As filed with the Securities and Exchange Commission on August 3, 2020
Registration No. 333-
Delaware (State or Other Jurisdiction of Incorporation or Organization) | | | 20-0709285 (I.R.S. Employer Identification Number) |
Brett Nadritch Milbank LLP 55 Hudson Yards New York, New York 10001 (212) 530-5301 | | | James W. Dobbins General Counsel 5201 Interchange Way Louisville, Kentucky 40229 (502) 778-4421 |
Large accelerated filer | | | ☐ | | | | | Accelerated filer | | | ☒ | |
Non-accelerated filer | | | ☐ | | | (Do not check if a smaller reporting company) | | | Smaller reporting company | | | ☐ |
Emerging Growth Company ☒ |
Title of Each Class of Securities to be Registered | | | Amount to be Registered | | | Proposed Maximum Offering Price per Unit | | | Proposed Maximum Aggregate Offering Price | | | Amount of Registration Fee |
Primary Offering: | | | | | | | | | ||||
Common Stock, par value $0.01 per share | | | (1)(2) | | | (1)(2) | | | (3) | | | — |
Preferred Stock, par value $0.01 per share | | | (1)(2) | | | (1)(2) | | | (3) | | | — |
Depositary Shares(4) | | | (1) | | | (1) | | | (3) | | | — |
Warrants | | | (1) | | | (1) | | | (3) | | | — |
Units | | | (1) | | | (1) | | | (3) | | | — |
Total Primary Offering | | | | | | | $200,000,000(5) | | | $25,960(6) | ||
Secondary Offering: | | | | | | | | | ||||
Common Stock, par value $0.01 per share | | | 6,442,280(2) | | | (2) | | | $193,654,937(7) | | | $25,137(8) |
Total Registration Fee (Primary and Secondary) | | | | | | | $393,654,937 | | | $51,097 |
(1) | There is being registered hereunder such indeterminate number or amount of common stock, preferred stock, depositary shares, warrants and units as may from time to time be issued by the registrant, which together shall have an aggregate initial offering price not to exceed $200,000,000. This registration statement also covers an indeterminate amount of securities that may be issuable upon conversion, redemption, exchange, exercise or settlement of any securities registered hereunder, including under any applicable antidilution provisions. |
(2) | Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), the shares of common stock and preferred stock being registered hereunder include such indeterminate number of shares of common stock and preferred stock as may be issuable by the registrant with respect to the shares being registered hereunder as a result of stock splits, stock dividends or similar transactions. |
(3) | With respect to the primary offering, the proposed maximum aggregate offering price for each class of securities to be registered is not specified pursuant to General Instruction II.D. of Form S-3. |
(4) | Each depositary share will be issued under a deposit agreement, will represent an interest in a fractional share or multiple shares of preferred stock and will be evidenced by a depositary receipt. |
(5) | With respect to the primary offering, in no event will the aggregate initial offering price of all securities offered from time to time pursuant to the prospectus included as a part of this registration statement and any applicable prospectus supplement exceed $200,000,000. |
(6) | Calculated in accordance with Rule 457(o) under the Securities Act. |
(7) | With respect to the secondary offering, the proposed maximum offering price per share of common stock will be determined from time to time in connection with, and at the time of, the sale by the holder of such shares of common stock. |
(8) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act on the basis of the average of the high and low sales prices of the shares of common stock on July 27, 2020 of $30.06, as reported on the New York Stock Exchange (“NYSE”). |
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• | declining sales of tobacco products, and expected continuing decline of sales, in the tobacco industry overall; |
• | our dependence on a small number of third-party suppliers and producers; |
• | the possibility that we will be unable to identify or contract with new suppliers or producers in the event of a supply or product disruption; |
• | our business may be damaged by events outside of our suppliers’ control, such as the impact of epidemics (e.g., coronavirus), political upheavals, or natural disasters; |
• | the possibility that our licenses to use certain brands or trademarks will be terminated, challenged or restricted; |
• | failure to maintain consumer brand recognition and loyalty of our customers; |
• | substantial and increasing U.S. regulation; |
• | regulation of our products by the FDA, which has broad regulatory powers; |
• | our products are subject to developing and unpredictable regulation, for example, current court action moving forward certain substantial Pre Market Tobacco Application obligations; |
• | some of our products contain nicotine, which is considered to be a highly addictive substance; |
• | uncertainty related to the regulation and taxation of our NewGen products; |
• | possible significant increases in federal, state and local municipal tobacco- and vapor-related taxes; |
• | our amount of indebtedness; |
• | the terms of our current and future credit facilities, which may restrict our current and future operations; |
• | possible significant increases in tobacco-related taxes; |
• | possible increasing international control and regulation; |
• | our reliance on relationships with several large retailers and national chains for distribution of our products; |
• | our amount of indebtedness; |
• | the terms of our credit facilities, which may restrict our current and future operations; |
• | intense competition and our ability to compete effectively; |
• | uncertainty and continued evolution of markets containing our NewGen products; |
• | significant product liability litigation; |
• | the scientific community’s lack of information regarding the long-term health effects of certain substances contained in some of our products; |
• | requirement to maintain compliance with master settlement agreement escrow account; |
• | competition from illicit sources; |
• | our reliance on information technology; |
• | security and privacy breaches; |
• | contamination of our tobacco supply or products; |
• | infringement on our intellectual property; |
• | third-party claims that we infringe on their intellectual property; |
• | failure to manage our growth; |
• | failure to successfully integrate our acquisitions or otherwise be unable to benefit from pursuing acquisitions; |
• | fluctuations in our results; |
• | exchange rate fluctuations; |
• | adverse U.S. and global economic conditions; |
• | sensitivity of end-customers to increased sales taxes and economic conditions; |
• | failure to comply with certain regulations; |
• | departure of key management personnel or our inability to attract and retain talent; |
• | imposition of significant tariffs on imports into the U.S.; |
• | reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors, potentially decreasing our stock price; |
• | failure to maintain our status as an emerging growth company before the five-year maximum time period a company may retain such status; |
• | our principal stockholders will be able to exert significant influence over matters submitted to our stockholders and may take certain actions to prevent takeovers; |
• | our certificate of incorporation and bylaws, as well as Delaware law and certain regulations, could discourage or prohibit acquisition bids or merger proposals, which may adversely affect the market price of our common stock; |
• | our certificate of incorporation limits the ownership of our common stock by individuals and entities that are Restricted Investors (as defined below). These restrictions may affect the liquidity of our common stock and may result in Restricted Investors being required to sell or redeem their shares at a loss or relinquish their voting, dividend and distribution rights; |
• | future sales of our common stock in the public market could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us; and |
• | we may issue preferred stock whose terms could adversely affect the voting power or value of our common stock. |
• | Our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 12, 2020 (including the portions of our proxy statement for our 2020 annual meeting of the stockholders incorporated by reference therein); |
• | Our Quarterly Reports on Form 10-Q for the quarterly period ended March 31, 2020 filed with the SEC on April 28, 2020 and the quarterly period ended June 30, 2020 filed with the SEC on July 28, 2020; |
• | Our Current Reports on Forms 8-K filed with the SEC on April 8, 2020, April 30, 2020, June 10, 2020 (except with respect to Item 7.01 included therein), June 26, 2020, July 8, 2020 (except with respect to Item 2.02 included therein), July 13, 2020, and July 16, 2020; and |
• |
| | Common Stock | | | ||||||||
Name of Selling Stockholder | | | Beneficially Owned as of August 3, 2020(1) | | | Offered Pursuant to this Prospectus(1) | | | Beneficially Owned upon Completion of this Offering(1) | | | Percentage Of Common Stock Beneficially Owned upon Completion of this Offering(1) |
Standard General L.P.(2)(3) | | | 6,442,280 | | | 6,442,280 | | | — | | | * |
* | Indicates percentage ownership below 1.0% |
(1) | We do not know when or in what amounts the selling stockholder may offer shares of common stock for sale. The selling stockholder may decide not to sell any or all of the shares offered by this prospectus. Because the selling stockholder may offer all, some or none of the shares pursuant to this offering, we cannot estimate the number of the shares that will be held by the selling stockholder after completion of the offering. However, for purposes of this table, we have assumed that the selling stockholder will sell all of its shares of our common stock covered by this prospectus. |
(2) | Consists of the shares beneficially owned by Standard General Master Fund L.P. (“Master Fund”), Standard General Master Fund II L.P. (“Master Fund II”), P Standard General L.P. (“P Standard”) and Standard General Focus Fund L.P. (“Focus Fund” and, collectively with Master Fund, Master Fund II and P Standard, the “Funds”) and 95,224 shares owned by Standard General L.P. (collectively with the Funds, the “Standard General Entities”). The common stock owned by the Funds consists of shares of common stock received by the Funds in connection with the Company’s merger with Standard Diversified, Inc. on July 16, 2020, as well as 1,534 shares of common stock previously received by Focus Fund from Mr. Thomas Helms in lieu of repayment of a number of loans Standard General L.P. made to Mr. Helms that were secured by shares of our common stock held by Mr. Helms and Helms Management Corp., an entity controlled by Mr. Helms. |
(3) | Soohyung Kim is the Managing Partner and Chief Investment Officer of Standard General L.P. and a director of the general partner of Standard General L.P. Mr. Kim may be deemed to be beneficially own, and have shared voting and/or investment control over the shares beneficially owned by the Standard General Entities. Mr. Glazek is a Partner of Standard General L.P. and is chairman of our board of directors. The business address of Standard General L.P. is 767 Fifth Avenue, 12th Floor New York, NY 10153. |
• | limits ownership of our common stock by any Restricted Investor to 14.9% of outstanding common stock and shares convertible or exchangeable therefor (including our non-voting common stock) (the “Permitted Percentage”); |
• | provides that any issuance or transfer of shares in excess of the Permitted Percentage to any Restricted Investor will be ineffective and that neither we nor our transfer agent will register such purported issuance or transfer of shares or be required to recognize the purported transferee or owner as our stockholder for any purpose whatsoever except to exercise our remedies thereunder; |
• | permits withholding of dividends and suspends voting rights with respect to any shares held by any Restricted Investor that exceed the Permitted Percentage; |
• | permits us to require submission of such documentary and other evidence of status to aid determination of the percentage ownership of our capital stock by such holder; |
• | permits our board of directors to authorize us to redeem any shares held by any Restricted Investor that exceeds the Permitted Percentage; and |
• | permits our board of directors to make such determinations to ascertain ownership and implement such measures as reasonably may be necessary. |
• | all outstanding depositary shares have been redeemed; or |
• | there has been a final distribution of the preferred stock in connection with our dissolution and such distribution has been made to all the holders of depositary shares. |
• | the title of warrants; |
• | the aggregate number of warrants offered; |
• | the price or prices at which the warrants will be issued; |
• | the currency or currencies, including composite currencies, in which the prices of the warrants may be payable; |
• | the designation, number and terms of the common stock, preferred stock or other securities or rights, including rights to receive; |
• | payment in cash or securities based on the value, rate or price of one or more specified commodities, currencies or indices, purchasable; |
• | upon exercise of the warrants and procedures by which those numbers may be adjusted; |
• | the dates or periods during which the warrants are exercisable; |
• | the designation and terms of any securities with which the warrants are issued as a unit; |
• | if the warrants are issued as a unit with another security, the date on and after which the warrants and the other security will be separately transferable; |
• | if the exercise price is not payable in U.S. dollars, the foreign currency, currency unit or composite currency in which the exercise price is denominated; |
• | any minimum or maximum amount of warrants that may be exercised at any one time; |
• | any terms relating to the modification of the warrants; and |
• | any other terms of the warrants, including terms, procedures and limitations relating to the transferability, exchange, exercise or redemption of the warrants. |
• | vote, consent or receive dividends; |
• | receive notice as stockholders with respect to any meeting of stockholders for the election of our directors or any other matter; or |
• | exercise any rights as stockholders of TPB. |
• | the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances the securities comprising the units may be held or transferred separately; |
• | a description of the terms of any unit agreement governing the units; |
• | a description of the provisions for the payment, settlement, transfer or exchange of the units; and |
• | whether the units if issued as a separate security will be issued in fully registered or global form. |
• | to or through underwriters, brokers or dealers; |
• | directly to one or more purchasers; |
• | through agents; |
• | “at the market offerings” to or through market makers or into an existing market for the securities; |
• | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
• | block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
• | privately negotiated transactions; |
• | short sales (including short sales “against the box”); |
• | through the writing or settlement of standardized or over-the-counter options or other hedging or derivative transactions, whether through an options exchange or otherwise; |
• | by pledge to secure debts and other obligations; |
• | in other ways not involving market makers or established trading markets, including direct sales to purchasers or sales effected through agents; |
• | a combination of any such methods of sale; and |
• | any other method permitted pursuant to applicable law and described in an applicable prospectus supplement. |
• | the name or names of any underwriters, dealers or agents and the amounts of securities underwritten or purchased by each of them; |
• | the public offering price of the securities and the proceeds to us and/or to the selling stockholder, as the case may be, and any discounts, commissions or concessions allowed or reallowed or paid to dealers; and |
• | information about the selling stockholder, including the relationship between the selling stockholder and us. |
• | at a fixed price or prices, which may be changed from time to time; |
• | at market prices prevailing at the time of sale; |
• | at prices relating to the prevailing market prices; or |
• | at negotiated prices. |
Item 14. | Other Expenses of Issuance and Distribution. |
SEC registration fee | | | $51,097 |
FINRA filing fee | | | * |
NYSE listing fee | | | * |
Printing and engraving expenses | | | 18,000 |
Fees and expenses of legal counsel | | | 30,000 |
Accounting fees and expenses | | | * |
Transfer agent and registrar fees | | | * |
Miscellaneous | | | 5,000 |
Total | | | $104,097 |
* | These fees are calculated based on the common stock offered and number of issuances and accordingly cannot be estimated at this time. |
Item 15. | Indemnification of Directors and Officers. |
• | for any breach of the director’s duty of loyalty to our company or our stockholders; |
• | for any act or omission not in good faith or that involves intentional misconduct or knowing violation of law; |
• | under Section 174 of the DGCL regarding unlawful dividends and stock purchases; or |
• | for any transaction from which the director derived an improper personal benefit. |
Item 16. | Exhibits. |
EXHIBIT NUMBER | | | DESCRIPTION OF EXHIBITS |
1.1* | | | Form of Underwriting Agreement |
| | Second Amended and Restated Certificate of Incorporation of Turning Point Brands, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37763) filed on May 16, 2016). | |
| | Amended and Restated By-laws (incorporated by reference to Exhibit 3.3 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-207816) filed on November 24, 2015). | |
| | Registration Rights Agreement of Turning Point Brands, Inc. dated May 10, 2016, between Turning Point Brands, Inc. and the Stockholders named therein (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37763) filed on May 16, 2016). | |
4.2* | | | Form of Deposit Agreement. |
4.3* | | | Form of Warrant Agreement. |
4.4* | | | Form of Unit Agreement. |
| | Opinion of Milbank LLP | |
| | Consent of RSM US LLP, Independent Registered Public Accounting Firm for the Company. | |
| | Consent of Milbank LLP (included in Exhibit 5.1) | |
| | Power of Attorney (included on signature page) |
* | To be filed, if necessary, by amendment or as an exhibit to a report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and incorporated herein by reference. |
Item 17. | Undertakings. |
(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; |
(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 |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, 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. |
(4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
a. | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) (§230.424(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 of 1933 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. |
(5) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned 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 undersigned 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 undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§230.424); |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned 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 undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(6) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(7) | 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. 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. |
| | Turning Point Brands, Inc. | ||||
| | | | |||
| | By: | | | /s/ Lawrence S. Wexler | |
| | Name: | | | Lawrence S. Wexler | |
| | Title: | | | President and Chief Executive Officer |
Signature | | | Title | | | Date |
| | | | |||
/s/ Lawrence S. Wexler | | | President & Chief Executive Officer, Director (Principal Executive Officer) | | | |
Lawrence S. Wexler | | | August 3, 2020 | |||
| | | | |||
/s/ Robert Lavan | | | Senior Vice President, Chief Financial Officer (Principal Financial Accounting Officer) | | | |
Robert Lavan | | | August 3, 2020 | |||
| | | | |||
/s/ Brian Wigginton | | | | | ||
Brian Wigginton | | | Chief Accounting Officer | | | August 3, 2020 |
| | | | |||
/s/ David Glazek | | | Chairman of the Board of Directors | | | |
David Glazek | | | August 3, 2020 | |||
| | | | |||
/s/ Ashley Davis Frushone | | | | | ||
Ashley Davis Frushone | | | Director | | | August 3, 2020 |
| | | | |||
/s/ Gregory H. A. Baxter | | | | | ||
Gregory H. A. Baxter | | | Director | | | August 3, 2020 |
| | | | |||
/s/ H.C. Charles Diao | | | | | ||
H.C. Charles Diao | | | Director | | | August 3, 2020 |
| | | | |||
/s/ Peggy H. Hebard | | | | | ||
Peggy H. Hebard | | | Director | | | August 3, 2020 |
| | | | |||
/s/ Arnold Zimmerman | | | | | ||
Arnold Zimmerman | | | Director | | | August 3, 2020 |
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