<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 11, 1999
REGISTRATION NO. 333--73123
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
HOMECOM COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 58-2153309
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
BUILDING 14, SUITE 100
3535 PIEDMONT ROAD
ATLANTA, GEORGIA 30305
(404) 237-4646
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES)
HARVEY SAX
CHIEF EXECUTIVE OFFICER
HOMECOM COMMUNICATIONS, INC.
BUILDING 14, SUITE 100
ATLANTA, GEORGIA 30305
(404) 237-4646
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
RAYMOND L. MOSS
SIMS MOSS KLINE & DAVIS LLP
400 NORTHPARK TOWN CENTER, SUITE 310
1000 ABERNATHY ROAD, N.E.
ATLANTA, GEORGIA 30328
(770) 481-7200
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement until March
24, 2001, or until such earlier time that all of the shares registered hereunder
have been sold.
If the only securities being registered on this Form are to be 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
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ].
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Title of each class of Amount Proposed maximum offering Proposed maximum
securities to be registered to be price aggregate Amount of
registered(1) per share offering price(2) registration fee(3)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.0001 per share......... 626,087 shares $5.09375 $3,189,131 $886.57
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The shares of common stock set forth in the Calculation of Registration Fee
Table, and which may be offered pursuant to this Registration Statement,
includes, pursuant to Rule 416 of the Securities Act of 1933, as amended, such
additional number of shares of the Registrant's common stock that may become
issuable as a result of any stock split, stock dividend or similar event.
(2) Estimated solely for the purpose of computing the amount of the registration
fee, based on the average of the high and low prices for the Company's common
stock as reported on the Nasdaq SmallCap Market(TM) on February 23, 1999, in
accordance with Rule 457 under the Securities Act of 1933.
(3) Previously Paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.
<PAGE> 2
PROSPECTUS
SUBJECT TO COMPLETION, DATED MAY 11, 1999
HOMECOM COMMUNICATIONS, INC.
626,087 SHARES OF COMMON STOCK
THE SHARES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK.
YOU SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" DESCRIBED BEGINNING ON PAGE
____ IN DETERMINING WHETHER TO PURCHASE SHARES OF HOMECOM.
These shares of common stock are being offered by three selling
shareholders, Daniel Delity, David Frank, and Jim Ellsworth. We issued the
shares to the selling shareholders in connection with the acquisition of FIMI
Securities, Inc., All Things Financial, Inc., First Institutional Marketing,
Inc., and Premier Financial Services, Inc. on March 24, 1999. The selling
shareholders may sell these shares from time to time:
- on the over-the-counter market;
- in transactions directly with market makers; or
- in privately negotiated transactions.
We will not receive any portion of the proceeds from the sale of these
shares.
HomeCom's common stock is quoted on the Nasdaq SmallCap Market(TM)
under the symbol "HCOM."
The Selling Shareholders will determine the price of the shares
independent of HomeCom. On May 4, 1999, the last sale price of the common stock
on the Nasdaq SmallCap Market(TM) was $5.53125 per share.
<TABLE>
<CAPTION>
===========================================================================================
PRICE TO PUBLIC UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNTS AND COMMISSION SELLING SHAREHOLDERS
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE..........
TOTAL.............. SEE TEXT ABOVE SEE TEXT ABOVE SEE TEXT ABOVE
===========================================================================================
</TABLE>
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The date of this prospectus is May 11, 1999
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY................................................................____
RISK FACTORS...........................................................____
USE OF PROCEEDS........................................................____
ISSUANCE OF SHARES TO SELLING SHAREHOLDERS.............................____
PLAN OF DISTRIBUTION...................................................____
SELLING SHAREHOLDERS...................................................____
LEGAL MATTERS..........................................................____
EXPERTS................................................................____
WHERE YOU CAN FIND MORE INFORMATION....................................____
INFORMATION INCORPORATED BY REFERENCE..................................____
</TABLE>
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You should
not rely on any unauthorized information. This prospectus does not offer to sell
or buy any shares in any jurisdiction in which it is unlawful. The information
in this prospectus is current as of the date on the cover.
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<PAGE> 4
SUMMARY
HomeCom Communications, Inc. specializes in Internet application
solutions for the financial services market, providing all of the professional
services and technology necessary to develop and integrate an online
marketplace. In addition, HomeCom offers several products designed for
e-commerce in the financial services industry, which includes Personal Internet
Banker(TM) (PIB), Harvey(TM), InsureRate(TM), and its Internet Security Services
Division.
As used in this prospectus, "HomeCom" refers to HomeCom Communications,
Inc., a Delaware corporation, and its wholly owned subsidiaries. HomeCom was
incorporated on December 2, 1994, under the laws of Delaware. Our principal
executive offices are located at Building 14, Suite 100, 3535 Piedmont Road,
Atlanta, Georgia 30305 and our telephone number is (404) 237-4646.
On April 23, 1999, we acquired all of the stock of the Ganymede
Corporation in exchange for 185,342 shares of HomeCom common stock and payment
of $100,000. Ganymede, based in Chicago, Illinois, is engaged in the business of
web development and consulting as well as hosting web sites for financial
services companies. HomeCom has agreed to file a registration statement covering
one-half of the shares issued in exchange for the stock of Ganymede.
RISK FACTORS
WE HAVE A LIMITED OPERATING HISTORY
We have a limited operating history. Our prospects are subject to the
risks, expenses, and uncertainties frequently encountered by young companies
that operate exclusively in the new and evolving markets for internet products
and services. Successfully achieving our growth plan depends upon:
- Our ability to attract, retain, and motivate qualified people;
- Our ability to upgrade and commercialize products and
services;
- Our ability to effectively integrate the technology and
operations of businesses or technologies we have acquired; and
- Our development or acquisition of services or products equal
or superior to those of our competitors.
We may not be successful in implementing our growth plans.
WE EXPECT TO INCUR CONTINUED LOSSES
As of December 31, 1998, we had an accumulated deficit of approximately
$6.7 million. On April 23, 1999, we announced unaudited results for the quarter
ended March 31, 1999, which included revenues of approximately $1 million and a
net loss of approximately $1.4 million or $0.26 per share. We currently expect
that our operating expenses will continue to increase in proportion to increases
in our revenues as we:
- expand our sales and marketing operations,
- continue to develop and extend the HomeCom brand,
- fund greater levels of product development, and
- acquire complementary business and technologies.
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As a result, we expect to experience significant losses on a quarterly
and annual basis for at least the next 6-12 months. This will be primarily due
to increased sales and marketing, product development, customer service and
support, and certain operating costs incurred in support of our product and
service offerings. If we cannot generate sufficient revenues to offset our
operating expenses, our business and operating results will continue to be
materially adversely affected.
WE WILL REQUIRE ADDITIONAL CAPITAL TO FINANCE OUR OPERATING LOSSES AND CAPITAL
REQUIREMENTS
We have incurred substantial operating losses, and we expect to utilize
substantial sums of cash in our operations for an indefinite period. We may also
need to spend significant amounts of cash to:
- fund continued growth, and offset operating losses;
- take advantage of unanticipated opportunities, such as major
strategic alliances or other special marketing opportunities,
acquisitions of complementary businesses or assets, or the
development of new products; or
- react to unanticipated developments or competitive pressures.
If we exhaust our current sources of capital and are not able to obtain
additional capital, we will be required to undertake steps to continue our
operations. These may include immediate reduction of our operating costs and
other expenditures, including potential reductions of personnel and suspension
of salary increases and capital expenditures. If these actions are still not
sufficient, we may elect to implement other cost reduction actions. These
actions may limit our opportunities to realize continued increases in sales, and
we may not be able to reduce our costs and amounts sufficient to achieve
break-even or profitable results. If we exhaust our sources of capital and
subsequent cost reduction measures are not sufficient to allow us to achieve
break-even or profitable results, we may be forced to seek protection from our
creditors.
OUR MARGINS MAY CONTINUE TO DECLINE DUE TO PRICE EROSION
The market for internet and intranet products and services is highly
competitive and is characterized by significant pressures to reduce prices,
incorporate new capabilities, and accelerate completion schedules. This increase
in competition has resulted in significant price competition, which in turn has
resulted in significant reductions in the average selling price of many of our
products and services, including our web site development and hosting services.
We have not been able to offset the effects of price reductions through an
increase in the number of our customers, higher revenue from enhanced services,
or cost reductions, and we expect that our margins may continue to decline. Our
gross margins are currently approximately 20%.
THERE IS INCREASED COMPETITION IN OUR MARKET
There are no substantial barriers to entry in our market, and we expect
that competition will continue to intensify. In addition, we compete with many
other companies that have longer operating histories, longer customer
relationships, and substantially greater financial, management, technical
development sales, marketing, and other resources. Many nationally known
companies and regional local companies across the country are involved in
intranet and intranet applications, including the development and support of web
sites and internet applications, and the number of these companies is
increasing. The companies that offer competitive products or services, include:
- web site service boutique firms;
- communications telephone and telecommunication companies;
- computer hardware and software companies;
- established online service companies;
- advertising agencies;
- specialized integrated marketing communications firms; and
- internal information technologies departments of prospective
and current customers.
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WE DEPEND UPON CONTINUED GROWTH IN USE OF THE INTERNET
Our future success is dependent upon continued growth in the use of the
internet and the web. The internet may not prove to be a viable commercial
marketplace for many reasons, including:
- lack of acceptable security technologies,
- potentially inadequate development of the necessary
infrastructure, or
- timely development and commercialization of performance
improvements.
To the extent that the internet continues to experience significant growth in
the number of users and level of services, the internet infrastructure may not
be able to support demands placed upon it by such growth and the performance and
reliability of the web may be adversely affected.
WE MAY NOT KEEP PACE WITH TECHNOLOGICAL CHANGES
The market for internet products and services is characterized by rapid
technological developments, evolving industry standards and customer demands and
frequent new product introductions and enhancements. Failure to effectively
adapt to technological developments could adversely affect our business,
operating results, and financial condition.
OUR STOCK PRICE MAY BE VOLATILE
The trading price of our shares has been, and may continue to be,
subject to wide fluctuations. During 1998, the closing sale prices of our shares
on the Nasdaq SmallCap Market(TM) ranged from $1.13 to $18.25. The stock price
may fluctuate in response to a number of events and factors such as:
- quarterly variations and operating results,
- announcements of technological innovations or new products and
media products by us or our competitors,
- changes in financial estimates and recommendations by
securities analysts,
- the operating and stock price performance of other companies
that investors view as comparable, and
- news reports related to trends in our markets.
In addition, the stock market in general and the market prices for
internet-related companies in particular have experienced extreme volatility and
often have been unrelated to the operating performance of such companies. These
broad market and industry fluctuations may adversely affect the price of the
stock regardless of our operating performance.
WE MAY NOT PROPERLY MANAGE OUR GROWTH
Our growth has placed a significant strain on our managerial,
operational and financial resources. To manage our growth, we must continue to
implement and improve our operational and financial systems and to expand,
train, and manage our employee base. Our systems, procedures, or controls may
not be adequate to support our operations. Our management may not be able to
achieve the rapid execution necessary to support our market opportunity. Any
failure to effectively manage growth could have a material adverse effect on our
business, operating results, or financial condition.
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WE MAY NOT PROPERLY HANDLE THE RISKS ASSOCIATED WITH ACQUISITIONS
As part of our business strategy, we have completed several
acquisitions and expect to enter into additional business combinations to
further our goal to become a leading provider of Internet software solutions for
the financial services industry. Since February 1999, we have acquired four
companies owned by the selling shareholders, as well as the Ganymede
Corporation. These acquisitions have added approximately 35 employees in total
to HomeCom.
Acquisition transactions are accompanied by many risks, including:
- the difficulty of closely monitoring quality;
- the difficulty of assimilating the operations and personnel of
the acquired companies;
- the difficulties of managing geographically separate business
units;
- the difficulty of incorporating acquired technology or content
and rights into our product and services;
- the failure to successfully develop and acquire in process
technology which could result in the impairments of amounts
capitalized as intangible assets;
- unanticipated expenses relating to technology integration;
- the maintenance of uniform standards, controls, procedures,
and policies;
- the impairment of relationships with employees and customers
as a result of any integration or management changes; and
- the potential unknown liabilities associated with acquired
businesses.
We may not be successful in addressing these risks.
WE DEPEND ON KEY PERSONNEL
We depend upon the continued services of our senior management for our
continued success. The loss of any member of senior management, such as Harvey
Sax, Dan Delity, David Frank, or Jim Ellsworth, could have a serious negative
impact upon our business and operating results. This is particularly true in the
case of senior management of the companies acquired from the selling
shareholders and Ganymede where senior management of these companies has been
retained following the acquisition of these companies. We can provide no
assurances that we will be able to retain our senior management or other key
personnel. Although we have entered into employment agreements with each of
executive officers that contain non-competition and nondisclosure provisions,
our ability to benefit from them is uncertain because such provisions are
typically limited to geographic scope and time. Such restrictions may not
effectively prohibit competition due to the global nature of the internet.
OUR AVERAGE SALES CYCLE MAY LENGTHEN
Our development and implementation of interactive web sites and intranet
software applications involves a lengthy sales cycle, which can be as long as
six to nine months. Extensive web sites, development or licensing of our
products may also involve substantial commitment of capital by potential
customers as well as the attendant delays frequently associated with approving
larger capital expenditures and reviewing new technologies that affect key
operations. If our average sales cycle continues to lengthen, we will face
increased costs, potentially lower profit margins and a potential inability to
achieve our target and sales goals.
WE MAY INCUR LOSSES FROM DEFECTS IN OUR PRODUCTS AND SERVICES
Web site services and other services based on software and computing
systems frequently encounter development and completion delays. Software may
contain undetected errors or failures when introduced, especially in the case of
web sites when the volume of traffic on the site increases. Errors found in the
software, underlying web site, or other
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<PAGE> 8
project may result in delays in completion, commercial release for acceptance of
such web site, or other project. In addition, we may incur unanticipated
additional costs in order to cure any defect or otherwise be obligated to refund
money paid to us or pay for damages caused by any delay or defect. Applications
or products developed by us may contain undetected errors or failures when first
introduced. If software errors are discovered after introduction, we could
experience delays and lost revenues during the period required to correct these
errors. Despite our best efforts to the contrary, errors may be found in new
applications, products, or releases after the commencement of installation or
shipment. These problems can result in losses, or in delays in receiving
revenues.
WE MAY INCUR LOSSES FROM SECURITY RISKS
Our software and equipment is vulnerable to computer viruses or similar
disruptive problems caused by customers or other internet uses. Computer viruses
or problems caused by third parties, such as hackers, could lead to
interruptions, delays, or termination of service to our customers. Third parties
could also potentially jeopardize security of confidential information stored in
our computer systems or our customers' computer systems by their inappropriate
use of the internet, which could cause losses to us and to our customers.
Inappropriate use of the internet includes attempting to gain unauthorized
access to information or systems. Although we intend to continue to implement
security measures to prevent this, hackers have circumvented such measures in
the past, and may be able to circumvent our security measures or the security
measures of third parties in the future. Further, until more comprehensive
technologies are developed, the security and privacy concerns of existing and
potential customers may inhibit the growth of the internet service industry in
general and our customer base and revenue in particular. We do not have errors
and omissions, product liability, or other insurance to protect against risks
caused by computer viruses or other misuse of software or equipment by third
parties.
WE MAY NOT BE SUCCESSFUL IN PROTECTING OUR PROPRIETARY RIGHTS OR AVOIDING CLAIMS
THAT WE INFRINGED THE PROPRIETARY RIGHTS OF OTHERS
Our success depends in part upon our software and related
documentation. We principally rely on copyright, trade secret, confidentiality
procedures, and contract laws to protect our proprietary technology. The steps
we have taken may not be adequate to prevent misappropriation of our technology,
and our competitors may independently develop technologies that are
substantially equivalent or superior to our technologies. We have a registered
service mark for our logo and have applied for federal registration of the names
"HomeCom," "Post On the Fly(TM)," and "Personal internet Banker(TM)." In
distributing our software products, we rely primarily on shrinkwrap, or form,
licenses that are not signed by licensees and may be unenforceable under the
laws of some jurisdictions. In addition, the laws of some foreign countries do
not protect our proprietary rights to as great an extent as the laws of the
United States. Although we do not believe that the software or trademarks we use
or any of the other elements of our business infringe on the proprietary rights
of any third parties, third parties may assert such claims against us in the
future and such claims may be successful. We could incur substantial costs and
diversion of management resources in the defense of any claims relating to
proprietary rights, which could materially adversely affect our business,
financial condition, and results of operations.
THERE ARE A SUBSTANTIAL NUMBER OF SHARES ELIGIBLE FOR FUTURE SALE
The market for the shares may be adversely affected as a result of
sales of a large number of shares in the market, or a perception that large
sales may occur. Such adverse effect may also limit HomeCom's ability to raise
capital through offerings of shares, or to effect acquisitions utilizing shares
as the purchase price.
Upon consummation of this offering, there will be 6,625,412 shares
outstanding. Of that amount, 3,662,934 shares, or approximately 55%, will be
freely tradable without restriction or further registration under the Securities
Act, except for any shares purchased by affiliates of HomeCom, as that term is
defined in Rule 144 under the Securities Act.
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Included in that number are the 626,087 shares registered hereunder, which are
subject to contractual provisions regarding resale. Please refer to "Plan of
Distribution." The remaining 2,962,478 shares, or approximately 45%, may be
sold in the public market only if registered or pursuant to an exemption from
registration such as Rule 144. In addition, there are also the following shares
that may become available for resale in the public markets:
- There are outstanding warrants to acquire an aggregate of 490,000
shares at a weighted average exercise price of $8.32 per share. The shares
issuable upon exercise of the warrants have been registered under the Securities
Act, and will be available for resale upon issuance following exercise of the
warrants.
- There are outstanding options to purchase 763,854 shares pursuant to
our stock option plans at a weighted average exercise price of $4.77 per share,
and 8,300 shares have been issued under our stock purchase plan at a weighted
average price of $2.19 per share. On July 31, 1998, we filed a registration
statement on Form S-8 under the Securities Act to register the potential sale of
300,000 shares reserved for issuance under our stock option plan and the 150,000
shares reserved for issuance under our stock purchase plan. Except for shares
held by our affiliates, shares purchased pursuant to this stock option and
purchase plans generally will be available for resale in the public market.
- We have issued 185,342 shares in connection with the acquisition of
Ganymede, and have contractually agreed to file a registration statement
covering 92,671, or one-half, of such shares by June 23, 1999.
PREFERRED STOCK, IF ISSUED, WILL HAVE RIGHTS SENIOR TO THE SHARES
We have the right to issue up to 10,000,000 shares of preferred stock
and to fix the rights, preferences, privileges and restrictions, which include
voting rights, of the preferred stock without shareholder approval. The rights
of holders of common stock may be adversely affected by the rights of holders of
any preferred stock that may be issued in the future. In addition, the issuance
of additional shares of preferred stock could make it more difficult for a third
party to acquire control of HomeCom, even if such change would be beneficial to
shareholders.
WE HAVE ANTI-TAKEOVER PROVISIONS IN PLACE
Our restated certificate of incorporation provides that our board is
divided into three classes of directors with each class serving a staggered
three year term. The division of the board of directors into three classes may
discourage a third party from making a tender offer or otherwise attempting to
obtain control of HomeCom and may maintain the incumbency of the present board
of directors.
THERE ARE LIMITATIONS ON THE LIABILITY OF OUR DIRECTORS AND OFFICERS
Our restated certificate of incorporation provides that our directors
shall have no personal liability for some breaches of their fiduciary duties. In
addition, our restated bylaws provide for mandatory indemnification of directors
and officers to the fullest extent permitted by Delaware law. These limitations
on personal liability do not apply to liabilities under the federal securities
laws. However these provisions may reduce the likelihood of derivative
litigation against directors and officers and may discourage stockholders from
bringing a lawsuit against directors and officers for a breach of their
fiduciary duties.
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THERE ARE UNCERTAINTIES ASSOCIATED WITH GOVERNMENT REGULATION AND OTHER LEGAL
ISSUES
There are currently few laws or regulations directly applicable to
access to or commerce on the internet. Due to the increased popularity and the
use of the internet, it is possible that laws and regulations may be adopted,
covering issues such as:
- user privacy,
- defamation,
- pricing,
- taxation,
- content regulation,
- quality of products and services, and
- intellectual property ownership and infringement.
Such legislation could expose us to substantial liability. Such
legislation could also dampen the growth in use of the web, decrease the
acceptance of the web as a communications and commercial medium, or require us
to incur significant expense in complying with any new regulations. Other
nations, including Germany, have taken actions to restrict the free flow of
material considered to be objectionable on the web. The European Union has
recently adopted privacy and copyright directives that may impose additional
burdens and costs on our international operations. In addition, several
telecommunication carriers, including America's Carriers Telecommunications
Association, are seeking to have telecommunications over the web regulated by
the Federal Communication Commission in the same manner as other
telecommunication services. Because the growing popularity and use of the web
has burdened the existing telecommunications infrastructure, many areas with
high web use have begun to experience interruptions in phone service. Local
telephone carriers, such as Pacific Bell, have petitioned the Federal
Communications Commission to regulate service providers and impose access fees.
Increased regulation, or the imposition of access fees, could substantially
increase the cost of communicating on the web and potentially decrease the
demand for our products. A number of proposals have been made at the federal,
state, and local level that would impose additional taxes on the sale of goods
and services through the internet. Such proposals, if adopted, could
substantially impair the growth of electronic commerce and could adversely
affect our opportunity to derive financial benefit from such activities.
THERE ARE POTENTIAL COMMERCE-RELATED LIABILITIES
With the acquisition of the companies from the selling shareholders, we
are offering and intend to continue to offer insurance and securities products
through the internet. These activities will expose us to a number of additional
risks and uncertainties, including:
- potential liabilities for wrongful or illegal activities that
may be conducted in connection with the sale of securities and
insurance products;
- consumer fraud and false or deceptive advertising or sales
practices;
- breach of contract claims related to the sales of such
products;
- claims that materials included in such sites infringe on
third-party patents, copyrights, trademarks or other
intellectual property rights or are libelous, defamatory, and
breach third-party confidentiality or privacy rights;
- claims relating to any failure to appropriately collect or
remit sales or other taxes arising from commerce transactions
that may be brought by customers as a result of losses
resulting from any down time or other performance failures in
our services; and
- state laws limiting the sale of insurance and securities
products.
Although we maintain liability insurance, insurance may not cover these claims
or may not be adequate. Even to the extent such claims do not result in material
liability, investigating and defending such claims is expensive.
FAILURE TO OBTAIN YEAR 2000 COMPLIANCE MAY HAVE ADVERSE EFFECTS ON US
Many existing computer programs were originally designed to use only two digits
to identify a year in date fields. As a result, date-sensitive software
applications may recognize a date using "00" as the year 1900 rather than the
year 2000.
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If not corrected, these applications could fail or produce erroneous results
when working with dates in the year 2000 and beyond. If not properly addressed,
the Year 2000 issue could have a material effect on our financial position and
future operating results. We primarily rely on industry standard operating
systems and applications for our internal systems rather than proprietary
software, and based on review of significant internal programs and systems, we
have determined that they are substantially Year 2000 compliant. In addition, we
are seeking confirmation from our primary telecommunications service providers
that they are developing and implementing plans to become Year 2000 compliant.
Information we have received so far has indicated that they are in the process
of implementing remediation procedures to ensure that their computer systems,
services, or products are Year 2000 compliant by December 31, 1999. However, we
have not undertaken an in-depth evaluation of these providers in relation to the
Year 2000 issue. In addition, we cannot predict whether or not all of these
vendors' programs will be successful. To the extent that these vendors fail to
resolve any Year 2000 issues on a timely basis or in a manner that is compatible
with our systems, that failure could have a material adverse effect on our
financial position and future operating results. We are using internal resources
to identify and correct our systems for Year 2000 compliance, and we expect any
incremental costs associated with addressing this issue to be minimal. We do not
believe that the costs of addressing Year 2000 issues will be material to our
future operating results or financial position.
MANAGEMENT AND SIGNIFICANT STOCKHOLDERS CAN EXERCISE INFLUENCE OVER HOMECOM
Based upon stock ownership as of May 4, 1999, our executive officers,
directors, and 5% stockholders and their affiliates own an aggregate of 39% of
our outstanding shares. As a result, such persons acting together will have the
ability to control all matters submitted to our shareholders for approval and to
control the management and affairs of HomeCom. Accordingly, such concentration
of ownership may have the effect of delaying or preventing a change in control
of HomeCom, impede a merger, consolidation, or takeover or other business
combination, or discourage a potential acquiror from attempting to obtain
control. This concentration of control could also have a negative effect on the
market price of your shares.
NEW INVESTORS WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION
Shares purchased in this offering may incur immediate and substantial
dilution. To the extent that currently outstanding options and warrants are
exercised or converted, there will be further dilution in your shares. Please
refer to the information above under "There Are a Substantial Number of Shares
Eligible For Future Sale."
WE MAY NOT MAINTAIN NASDAQ LISTING REQUIREMENTS
Under the currently effective criteria for continued listing of
securities on the Nasdaq SmallCap Market(TM), a company must maintain $2,000,000
in net tangible assets, a minimum bid price of $1.00, and a public float of at
least $1,000,000. If we are unable to maintain the standards for continued
listing, our shares could be subject to delisting from the Nasdaq SmallCap
Market(TM). If our shares were delisted, trading, if any, in our shares would be
conducted in the over-the-counter market on the OTC Bulletin Board established
for securities that do not meet the Nasdaq SmallCap Market(TM) listing
requirements or in what are commonly referred to as the "pink sheets." As a
result, investors may find it more difficult to dispose of or to obtain accurate
quotations as to the price of the shares.
THE SHARES MAY BECOME SUBJECT TO RISKS OF LOW PRICED STOCKS
In the absence of the shares being quoted in Nasdaq, or listed on an
exchange, trading in the shares would be covered by Rule 15g-9 promulgated under
the Securities Exchange Act of 1934, if our shares are a penny stock. Under that
rule, broker-dealers who recommend such securities to persons other than
established customers and accredited investors, who are generally investors with
net worth in excess of $1,000,000 or annual income exceeding $200,000 or
10
<PAGE> 12
$300,000 together with a spouse, must make a special written suitability
determination for the purchaser and receive the purchaser's written agreement to
a transaction before the sale.
The SEC has adopted regulations that generally defined a penny stock to
be any equity security that has a market price of less than $5.00 per share.
However, exemptions to this rule include:
- - an equity security listed on the Nasdaq Stock Market(TM), and
- - an equity security issued by an issuer that has:
- net tangible assets of at least $2,000,000, if such issuer has
been in continuous operation for three years,
- net tangible assets of at least $5,000,000, if such issuers
has been in continuous operation for less than three years, or
- average revenue of at least $6,000,000 for the preceding three
years.
Unless an exception is available, the regulations require the delivery, before
any transaction involving a penny stock, of a disclosure schedule explaining the
penny stock market and the associated risks. The applicability of this rule, if
it occurs, could materially adversely affect the ability of broker-dealers to
sell our shares and the ability of purchasers in this offering to sell their
shares in the secondary market.
USE OF PROCEEDS
The proceeds from the sale of the shares offered pursuant to this
prospectus are entirely for the benefit of the selling shareholders. We will not
receive any proceeds from the sale of the Shares from the selling shareholders.
ISSUANCE OF SHARES TO SELLING SHAREHOLDERS
Pursuant to merger agreements by and among HomeCom and FIMI Securities,
Inc., All Things Financial, Inc., First Institutional Marketing, Inc., and
Premier Financial Services, Inc., we issued 1,252,174 shares of common stock to
the three selling shareholders. On February 26, 1999, at a special meeting of
our shareholders, our shareholders approved the merger and the issuance of the
shares. The merger was consummated on March 24, 1999.
PLAN OF DISTRIBUTION
Shares covered by this prospectus may be offered and sold from time to
time by the selling shareholders. The selling shareholders will act
independently of HomeCom in making decisions with respect to the timing, manner
and size of each sale. The selling shareholders may sell the shares:
- on The Nasdaq SmallCap Market(TM);
- at prices and at terms then prevailing or at prices related to
the then current market price; or
- in private sales at negotiated prices directly or through
brokers.
The selling shareholders and any underwriter, dealer or agent who participates
in the distribution of such shares may be deemed to be underwriters under the
Securities Act, and any discount, commission or concession received by such
persons might be deemed to be an underwriting discount or commission under the
Securities Act. We have agreed to indemnify the selling shareholders against
some liabilities arising under the Securities Act.
Any broker-dealer participating in such transactions as agent may
receive commissions from the selling shareholders (and, if acting as agent for
the purchaser of such shares, from such purchaser). Usual and customary
brokerage fees will be paid by the selling shareholders. Broker-dealers may
agree with the selling shareholders to sell a
11
<PAGE> 13
specified number of shares at a stipulated price per share, and, to the extent
such a broker-dealer is unable to do so acting as agent for the selling
shareholders, to purchase as principal any unsold shares at the price required
to fulfill the broker-dealer commitment to the selling shareholders.
Broker-dealers who acquire shares as principal may then resell such shares from
time to time in transactions (which may involve sales to and through other
broker-dealers, including transactions of the nature described above) in the
over-the-counter market, in negotiated transactions or by a combination of such
methods of sale or otherwise at market prices prevailing at the time of sale or
at negotiated prices, and in connection with such resales may pay to or receive
from the purchasers of such shares commissions as described above.
We have advised the selling shareholders that the anti-manipulation
rules under the Exchange Act may apply to sales of Shares in the market and to
the activities of the selling shareholders and their affiliates. The selling
shareholders have advised HomeCom that during such time as the selling
shareholders may be engaged in the attempt to sell shares registered under this
prospectus, they will:
- not engage in any stabilization activity in connection with
any of the shares;
- not bid for or purchase any of the shares or any rights to
acquire the shares, or attempt to induce any person to
purchase any of the shares or rights to acquire the shares
other than as permitted under the Securities Exchange Act;
- not effect any sale or distribution of the shares until after
the prospectus shall have been appropriately amended or
supplemented, if required, to describe the terms of the sale
or distribution; and
- effect all sales of shares in broker's transactions through
broker-dealers acting as agents, in transactions directly with
market makers, or in privately negotiated transactions where
no broker or other third party (other than the purchaser) is
involved.
The selling shareholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against some
liabilities, including liabilities arising under the Securities Act. Any
commissions paid or any discounts or concessions allowed to any such
broker-dealers, and any profits received on the resale of such shares, may be
deemed to be underwriting discounts and commissions under the Securities Act if
any such broker-dealers purchase shares as principal.
In order to comply with the securities laws of some states, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In some states, the shares may not be
sold unless such shares have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Sellers have agreed to sell no more than 313,043 of the shares within
90 days from the effective date of this registration statement. The Sellers
have agreed to limit sales to no more than one-third of these 313,043 shares
during the first three thirty day periods following effectiveness. These
trading restrictions shall not apply in the event that the shares have traded
sale as long as such sale is made at a price per share of at least $4.813.
Sellers have also agreed not to sell any of the remaining 313,043 shares within
90 days of the effective date of this registration statement. The Sellers have
agreed to limit sales on a cumulative basis to no more than one-sixth of these
313,043 shares during each month for the following sixth months. These trading
restrictions shall not apply in the event that the shares have traded above
$10.00 per share on each of the five trading days prior to any single sale as
long as such sale is made at a price per share of at least $10.00.
HomeCom has agreed to use its best efforts to maintain the
effectiveness of this registration statement with respect to the shares of until
the earlier of the sale of such shares or two years from the date of this
prospectus. No sales may be made pursuant to this prospectus after such date
unless we amend or supplement this prospectus to indicate that it has agreed to
extend such period of effectiveness. There can be no assurance that the selling
shareholders will sell all or any of the shares offered under this prospectus.
SELLING SHAREHOLDERS
All of the shares registered for sale pursuant to this prospectus will
be owned immediately after registration by the selling shareholders, as all of
the shares offered by the selling shareholders were acquired in connection with
the merger. Such shares amount to approximately 19% of our outstanding
capitalization as of the date of this prospectus.
12
<PAGE> 14
The selling shareholders have been employed by and are employees and senior
officers and directors of the acquired companies and HomeCom.
The following table sets forth information known to us with respect to
beneficial ownership of our shares as of May 4, 1999, by each selling
shareholder. The following table assumes that there are 6,625,412 shares
outstanding and that the selling shareholders sell all of the shares. We are
unable to determine the exact number of shares that actually will be sold.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
BEFORE THE OFFERING SHARES AFTER THE OFFERING
------------------------- OFFERED BY THIS -------------------
SELLING SHAREHOLDERS SHARES PERCENT PROSPECTUS SHARES PERCENT
- -------------------- ---------- ----------- ---------------- ------- -------
<S> <C> <C> <C> <C> <C>
Daniel A. Delity 737,840 11.1% 368,920 368,920 5.6%
James Wm. Ellsworth 162,917 2.5 81,458 81,458 1.2
David B. Frank 351,417 5.3 175,709 175,709 2.7
</TABLE>
LEGAL MATTERS
The validity of the shares offered under this prospectus will be passed
upon by Sims Moss Kline & Davis LLP, Atlanta, Georgia, counsel to HomeCom.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K of HomeCom Communications, Inc. for the year
ended December 31, 1998 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement on Form S-3 that we
filed with the Securities and Exchange Commission. Some information in the
registration statement has been omitted from this prospectus in accordance with
the rules of the SEC. We file the annual, quarterly and special reports, proxy
statements and other information with the SEC. You can inspect and copy the
registration statement as well as reports, proxy statements and other
information we have filed with the SEC at the public reference room maintained
by the SEC at 450 Fifth Street, NW, Washington, D.C. 20549, and at the following
Regional Offices of the SEC: Seven World Trade Center, New York, New York 10048,
and Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois 60661.
You can obtain copies from the public reference room of the SEC at 450 Fifth
Street, NW, Washington, D.C. 20549 upon payment of certain fees. You can call
the SEC at 1-800-732-0330 for further information about the public reference
room. We are also required to file electronic versions of these documents with
the SEC, which may be accessed through the SEC's World Wide Web site at
http://www.sec.gov. Our latest annual report and quarterly reports can also be
accessed through our Internet World Wide Web site at "http:\\www.homecom.com."
Our common stock is quoted on The Nasdaq SmallCap Market(TM). Reports, proxy and
information statements and other information concerning HomeCom. may be
inspected at The Nasdaq Stock Market at 1735 K Street, NW, Washington, D.C.
20006.
13
<PAGE> 15
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" some of our
publicly-filed documents into this prospectus, which means that information
included in these documents is considered part of this prospectus. Information
that we file with the SEC subsequent to the date of this prospectus will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, until the selling shareholders have sold all the shares.
The following documents filed with the SEC are incorporated by
reference in this prospectus:
1. Our Annual Report on Form 10-K for the year ended December 31,
1998 (File No. 0-26822).
2. Our definitive Proxy Statement dated February 11, 1999, filed
in connection with our February 26, 1999, Special Meeting of Shareholders.
3. Our Current Reports on Form 8-K, filed with the SEC on May 10,
1999, April 13, 1999, and April 1, 1999, (File No. 0-26822).
We will furnish without charge to you, on written or oral request, a
copy of any or all of the documents incorporated by reference, other than
exhibits to such documents. You should direct any requests for documents to
Corporate Communications and Investor Relations, HomeCom Communications, Inc.,
Building 14, Suite 100, 3535 Piedmont Road, Atlanta, Georgia 30305, telephone
(404) 237-4646.
14
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant will bear no expenses in connection with any sale or other
distribution by the selling shareholders of the shares being registered other
than the expenses of preparation and distribution of this Registration Statement
and the prospectus included in this Registration Statement. Such expenses are
set forth in the following table. All of the amounts shown are estimates except
the Securities and Exchange Commission ("SEC") registration fee and the NASD
listing fee.
<TABLE>
<S> <C>
SEC registration fee $ 886.57
Legal fees and expenses 15,000.00
Accounting fees and expenses 10,000.00
NASD listing fee 7,500.00
Miscellaneous expenses 1,000.00
Total $34,386.57
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law (the "DGCL") permits a corporation
to eliminate or limit the personal liability of a director to the corporation or
its stockholders for monetary damages for breach of duty of care or other duty
as a director, provided that no provision shall eliminate or limit the liability
of a director: (A) for an appropriation, in violation of his duties, of any
business opportunity of the corporation; (B) for acts or omissions which involve
intentional misconduct or a knowing violation of law; (C) for unlawful corporate
distributions; or (D) for any transaction from which the director received an
improper personal benefit. This provision pertains only to breaches of duty by
directors in their capacity as directors (and not in any other corporate
capacity, such as officers) and limits liability only for breaches of fiduciary
duties under Delaware corporate law (and not for violation of other laws, such
as the federal securities laws). The Company's Restated Certificate of
Incorporation (the "Restated Certificate") exonerates the Company's directors
from monetary liability to the extent permitted by this statutory provision.
The Company's Restated Certificate of Incorporation and Restated Bylaws
(the "Restated Bylaws") also provide that the Company shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including any action by or in the right of the
Company), by reason of the fact that such person is or was a director or officer
of the Company, or is or was serving at the request of the Company as a director
or officer of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including reasonable attorneys' fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding, if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the Company (and with respect to any criminal
action or proceeding, if such person had no reasonable cause to believe such
person's conduct was unlawful), to the maximum extent permitted by, and in the
manner provided by, the DGCL.
Notwithstanding any provisions of the Company's Restated Certificate of
Incorporation and Restated Bylaws to the contrary, the DGCL provides that the
Company shall not indemnify a director or officer for any liability incurred in
a proceeding in which the director is adjudged liable to the Company or is
subjected to injunctive relief in favor of the Company: (1) for any
appropriation, in violation of his duties, of any business opportunity of the
Company; (2) for acts or omissions which involve intentional misconduct or a
knowing violation of law; (3) for unlawful corporate distributions; or (4) for
any transaction from which the director or officer received an improper personal
benefit.
II-1
<PAGE> 17
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBITS.
--------
<S> <C>
5.1 Opinion of Sims Moss Kline & Davis LLP
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
23.2 Consent of Sims Moss Kline & Davis LLP
(included in Exhibit 5.1)
24.1 Power of Attorney (see page II-3)
</TABLE>
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 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, each 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
this offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC 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.
II-2
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
HomeCom Communications, Inc. certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Atlanta, State of Georgia, on May 7,
1999.
HOMECOM COMMUNICATIONS, INC.
By: /s/ Harvey W. Sax
-------------------------------------
HARVEY W. SAX
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Harvey W. Sax and Norman H. Smith,
jointly and severally, his or her true and lawful attorneys-in-fact, each with
full power of substitution, for him or her in any and all capacities, to sign
any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact or any
of them, or his or their substitute or substitutes, may lawfully do or cause to
be done or by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Harvey W. Sax President, Chief Executive Officer and Director May 7, 1999
- -------------------------- (Principal Executive Officer)
HARVEY W. SAX
/s/ Nat Stricklen May 7, 1999
- --------------------------
NAT STRICKLEN Executive Vice President and Director
/s/ Krishan Puri May 7, 1999
- --------------------------
KRISHAN PURI Executive Vice President and Director
/s/ Gia Bokuchava, Ph.D. May 7, 1999
- --------------------------
GIA BOKUCHAVA, PH.D. Chief Technical Officer and Director
/s/ Roger Nebel May 7, 1999
- --------------------------
ROGER NEBEL Vice President and Director
/s/ Norman H. Smith May 7, 1999
- --------------------------
NORMAN H. SMITH Chief Financial Officer
/s/ Claude Thomas May 7, 1999
- --------------------------
CLAUDE THOMAS Director
</TABLE>
II-3
<PAGE> 19
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- ------------------
<S> <C>
5.1 Opinion of Sims Moss Kline & Davis LLP
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.2 Consent of Sims Moss Kline & Davis LLP (included in Exhibit 5.1)
24.1 Power of Attorney (see page II-3)
</TABLE>
II-4
<PAGE> 1
EXHIBIT 5.1
OPINION OF COUNSEL
May 10, 1999
HomeCom Communications, Inc.
Fourteen Piedmont Center, Suite 100
3535 Piedmont Road
Atlanta, Georgia 30305
RE: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by
you with the Securities and Exchange Commission on or about May 10, 1999 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933 of shares of your common stock (the "Shares"), to be sold
by certain shareholders listed in the Registration Statement (the "Selling
Shareholders"). As your legal counsel in connection with this transaction, we
have examined the proceedings taken and are familiar with the proceedings
proposed to be taken by you in connection with the sale of the Shares.
As counsel to you, we have examined such corporate records, documents,
instruments, certificates of public officials and of the Company and such
questions of law as we have deemed necessary for the purpose of rendering the
opinions set forth herein.
It is our opinion that the Shares, when sold by the selling
shareholders in the manner described in the Registration Statement, will be
legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever it appears in the
Registration Statement and in any amendment to it.
Sincerely,
SIMS MOSS KLINE & DAVIS LLP
/s/ SIMS MOSS KLINE & DAVIS LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-3 of our report dated March 29, 1999 relating
to the financial statements, which appears in HomeCom Communications, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1998. We also
consent to the reference to us under the heading "Experts" in such Registrant
Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
Atlanta, Georgia
May 10, 1999
