<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 1, 1999
REGISTRATION NO. 333--
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
_____, 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. [ ]
<PAGE> 2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------------------------------------------------------
<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 splits, stock dividends 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.
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> 3
PROSPECTUS
SUBJECT TO COMPLETION, DATED FEBRUARY _____, 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" REFERENCED ON PAGE ____ IN
DETERMINING WHETHER TO PURCHASE THE HOMECOM COMMUNICATIONS, INC. COMMON STOCK.
These shares of common stock are being offered by certain selling
shareholders identified in this Prospectus. We will issue the shares to the
selling shareholders in connection with the closing of the acquisition of FIMI
Securities, Inc., All Things Financial, Inc., First Institutional Marketing,
Inc., and Premier Financial Services, Inc. in March 1999 (the "FIMI Companies").
Upon receipt of the shares, subject to certain contractual restrictions on the
amount that can be resold at any one time and applicable securities laws, the
selling shareholders may sell these shares from time to time on the
over-the-counter market in regular brokerage transactions, in transactions
directly with market makers or in certain privately negotiated transactions. For
additional information on the methods of sale, you should refer to the section
entitled "Plan of Distribution" on page _____. We will not receive any portion
of the proceeds from the sale of these shares.
Each of the selling shareholders may be deemed to be an "Underwriter," as
such term is defined in the Securities Act of 1933, as amended.
HomeCom Communications, Inc.'s common stock is quoted on the Nasdaq
SmallCap Market(TM) under the symbol "HCOM."
On February 23, 1999, the last sale price of the common stock on the Nasdaq
SmallCap Market(TM) was $5.375 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 THE SECURITIES OR PASSED ON THE
ADEQUACY OR ACCURACY OF THE DISCLOSURES IN 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 February ______, 1999
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ADDITIONAL INFORMATION AVAILABLE TO YOU..........................................____
INFORMATION INCORPORATED BY REFERENCE............................................____
THE COMPANY......................................................................____
RISK FACTORS.....................................................................____
USE OF PROCEEDS..................................................................____
ISSUANCE OF COMMON STOCK TO SELLING SHAREHOLDERS.................................____
PLAN OF DISTRIBUTION.............................................................____
SELLING SHAREHOLDERS.............................................................____
LEGAL MATTERS....................................................................____
EXPERTS..........................................................................____
</TABLE>
<PAGE> 5
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.
ADDITIONAL INFORMATION AVAILABLE TO YOU
This prospectus is part of a Registration Statement on Form S-3 that we
filed with the Securities and Exchange Commission. Certain 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. The Company's 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 Communications, Inc. may be inspected at The Nasdaq Stock
Market at 1735 K Street, NW, Washington, D.C. 20006.
<PAGE> 6
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" certain 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, 1997
(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 Quarterly Reports on Form 10-Q for the quarters ended March 31,
1998, June 30, 1998 and September 30, 1998 (File No. 0-26822).
4. Our Current Reports on Form 8-K, filed with the SEC on November 18,
1998, June 25, 1998, and April 28, 1998, (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.
<PAGE> 7
THE COMPANY
HomeCom Communications, Inc. develops and markets specialized software
applications and products and provides services that enable businesses to use
the Internet and Intranets to obtain and communicate important business
information, conduct commercial transactions and improve business productivity.
HomeCom provides Internet/Intranet solutions in two areas: (i) customized
software applications design, development and integration, including World Wide
Web site development; and (ii) security consulting and integration services.
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. As used in this prospectus, the "Company" and "HomeCom" refer to
HomeCom Communications, Inc., a Delaware corporation, and its wholly owned
subsidiaries.
RECENT DEVELOPMENTS
On February 4, 1999, we announced unaudited results for the year ended
December 31, 1998, which included revenues of approximately $3.3 million and a
net loss of approximately $1.1 million or $0.42 per share.
RISK FACTORS
LIMITED OPERATING HISTORY; ACCUMULATED DEFICIT; CONTINUING LOSSES
HomeCom was incorporated in December 1994, and commenced sales in January
1995. Therefore, 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,
among other things:
- Our ability to attract, retain, and motivate qualified persons;
- 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.
INCREASES IN OPERATING EXPENSES; ANTICIPATED LOSSES
The Report of Independent Accountants of the Company, dated as of March
13, 1998, included an explanatory paragraph relating to the uncertainty of the
Company's ability to continue as going concern.
As of December 31, 1998, we had an accumulated deficit of approximately
$6.6 million. Because of our limited operating history and the uncertain nature
of the rapidly changing markets we serve, we believe the prediction of future
results of operations is difficult or impossible. In addition, we believe that
period-to-period comparisons of our operating results are not meaningful. You
should not rely on the results for any periods as an indication of future
performance. We currently expect that our operating expenses will continue to
increase significantly 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. As a result,
we may experience significant losses on a quarterly and annual basis. If we
cannot generate sufficient revenues to offset our operating expenses, our
business and operating results will continue to be materially adversely
effected.
WE WILL NEED ADDITIONAL CAPITAL TO
FINANCE OUR GROWTH AND CAPITAL REQUIREMENTS
We expect to continue to incur substantial operating losses and will
continue to use substantial sums of cash in our operations for an indefinite
period of time. We may also need to spend significant amounts of cash to
- fund growth, operating losses, and increases in expenses;
- take advantage of unanticipated opportunities such as major strategic
alliance or other special marketing opportunities, acquisitions of
complementary businesses or assets, or the development of new
products; or
- otherwise respond to unanticipated developments or competitive
pressures.
<PAGE> 8
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. Such steps 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 such measures are
still not sufficient, we may elect to implement other cost reduction actions.
Any such actions undertaken may limit our opportunities to realize continued
increases in sales and may not be able to reduce our costs and amounts
sufficient to achieve break-even or profitable returns. If we exhaust our
sources of capital and, subsequently, cost reduction measures are not sufficient
to allow us to achieve break-even or profitable returns, we may be forced to
seek protection from our creditors.
WE CANNOT ASSURE YOU THAT WE WILL EFFECTIVELY MANAGE OUR GROWTH
Our growth has in the past placed, and may in the future place, a
significant strain on our business resources. In order to effectively manage our
operations, we must continue to implement and approve our operational,
financial, and management information systems and identify, attract, train,
integrate, and retain qualified personnel. These demands will require us to add
new management personnel and develop additional expertise. In addition, in order
for us to successfully integrate newly acquired assets and continue to implement
our strategy, we must:
- closely monitor service quality;
- identify and acquire physical sites;
- acquire and install necessary equipment and telecommunications
facilities;
- implement marketing efforts in new and existing markets;
- employ qualified personnel to provide technical and marketing support;
and
- continue to expand our managerial operation of financial resources to
support development.
PRICE EROSION; CONTINUING DECLINE IN OUR MARGINS
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.
INTENSE COMPETITION
The market for Internet products and services is highly competitive.
There are no substantial barriers to entry in these markets, and we expect that
competition will continue to intensify. Negative competitive developments could
have material adverse effects on our business and on the trading price of our
stock.
MULTIPLE PROVIDERS OF COMPETITIVE SERVICES
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
Internet 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,
among others:
- Web site service boutique firms;
- communications, telephone and telecommunication companies;
- computer hardware and software companies;
- established online service companies;
- advertising agencies;
- direct access Internet and Internet-services and access providers;
- specialized integrated marketing communications firms; and
- internal information technologies departments of prospective and
current customers.
<PAGE> 9
DEPENDENCE ON CONTINUED GROWTH IN
USE OF THE INTERNET: TECHNOLOGICAL CHANGE
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 a number of 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 reliability of the Web may be adversely affected.
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.
VOLATILITY OF STOCK PRICE
The trading price of our shares has been, and may continue to be, subject
to wide fluctuations. During 1998, the closing sale prices of the Company's
common stock 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.
MANAGEMENT OF POTENTIAL GROWTH AND INTEGRATION OF ACQUISITIONS
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. Our ability to
effectively manage growth could have a material adverse effect on our business,
operating results, or financial condition.
As part of our business strategy, we have completed several acquisitions
and expect to enter into additional business combinations. Our proposed
acquisition of the FIMI Companies is expected to close in March of 1999. See
"Issuance of Common Stock to Selling Shareholders." We recently signed a
non-binding letter of intent to acquire the stock of Ganymede Corporation which
is engaged in web site development. The consummation of this acquisition is
subject to a number conditions, including the results of satisfactory due
diligence by us and approval by the Ganymede Corporation's shareholders.
Acquisition transactions are accompanied by a number of risks, including:
- the difficulty of assimilating the operations and personnel of the
acquired companies;
- the potential disruption of our ongoing business and distraction of
management;
- the difficulty of incorporating acquired technology or content and
rights into our product and service offerings;
- 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 or any other problems
encountered in connection with such acquisitions.
<PAGE> 10
DEPENDENCE ON KEY PERSONNEL
We are substantially dependent upon the continued services of our senior
management for our success. The loss of a member of senior management could
have a serious negative impact upon our business and operating results. 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. In addition,
such restrictions may not effectively prohibit competition due to the global
nature of the Internet.
LENGTHY SALES CYCLE
Our development and implementation of interactive web sites and Intranet
software applications involves a lengthy sales cycle. Extensive web sites,
development or licensing of the Company's 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.
RISK OF DEFECTS
Web site services and other services based on software and computing
systems frequently encounter development and completion delays and the
underlying software may contain undetected errors or failures when introduced,
and in the case of web sites when the volume of traffic on the site increases.
In addition, there can be no assurance that errors found in the software,
underlying web site, or other project will not 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. There can be no assurance
that, despite our efforts to protect ourselves from the contrary, errors will
not be found in new applications, products, or releases after the commencement
of installation or shipment. These problems can result in loss or in delay by us
of necessary revenues to continue operations.
SECURITY RISKS
Our software and equipment are 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, commonly known as "cracking" or "hacking."
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. To alleviate problems caused by computer viruses or inappropriate
security breaches, we may have to interrupt, delay, or cease service to our
customers, which could have a material adverse effect on our business,
financial condition, or the results of operations. 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. Although we attempt to limit our liability to
customers of these types of risks through contractual provisions, there can be
no assurance that these provisions will be enforceable.
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. We cannot be certain that
we have taken adequate steps to prevent misappropriation of our technology or
that our competitors will not 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 "shrink wrap" licenses
that are not signed by licensees and may be unenforceable under the laws of
certain jurisdictions. In addition, the laws of some foreign countries do not
protect our proprietary rights to as great an
<PAGE> 11
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.
Parties making such claims could secure a judgment awarding substantial damages
as well as injunctive or other equitable relief that could effectively block our
ability to license our products in the United States or abroad. A judgment could
have a material adverse effect on our business, financial condition, and results
of operations if a third party asserts a claim related to proprietary technology
or information against us, we may seek licenses to the intellectual property
from the third party. In addition, as a web site developer, we face potential
liability for the actions of customers and others using their services. Any
position of such liability could have a material adverse effect on us. We cannot
be certain however that third-parties will extend licenses to us under
commercially reasonable terms or at all. If we fail to obtain the necessary
licenses or other rights, such failure could materially adversely affect our
business financial condition and results of operation.
SHARES ELIGIBLE FOR FUTURE SALE
Upon consummation of this Offering, we will have 6,339,571 shares of common
stock outstanding and will have outstanding options to purchase an additional
573,360 shares of common stock pursuant to the Company's stock option plans at a
weighted average exercise price of $4.21 per share. We will also have
outstanding warrants to acquire an aggregate of 525,000 shares at a weighted
average exercise price of $8.02 per share. Of the 6,399,571 shares outstanding
after this Offering, 3,622,435 shares (including the 626,087 shares assumed to
be sold in this Offering) will be freely tradable without restriction (except
those shares issued the Selling Shareholders which are subject to certain resale
limitations as described in the Merger Agreement) or further registration under
the Securities Act unless they are purchased by affiliates of the Company as
that term is defined in Rule 144 under the Securities Act. The remaining
2,777,136 outstanding shares of common stock may be sold in the public market
only if registered or pursuant to an exemption from registration such as Rule
144 or Rule 144K (promulgated under the Securities Act). In addition, on July
31, 1998, we filed a Registration Statement on Form S-8 under the Securities Act
for purpose registering the potential sale of 300,000 shares reserved for
issuance under our stock option plan (of which options to purchase 573,360
shares are outstanding) and the 150,000 shares reserved for issuance under the
Company's stock purchase plan (of which 6,531 shares have been issued at a
weighted average price of $2.19 per share). After the effective date of that
registration statement, except for shares held by affiliates of the Company,
shares purchased pursuant to this stock option and purchase plans generally will
be available for resale in the public market.
SENIORITY OF PREFERRED STOCK;
STAGGERED BOARD; POSSIBLE TAKEOVER EFFECTS
The Board of Directors has authority to issue up to 10,000,000 shares of
preferred stock and to fix the rights, preferences, privilege and restrictions
(including voting rights) of the preferred stock without further voter action by
our shareholders. 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. The issuance of additional shares of preferred stock could make it
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. Our Restated Certificate of Incorporation provides that
our board be 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 tend to discourage a third party from making a tender offer or
otherwise attempting to obtain control of the Company and may maintain
incumbency of the present board of directors.
LIMITATION OF DIRECTORS AND OFFICER'S LIABILITY
Our restated Certificate of Incorporation provides that our directors shall
have no personal liability for certain breaches of their fiduciary duties to the
Companies. 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.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES
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
<PAGE> 12
material considered to be objectionable on the web. The European Union has
recently adapted 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 FCC 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 FCC to regulate ISP's and OSP's 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. Also,
Congress recently passed, and the President has signed into law, the Digital
Millennium Copyright Act, which is intended to reduce the liability of online
service providers for listing or linking to third party web sites that include
materials that infringe copyrights or rights of others. Congress also recently
passed, and the President has signed into law, the Children's Online Protection
Act and Children's Online Privacy Act, which will restrict the distribution of
certain materials deemed harmful to children and to impose additional
restrictions on the ability of online services to collect user information from
minors. We are currently reviewing this legislation and cannot currently predict
the effect, if any, it will have on our business. There can be no assurance that
such legislation will not impose significant additional costs in our business or
subject us to additional liabilities. In addition a number of other countries
are considering additional regulation. In addition, the applicability to the
Internet of existing laws governing issues such as property ownership,
copyright, defamation, obscenity, and personal privacy is uncertain. We may be
subject to claims that our services violate such laws. Any new legislation or
regulation in the United States or abroad where the application of existing laws
and regulations to the Internet could have a material adverse effect on our
business, operating results and financial condition. Due to the global nature of
the web, it is possible that the governments of other states and foreign
counties may attempt to regulate our transmission or prosecute us for violations
of their laws. We might unintentionally violate such laws. Such laws may be
modified, or new laws enacted, in the future. Any such developments could have a
material adverse effect on our business, results of operations, and financial
condition.
LIABILITY FOR THE COMPANY'S SERVICES
We host a wide variety of information, communications, and commerce
services that enable individuals and corporations to exchange information,
conduct business, and engage in various online activities. The law relating to
the liability of providers of these services for activities of their users is
currently unsettled. Claims could be made against us for defamation, negligence,
copyright or trademark infringement, personal injury, or other theories based on
the nature and content of information that may be posted by our users.
POTENTIAL COMMERCE-RELATED LIABILITIES AND EXPENSES
In connection with our acquisition of the FIMI Companies, we intend 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; and
- 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.
Although we maintain liability insurance, insurance may not cover these claims
or may not be adequate. Even to the extent such claims did not result in
material liability, investigation defending such claims is expensive.
FAILURE TO OBTAIN YEAR 2000
COMPLIANCE MAY HAVE ADVERSE EFFECTS ON US
YEAR 2000 READINESS
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. If not corrected,
<PAGE> 13
these applications could fail or produce erroneous results when working with
dates in the year 2000 and beyond. If not properly addressed, 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 out 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 CERTAIN STOCKHOLDERS CAN
EXERCISE SIGNIFICANT INFLUENCE OVER HOMECOM
Based upon stock ownership as of February 23, 1999, our executive officers,
directors, and 5% stockholders and their affiliates own an aggregate of 30% of
our outstanding shares. Upon consummation of our acquisition of the FIMI
Companies, our executive officers, directors, and 5% stockholders will own an
aggregate of 43% of our outstanding shares. As a result, such person acting
together will have the ability to control all matters submitted to shareholders
of the Company for approval (including the election and removal of directors and
any merger, consolidation, or sale of all or substantially all of the our
assets) and to control the management and affairs of the Company.
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.
Accordingly, such concentration of ownership may have the effect of delaying or
preventing a change in control of the Company, impede a merger, consolidation,
or takeover or other business combination involving the Company, or discourage a
potential acquiror from attempting to obtain control of the Company. This
concentration of control could also have an adverse effect on the market price
of our shares.
NASDAQ MAINTENANCE 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. In the event that we are unable to maintain the standards for
continued listing, our shares could be subject to delisting from the Nasdaq
SmallCap Market(TM). Trading, if any, in our shares would thereafter 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 Stock.
RISK OF LOW PRICED STOCKS; PENNY STOCKS
In the event that we are unable to satisfy the maintenance requirements for
the Nasdaq SmallCap Market(TM) and the bid price of our shares falls below $5.00
per share, trading would be conducted in the "pink sheets" or the OTC Bulletin
Board. In the absence of the Shares being quoted in Nasdaq, or listed on an
exchange, trading in the Common Shares would be covered by Rule 15g-9
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), if our Common Stock is a "penny stock." Under such rule, broker-dealers
who recommend such securities to persons other than established customers and
accredited investors (generally defined as investors with net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $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 prior to sale.
Securities are exempt from this rule if the market price is at least $5.00 per
share.
<PAGE> 14
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,
subject to certain exceptions. Such exceptions include an equity security listed
on the Nasdaq Stock Market(TM), and an equity security issued by an issuer that
has (i) net tangible assets of at least $2,000,000, if such issuer has been in
continuous operation for three years, (ii) net tangible assets of at least
$5,000,000, if such issuers has been in continuous operation for less than three
years, or (iii) average revenue of at least $6,000,000 for the preceding three
years. Unless an exception is available, the regulations require the delivery,
prior to any transaction involving a penny stock of a disclosure schedule
explaining the penny stock market and the risks associated therewith.
Consequently, such delisting, if it were to occur, 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 common stock offered pursuant to this
Prospectus (the "Shares") are solely for the account of the selling
shareholders. Accordingly, the Company will not receive any proceeds from the
sale of the Shares from the selling shareholders.
ISSUANCE OF COMMON STOCK TO SELLING SHAREHOLDERS
Pursuant to an Agreement and Plan of Merger (the "Merger Agreements") among
the Company, ATF, FIMI, and wholly-owned subsidiaries of the Company (the
"Subs"), the Company will issue at closing an aggregate of 1,252,174 shares of
the Company's common stock (the "Share Issuance") to the three shareholders of
FIMI Securities, Inc., ("FIMI") and All Thing Financial, Inc. ("ATF"). Under the
terms of the Merger Agreement, FIMI and ATF will merge with and into the Subs
and become wholly-owned subsidiaries of the Company (the "Merger"). Immediately
following the closing of the Merger, First Institutional Marketing, Inc. ("First
Institutional") and Premier Financial Services, Inc. ("Premier") which are also
owned by these three shareholders will merge with and into FIMI (the "FIMI
Merger"). On , 1999, at a special meeting of our shareholders, the
shareholders of the Company approved the Merger and the Share Issuance. The
closing of the Merger is subject to the satisfaction of a number of conditions,
including the effectiveness of this registration statement with the SEC.
PLAN OF DISTRIBUTION
Shares of common stock covered hereby may be offered and sold from time to
time by the selling shareholders. The selling shareholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. The selling shareholders may sell the Shares being
offered hereby: (i) on The Nasdaq SmallCap Market(TM), or otherwise at prices
and at terms then prevailing or at prices related to the then current market
price; or (ii) in private sales at negotiated prices directly or through a
broker or brokers, who may act as agent or as principal or by a combination of
such methods of sale. The selling shareholders and any underwriter, dealer or
agent who participate 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. The Company has agreed to
indemnify the selling shareholders against certain 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 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 thereafter
resell such shares from time to time in transactions (which may involve crosses
and block transactions and 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 computed as described above.
The Company has 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 the Company that during such time as the selling
shareholders may be engaged in the attempt to sell shares registered hereunder,
they will: (i) not engage in any stabilization activity in connection with any
of the Company's securities; (ii) not bid for or purchase any of the Company's
securities or any rights to acquire the Company's securities, or attempt to
induce any person to purchase any of the Company's securities or rights to
acquire the Company's securities other than as permitted under the Exchange Act;
(iii) not effect any sale or distribution of the Shares until after the
prospectus shall have been appropriately amended or
<PAGE> 15
supplemented, if required, to set forth the terms thereof; and (iv) 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
transaction 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 certain 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 certain states, if
applicable, the Company's common stock will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states, the common stock 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.
The Company has agreed to use its best efforts to maintain the
effectiveness of this Registration Statement with respect to the shares of
common stock offered hereunder by the selling shareholders 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 the Company
amends or supplements 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 of common stock offered
hereunder.
SELLING SHAREHOLDERS
All of the Shares registered for sale pursuant to this Prospectus will be
owned immediately after registration by the Selling Shareholders as the former
shareholders of FIMI, ATF, First Institutional, and Premier and all of the
shares offered by the Selling Shareholders were acquired in connection with the
Merger and the FIMI Merger respectively. Such shares amount to approximately 20%
of the Company's outstanding capitalization as of the date of this Prospectus.
The Selling Shareholders are employees and senior officers and directors of
FIMI, ATF, First Institutional, and Premier and the Company.
The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's common stock as of
February 23, 1999 by each selling shareholder. The following table assumes that
the selling shareholders sell all of the Shares registered for sale under this
Prospectus. The Company is unable to determine the exact number of Shares that
actually will be sold.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
PRIOR TO THE OFFERING(1)(2) SHARES AFTER THE OFFERING(1)(2)
------------------------------ OFFERED BY THIS ------------------------------
SELLING SHAREHOLDERS SHARES PERCENT (3) PROSPECTUS SHARES PERCENT (3)
- ---------------------- ------ ----------- --------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Daniel A. Delity 737,840 11.5% 368,920 368,920 5.8%
James Wm. Ellsworth 162,917 2.5 81,458 81,458 1.3
David B. Frank 351,417 5.5 175,709 175,709 2.7
</TABLE>
(1) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Exchange Act, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under such
rule, beneficial ownership includes any shares as to which the individual has
sole or shared voting power or investment power and also any shares which the
individual has the right to acquire within 60 days of February 23, 1999, through
the exercise of any stock option or other right. Unless otherwise indicated in
the footnotes, each person has sole voting and investment power (or shares such
powers with his or her spouse) with respect to the shares shown as beneficially
owned.
(2) Assumes the Selling Shareholders receive the 1,252,174 shares to be issued
at the closing of the FIMI Merger.
(3) Assumes that 6,379,591 shares are outstanding.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
upon by Sims Moss Kline & Davis LLP, Atlanta, Georgia, counsel to the Company.
<PAGE> 16
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 1997 have been so
incorporated in reliance on the report (which contains an explanatory paragraph
relating to the Company's ability to continue as a going concern as described in
Note 1 to the financial statements) of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
<PAGE> 17
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.
<PAGE> 18
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> 19
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 February
25, 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 February 25, 1999
- ---------------------------- (Principal Executive Officer)
HARVEY W. SAX
/s/ Nat Stricklen February 25, 1999
- ----------------------------
NAT STRICKLEN Executive Vice President and Director
/s/ Krishan Puri February 25, 1999
- ----------------------------
KRISHAN PURI Executive Vice President and Director
/s/ Gia Bokuchava, Ph.D. February 25, 1999
- ----------------------------
GIA BOKUCHAVA, PH.D. Chief Technical Officer and Director
/s/ Roger Nebel February 25, 1999
- ----------------------------
ROGER NEBEL Vice President and Director
/s/ Norman H. Smith February 25, 1999
- ----------------------------
NORMAN H. SMITH Chief Financial Officer
/s/ Gregory Abowd February 25, 1999
- ----------------------------
GREGORY ABOWD Director
/s/ Claude Thomas February 25, 1999
- ----------------------------
CLAUDE THOMAS Director
</TABLE>
II-3
<PAGE> 20
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
February 25, 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 February 25, 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 the Prospectus
constituting part of this Registration Statement on Form S-3 of our report,
which includes an explanatory paragraph relating to the Company's ability to
continue as a going concern, dated March 13, 1998 appearing on page 18 of
HomeCom Communications, Inc.'s, Annual Report on Form 10-K for the year ended
December 31, 1997. We also consent to the reference to us under the heading
"Experts" in such Prospectus.]
/s/ PricewaterhouseCoopers LLP
Atlanta, Georgia
February 26, 1999
