Christopher
Aguilar, Esq., General Counsel
|
|
Michael
C. Doran, Esq.
|
MCF
Corporation
|
|
Fish
& Richardson P.C.
|
600
California Street, 9th Floor
|
|
500
Arguello Street
|
San
Francisco, California 94108
|
|
Redwood
City, CA 94063
|
(415)
248-5634
|
|
(650)
839-5053
|
Title
of Each Class of Securities to be Registered
|
Amount
to be
Registered(1)
|
Proposed
Maximum
Offering
Price per Share(2)
|
Proposed
Maximum
Aggregate
Offering
Price
|
Amount
of
Registration
Fee
|
|||||||||
Common
Stock, $0.0001 par value per share
|
914,778
|
$
|
1.32
|
$
|
1,207,507 (3
|
)
|
$
|
129.20
|
|||||
Common
Stock, $0.0001 par value per share, issuable upon conversion of
Debenture
|
6,914,894
|
$
|
1.32
|
9,127,660(4
|
)
|
$
|
976.66
|
||||||
Common
Stock, $0.0001 par value per share, issuable upon exercise of stock
warrants
|
2,437,500
|
$
|
1.32
|
$
|
3,217,500(5
|
)
|
$
|
344.28
|
|||||
Total
|
10,267,172
|
$
|
1.32 |
$
|
13,552,667
|
$
|
1450.14
|
||||||
Fees
previously paid
|
$
|
(1,245.09
|
) | ||||||||||
Fees
paid herewith
|
$
|
205.05
|
|||||||||||
(1) |
Pursuant
to Rule 416 under the Securities Act this Registration Statement also
covers such additional shares as may hereafter be offered or issued
to
prevent dilution resulting from stock splits, stock dividends,
recapitalizations or certain other capital
adjustments.
|
(2) |
Estimated
solely for purposes of calculating the registration fee pursuant
to
Rule 457(c) of the Securities Act based upon the average of the high
and low price of the shares of common stock of the Registrant reported
on
the American Stock Exchange on April 19,
2006.
|
(3) |
Estimated
solely for the purpose of computing the registration fee in accordance
with Rule 457(c) of the Securities Act with respect to shares of
common
stock currently held by selling stockholders and to be sold by
them, by
multiplying the number of such shares by $1.32 , the average of
the high
and low price of the shares of common stock of the Registrant reported
on
the American Stock Exchange on April 19,
2006.
|
(4) |
Estimated
solely for the purpose of computing the registration fee in accordance
with Rule 457(c) of the Securities Act with respect to 130% of
shares of
common stock currently held by selling stockholders and to be sold
by
them, by multiplying the number of such shares by $1.32 , the average
of
the high and low price of the shares of common stock of the Registrant
reported on the American Stock Exchange on April 19,
2006.
|
(5) |
Estimated
solely for the purpose of computing the registration fee in accordance
with Rule 457(c) of the Securities Act with respect to 130% of
shares of
common stock currently held by selling stockholders and to be sold
by
them, by multiplying the number of such shares by $1.32 , the average
of
the high and low price of the shares of common stock of the Registrant
reported on the American Stock Exchange on April 19,
2006.
|
|
·
|
|
914,778
shares of common stock currently held by them; and
|
|
|
|
|
|
·
|
|
6,914,894
shares of common stock issuable upon exercise of convertible debentures
currently held by them. Of these shares, 5,319,149 are currently
issuable
upon conversion of the debenture, and an additional 1,595,745 shares
are
issuable only upon the occurrence of certain events, such as if
the
issuance by us of additional shares of common stock at a price
of less
than $1.41 per share.
|
|
|
|
|
|
·
|
|
2,437,500
shares of common stock issuable upon exercise of warrants currently
held
by them. Of these shares, 1,875,000 are currently issuable upon
exercise
of warrants, and an additional 562,500 shares are issuable only
upon the
occurrence of certain events, such as if the issuance by us of
additional
shares of common stock at a price of less than $1.41 per
share.
|
Our
principal executive office is located at 600 California Street, 9th
Floor,
San Francisco, California 94108 and our telephone number is
(415) 248-5600.
|
The
date of this prospectus is [_______],
2006
|
|
·
|
|
future
events,
|
|
·
|
|
our
financial performance and operating
results,
|
|
·
|
|
our
business strategy, and
|
|
·
|
|
our
financing plans
|
|
|
|
|
|
|
Page
|
|
|
1
|
|
|
|
2
|
|
|
|
8
|
|
|
|
8
|
|
|
|
10
|
|
|
|
11
|
|
|
|
12
|
|
|
|
13
|
|
|
|
13
|
|
|
|
13
|
|
|
|
15
|
|
|
|
16
|
|
|
|
16
|
|
·
|
establish,
maintain and increase our client base;
|
|
|
·
|
manage
the quality of our services;
|
|
|
·
|
compete
effectively with existing and potential competitors;
|
|
|
·
|
further
develop our business activities;
|
|
|
·
|
manage
expanding operations; and
|
|
|
·
|
attract
and retain qualified personnel.
|
·
|
the
level of institutional brokerage transactions and the level of commissions
we receive from those transactions;
|
|
|
·
|
the
valuations of our principal investments;
|
|
|
·
|
the
number of capital markets transactions completed by our clients,
and the
level of fees we receive from those transactions; and
|
|
|
·
|
variations
in expenditures for personnel, consulting and legal expenses, and
expenses
of establishing new business units, including marketing and technology
expenses.
|
·
|
variations
in quarterly operating results;
|
|
|
·
|
our
announcements of significant contracts, milestones,
acquisitions;
|
|
|
·
|
our
relationships with other companies;
|
|
|
·
|
our
ability to obtain needed capital commitments;
|
|
|
·
|
additions
or departures of key personnel;
|
|
|
·
|
sales
of common stock, conversion of securities convertible into common
stock,
exercise of options and warrants to purchase common stock or termination
of stock transfer restrictions;
|
|
|
·
|
general
economic conditions, including conditions in the securities brokerage
and
investment banking markets;
|
|
|
·
|
changes
in financial estimates by securities analysts; and
|
|
|
·
|
fluctuation
in stock market price and volume.
|
Name
of Selling
Stockholder
|
|
Common
Stock
Owned
Prior to Offering (1)
|
|
Percent
of Stock
Owned
Prior
to
Offering (1)
|
|
Common
Stock
Offered
(1)
|
|
Common
Stock
Owned
After
Offering
(1)(2)
|
|
Percent
of Common
Stock
Owned After
Offering
(1)(2)
|
|
|||||
Midsummer
Investment Ltd.
|
|
|
0
|
|
|
0
|
%
|
|
9,352,394(3
|
)
|
|
9,352,394(3
|
)
|
|
12.8
|
%
|
Madelyn
Mallory Revocable Trust u/a/d
June
14, 2001
|
|
|
12,500
|
|
|
*
|
|
|
555,195
|
|
|
567,695
|
|
|
*
|
|
San
Francisco Equity Partners
|
|
|
6,000,001
|
|
|
8.2
|
%
|
|
359,583
|
|
|
6,359,584
|
|
|
8.7
|
%
|
Total
(4)
|
|
|
6,012,501
|
|
|
8.2
|
%
|
|
10,267,172
|
|
|
16,279,673
|
|
|
22.2
|
%
|
* | Less than 1% | |
(1)
|
|
This
information is based on information provided to us by the selling
stockholder.
|
(2)
|
|
Assumes
the sale of all shares offered in this
prospectus.
|
(3)
|
|
Includes
6,914,894 shares of common stock issuable to Midsummer Investment
Ltd.
upon conversion of convertible debentures and 2,437,500 shares
of common
stock issuable to Midsummer Investment Ltd. upon exercise of warrants
that
are exercisable within 60 days of the date of this prospectus.
Midsummer
Capital, LLC is the investment manager to Midsummer Investment
Ltd. By
virtue of such relationship, Midsummer Capital, LLC may be deemed
to have
dispositive power over the shares owned by Midsummer Investment
Ltd.
Midsummer Capital, LLC disclaims beneficial ownership of such shares.
Mr.
Michel Amsalem and Mr. Scott Kaufman have delegated authority from
the
members of Midsummer Capital, LLC with respect to the shares of
common
stock owned by Midsummer Investment Ltd. Messrs. Amsalem and Kaufman
may
be deemed to share dispositive power over the shares of our common
stock
owned by Midsummer Investment Ltd. Messrs. Amsalem and Kaufman
disclaim
beneficial ownership of such shares of our common stock and neither
person
has any legal right to maintain such delegated
authority.
|
(5)
|
|
Includes
shares of our common stock held by the selling stockholders, as well
as
common stock issuable upon conversion of convertible debentures and
exercise of warrants that are convertible or exercisable within 60
days of
the date hereof.
|
|
·
|
|
one
vote per share;
|
|
·
|
|
share
in all dividends that our Board of Directors, in its discretion,
declares
from legally available funds; and
|
|
·
|
|
participate
pro rata in all assets subject to the prior rights of creditors and
holders of any preferred stock, in the event of our liquidation,
dissolution or winding up.
|
|
·
|
|
powers,
|
|
·
|
|
designations,
|
|
|
|
|
|
·
|
|
preferences,
and
|
|
·
|
|
relative,
participating, optional or other special
rights
|
|
|
Pro
Forma
|
Pro
Forma
|
|||||||
|
Historical
|
Adjustments
|
Adjusted
|
|||||||
ASSETS
|
|
|
|
|||||||
Cash
and cash equivalents
|
$
|
11,138,923
|
$
|
7,500,000(a
|
)
|
$
|
18,638,923
|
|||
Securities
owned:
|
||||||||||
Marketable,
at fair value
|
8,627,543
|
—
|
8,627,543
|
|||||||
Not
readily marketable, at estimated fair value
|
1,065,743
|
—
|
1,065,743
|
|||||||
Restricted
cash
|
627,606
|
—
|
627,606
|
|||||||
Due
from clearing broker
|
973,138
|
—
|
973,138
|
|||||||
Accounts
receivable, net
|
2,073,195
|
—
|
2,073,195
|
|||||||
Equipment
and fixtures, net
|
1,378,235
|
—
|
1,378,235
|
|||||||
Prepaid
expenses and other assets
|
1,810,030
|
150,000(b
|
)
|
1,960,030
|
||||||
Total
assets
|
$
|
27,694,413
|
$
|
7,650,000
|
$
|
35,344,413
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||
Accounts
payable
|
$
|
901,138
|
$
|
150,000(b
|
)
|
$
|
1,051,138
|
|||
Commissions
and bonus payable
|
4,735,892
|
—
|
4,735,892
|
|||||||
Accrued
expenses
|
2,201,499
|
—
|
2,201,499
|
|||||||
Due
to clearing and other brokers
|
118,798
|
—
|
118,798
|
|||||||
Securities
sold, not yet purchased
|
41,579
|
—
|
41,579
|
|||||||
Capital
lease obligation
|
883,993
|
—
|
883,993
|
|||||||
Convertible
notes payable, net
|
176,741
|
6,255,376(c
|
)
|
6,432,117
|
||||||
Notes
payable
|
231,772
|
—
|
231,772
|
|||||||
Total
liabilities
|
9,291,412
|
6,405,376
|
15,696,788
|
|||||||
Commitments
and contingencies
|
||||||||||
Stockholders'
equity:
|
||||||||||
Common
stock, $0.0001 par value; 300,000,000 shares authorized; 71,467,118
and
68,648,627 shares issued and outstanding as of December 31, 2005 and
2004, respectively
|
7,147
|
—
|
7,147
|
|||||||
Additional
paid-in capital
|
111,725,167
|
1,244,624(d
|
)
|
112,969,791
|
||||||
Deferred
compensation
|
(3,146,839
|
)
|
—
|
(3,146,839
|
||||||
Accumulated
deficit
|
(90,182,474
|
)
|
—
|
(90,182,474
|
)
|
|||||
Total
stockholders' equity
|
18,403,001
|
1,244,624
|
19,647,625
|
|||||||
Total
liabilities and stockholders' equity
|
$
|
27,694,413
|
$
|
7,650,000
|
35,344,413
|
(a)
|
The
proceeds from the $7.5 million convertible debenture were initially
invested in cash in one of our proprietary funds managed by MCF Asset
Management, LLC.
|
|
|
(b)
|
Estimated
debt issuance costs, which included legal, accounting and printing
costs
related to the private placement transaction and the preparation
of this
registration statement.
|
|
|
(c)
|
The
$7.5 million convertible debenture was recorded net of discounts
resulting
from the relative fair value of the stock warrants totaling $1,244,624.
The discount will be amortized over the five-year term on a straight-line
basis. The amortization of the discount will be recorded as additional
interest expense.
|
|
|
(d)
|
The
increase in additional paid-in capital represents the discount resulting
from the relative fair value of the stock warrants totaling $1,244,624,
partially offset by the debt issuance
costs.
|
(a)
|
|
Annual
Report on Form 10-K for our fiscal year ended December 31, 2005 filed
February 16, 2006;
|
(b)
|
|
Current
Report on Form 8-K filed on February 16, 2006 relating to the release
of
earnings for the quarter ended December 31,
2005;
|
(c)
|
|
Current
Report on Form 8-K filed on March 8, 2006 relating to the issuance
of $7.5
million of convertible debentures convertible into common stock and
the
issuance of warrants to purchase 1,875,000 shares common stock to
Midsummer Investment Ltd.;
|
|
|
|
(d)
|
|
The
Registrant's Notice of Annual Meeting and Proxy Statement filed on
March
30, 2006; and
|
(e)
|
|
The
Registrant's Registration Statement on Form 8-A12B filed with the
SEC on
April 17, 2000 as amended by the Registrant's Registration Statement
on
Form 8-A12B/A filed with the SEC on July 7, 2000, pursuant to Section
12
of the Securities Exchange Act of 1934, as amended (the “1934 Act”), in
which are described the terms, rights and provisions applicable to
the
Registrant's Common Stock.
|
No
dealer, salesman or any other person is authorized to give any
information
or to represent anything not contained in this prospectus. You
must not
rely on any unauthorized information or representations. This prospectus
is an offer to sell these securities and it is not a solicitation
of an
offer to buy these securities in any state where the offer or sale
is not
permitted. The information contained in this Prospectus is current
only as
of this date.
|
7,829,672
SHARES OFFERED BY
SELLING
STOCKHOLDERS,
73,299,581 SHARES
CURRENTLY
OUTSTANDING
AND
2,437,500
SHARES ISSUABLE
UPON
EXERCISE OF WARRANTS
|
|
|
|
MCF
CORPORATION
|
PROSPECTUS
|
||
[
_____ ] ,
2006
|
SEC
Registration Fee
|
$
|
|
||
Printing
|
$
|
|
||
Legal
Fees and Expenses
|
$
|
|
||
Accounting
Fees and Expenses
|
$
|
|
||
Listing
fees
|
$
|
|
||
Miscellaneous
Expenses
|
$
|
|
||
TOTAL
|
$
|
|
|
Securities
Purchase Agreement dated March 7, 2006 by and between MCF Corporation
and
Midsummer Investment, Ltd. (incorporated by reference to MCF's Form
8-K
dated March 7, 2006).
|
|
|
|
|
|
Variable
Rate Secured Convertible Debenture Due December 31, 2010 executed
by MCF
Corporation in favor of Midsummer Investment, Ltd. (incorporated
by
reference to MCF's Form 8-K dated March 7, 2006).
|
|
|
|
|
|
Common
Stock Purchase Warrant dated March 7, 2006 executed by MCF Corporation
in
favor of Midsummer Investment, Ltd. (incorporated by reference to
MCF's
Form 8-K dated March 7, 2006).
|
|
|
|
|
|
Registration
Rights Agreement dated March 7, 2006 by and between MCF Corporation
and
Midsummer Investment, Ltd. (incorporated by reference to MCF's Form
8-K
dated March 7, 2006).
|
|
Security
Agreement dated March 7, 2006 by and among MCF Corporation, MCF Asset
Management LLC, MCF/NV Asset Management, LLC, MCF Wealth Management
LLC,
Catalyst Financial Planning and Investment Management Corporation
and
Midsummer Investment, Ltd. (incorporated by reference to MCF's Form
8-K
dated March 7, 2006).
|
|
|
|
|
|
Subsidiary
Guarantee dated March 7, 2006 by and among MCF Asset Management LLC,
MCF/NV Asset Management, LLC, MCF Wealth Management LLC, Catalyst
Financial Planning and Investment Management Corporation and Midsummer
Investment, Ltd. and Midsummer Investment, Ltd. (incorporated by
reference
to MCF's Form 8-K dated March 7, 2006).
|
|
|
|
|
5.1
|
|
Opinion
of Fish & Richardson P.C.**
|
|
|
|
|
Stock
Purchase Agreement by and between MCF Corporation and Ascend Services
Ltd., dated April 29, 2005; together with the following documents
which
form exhibits thereto: Escrow Agreement and Registration Rights Agreement.
(incorporated by reference to Exhibit 10.43 of our Report on Form
10-Q for
the quarter ended March 31, 2005).
|
|
|
|
|
|
Consent
of Ernst & Young LLP, independent auditors.*
|
|
|
|
|
23.2
|
|
Consent
of Fish & Richardson P.C. (included with Exhibit
5.1).**
|
*
|
|
Filed
herewith.
|
**
|
|
To
be filed by amendment.
|
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 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% 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;
|
|
|
|
|
MCF
CORPORATION
|
|
|
|
|
|
By:
|
/s/ D.
JONATHAN MERRIMAN
|
|
D.
Jonathan Merriman
Chief
Executive Officer
|
Signature
|
Title
|
Date
|
|
|
|
|
|
|
|
/s/ D.
JONATHAN MERRIMAN
|
Chairman
of the Board and
Chief Executive Officer
|
April
20, 2006
|
|
|
D.
Jonathan Merriman
|
|
|
|
|
/s/ John
D. Hiestand
|
Chief
Financial Officer
|
April
20, 2006
|
|
|
John
D. Hiestand
|
|
|
|
|
/s/ PATRICK
H. ARBOR
|
Director
|
April
20, 2006
|
|
|
Patrick
H. Arbor
|
|
|
|
|
/s/ ANTHONY
B. HELFET
|
Director
|
April
20, 2006
|
|
|
Anthony
B. Helfet
|
|
|
|
|
/s/ RAYMOND
J. MINEHAN
|
Director
|
April
20, 2006
|
|
|
Raymond
J. Minehan
|
|
|
|
|
/s/ SCOTT
POTTER
|
Director
|
April
20, 2006
|
|
|
Scott
Potter
|
|
|
|
|
/s/ DENNIS
G. SCHMAL
|
Director
|
April
20, 2006
|
|
|
Dennis
G. Schmal
|
|
|
|
|
/s/ DONALD
H. SLEDGE
|
Director
|
April
20, 2006
|
|
|
Donald
H. Sledge
|
|
|
|
|
/s/ RONALD
E. SPEARS
|
Director
|
April
20, 2006
|
|
|
Ronald
E. Spears
|
|
|
|
|
/s/ STEVEN
W. TOWN
|
Director
|
April
20, 2006
|
|
|
Steven
W. Town
|