign manufacturing, all of which can have a significant impact on our licensees' sales of licensed products and consequently, our earnings, including: - increased credit risks; - fluctuations in foreign currency exchange rates; - shipping delays; and - international political, regulatory and economic developments. 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, our licensees may be unable to successfully compete in the markets for such products. 6 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. The Company's current employment agreement with Mr. Cole, expires in January 2005 and the loss of his services could have a material adverse effect on our business and prospects. Our success is also dependent upon our ability to hire and retain additional qualified sales and marketing personnel in connection with the design, marketing and distribution of our products as well as our ability to hire and retain 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 27,533,000 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. 7 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. We are also a plaintiff in an action against the former manager of Unzipped and cannot assure you that Unzipped will not seek to file counterclaims against us that may seek to recover monetary damages from us. 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. Under existing loan agreements with our principal lender, we are not permitted to pay dividends without the lender's consent. The market price of our common stock may be volatile. The market price of our common stock may be highly volatile. Disclosures of 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, 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 previously registered for resale a substantial number of restricted shares of common stock held by certain selling stockholders, which are in addition to the 214,981 shares, and any Additional Shares, that may be offered under this prospectus by the selling stockholder. 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 choose to sell such shares in the public market under Rule 144 or otherwise, the prevailing market price for our 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 stockholder named in this prospectus. We have agreed to pay expenses in connection with the registration of the shares being offered by the selling stockholder. 8 Selling Stockholder Based on information provided by the selling stockholder, the following table sets forth certain information regarding the selling stockholder: The table below assumes for calculating the 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 by the selling stockholder pursuant to this prospectus.
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 ----------------------- --------------------- ------------- --------- ----------- B.E.M. Enterprise, Ltd. (1) 214,981 (2) 214,891 (2) 0 0
- -------------- (1) Mr. Wolfgang Ley, the Chairman of B.E.M, has sole voting and investment power with respect to the shares being offered by the selling stockholder pursuant to this prospectus. Upon the appointment of a new President of B.E.M., both Mr. Ley and the President will have voting and investment power with respect to the shares. (2) Does not reflect any Additional Shares that may be issued by Candie's to the selling stockholder according to the terms of the Asset Purchase Agreement pursuant to which the Shares were issued. Any Additional Shares that may be issued to the selling stockholder are covered by the registration statement of which this prospectus forms a part. Plan of Distribution We have been advised that the selling stockholder, which may include pledgees, donees, transferees or other successors-in-interest who have received shares from the 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 stockholder. 9 The shares may be sold by the selling stockholder by one or more of the following methods: o 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; o purchases by a broker or dealer as principal and resale by such broker dealer for its account pursuant to this prospectus; o an exchange distribution in accordance with the rules of the applicable exchange; o ordinary brokerage transactions and transactions in which the broker solicits purchasers; o through put and call options relating to the shares; o negotiated transactions; o a combination of any such methods of sale at market prices prevailing at the time of the sale or at negotiated prices; and o any other method permitted pursuant to applicable law. The transactions described above may or may not involve brokers or dealers. The selling stockholder will not be restricted as to the price or prices at which the selling stockholder may sell its shares. Sales of shares by the selling stockholder may depress the market price of our common stock since the number of shares which may be sold by the selling stockholder is relatively large compared to the historical average weekly trading of our common stock. Accordingly, if the selling stockholder 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 the 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 the 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 stockholder 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 stockholder 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 stockholder, to purchase as principal any unsold shares at the price required to fulfill the broker-dealer commitment to the selling stockholder. Broker-dealers who acquire shares as principal may then resell those shares from time to time in transactions 10 o in the over-the counter market or otherwise; o at prices and on terms prevailing at the time of sale; o at prices related to the then-current market price; or o 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 stockholder may also sell the shares in open market transactions under Rule 144 under the Securities Act, rather than under this prospectus. The selling stockholder and any broker-dealers or agents that participate with the selling stockholder 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. We have agreed to indemnify the selling stockholder against certain liabilities under the Securities Act. The selling stockholder 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 stockholder is 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 stockholder. 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 consolidated balance sheets as of January 31, 2004 and 2003 and the consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended January 31, 2004, incorporated by reference in this prospectus, have been included herein in reliance on the report of BDO Seidman, LLP, independent registered public accountants, given on the authority of that firm as experts in auditing and accounting. 11 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 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. 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 of 1933, 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; 3. Our Quarterly Report on Form 10-Q for the quarter ended July 31, 2004; 4. Our Current Report on Form 8-K for the event dated August 25, 2004; 5. Our Current Report on Form 8-K for the event dated September 9, 2004; 6. Form 8-K/A Amendment No. 1 to our Form 8-K for the event dated September 9, 2004; 12 7. Form 10-Q/A for the quarter ended April 30, 2004; 8. Our Current Report on Form 8-K for the event dated October 29, 2004; 9. 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 10. 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 Compensation Committee 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, at no cost, 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. 13 Candie's, Inc. 214,981 shares of Common Stock Prospectus _________, 2004 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 $ 231.07 Accounting Fees and Expenses $10,000.00 Legal Fees and Expenses $10,000.00 Miscellaneous Expenses $ 4,768.93 Total $25,000.00 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 15th day of November 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 November 15, 2004 - --------------------- Director (Principal Executive Officer) Neil Cole /s/Richard Danderline Executive Vice President of Operations November 15, 2004 - --------------------- and Finance (Principal Financial and Richard Danderline Accounting Officer) /s/Barry Emanuel Director November 15, 2004 - --------------------- Barry Emanuel /s/Steven Mendelow Director November 15, 2004 - --------------------- Steven Mendelow /s/Robert D'Loren Director November 15, 2004 - --------------------- Robert D'Loren /s/Michael Caruso Director November 15, 2004 - --------------------- Michael Caruso /s/Michael Groveman Director November 15, 2004 - --------------------- Michael Groveman /s/Drew Cohen Director November 15, 2004 - --------------------- Drew Cohen EX-5 2 s3ex5.txt OPINION OF BLANK ROME LLP Exhibit 5 [LETTERHEAD OF BLANK ROME LLP] November 16, 2004 Candie's, Inc. 215 West 40th Street New York, New York 10018 Gentlemen: You have requested our opinion with respect to the offer and sale by a selling stockholder pursuant to the Registration Statement on Form S-3 ("Registration Statement") under the Securities Act of 1933, as amended (the "Act"), to be filed by Candie's, Inc. (the "Company") with the Securities and Exchange Commission, of (i) 214, 981 shares (the "Issued Shares") of the Company's common stock, $.001 par value, (the "Common Stock") previously issued by the Company to the selling stockholder pursuant to the terms of an Asset Purchase Agreement dated October 29, 2004 among the Company, a wholly-owned subsidiary of the Company, the selling stockholder and the stockholder of the selling stockholder (the "Asset Purchase Agreement") and (ii) such additional shares of Common Stock that may be issued by the Company to the selling stockholder under certain circumstances specified in the Asset Purchase Agreement as an adjustment to the purchase price of the assets acquired by the Company under the terms of the Asset Purchase Agreement (the "Additional Shares"). We have examined and relied upon originals, or copies certified or otherwise identified to our satisfaction, of such documents and corporate and public records as we deemed necessary as a basis for the opinion hereinafter expressed. With respect to such examination, we have assumed the genuineness of all signatures appearing on all documents presented to us as originals, and the conformity to the originals of all documents presented to us as conformed or reproduced copies. Where factual matters relevant to such opinion were not independently established, we have relied upon representations of executive officers of the Company. Based upon the foregoing, it is our opinion that: (i) the Issued Shares have validly issued and are fully paid and non assessable and (ii) the Additional Shares, if issued pursuant to the terms of the Asset Purchase Agreement, will be validly issued and will be fully paid and non assessable. We hereby consent to the use of this opinion as Exhibit 5 to the Registration Statement, and to the use of our name as your counsel in connection with the Registration Statement and in the Prospectus forming a part thereof. In giving this consent, we do not thereby concede that we come within the categories of persons whose consent is required by the Securities Act of 1933 or the General Rules and Regulations promulgated thereunder. Very truly yours, /s/ Blank Rome LLP BLANK ROME LLP EX-23.1 3 s3ex231.txt CONSENT OF BDO SEIDMAN Exhibit 23.1 Candie's Inc. New York, New York We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement of our reports dated April 23, 2004, except for Note 2, which is as of April 30, 2004, relating to the consolidated financial statements and schedule of Candie's Inc. appearing in the Company's Annual Report on Form 10-K for the year ended January 31, 2004. We also consent to the reference to us under the caption "Experts" in the Prospectus. /s/ BDO Seidman, LLP BDO Seidman, LLP New York, New York November 16, 2004 -----END PRIVACY-ENHANCED MESSAGE-----