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As filed with the Securities and Exchange Commission on March 16, 2001
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ERESOURCE CAPITAL GROUP, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 23-2265039
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(State or other jurisdiction of incorporation or organization) (IRS Employer Identification Number)
3353 PEACHTREE ROAD, N.E.
SUITE 130
ATLANTA, GEORGIA 30326
(404) 760-2570
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(Address and telephone number of Registrant's principal executive offices)
MICHAEL D. PRUITT
CHIEF EXECUTIVE OFFICER
ERESOURCE CAPITAL GROUP, INC.
3353 PEACHTREE ROAD, N.E.
SUITE 130
ATLANTA, GEORGIA 30326
(404) 760-2570
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(Name, address and telephone number of agent for service)
Copies of all communications, including all communications sent to the agent
for service, should be sent to:
EDWARD J. HARDIN, ESQ.
DAVID G. THUNHORST, ESQ.
ROGERS & HARDIN LLP
2700 INTERNATIONAL TOWER, PEACHTREE CENTER
229 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30303
(404) 522-4700
Approximate date of commencement of proposed sale to the public: From
time to time 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, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [x]
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If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering.
[ ] ________
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration number of the earlier effective
registration statement for the same offering. [ ] _________
If the delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED(1) OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
SECURITY(2) PRICE
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Common Stock, $.04 par value (3) 7,729,684 .935 $7,227,254.51 $1,807
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Common Stock, $.04 par value, 7,753,745 .935 $7,249,751.58 $1,813
underlying warrants and options (3) (4)
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(1) The shares in the Calculation of Registration Fee Table, and which may be
offered pursuant to this Registration Statement, include, pursuant to Rule 416
of the Securities Act of 1933, as amended, such additional number of shares that
may become issuable as a result of any stock split, stock dividend or similar
transaction.
(2) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based
on the average of the high and low sales prices as reported on the American
Stock Exchange on March 12, 2001.
(3) Securities being registered for resale only.
(4) Shares of Common Stock issuable upon exercise of Common Stock purchase
warrants and options held by the Selling Stockholders under this Registration
Statement. An indeterminate number of additional shares is registered under this
Registration Statement that may be issued, as provided in the Common Stock
purchase warrants, to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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PRELIMINARY
PROSPECTUS
SUBJECT TO COMPLETION, DATED MARCH 16, 2001
The information in this prospectus is not complete, and it may
change. This prospectus is included in a registration statement that we
filed with the Securities and Exchange Commission. The selling
stockholders cannot sell these securities until that registration
statement becomes effective. This prospectus is not an offer to sell
these securities or the solicitation of an offer to buy these
securities in any state where an offer to sell or the solicitation of
an offer to buy is not permitted.
ERESOURCE CAPITAL GROUP, INC.
3353 PEACHTREE ROAD, N.E., SUITE 130
ATLANTA, GEORGIA
(404) 760-2570
15,483,429 SHARES
COMMON STOCK
This prospectus relates to the resale of up to a maximum of
15,483,429 shares of common stock, par value $.04 per share (the
"Common Stock"), which may be sold from time to time by certain
stockholders (the "Selling Stockholders") of eResource Capital Group,
Inc. (the "Company" or "We") identified in the "Selling Stockholders"
section of this prospectus beginning on page 12. The shares that may be
resold pursuant to this prospectus (the "Shares") include 7,729,684
shares of Common Stock owned by the Selling Stockholders and 7,753,745
shares of Common Stock issuable upon the exercise of warrants and
options owned by the Selling Stockholders. Our filing of the
registration statement of which this prospectus is a part is intended
to satisfy our obligations to certain of the Selling Stockholders to
register for resale the Shares issued to them and the Shares issuable
upon exercise of the warrants or options issued to them.
We are not offering or selling any shares of our Common Stock
pursuant to this prospectus. We will not receive any proceeds from the
sale of the Shares by the Selling Stockholders. We will, however,
receive proceeds if the Selling Stockholders pay cash to exercise some
or all of the warrants or options owned by the Selling Stockholders. We
will bear the expenses of the offering of the Shares, except that the
Selling Stockholders will pay any applicable underwriting discounts,
brokerage fees or commissions and transfer taxes, as well as fees and
disbursements of their counsel and advisors.
Our Common Stock is traded on the American Stock Exchange
under the symbol "RCG." The closing sales price of our Common Stock on
March 12, 2001 was $0.99 per share.
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE
"RISK FACTORS" BEGINNING ON PAGE 4 FOR INFORMATION THAT YOU SHOULD
CONSIDER.
THE SHARES HAVE NOT BEEN APPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAVE THESE
ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is March 16, 2001.
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TABLE OF CONTENTS
PAGE
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Risk Factors.......................................... 4
Forward Looking Statements............................ 9
About the Company..................................... 10
Use of Proceeds....................................... 12
Selling Stockholders.................................. 12
Plan of Distribution.................................. 14
Legal Matters......................................... 16
Experts............................................... 16
Where You Can Find More Information................... 16
Incorporation of Certain Documents By
Reference........................................... 17
WE HAVE NOT AUTHORIZED ANYONE (INCLUDING ANY SALESMAN OR BROKER) TO GIVE ORAL OR
WRITTEN INFORMATION ABOUT THIS OFFERING THAT IS DIFFERENT FROM THE INFORMATION
INCLUDED IN THIS PROSPECTUS OR THAT IS NOT INCLUDED IN THIS PROSPECTUS.
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RISK FACTORS
You should carefully consider the risk factors set forth below, as well
as the other information in this prospectus, in evaluating whether to purchase
the Shares.
WE HAVE BEEN INCURRING OPERATING LOSSES AND THERE CAN BE NO ASSURANCE
THAT WE WILL ACHIEVE OR SUSTAIN PROFITABILITY.
We incurred operating losses in our fiscal year ended June 30, 2000 and
in each of the first two fiscal quarters of our current fiscal year. Our past
operating losses include significant losses associated with our aviation
businesses and in particular losses associated with the development of our
Private Seats(TM) program and our jet shuttle service based in Norfolk,
Virginia. While we have suspended our operations of both the Private Seats(TM)
AND Norfolk jet shuttle programs, our other businesses have been and continue to
incur operating losses as well. We expect to continue to incur operating costs
in connection with our efforts to expand our existing businesses and to grow
through acquisitions. We also expect to incur substantial non-cash costs
relating to the amortization of goodwill related to recent and future business
acquisitions which will contribute to our net losses. As a result of these costs
and uncertain revenue growth, there can be no assurance that we will achieve or
sustain profitability.
OUR RECENTLY ACQUIRED BUSINESSES HAVE LIMITED OPERATING HISTORIES.
We acquired DM Marketing, Inc. ("DMM"), Internet Aviation Services,
Ltd. ("IASL") and Avenel Ventures, Inc. ("Avenel") during the current fiscal
year. DMM was formed in October 1998 and IASL and Avenel were both formed during
calendar year 2000. Each of these companies has incurred losses since its
inception and has a limited operating history. As a result, there is limited
information upon which to base an evaluation of our business and prospects. You
should evaluate our chances of financial and operating success in view of the
risks, uncertainties, expenses, delays and difficulties associated with starting
new businesses.
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WE NEED TO RAISE ADDITIONAL FUNDS IN ORDER TO CONTINUE TO OPERATE AND
GROW OUR BUSINESS.
Based on our current operations and projections, we anticipate that our
available funds will be sufficient to satisfy our existing businesses
anticipated needs for working capital, but that we will need to raise additional
funds in order to grow our business and continue the execution of our business
acquisition strategy. Moreover, if our actual revenues are less than our
projections, we may need additional funds to continue to operate our existing
businesses. If we are unable to raise additional funds through the private
equity markets we may be required to sell certain of our assets (including our
real estate assets and marketable securities) in order to provide needed
liquidity. If we raise additional funds by issuing additional equity securities,
the percentage ownership of our current stockholders will be diluted. We
currently do not have any binding commitments for additional financing and
cannot be certain that additional financing will be available when and to the
extent required or that, if available, it will be on acceptable terms. In
addition, our ability to complete future financings may be affected by the
market price of our Common Stock. If adequate funds are not available on
acceptable terms, we will not be able to continue to fund our existing
businesses or our planned expansion or take other steps necessary to enhance our
business.
WE MAY BE UNABLE TO SUCCESSFULLY EXECUTE OUR ACQUISITION STRATEGY.
We plan to grow our business through strategic acquisitions. Our
ability to do so depends on a number of factors including our ability to
identify companies that fall within our business plan and our ability to acquire
such companies on acceptable terms. Even if we are able to identify and acquire
such companies, acquisitions of companies involve numerous risks, including, the
inability to assimilate acquired operations, diversion of management attention,
loss of key employees of acquired companies and substantial transaction costs.
It is likely that the companies we may acquire may be operating at a loss and
may require significant time, effort and capital in order to achieve
profitability. In addition, acquisitions by us in the future will result in the
further dilution of our equity securities and the creation of goodwill or other
intangible assets that could result in significant amounts of expense going
forward. Each of the above factors could be materially adverse to our business
and could impair the value of our Common Stock.
WE HAVE BEEN UNSUCCESSFUL IN IMPLEMENTING OUR PRIOR BUSINESS PLANS,
HAVE RECENTLY MODIFIED OUR BUSINESS PLAN AND MAY NOT BE ABLE TO SUCCESSFULLY
IMPLEMENT OUR CURRENT BUSINESS PLAN.
During our fiscal year ending June 30, 2000, we incurred substantial
expenses developing our Private Seats(TM) program. We were unable to generaTE
sufficient customer use of our Private Seats(TM) program and had to discontinue
the service shortly after it was launched. As a result, we made a decisiON to
diversify through the acquisitions of DMM, IASL and Avenel. In addition, we
expanded our business plan to attempt to acquire expansion-stage technology
companies. At the same time, we have had a change in our executive team.
However, we have limited resources and there can be no assurance that we will be
able to implement our expanded business plan or achieve profitability. In
addition, while we have no intention to change our business strategy in the
future, if we are not successful in implementing our new strategy or if we
otherwise believe it to be in our best interest, we may modify or change our
business plans.
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OUR ACQUISITION STRATEGY HAS AND WILL CONTINUE TO DILUTE OUR CURRENT
STOCKHOLDERS' OWNERSHIP.
We have issued a total of 16,900,000 shares in connection with the
acquisitions of IASL, DMM and Avenel. Our acquisition strategy contemplates that
we will continue to issue shares of our Common Stock to make strategic
acquisitions and attempt to grow our business. However, each of the acquisitions
that we complete in the future will further dilute our current stockholders'
ownership interest in the Company.
DMM MAY NOT ACHIEVE OR SUSTAIN PROFITABILITY.
DMM began operations on October 2, 1998 and since then has not achieved
profitability. DMM currently utilizes 10 out of the 35 customer service
representative seats in its call center. DMM's ability to become profitable
depends in part on its ability to more fully utilize these seats. Although DMM
continues to pursue additional contracts to utilize its customer service
representative capacity, there is no guarantee that it will obtain adequate
contracts to utilize the remaining seats or that it will be able to maintain its
current customers. Failure to fill these seats and utilize DMM's capacity would
likely result in DMM continuing to operate at a loss.
THE SUCCESS OF AVENEL AND OTHER COMPANIES WE MAY ACQUIRE PURSUANT TO
OUR BUSINESS PLAN ARE SUBJECT TO INTENSE COMPETITION.
The success of our business plan depends greatly on increased use of
the Internet for advertising, marketing, providing services and conducting
business. The current slow down in internet advertising and decline in
e-business generally may adversely affect our success. The market for Internet
products and services is highly competitive. Moreover, the market for Internet
products and services lacks significant barriers to entry, enabling new
businesses to enter this market relatively easily. Competition in the market for
Internet products and services may intensify in the future. Numerous
well-established companies and smaller entrepreneurial companies are focusing
significant resources on developing and marketing products and services that
will compete with the products and services of Avenel and other companies we may
acquire. In addition, many of the current and potential competitors of Avenel
and other companies we may acquire have greater financial, technical,
operational and marketing resources than those of Avenel or other companies we
may acquire. We may not be able to compete successfully against these
competitors. Competitive pressures may also force prices for Internet goods and
services down and such price reductions may cause Avenel and other companies we
may acquire to operate at a loss.
WE FACE COMPETITION FROM OTHER ACQUIRORS OF, AND INVESTORS IN,
INTERNET-RELATED VENTURES WHICH MAY PREVENT US FROM REALIZING STRATEGIC
OPPORTUNITIES.
We plan to acquire or invest in existing companies that we believe are
complementary to our existing operations and fulfill our business plan. In
pursuing these opportunities, we face competition from other capital providers
and operators of Internet-related companies, including publicly-traded Internet
companies, venture capital companies and large corporations. Some of these
competitors have greater financial resources than we do. This competition may
limit our opportunity to acquire interests in companies that we believe could
help us fulfill our business plan and increase our value.
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OUR GROWTH PLACES STRAIN ON OUR MANAGERIAL, OPERATIONAL AND FINANCIAL
RESOURCES.
Our growth has placed, and is expected to continue to place, a
significant strain on our managerial, operational and financial resources. Our
further growth will increase this strain on our managerial, operational and
financial resources, inhibiting our ability to successfully implement our
business plan.
THE EXERCISE OF OUTSTANDING OPTIONS AND WARRANTS COULD SUBSTANTIALLY
DILUTE EXISTING STOCKHOLDERS AND COULD HAVE A NEGATIVE EFFECT OUR STOCK PRICE.
We have adopted the eResource Capital Group, Inc. Stock Compensation
Plan (the "Plan") and our stockholders have authorized the issuance of options
to acquire up to 20,000,000 shares of Common Stock under the Plan. Currently, we
have outstanding options for 7,210,000 shares under the Plan that have been
granted to our officers, directors and employees of which options for 4,700,000
shares are vested. Options for 2,000,000 shares of Common Stock that were issued
under the Plan were exercised in February and March of this year. In addition to
options issued under the Plan, we currently have outstanding options and
warrants for up to 20,670,120 shares. The shares underlying 7,753,745 of these
non-Plan warrants and options are being registered pursuant to this prospectus.
Our outstanding options and warrants have exercise prices ranging from $.04 to
$4.00. The exercise of these options or warrants will dilute the percentage
ownership of our current stockholders and the potential sale of shares issued
upon the exercise of these warrants or options could have a negative impact on
the market price of our Common Stock.
IF THE SELLING STOCKHOLDERS SELL A SUBSTANTIAL AMOUNT OF THEIR SHARES,
THESE SALES COULD HAVE AN ADVERSE IMPACT ON OUR STOCK PRICE.
There are several stockholders who own significant blocks of our Common
Stock, including those registering the possible sale of their Shares under this
prospectus. If each of these significant stockholders sold a substantial amount
of our Common Stock as allowed under the Securities Act, such sales could have a
significant negative impact on the market price of our Common Stock. This
prospectus could result in a large number of shares of our Common Stock being
sold in the market which, in turn, could result in a reduction in the market
price of our Common Stock.
THE FUTURE SALES OF RESTRICTED SECURITIES COULD HAVE A NEGATIVE EFFECT
ON OUR STOCK PRICE.
The market price of our Common Stock could be negatively affected by
the future sale of shares of restricted Common Stock, including shares of
restricted Common Stock underlying options and warrants that have been issued by
us. Approximately 46,600,000 issued and outstanding shares of our Common Stock
are believed to be restricted securities as defined in Rule 144 promulgated
under the Securities Act, of which 5,869,000 shares have been held for over two
years and 9,954,000 shares have been held for over one year. Rule 144 provides
generally that restricted securities must be held for one year prior to resale
and provides certain additional limitations on the volume of such shares that a
beneficial owner may sell in any three month period thereafter. Generally,
non-affiliated stockholders may sell restricted shares that have been held for
at least two years without any limitations. In addition, Rule 145 permits the
sale by non-affiliates of restricted securities issued in connection with
certain business combinations one year after such shares are issued. As
restricted shares become eligible for resale pursuant to Rule 144 or Rule 145,
the number of sellers of our Common Stock could increase significantly and, as a
result, the market price of our Common Stock could decrease.
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WE DEPEND ON CERTAIN IMPORTANT EMPLOYEES, AND THE LOSS OF ANY OF THOSE
EMPLOYEES MAY HARM OUR BUSINESS.
Our performance is substantially dependent on the performance of our
executive officers and other key employees. The familiarity of these key
employees with the technology and Internet industry and the familiarity of the
key employees of IASL with the leisure charter services business makes them
especially critical to our success. In addition, our success is dependent on our
ability to attract, train, retain and motivate high quality personnel,
especially for our management team. The loss of the services of any of our
executive officers or key employees may harm our business. Our success also
depends on our continuing ability to attract, train, retain and motivate other
highly qualified technical and managerial personnel. Competition for such
personnel is intense.
INABILITY TO PROTECT INTELLECTUAL PROPERTY RIGHTS.
We rely primarily on a combination of intellectual property laws and
contractual provisions to protect our proprietary rights and technology, brand
and marks. These laws and contractual provisions provide only limited protection
of proprietary rights and technology. If we are not able to protect our
intellectual property, proprietary rights and technology, we could lose those
rights and incur substantial costs policing and defending those rights. Our
means of protecting our intellectual property, proprietary rights and technology
may not be adequate.
IASL MAY NOT OBTAIN PROFITABILITY.
IASL began operations in November 2000 and since then has not achieved
profitability. From November 2000 to January 2001 IASL operated a jet shuttle
service to New York City and Orlando, Florida from Norfolk, Virginia (the
"Norfolk Jet Shuttle"). IASL was unable to attract sufficient passengers for
this jet shuttle service and as a result discontinued it. IASL currently offers
charter jet services for casino and tour operators. The air service is currently
based in Memphis, Tennessee and Charlotte, North Carolina. While IASL is able to
achieve positive profit margins on its current services, IASL will need to
expand the number of chartered flights it offers in order to achieve and
maintain profitability. Although IASL is pursuing additional contracts to
provide charter jet services, there is no guarantee IASL can secure such
contracts.
IASL IS DEPENDENT ON THE AVAILABILITY AND QUALITY OF CHARTER FLIGHT
OPERATORS AND MAY BE NEGATIVELY EFFECTED IF THE COST OF CHARTERING FLIGHTS
INCREASES.
IASL does not own or operate any aircraft and is dependent upon
certified charter operators to provide all flight services. The success of IASL
will depend directly on the ability of certified charter operators to provide
quality service to IASL's customers at reasonable prices to IASL. Shortages in
available charter aircraft could be disruptive to IASL's business and could
damage its brand name and result in fewer customers. If the costs of operating
charter flights increase over time, the charter operators may increase the price
of chartering a flight. In that event, IASL will have to increase the price it
charges its customers or experience a reduced profit margin it receives from
each flight. IASL will have limited control over the cost of chartering flights
which could increase as a result of changes in operating costs (such as jet
fuel, pilot fees, airport fees or maintenance fees) or as a result of other
factors such as high demand for charter flights or general economic conditions.
If charter costs increase and, as a result, IASL increases the price of a seat
purchased on IASL's chartered flights, IASL may lose customers to competitors.
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GOVERNMENT REGULATION OF THE TRAVEL INDUSTRY COULD IMPACT IASL'S
OPERATIONS.
Certain segments of the travel industry are regulated by the United
States Government and, while IASL is not currently required to be certified or
licensed under such regulation, certain services offered by IASL are affected by
such regulation. Charter flights operators, upon which IASL depends, are subject
to vigorous and continuous certification requirements by the Federal Aviation
Administration. Changes in the regulatory framework for charter aviation travel
could adversely affect IASL's business, operations and financial condition.
IASL FACES INTENSE COMPETITION FOR CUSTOMERS FROM THE TRAVEL INDUSTRY.
IASL provides charter jet travel which services Tunica, Mississippi and
Cancun, Mexico and faces intense competition from commercial airlines for the
potential customers who travel to these locations and other locations that IASL
may serve in the future. These commercial airlines have greater resources,
marketing efforts and brand equity than does IASL and they also offer a
potential customer more flights to these locations than does IASL. Furthermore,
travelers have numerous choices of location when choosing travel destinations.
Since IASL offers only limited travel destinations, it faces intense competition
from travel agents, commercial airlines, hotels, resorts, casinos and other
organizations in the travel industry that offer alternative travel destinations
to those offered by IASL. Such competitors possess far greater capital and human
resources, marketing efforts and brand equity than does IASL. If IASL is unable
to compete effectively with its various competitors in the travel industry, it
will not achieve profitability.
WE DO NOT INTEND TO PAY DIVIDENDS.
We have never declared or paid any cash dividends on our Common Stock.
We currently intend to retain any future earnings for funding growth and,
therefore, do not expect to pay any dividends in the foreseeable future.
FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT MAY PROVE NOT
TO BE ACCURATE. This prospectus (including information included or incorporated
by reference herein) contains certain "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Exchange Act which represent our
expectations or beliefs concerning future events that involve risks and
uncertainties. All statements other than statements of historical facts included
in this prospectus (including, without limitation, the statements under "About
the Company" and elsewhere herein) and in our filings that are incorporated by
reference herein are forward-looking statements. Although we believe that the
expectations reflected in such forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to be correct. Such
forward-looking statements are subject to risks, uncertainties and other factors
which could cause actual future results or trends to differ materially from
future results or trends expressed or implied by such forward-looking
statements. The most significant of such risks, uncertainties and other factors
are discussed under the heading "Risk Factors," beginning on page 4 of this
prospectus, prospective investors are urged to consider carefully such factors.
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ABOUT THE COMPANY
WHO WE ARE
We are a Delaware corporation engaged in the operation of:
- a leisure charter travel service business,
- a telecommunications call center business,
- a technology investment and advisory services business, and
- certain limited commercial real estate activities.
Our current operating subsidiaries include DMM, IASL, Avenel, Avenel Alliance,
Inc. and West Side Investors, Inc. During the first half of fiscal year 2001, we
modified and expanded our business plan to target the acquisition of
expansion-stage companies in five technology industry segments: e-commerce,
Internet infrastructure, technology professional services, enabling technology
and data communication systems. These industry segments may be defined as
follows: (i) companies in the e-commerce segment use the Internet as a sales
channel to drive profitability and growth, (ii) companies in the Internet
infrastructure segment sell equipment infrastructure on which the Internet or IP
based networks are delivered or accessed, (iii) companies in the technology
professional services segment provide marketing, financial and other consulting
services related to technology companies, (iv) companies in the enabling
technology industry segment improve performance or delivery of Internet or
network based services, and (v) companies in the data communications systems
segment use the Internet, wireless or network technology to provide a data or
communication network. We are in the initiative phases of our expanded strategy
and continue to focus on existing operations as well as our efforts to implement
this strategy.
OUR SUBSIDIARIES
DMM operates a thirty-five (35) seat (10 of which are currently
utilized) telecommunications call center located in Pensacola, Florida providing
telemarketing, help desk and other services to Internet related companies. DMM
commenced operations on October 2, 1998 and was acquired by us on September 7,
2000.
IASL is a leisure and travel services company which currently offers
charter aviation services to leisure destinations. IASL is an indirect charter
operator which does not own or operate any aircraft. Instead, IASL has
contracted with Southeast Airlines on an annual basis for two chartered
passenger jet aircraft for casino trips and for tour operators providing
vacation packages to warm weather destinations. The aircraft are based in
Memphis, Tennessee and Charlotte, North Carolina. Air service is provided for
casinos in Tunica, Mississippi from various cities and to Cancun, Mexico from
both Memphis and Charlotte. IASL is pursuing additional contracts in casino and
leisure charters and exploring opportunities in direct marketing of leisure trip
packages. From November 2000 to January 2001, IASL contracted with Southeast
Airlines to charter two passenger jet aircrafts to provide jet shuttle service
for the Norfolk Jet Shuttle. Due to low customer demand, IASL discontinued the
Norfolk Jet Shuttle operations in January 2001 and terminated its airline
contract.
Avenel is a technology investment and e-commerce advisory firm that
operates in the technology professional services segment by providing services
to clients implementing strategies in e-commerce and Internet marketing. Avenel
Alliance, Inc., a wholly-owned subsidiary of Avenel ("Alliance"), creates
e-commerce strategies, performs business development, sales and marketing,
merger and acquisition functions, and web site analysis for its partner
companies and other
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organizations. Alliance also analyzes and researches business proposals from
prospective companies in which we may invest or seek to acquire.
COMMERCIAL AND RESIDENTIAL REAL ESTATE OPERATIONS
We also own and operate two commercial shopping centers in the Atlanta,
Georgia area through our subsidiary West Side Investors, Inc. We do not plan to
acquire additional commercial real estate.
We discontinued our residential real estate development business in
fiscal year 1999. During fiscal years 1999 and 2000, we disposed of the majority
of our residential real estate holdings. We currently hold two residential real
estate properties, including 100 acres of undeveloped residential real estate in
Albany, Georgia and 800 partially-developed acres in Freeport, Florida. We plan
to sell the residential real estate properties when and if we are able to reach
agreement with a buyer on terms acceptable to us.
RECENT DEVELOPMENTS
We have signed a non-binding letter of intent to acquire a controlling
interest in LST, Inc., d/b/a LifeStyle Technologies, a technology company
operating in the Internet infrastructure segment that provides home networking
technology applications to home building organizations and home owners,
including high speed Internet services, satellite services, communication
services, security, video and voice entertainment systems, as well as long
distance and local telephone services. While we currently intend to complete the
acquisition, there can be no assurance that we will be able to do so.
OUR CORPORATE HISTORY
From fiscal year 1996 and through the first half of fiscal year 1999,
we engaged primarily in the design, development and sale of single-family
subdivisions. In the second half of fiscal year 1999, we also acquired
commercial real estate businesses consisting of two strip-mall shopping centers
and a hotel development concept at private aviation airports. Also during the
second half of fiscal year 1999, we decided to discontinue our residential real
estate development operations and focus primarily on developing an Internet Web
site to provide access to private aviation travel services. We changed our name
to flightserv.com in June 1999 to reflect the new business direction.
In fiscal years 1999 and 2000, we developed our Private Seats(TM)
program to provide, as agent, Internet access to private jet flight and relatED
services. The Private Seats(TM) program was designed to sell, directly to the
public, tickets for air travel out of alternative airports on corporate jeTS
between city pairs such as Atlanta and New York. We launched the Private
Seats(TM) program in March 2000, but were not able to generate customer
bookingS, had very minimal revenue and did not book any flights after June 2000.
We do not expect to utilize the Private Seats(TM) program but, through IASL,
continUE to evaluate alternate private charter services.
In August and September 2000, we acquired IASL and DMM, respectively.
In October 2000, as part of our expanded business plan, we changed our name to
eResource Capital Group, Inc. In February 2001, also as part of this expanded
business plan, we acquired Avenel.
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OUR ADDRESS AND PHONE NUMBER
Our principal executive offices are located at 3353 Peachtree Road,
N.E., Suite 130, Atlanta, Georgia 30326 and 5935 Carnegie Blvd., Suite 101,
Charlotte, North Carolina 28209. Our telephone number at our Atlanta office is
(404) 760-2570 and at our Charlotte office is 704-553-9330.
USE OF PROCEEDS
All of the Shares of our Common Stock offered hereby are being sold by
the Selling Stockholders. We will not receive any of the proceeds from the sale
of the Shares. We will receive proceeds if the warrants and options issued to
the Selling Stockholders are exercised for cash. However, we do not control the
exercise of the warrants or options and do not know whether any or all of the
warrants or options will be exercised. In addition, certain of the warrants
issued to the Selling Stockholders provide the Selling Stockholders with the
right to exercise the warrants in cashless transactions. To the extent such
warrants are exercised through cashless transactions, we will not receive any
additional proceeds at the time such warrants are exercised. We intend to use
the proceeds we receive, if any, upon exercise of the warrants or options, for
general corporate purposes.
SELLING STOCKHOLDERS
The table below identifies each Selling Stockholder and sets forth information,
to the best of our knowledge, regarding each Selling Stockholders' beneficial
ownership of Shares of our Common Stock. This information is based upon
information provided by each respective Selling Stockholder and Schedules 13D
and other public accounts filed with the Commission.
The Shares offered by this prospectus may be offered for sale from time
to time by the Selling Stockholders. Because the Selling Stockholders may offer
all, some or none of the Shares pursuant to this prospectus, and because there
are currently no agreements, arrangements or understandings with respect to the
sale of any Shares, no estimate can be given as to the number of Shares that
will be held by the Selling Stockholders after the completion of this offering,
unless it is assumed that all the Shares offered pursuant to this prospectus are
sold. Except as indicated below, none of the Selling Stockholders has had a
material relationship with us within the past three years other than as a result
of the ownership of the Shares or other of our securities.
The number of Shares of Common Stock beneficially owned by the Selling
Stockholders includes the Shares of Common Stock beneficially owned by the
Selling Stockholders as of the date of this prospectus and Shares of Common
Stock underlying warrants or options held by Selling Stockholders that are
exercisable within sixty (60) days of March 7, 2001. Except as otherwise
indicated, to our knowledge, the Selling Stockholders have sole voting and
investment power with respect to all Shares beneficially owned by them, or with
respect to the Shares underlying options or warrants, will have sole voting and
investment power at the time such Shares are sold. The percentages shown in the
table below are based upon 61,687,654 shares of Common Stock outstanding as of
March 7, 2001. The numbers shown in the column "Number of Shares That May be
Offered Pursuant to this Prospectus" include additional Shares of Common Stock
that may be issued to certain of the Selling Stockholders upon exercise of any
warrants or options held by them.
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PERCENT OF
OUTSTANDING
SHARES TO BE
BENEFICIALLY
OWNED IF ALL
SHARES WHICH MAY
NUMBER OF SHARES NUMBER OF SHARES BE OFFERED
NUMBER OF SHARES THAT MAY BE BENEFICIALLY PURSUANT TO THIS
BENEFICIALLY OWNED OFFERED PURSUANT OWNED AFTER PROSPECTUS ARE
SELLING STOCKHOLDERS BEFORE OFFERING (1) TO THIS PROSPECTUS OFFERING (1) SOLD (1)
-----------------------------------------------------------------------------------------------------------------------------
Acqua Wellington Value Fund, Ltd. 2,455,431(2) 2,455,431(2) 0 0
-----------------------------------------------------------------------------------------------------------------------------
Catizone, Carmine & Pat 100,000 100,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Catizone, Pat & Barbara 100,000 100,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Claulice, Despina M. 8,000 8,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Corsica Marketing Service 266,667 266,667 0 0
-----------------------------------------------------------------------------------------------------------------------------
DC Investment Partners Exchange Fund, L.P. 363,872(3) 363,872(3) 0 0
-----------------------------------------------------------------------------------------------------------------------------
Fairwinds Investment 193,333 193,333 0 0
-----------------------------------------------------------------------------------------------------------------------------
Four Corners Capital, LLC(4) 3,857,042(5) 3,857,042(5) 0 0
-----------------------------------------------------------------------------------------------------------------------------
Galland, Kharasch, Greenberg, Fellman & 400,000(6) 400,000(6) 0 0
Swirsky, P.C.
-----------------------------------------------------------------------------------------------------------------------------
Garner, Robert 310,000 310,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Gold, Robert M. 300,000 300,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Gordon, George 140,000 140,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Herold, Glenn F. 12,000 12,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Hjelle, Eirik 41,333 41,333 0 0
-----------------------------------------------------------------------------------------------------------------------------
International Internet, Inc. 550,000 550,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Lazard, Freres & Co., LLC 2,000,000(7) 2,000,000(7) 0 0
-----------------------------------------------------------------------------------------------------------------------------
Morris, W.L. 670,000 670,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Pope, Thomas D. 30,000 30,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Peterson, Joseph G. 5,400 5,400 0 0
-----------------------------------------------------------------------------------------------------------------------------
SGD Holdings, Ltd. (8) 800,000 800,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Smith, Marianne 66,666 66,666 0 0
-----------------------------------------------------------------------------------------------------------------------------
Turner, Terry 300,000 300,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Vance Executive Protection, Inc. 947,019(9) 947,019(9) 0 0
-----------------------------------------------------------------------------------------------------------------------------
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=============================================================================================================================
PERCENT OF
OUTSTANDING
SHARES TO BE
BENEFICIALLY
OWNED IF ALL
SHARES WHICH MAY
NUMBER OF SHARES NUMBER OF SHARES BE OFFERED
NUMBER OF SHARES THAT MAY BE BENEFICIALLY PURSUANT TO THIS
BENEFICIALLY OWNED OFFERED PURSUANT OWNED AFTER PROSPECTUS ARE
SELLING STOCKHOLDERS BEFORE OFFERING (1) TO THIS PROSPECTUS OFFERING (1) SOLD (1)
-----------------------------------------------------------------------------------------------------------------------------
Vertical Computer Systems, Inc.(10) 800,000 800,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
West Main Investments 700,000 700,000 0 0
-----------------------------------------------------------------------------------------------------------------------------
Wussler, Robert 66,666 66,666 0 0
-----------------------------------------------------------------------------------------------------------------------------
(1) Beneficial ownership has been determined in accordance with Rule 13d-3
under the Exchange Act.
(2) Includes shares underlying a warrant to purchase 1,630,077 shares of
Common Stock.
(3) Includes shares underlying warrants to purchase 123,802 shares of
Common Stock.
(4) Joel Goldberg, a member of Four Corners Capital, LLC, was a director of
the Company from February 10, 1999 through December 2, 1999.
(5) Includes shares underlying a warrant and option to purchase 3,599,866
shares of Common Stock. Four Corners Capital, LLC provided investment
banking services to us and in return received 200,000 shares of Common
Stock and options to purchase 1,000,000 shares of Common Stock in
connection with such services. The remainder of the Shares and warrants
owned by Four Corners Capital, LLC were issued in connection with a
private placement transaction.
(6) Represents shares underlying warrants to purchase 400,000 shares of
Common Stock which were issued in connection with the provision of
certain legal services to us.
(7) Represents shares underlying a warrant to purchase 2,000,000 shares of
Common Stock issued in connection with an agreement to provide
investment banking and consulting services to us.
(8) Alliance entered into an Agreement dated Sept 5, 2000 with SGD
Holdings, Ltd. to provide strategic alliances services in exchange
for commissions and equity in SGD Holdings, Ltd.
(9) Represents shares received upon the exercise of a warrant issued to
Vance Executive Protection, Inc. in connection with a strategic
alliance established with us to provide our customers with services to
be sold over the Internet.
(10) Alliance entered into a Business Development and Marketing Agreement
dated Sept 7, 2000 with Vertical Computer Systems, Inc. with an initial
term of one year to provide services in connection with its internet,
e-commerce and software services in exchange for monthly fees,
commissions and equity in Vertical Computer Systems, Inc.
PLAN OF DISTRIBUTION
All or part of the Shares may be offered by the Selling Stockholders
from time to time in transactions on the American Stock Exchange, in privately
negotiated transactions, through the writing of options on the Shares, or a
combination of such methods of sale, at fixed prices that may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. For purposes of this
prospectus, the term "Selling Stockholder" includes donees, transferees,
pledgees or other successors in interest of or to the Selling Stockholder, that
receive the Shares as a gift, partnership or limited liability company
distribution or other non-sale related transfer. The Selling Stockholders will
act independently of us in making decisions with respect to the timing, manner
and size of each sale. The methods by which the Shares may be sold or
distributed may include, but are not limited to, the following:
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- a cross or block trade in which the broker or dealer engaged by a
Selling Stockholder will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to facilitate
the transaction;
- purchases by a broker or dealer as principal and resale by such broker
or dealer for its account;
- an exchange distribution in accordance with the rules of such exchange;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- privately negotiated transactions;
- short sales or borrowings, returns and reborrowings of the Shares
pursuant to stock loan agreements to settle short sales;
- delivery in connection with the issuance of securities by issuers,
other than us, that are exchangeable for (whether on an optional or
mandatory basis), or payable in, such shares (whether such securities
are listed on a national securities exchange or otherwise) or pursuant
to which such shares may be distributed; and
- a combination of any such methods of sale or distribution.
In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate in such
sales. Brokers or dealers may receive commissions or discounts from a Selling
Stockholder or from the purchasers in amounts to be negotiated immediately prior
to the sale. A Selling Stockholder may also sell the Shares in accordance with
Rule 144 under the Securities Act or pursuant to other exemptions from
registration under the Securities Act.
If the Shares are sold in an underwritten offering, the Shares may be
acquired by the underwriters for their own account and may be further resold
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The names of the underwriters with respect to any such
offering and the terms of the transactions, including any underwriting
discounts, concessions or commissions and other items constituting compensation
of the underwriters and broker-dealers, if any, will be set forth in a
prospectus supplement relating to such offering. Any public offering price and
any discounts, concessions or commissions allowed or reallowed or paid to
broker-dealers may be changed from time to time. Unless otherwise set forth in a
prospectus supplement, the obligations of the underwriters to purchase the
Shares will be subject to certain conditions precedent and the underwriters will
be obligated to purchase all the Shares specified in such prospectus supplement
if any such Shares are purchased. This prospectus also may be used by brokers
who borrow the Shares to settle short sales of shares of our Common Stock and
who wish to offer and sell such Shares under circumstances requiring use of the
prospectus or making use of the prospectus desirable.
From time to time the Selling Stockholders may engage in short sales,
short sales against the box, puts, calls and other transactions in our
securities, or derivatives thereof, and may sell and deliver the Shares in
connection therewith.
None of the proceeds from the sales of the Shares by the Selling
Stockholders will be received by us. We will bear certain expenses in connection
with the registration of the Shares being
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offered by the Selling Stockholders, including all costs incident to the
offering and sale of the Shares to the public other than any commissions and
discounts of underwriters, dealers or agents and any transfer taxes.
The Selling Stockholders, and any broker-dealer who acts in connection
with the sale of Shares hereunder, may be deemed to be an "underwriter" as that
term is defined in the Securities Act and any commissions received by them and
profit on any resale of the Shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. We have agreed
to indemnify the Selling Stockholders, any underwriters and certain other
participants in an underwriting or distribution of the Shares and their
directors, officers, employees and agents against certain liabilities, including
liabilities arising under the Securities Act.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for
us by Rogers & Hardin LLP, Atlanta, Georgia. Rogers & Hardin LLP is the holder
of warrants to purchase up to 750,000 shares of Common Stock.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-KSB for the year
ended June 30, 2000, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
The financial statements of DM Marketing, Inc. as of December 31, 2000
and for the year then ended, have been incorporated by reference in this
prospectus in reliance on the report of Waller, Crook & Jones, P.C., independent
auditors, incorporated by reference herein, given on the authority of such firm
as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). You
can inspect and copy the registration statement of which this prospectus is a
part, as well as such reports, proxy statements and other information, at the
public reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's
regional offices located at Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material can be obtained from the public
reference room of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. You may obtain information on the
operation of the Public Reference Room by calling the Commission at
1-800-SEC-0330. We are also required to file electronic versions of these
documents with the Commission, which may be accessed through the Commission's
Web site at http://www.sec.gov. You may also inspect reports, proxy and
information statements and other information about us at The American Stock
Exchange at 86 Trinity Place, New York, New York 10006.
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INFORMATION INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the Commission will automatically update and supercede this information. We
incorporate by reference the documents listed below and any future filings made
with the Commission under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), until the earlier of the
date the Selling Stockholders sell all the Shares or such other date as the
offering is terminated and any unsold Shares are deregistered by the filing of a
post-effective amendment:
- Our Annual Report on Form 10-KSB for the fiscal year ended
June 30, 2000;
- Our Quarterly Reports on Form 10-QSB for the quarters ended
September 30, 2000 and December 31, 2000;
- Our Current Reports on Form 8-K filed with the Commission on
(i) September 22, 2000, and amended on November 13, 2000,
reporting the acquisition of DM Marketing, Inc.; and (ii)
February 28, 2001 reporting the acquisition of Avenel
Ventures, Inc.;
- Our amended Quarterly Reports on Form 10-QSB/A for the
quarters ended September 30, 1999; December 31, 1999; and
March 31, 2000; all filed with the Commission on October 12,
2000;
- Our Definitive Proxy Statement for our Annual Meeting of
Stockholders held on January 19, 2001, filed with the
Commission on January 2, 2001; and
- Our Registration Statement on Form 8-A filed with the
Commission on July 19, 1996.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address or telephone number:
eResource Capital Group, Inc.
3353 Peachtree Road, N.E.
Suite 130
Atlanta, Georgia 30326
Attention: William L. Wortman
Telephone: (404) 760-2570
This prospectus provides you with a general description of the
securities that may be offered for sale, but does not contain all of the
information that is in the registration statement that we filed with the
Commission. Statements contained herein concerning the provisions of certain
documents filed with, or incorporated by reference in, the registration
statement are not necessarily complete and each such statement is qualified in
its entirety by references to the applicable document filed with the Commission.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The Selling Stockholders will
not make an offer of these Shares in any state where the
17
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offer is not permitted. You should not assume that the information in this
prospectus or any supplement is accurate as of any date other than the date on
the front of the respective document.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid in connection with the offering of
the securities being registered are as follows and will be borne by the
Registrant:
SEC Registration Fee.......................................... $ 3,620
Legal Fees and Expenses....................................... *$ 25,000
Accounting and other Miscellaneous Fees and Expenses.......... *$ 2,500
Total............................................... $ 31,120
----------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") provides
that, to the extent a director, officer, employee or agent of a corporation has
been successful on the merits or otherwise in defense of any action, suit or
proceeding, whether civil, criminal, administrative or investigative or in
defense of any claim, issue, or matter therein (hereinafter a "Proceeding"), by
reason of the fact that person is or was a director, officer, employee or agent
of a corporation or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise (collectively an "Agent" of the
corporation) that person shall be indemnified against expenses (including
attorney's fees) actually and reasonably incurred by him in connection
therewith.
The DGCL also provides that a corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened
Proceeding by reason of the fact that person is or was an Agent of the
corporation, against expenses (including attorney's fees), judgment, fines and
amounts paid in settlement actually and reasonably incurred by that person in
connection with such action, suit or proceeding if that person acted in good
faith and in a manner that person reasonably believed to be in, or not opposed
to, the best interest of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that person's conduct
was unlawful; provided, however, that in an action by or in the right of the
corporation, the corporation may not indemnify such person in respect of any
claim, issue, or matter as to which that person is adjudged to be liable to the
corporation unless, and only to the extent that, the Court of Chancery or the
court in which such proceeding was brought determined that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is reasonably entitled in indemnity.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that, in the opinion of the Commission, such indemnification is against
public policy as expressed in the Act and is therefore unenforceable.
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ITEM 16. EXHIBITS.
3(i) -- Restated Certificate of Incorporation, as filed with
the Secretary of State of Delaware (Incorporated by
reference to Exhibit 3.1 to the Company's Quarterly
Report for the quarter ended December 31, 2000 on
Form 10-QSB filed on February 14, 2000).
3(ii) -- Amended and Restated Bylaws of the Registrant
(Incorporated by reference to Exhibit 3.4 to the
Company's Annual Report on Form 10-KSB for the period
ended June 30, 2000).
4.1 -- Registration Rights Agreement between the Company,
Four Corners Capital, LLC and DC Investment Partners
Exchange Fund, Ltd. dated January 23, 2001
(incorporated by reference to Exhibit 4.1 to the
Company's Quarterly Report for the quarter ended
December 31, 2000 on Form 10-QSB filed on February
14, 2001).
4.2 -- Registration Rights Agreement between the Company and
Acqua Wellington Value Fund, Ltd. dated January 23,
2001 (incorporated by reference to Exhibit 4.2 to the
Company's Quarterly Report for the quarter ended
December 31, 2000 on Form 10-QSB filed on February
14, 2001).
4.3 -- General Release and Settlement between the Company,
Four Corners Capital, LLC and DC Investment Partners
Exchange Fund Ltd. dated January 23, 2001
(incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report for the quarter ended
December 31, 2000 on Form 10-QSB filed on February
14, 2001).
4.4 -- Option Agreement between the Company and Four Corners
Capital, LLC dated January 23, 2001 (incorporated by
reference to Exhibit 10.4 to the Company's Quarterly
Report for the quarter ended December 31, 2000 on
Form 10-QSB filed on February 14, 2001).
4.5 -- Warrant between the Company and Four Corners Capital,
LLC dated January 23, 2001 (incorporated by reference
to Exhibit 10.4 to the Company's Quarterly Report for
the quarter ended December 31, 2000 on Form 10-QSB
filed on February 14, 2001).
4.6 -- Warrant between the Company and DC Investment
Partners Exchange Fund Ltd. dated January 23, 2001
(incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report for the quarter ended
December 31, 2000 on Form 10-QSB filed on February
14, 2001).
4.7 -- Warrant Certificate dated as of January 3, 2000
between the Company and Lazard Freres & Co., LLC,
which includes registration rights (incorporated by
reference to the Company's Quarterly Report for the
quarter ended March 31, 2000 on Form 10-QSB filed on
May 15, 2000 and amended on October 12, 2000).
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4.8 -- Warrant Certificate between the Company and Galland,
Kharasch, Greenberg, Fellman and Swirsky, P.C. dated
June 16, 1999 which includes registration rights.
4.9 -- Warrant Certificate between the Company and Vance
Executive Protection, Inc. dated April 30, 1999 which
includes registration rights.
5.1 -- Opinion and Consent of Rogers & Hardin LLP.
23.1 -- Consent of Rogers & Hardin LLP (included in Exhibit
5.1).
23.2 -- Consent of Ernst & Young LLP, independent
auditors to eResource Capital Group, Inc.
(to be filed by amendment)
23.3 -- Consent of Waller, Crook & Jones, P.C., independent
auditors (DM Marketing, Inc.).
24.1 -- Powers of Attorney (included on the signature page to
this Registration Statement).
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in the 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 a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration Statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change in such information in the
Registration Statement.
Provided, however, that (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference into this Registration Statement.
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(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this Registration Statement as
of the time it was declared effective.
(5) 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 Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in the Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted as to directors, officers and controlling persons of the
Registrant pursuant to the Delaware General Corporation Law, the Restated
Certificate of Incorporation or the By-laws of Registrant, 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended
(the "Securities Act"), 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 Atlanta, Georgia, on this 16th day of
March, 2001.
ERESOURCE CAPITAL GROUP, INC.
By: /s/ Michael D. Pruitt
------------------------------------
Michael D. Pruitt
Chief Executive Officer
We, the undersigned officers and directors of eResource Capital Group,
Inc., hereby severally constitute and appoint Michael D. Pruitt and Arthur G.
Weiss, and each of them, with full power of substitution, our true and lawful
attorneys and agents, to execute in our names and on our behalf in the
capacities indicated below, any and all amendments (including, without
limitation, post-effective amendments) to this Registration Statement and any
and all other instruments which such attorneys and agents, or any one of them,
deem necessary or advisable to enable eResource Capital Group, Inc. to comply
with the Securities Act, the rules, regulations and requirements of the
Securities Act in respect thereof, and the securities laws of any state or other
political subdivision or jurisdiction; and the undersigned officers and
directors do hereby severally ratify and confirm as our own acts and deeds all
that such attorneys and agents, and each of them, shall do or cause to be done
by virtue hereof. Any one of such attorneys and agents shall have, and may
exercise, all of the powers hereby conferred.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Arthur G.Weiss Chairman of the Board March 15, 2001
------------------------------- and Director
Arthur G. Weiss
/s/ Michael D. Pruitt Chief Executive Officer, March 16, 2001
------------------------------- President and Director
Michael D. Pruitt
/s/ Melinda Morris Zanoni Executive Vice President and March 16, 2001
------------------------------- Director
Melinda Morris Zanoni
/s/ James A. Verbrugge Director March 14, 2001
-------------------------------
James A. Verbrugge
/s/ Director
-------------------------------
Sylvia A. de Leon
/s/ William L. Wortman Vice President, Treasurer and March 16, 2001
------------------------------- Chief Financial Officer
William L. Wortman
22
23
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
------ -------
3(i) -- Restated Certificate of Incorporation, as filed with
the Secretary of State of Delaware (Incorporated by
reference to Exhibit 3.1 to the Company's Quarterly
Report for the quarter ended December 31, 2000 on
Form 10-QSB filed on February 14, 2000).
3(ii) -- Amended and Restated Bylaws of the Registrant
(Incorporated by reference to Exhibit 3.4 to the
Company's Annual Report on Form 10-KSB for the period
ended June 30, 2000).
4.1 -- Registration Rights Agreement between the Company,
Four Corners Capital, LLC and DC Investment Partners
Exchange Fund, Ltd. dated January 23, 2001
(incorporated by reference to Exhibit 4.1 to the
Company's Quarterly Report for the quarter ended
December 31, 2000 on Form 10-QSB filed on February
14, 2001).
4.2 -- Registration Rights Agreement between the Company and
Acqua Wellington Value Fund, Ltd. dated January 23,
2001 (incorporated by reference to Exhibit 4.2 to the
Company's Quarterly Report for the quarter ended
December 31, 2000 on Form 10-QSB filed on February
14, 2001).
4.3 -- General Release and Settlement between the Company,
Four Corners Capital, LLC and DC Investment Partners
Exchange Fund Ltd. dated January 23, 2001.
(incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report for the quarter ended
December 31, 2000 on Form 10-QSB filed on February
14, 2001).
4.4 -- Option Agreement between the Company and Four Corners
Capital, LLC dated January 23, 2001 (incorporated by
reference to Exhibit 10.4 to the Company's Quarterly
Report for the quarter ended December 31, 2000 on
Form 10-QSB filed on February 14, 2001).
4.5 -- Warrant between the Company and Four Corners Capital,
LLC dated January 23, 2001 (incorporated by reference
to Exhibit 10.4 to the Company's Quarterly Report for
the quarter ended December 31, 2000 on Form 10-QSB
filed on February 14, 2001).
4.6 -- Warrant between the Company and DC Investment
Partners Exchange Fund Ltd. dated January 23, 2001
(incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report for the quarter ended
December 31, 2000 on Form 10-QSB filed on February
14, 2001).
24
4.7 -- Warrant Certificate dated as of January 3, 2000
between the Company and Lazard Freres & Co., LLC,
which includes registration rights (incorporated by
reference to the Company's Quarterly Report for the
quarter ended March 31, 2000 on Form 10-QSB filed on
May 15, 2000 and amended on October 12, 2000).
4.8 -- Warrant Certificate between the Company and Galland,
Kharasch, Greenberg, Fellman and Swirsky, P.C. dated
June 16, 1999 which includes registration rights.
4.9 -- Warrant Certificate between the Company and Vance
Executive Protection, Inc. dated April 30, 1999 which
includes registration rights.
5.1 -- Opinion and Consent of Rogers & Hardin LLP.
23.1 -- Consent of Rogers & Hardin LLP (included in Exhibit
5.1 filed herewith).
23.2 -- Consent of Ernst & Young LLP, independent
auditors to eResource Capital Group, Inc.
(to be filed by amendment)
23.3 -- Consent of Waller, Crook & Jones, P.C., independent
auditors (DM Marketing, Inc.).
24.1 -- Powers of Attorney (included on the signature page to
this Registration Statement).
2