As filed with the Securities and Exchange Commission on January 18, 2001
Registration No. 333- 48934
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EDUCATIONAL VIDEO CONFERENCING, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 06-1488212
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
35 EAST GRASSY SPRAIN ROAD, SUITE 200
YONKERS, NEW YORK 10710
(914) 787-3500
(Address and telephone number of registrant's principal executive offices)
COPIES TO:
DR. AROL I. BUNTZMAN JOSEPH D. ALPERIN, ESQ.
35 EAST GRASSY SPRAIN ROAD, SUITE 200 FISCHBEIN BADILLO WAGNER HARDING
YONKERS, NEW YORK 10710 909 THIRD AVENUE
(914) 787-3500 NEW YORK, NEW YORK 10022
(Name and address and telephone (212) 826-2000
number of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box:
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered 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:
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
-------------------------- ------------------ ------------------------- ------------------------ -------------------
Title Of Securities Amount To Be Proposed Maximum Proposed Maximum Amount Of
Registered Offering Price Per Share Aggregate Offering Registration Fee
Price
-------------------------- ------------------ ------------------------- ------------------------ -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Common Stock, $.0001 1,962,891(1) $8.00 (2) $14,183,128 (2) $3,744.35 (2)(3)
Par value............
-------------------------- ------------------ ------------------------- ------------------------ -------------------
Common Stock, $.0001 190,000 3.75 (4) 712,500 (4) 178.13 (4)
Par value............
-------------------------- ------------------ ------------------------- ------------------------ -------------------
Total................ 1,962,891(1) $14,895,628 $3,922.48
-------------------------- ------------------ ------------------------- ------------------------ -------------------
</TABLE>
<PAGE>
(1) This Registration Statement also includes an indeterminable number of
shares of common stock which may be issued under the antidilution provisions of
preferred stock and warrants held by certain selling stockholders.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, based on the average
of the bid and asked price on October 26, 2000 as reported by Nasdaq.
(3) Previously paid.
(4) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, based on the last sale
price on January 12, 2001 as reported by Nasdaq.
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 SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
PROSPECTUS
EDUCATIONAL VIDEO CONFERENCING, INC.
1,962,891 SHARES OF COMMON STOCK
The shares are being offered by certain stockholders named in the
prospectus. They have the right to determine both the number of shares they will
offer and the time or times when they will offer shares. They may sell the
shares at the market price at the time of sale or at such other prices as they
may negotiate. We will not receive any proceeds from the sale of the shares of
this offering.
Our common stock is quoted on the Pacific Exchange and the Boston Stock
Exchange under the symbol "EVI" and the Nasdaq SmallCap Market under the symbol
"EVCI." On January 17, 2001, the closing sale price of our common stock, as
reported by Nasdaq, was $3.875 per share.
--------------------------------------------------
THESE ARE SPECULATIVE SECURITIES AND THIS
INVESTMENT INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 5.
--------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS
HAVE NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
January 18, 2001.
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. OFFERS OF THESE SECURITIES ARE NOT BEING MADE IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS.
TABLE OF CONTENTS
PAGE
Where you can find more information...........................................2
PROSPECTUS SUMMARY............................................................3
RISK FACTORS..................................................................5
USE OF PROCEEDS FROM EXERCISE OF WARRANTS AND OPTIONS........................14
SELLING STOCKHOLDERS.........................................................15
PLAN OF DISTRIBUTION.........................................................16
Indemnification of Directors and Officers....................................17
LEGAL MATTERS................................................................18
EXPERTS......................................................................18
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and other reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the SEC's public reference rooms at 450 Fifth Street,
N.W. in Washington, D.C., and Seven World Trade Center, Suite 1300, New York,
New York. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public at the
SEC's web site at http://www.sec.gov. Our reports, proxy statements and other
information are also available to the public at the Nasdaq's web site at
http://www.nasdaq.com.
This prospectus is part of a registration statement on Form S-3 filed
with the SEC under the Securities Act of 1933. This prospectus omits some of the
information contained in the registration statement. You should refer to the
registration statement for further information with respect to the securities
offered by this prospectus. Any statement contained in this prospectus
concerning the provisions of any document filed as an exhibit to the
registration statement or otherwise filed with the SEC is not necessarily
complete, and in each case you should refer to the copy of the document filed
for complete information.
The SEC allows us to "incorporate by reference" the information we file
with it, which means we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be a part of this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we make with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until all of the securities covered by this prospectus are sold by the selling
stockholders.
1. Our annual report on Form 10-KSB for our fiscal year ended December
31, 1999, filed March 30, 2000.
2. Our current report on Form 8-K filed January 31, 2000, as amended by
Form 8-K/A filed March 28, 2000.
3. Our current report on Form 8-K filed February 18, 2000, as amended by
Form 8-K/A filed March 7, 2000.
4. Our quarterly report on Form 10-QSB for our quarter ended March 31,
2000, filed May 12, 2000.
5. Our quarterly report on Form 10-QSB for our quarter ended June 30,
2000, filed August 11, 2000.
6. Our current report on Form 8-K filed October 6, 2000.
7. Our quarterly report on Form 10-QSB for our quarter ended September
30, 2000, filed November 13, 2000.
8. The description of our common stock contained under the caption
"Description of Capital Stock" in our Prospectus filed February 24,
1999 pursuant to Rule 424(b) under the Securities Act.
You may request a copy of these filings, at no cost, by writing or
telephoning us:
35 East Grassy Sprain Road, Suite 200, Yonkers, New York 10710
Attention: Richard Goldenberg, Chief Financial Officer, (914)
787-3500
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PROSPECTUS SUMMARY
ABOUT OUR COMPANY
We are a leading aggregator and distributor, via live interactive video
conferencing systems, of accredited college courses and degree programs, as well
as corporate training, professional development and continuing education
programs. The instructor can see and hear the students as the students see and
hear the instructor and the students can see and hear each other. The instructor
and the students can also share data at multiple locations. Educational content
is currently being delivered by us over high speed point-to-point or multi-point
digital data lines (T-1 or ISDN).
We expect to complete deploying our proprietary broadband network design
at strategically placed hubs in New York, California and Virginia by March 31,
2001. From these hubs we will be able to link up with national and international
high speed broadband networks of major communications carriers to provide unique
two-way multi-point, multi-media voice, video and data transmissions. Our
broadband network design is unique because it permits video conferencing at
approximately 30 frames per second (broadcast quality) through ATM, DSL, cable
modems or satellite while we control bandwidth and throughput. This means higher
quality transmissions at competitive broadband rates and at lower rates than
ISDN service. Our broadband network design also gives us the opportunity to
expand our business by offering our proprietary software to major corporations
that want the travel and time convenience and cost savings afforded by using our
technology to improve real time multi-point communications among their offices
throughout the world for corporate communications, generally, and for job skills
training, professional development and academic programs. These programs can be
obtained from us or from others that have purchased our software from us, or our
customers can generate them internally.
Since January 14, 2000, we have owned and operated Interboro Institute, a
two year college in New York City. Interboro Institute offers degree programs
leading to the Associate of Occupational Studies Degree in business
administration (accounting and business management), ophthalmic dispensing,
paralegal studies, administrative secretarial arts (executive, legal,
correspondence or medical secretary) and security services and management.
Interboro Institute continues to operate as a campus college and will also
provide content for remote delivery by us after requisite regulatory approvals
are obtained. Most of Interboro Institute's student body consists of
non-traditional students who pay their tuition using federal (Pell) and New York
State (TAP) tuition grants.
As a content aggregator and distributor, we presently can offer more than
2,500 courses, 250 degree programs and 1,000 professional development and
continuing education courses from content providers that include St. John's
University, Adelphi University, Clemson University, Manhattan College, The
College of Insurance, Computer Generated Solutions, Inc. Mercy College,
Concordia College, Touro University International, Kaplan Educational Centers
and Telecommunications Research Associates. Since beginning to offer courses in
February 1998, through December 31, 2000, we have delivered 632 courses that
have resulted in 14,455 completed student course registrations. In the fall
2000, we delivered synchronously to 19 sites located in 12 cities. By January
15, 2001, we expect to complete delivery via the Internet to 40 locations, of 40
asynchronous courses representing 226 student course registrations.
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We have multi-year contracts with customers that include:
o Major corporations, including Citibank, N.A., American
International Group, Inc., Merrill Lynch & Co., Inc., Travelers
Indemnity Company and Lockheed Martin Corp.
o Community outreach programs in New York City and Rochester with
economically disadvantaged constituents who can qualify for
substantial tuition grants.
o YAI National Institute for People with Disabilities.
o New York City Correction Officer's Benevolent Association.
We have multi-year co-marketing contracts with organizations that have a
strong interest in increasing usage of their services by being able to offer our
training and education content and delivery technologies and services. Our
co-marketing agreements with Verizon and @Home Network give us marketing access
to a large number of major corporations and to more than 70 million U.S.
households. Our co-marketing agreement with We Media, Inc. gives us marketing
access to 54 million Americans with disabilities, their families and friends.
We were organized in March 1997. We completed an underwritten initial
public offering of our common stock in the first quarter of 1999. Our principal
executive offices are located at 35 East Grassy Sprain Road, Suite 200, Yonkers,
New York 10710 and our telephone number is (914) 787-3500. We maintain a world
wide web site at www.evcinc.com. This reference to our world wide web site
address does not constitute incorporation by reference of the information
contained therein.
THE OFFERING
The purpose of this offering is to register the resale of the shares of
common stock owned by the selling stockholders. The selling stockholders are
required to deliver a copy of this prospectus in connection with any sale of
these shares.
<TABLE>
<CAPTION>
<S> <C>
Common stock offered....................................................... 1,962,891 shares
Common stock outstanding................................................... 4,492,961 shares
Common stock outstanding if all shares offered are sold.................... 6,265,852 shares
Net offering proceeds to us................................................ None
</TABLE>
Please note the following:
o The 1,962,891 shares offered consist of 190,000 outstanding shares,
962,963 shares that are purchasable from us upon conversion of our
Series B 7% Convertible Preferred Stock and 809,928 shares that are
purchasable upon exercise of warrants.
o We will receive proceeds of up to $16,050,246 from the exercise of
the warrants prior to the sale of the underlying shares by selling
stockholders.
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<PAGE>
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. If any of the following or other risks actually occur, our
business, financial condition or results of operations could be materially and
adversely affected.
BECAUSE WE HAVE HAD LIMITED REVENUES AND ANTICIPATE CONTINUING SIGNIFICANT
LOSSES WE MAY NOT BE ABLE TO ACHIEVE PROFITABILITY.
Our net revenue for the year ended December 31, 1999 was $752,777 and our
accumulated losses at December 31, 1999 were $9,578,439. Our net revenue for the
nine months ended September 30, 2000 was $6,177,197 and our accumulated deficit
at September 30, 2000 was $17,400,425. We may be unable to generate enough
revenue to offset our operating costs for the foreseeable future. We cannot
assure you that we will ever generate sufficient revenue to achieve or sustain
profitability.
OUR CONTINUED NEGATIVE CASH FLOW COULD MATERIALLY IMPEDE OUR ABILITY TO OPERATE.
Because our expenses have been growing at a much faster rate than our
revenues, we have experienced, and expect to continue to experience, negative
cash flow from operations for the foreseeable future. Our negative cash flow
from operations was $2,304,980 in 1998, $6,084,932 in 1999 and $7,939,585 for
the first nine months of 2000. At September 30, 2000, we had $9,578,618 in cash
and cash equivalents. The rate at which we are using cash to operate and grow
our business may limit our ability to continue to implement our business
strategy.
OUR SUCCESS MAY DEPEND ON OUR ABILITY TO OBTAIN SUBSTANTIAL ADDITIONAL
FINANCING.
From our inception in March 1997 through September 30, 2000, we have
received net proceeds from offerings of our debt and equity securities of
approximately $35,750,000. At September 30, 2000, we had working capital of
$10,586,411. Based on current plans and assumptions relating to our operations,
we believe that cash flow from our operations and the cash remaining from our
financing will be sufficient to satisfy our cash requirements until at least the
third quarter of 2001. After that, we expect to require additional funding in
order to grow. If, however, we are underestimating our cash needs, we will
require additional debt or equity financing sooner. Our ability to obtain the
necessary financing, and its cost to us, are uncertain. Accordingly, we may be
forced to curtail our planned business expansion and may also be unable to fund
our ongoing operations.
DEPLOYMENT OF OUR BROADBAND NETWORK DESIGN MAY NOT RESULT IN ANY SIGNIFICANT
REVENUES OR PROFITS FOR US.
Technical problems or delays in installing our broadband network design,
as well as unanticipated operational problems, have occurred, and may continue
to occur, including delays by major communications carriers in providing line
services that are exacerbated by a slowing U.S. economy. We have no experience
in installing or operating broadband networks except for our own installation
that has been used to test its effectiveness. We also have no experience in
pricing our broadband network design software for sale to others or in
installing our software in their networks. These and other factors, including a
sustained economic downturn and the substantial costs of marketing our software
and support services, could prevent the successful launch by us of our new
broadband network services. . The implementation of our broadband
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<PAGE>
network design may require us to license, or partner with, others having
substantially greater resources than we do. Even if this alternative strategy is
successful, the revenue and profit potential from the deployment of our
technology could be much less than we were anticipating.
OUR BROADBAND NETWORK DESIGN MAY NOT PROVIDE A SHORT OR LONG-TERM COMPETITIVE
ADVANTAGE.
We currently intend to protect our broadband network design as a trade
secret and have not sought any patent protection for it. This may be inadequate
to protect us. Our competition may, at any time, develop similar or superior
technology that diminishes any advantage which our technology may now have in
the marketplace. To remain competitive we expect we will be required to invest
substantial resources in additional technology development and deployment,
including a synchronous delivery technologies
OUR GREATER EMPHASIS ON PROVIDING TRAINING AND DEVELOPMENT CONTENT MAY NOT
INCREASE OUR CONTENT DELIVERY REVENUES SUBSTANTIALLY.
We recently decided to place greater emphasis on offering training and
professional development content to existing and potential corporate customers.
We believe this new strategy can help us increase student course registrations
more rapidly than the rate of increase of our student course registrations for
higher education courses. Our change in strategy has required us to expend
substantial time and effort to obtain contracts with training and development
content providers. We are in the initial stages of marketing the training and
professional development content we have aggregated and continue to aggregate.
It is, therefore, too early to determine if our new strategy will accelerate our
revenue growth.
THE SUBSTANTIAL TIME, FINANCIAL RESOURCES AND EFFORT REQUIRED FOR US TO OBTAIN
ADDITIONAL CAPITAL AND CONTRACTS HAS IMPEDED OUR GROWTH AND ABILITY TO BECOME
PROFITABLE.
Our focus on raising additional capital and obtaining contracts with
co-marketing partners, content providers, corporations and community based
organizations has limited our ability to implement existing contracts. Once
contact with a potential customer is initiated, it generally takes between four
and six months to conclude a contract. In some instances discussions have been
ongoing for more than 12 months. Our ability to conclude contracts with large
corporate customers and co-marketing partners is also affected by the reputation
and standing of our content providers and their ability to offer the training
and professional development courses and programs needed by corporate customers
and the higher education programs approved by them.
OUR DEPENDENCE ON A LIMITED NUMBER OF CONTENT PROVIDERS FOR COURSES AND PROGRAMS
HAS LIMITED OUR ABILITY TO INCREASE ENROLLMENT TO PROFITABLE LEVELS.
Our success depends upon our ability to establish and maintain
relationships with training and professional development organizations and
colleges and universities that can provide the programs and courses desired by
our customers and their employees. We have multi-year agreements with our
approximately 20 content providers. However, in many instances our content
providers do not offer either the programs or courses desired by our corporate
customers and their employees. This stems from factors that include academic
standing, scheduling of class times and creating sufficient demand for
particular courses or degree programs so that classes have minimum numbers of
students. We, therefore, are continually seeking to diversify our available
training,
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professional development and higher education content by obtaining agreements
with other content providers.
WE BELIEVE WE NEED TO SUBSTANTIALLY INCREASE ENROLLMENT BY EMPLOYEES OF LARGE
CORPORATE CUSTOMERS IN ORDER FOR OUR DISTANCE LEARNING SERVICES TO BECOME
PROFITABLE.
For the nine months ended September 30, 2000, approximately 88% of our
net revenue is attributable to Interboro Institute, approximately 6% resulted
from courses completed by our corporate customers and the balance resulted
primarily from courses completed by participants in community outreach programs.
Our distance learning services cannot become profitable without substantially
greater increases in enrollment in courses and programs offered by us.
WE ARE DEPENDING ON OTHERS TO MATERIALLY INCREASE OUR STUDENT ENROLLMENT.
We need to market our services to large numbers of potential students in
order to materially increase our enrollment. We believe this requires us to have
access to the employees of large corporations and that this access can best be
obtained by having co-marketing alliances with entities that have large customer
bases and experienced sales personnel. We have, accordingly, been focusing less
on obtaining new corporate customers on our own in favor of obtaining
co-marketing partners such as Verizon, @ Home Network and We Media. In the
process, we are becoming dependent upon them to increase our marketing reach and
effectiveness. We do not have control over the marketing, or budgeting
priorities of our co-marketing partners or the effort and resources they devote
to marketing our content and delivery services. For example, the merger of Bell
Atlantic and GTE and the Verizon strike have delayed the progress of our
co-marketing activities with Verizon. Our co-marketing strategy may not
substantially improve our student enrollment.
THE COSTS ASSOCIATED WITH OUR CONTENT DELIVERY ACTIVITIES MAY CONTINUE TO
SUBSTANTIALLY EXCEED OUR REVENUES FROM THESE ACTIVITIES.
While striving to become more efficient, generally, we must devote more
resources to activities that include:
o Making it more convenient to access our aggregated content by
delivering it to desktops, providing more time slots for delivery of courses and
programs and providing more asynchronous content.
o Spending more time and other resources tailoring our training course
and program offerings to the needs of our customers.
o Shortening and simplifying the course registration process, including
by permitting online registration and registering greater numbers of corporate
employees for the same program at the same time.
All of these activities require us to spend more money for the
foreseeable future without any guarantee that our efforts will result in
significant increases in revenue.
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OUR REQUIRING ADVANCE TUITION PAYMENTS AND CORPORATE GUARANTEES OF DEFERRED
TUITION IS HINDERING OUR EFFORT TO INCREASE REGISTRATION FOR OUR HIGHER
EDUCATION COURSES AND PROGRAMS.
We require advance payment of at least 50% of tuition for higher
education courses or, alternatively, that deferred payments be guaranteed by the
corporate employer. This new policy has made recruiting more difficult and time
consuming and has had an adverse impact on student enrollment.
OUR CASH FLOW FROM OUR DELIVERY OF HIGHER EDUCATION CONTENT IS UNPREDICTABLE
BECAUSE WE DO NOT CONTROL TUITION BILLING BY OUR HIGHER EDUCATION PROVIDERS AND
COLLECTION FROM OUR CORPORATE CUSTOMERS.
Our higher education providers control the entire billing and collection
process for deferred tuition payments and we do not receive our share of tuition
until they receive payment. In most cases, we have been receiving our share more
than 90 days after completion of courses and, in some cases, more than nine
months after completion of courses. We believe this is caused mostly by the
inability of our education providers to expedite billing procedures and of our
corporate customers to expedite processing requests for payment from their
employees. The requirement by most of our corporate customers that they receive
evidence of satisfactory completion of higher education courses by their
employees, before requests for payment can be processed, also contributes
significantly to these delays.
IN AN ECONOMIC DOWNTURN, IT COULD BECOME INCREASINGLY DIFFICULT FOR US TO
OPERATE AND GROW.
If we are to survive a sustained economic slow down in the U.S. economy,
we will need to be lean, flexible and quick to implement new strategies. We have
had no experience operating our business during a downturn. Significant cutbacks
in personnel and reallocation of our resources may be required in order for us
to continue operations. We could be wrong in our belief that placing greater
emphasis on our being able to provide more job skills training to the unemployed
and underemployed is a good strategy for us while an economic downturn
continues.
CHANGES IN TRAINING AND EDUCATION POLICIES OF OUR CORPORATE CUSTOMERS COULD
QUICKLY AND MATERIALLY DECREASE OUR EXISTING AND POTENTIAL STUDENT ENROLLMENT
AND, THEREFORE, OUR REVENUE.
Our contracts with our corporate customers do not give us protection
against subsequent changes in their corporate tuition reimbursement policies or
shifts in their attitudes toward corporate training and higher education
opportunities for employees. Contracts we may obtain to deliver training or
professional development content may not protect us against changes in corporate
training budgets or policies. If training budgets or tuition reimbursement are
materially curtailed by our customers, student enrollment would materially and
precipitously decline. The likelihood of this happening is much greater during
an economic downturn in a particular industry sector or the economy in general.
THE LACK OF EXCLUSIVITY AND NON-COMPETE PROVISIONS COULD MATERIALLY IMPAIR THE
VALUE OF OUR CORPORATE CUSTOMER AGREEMENTS.
None of our agreements with customers gives us an exclusive right to
deliver courses to their employees or constituents and we do not foresee being
able to obtain exclusivity. There are
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no restrictions in our agreements with customers, and none are contemplated, to
prohibit them from competing with us or from using products or services that
compete with us. Accordingly, our customers could materially impair our ability
to enroll their employees or constituents in our courses and programs by
actively encouraging them to enroll in competing courses and programs.
DEMAND FOR OUR SERVICES MAY NOT INCREASE RAPIDLY BECAUSE TRAINING AND EDUCATION
VIA LIVE INTERACTIVE VIDEO CONFERENCING DOES NOT BECOME WIDELY ACCEPTED.
Training and education via video conferencing is a relatively new
alternative to traditional classroom instruction. Video conferencing is
relatively expensive compared to asynchronous and other distance learning
delivery systems because it requires special equipment and is most effectively
delivered over broadband high speed transmission lines. Our experience has been
that some instructors are unwilling to teach by means of interactive video
conferencing systems or to adopt our method of teaching. We have also
encountered some reluctance from some students to use our content delivery
method. For these and other reasons, many colleges, universities, professional
training providers and students may be unwilling to accept our delivery concept
as an appropriate way to provide quality training and education. The extent to
which training and education using video conferencing is accepted, and the rate
of acceptance, will materially affect our ability to achieve our objectives.
WE DEPEND ON OUR CHAIRMAN, PRESIDENT AND OTHER KEY MANAGEMENT PERSONNEL TO
OPERATE AND GROW.
We believe the efforts of our executive officers and other management
personnel, especially Dr. Arol I. Buntzman, our chairman and chief executive
officer, and Dr. John J. McGrath, our president, are essential to our operations
and growth. The loss of the services of Drs. Buntzman or McGrath would
materially adversely affect us. We maintain insurance on the life of Dr.
Buntzman in the amount of $2 million. In recognition of our dependence on Dr.
Buntzman and his contributions to EVCI in 2000, our board of directors awarded
him a $500,000 bonus in November 2000. We have employment agreements, expiring
December 31, 2001, with each of Dr. Buntzman, Dr. McGrath and James H. Mollitor,
our chief technology officer.
TO SUCCEED, WE NEED TO ATTRACT AND RETAIN MORE SENIOR MANAGEMENT AND SKILLED
ADMINISTRATORS AND TECHNICIANS IN A HIGHLY COMPETITIVE LABOR MARKET.
We need to hire more senior management in order to operate and grow. Our
business also requires the services of more skilled administrators to manage
student recruitment and enrollment, develop strategies to increase student
retention, train instructors and deal generally with college and corporate
administrators. Unless we decide to rely more on others to further develop, sell
and service our technology, we will also require engineers and technicians to
effectively operate our interactive video conferencing systems and deploy and
operate broadband network design. The competition for qualified management,
skilled administrators and technicians is intense. If we cannot compete for new
employees or retain and motivate our existing employees, we would be adversely
affected. An economic downturn could require us to make significant cuts in
personnel that materially restrain our growth.
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CONTENT PROVIDERS AND OTHERS WITH GREATER RESOURCES AND NAME RECOGNITION COULD
MAKE IT VERY DIFFICULT FOR US TO BE COMPETITIVE IN OUR AGGREGATION AND DELIVERY
OF TRAINING AND EDUCATION CONTENT.
Two and four year colleges and professional training organizations
offering traditional classroom instruction are our most significant competition
in our distance learning business and with respect to the on-campus courses and
programs given by Interboro Institute. In addition, alternative methods of
delivering courses are proliferating rapidly. These alternatives are usually
less expensive and more readily available than video conferencing. Interactive
video conferencing equipment has been used throughout the world for more than
five years, the technology upon which it is based is established and its cost
has been declining. We expect a significant increase in direct competition from
numerous colleges, universities, professional training organizations and large
corporations. In addition, the Higher Education Act encourages more competition
by providing government incentives for distance learning companies.
SINCE THERE ARE NO SIGNIFICANT BARRIERS TO ENTRY INTO OUR MARKET, OUR DISTANCE
LEARNING ACTIVITIES ARE FACING INCREASING COMPETITION FROM OTHER COMPANIES THAT
OFFER A VARIETY OF OTHER PRODUCTS AND DELIVERY SERVICES.
Our current distance learning competition includes numerous companies
that offer a variety of asynchronous and synchronous delivery methods. These
include Internet-based instruction, one-way and limited two-way satellite video
conferencing, video and audio cassettes and CD-roms. New products and services
will probably be developed, including by competitors and potential competitors
that are much larger and have greater development, marketing and financial
resources than we do.
OUR AGREEMENTS AND RELATIONSHIPS WITH OUR CONTENT PROVIDERS MAY HELP THEM TO
COMPETE WITH US.
Our agreements with our content providers do not restrict the education
provider from competing with us except, in most cases, as long as it does not
offer courses via competing interactive video conferencing systems to our
corporate customers and their employees during the term of the agreement and for
one year after its termination. By teaching our content providers how to give
courses and programs via interactive video conferencing, we may be helping them
to compete with us, even during the terms of their agreements with us.
REPLACING OBSOLETE OR DISCONTINUED EQUIPMENT MAY RESULT IN SUBSTANTIAL
UNANTICIPATED COSTS OR DELAYS.
Our success will depend on our ability to adapt timely and effectively to
rapidly occurring technological advances in telecommunications and video
conferencing equipment. To remain competitive, we may need to make substantial
capital investments in new equipment that has made our existing equipment
obsolete. We have designed our network software based, in part, on Intel video
conferencing equipment that Intel has discontinued manufacturing. We could be
wrong in our belief that we will have available to us enough inventory of this
discontinued equipment and enough time to permit us to supersede it with later
generation equipment without adversely affecting our business. Other
technologies developed by competitors may significantly reduce demand for our
services or render our services obsolete.
10
<PAGE>
REGULATORY CHANGES MAY IMPOSE CONSTRAINTS, ADDITIONAL COSTS OR OTHER BURDENS ON
US AND EDUCATION PROVIDERS.
State and local agencies, as well as federal lawmakers, are continually
evaluating laws and regulations that could have a significant impact on our
business. It is uncertain to what extent this impact will be favorable or
adverse, or when regulatory authorities will take action.
Many states are re-evaluating their educational licensing requirements to
reflect new developments in distance learning. Our agreements with our content
providers require them to obtain the accreditation and licenses necessary to
offer their courses, certificates and degrees in our programs. If state or local
authorities impose new or more burdensome licensing requirements on our
education providers, we may be unable to attract or retain the education
providers on which our business depends.
Federal agencies and independent accreditation organizations are also
conducting reviews of new and existing laws and policies. We cannot predict the
scope or outcome of these reviews. Additional regulation resulting from these
reviews, if any, may materially adversely affect us by increasing the costs or
administrative burdens of providing education programs, or by discouraging
education providers from participating in our distance learning business.
INTERBORO INSTITUTE IS SUBJECT TO EXTENSIVE FEDERAL AND NEW YORK STATE
REGULATION BECAUSE IT DEPENDS ON SUBSTANTIAL FEDERAL AND STATE FUNDS IN ORDER TO
OPERATE.
Interboro's participation in the Pell Grant program under Title IV of the
Higher Education Act subject it to frequent reviews and detailed oversight and
require it to comply with complex laws and regulations. Similarly, Interboro is
subject to extensive regulation and oversight by New York State administrators
of the TAP program. Approximately $6.9 million in Pell and TAP financial aid was
provided to Interboro students during 2000. Most of Interboro's students rely on
this aid to pay all of their tuition. Any significant curtailment or delays in
disbursement of Pell or TAP funds would have a material adverse effect on
Interboro and, therefore, on our company.
INTERBORO INSTITUTE'S PRIOR PROBLEMS WITH REGULATORS COULD REOCCUR AND ADVERSELY
AFFECT ITS OPERATIONS.
Prior to our acquiring Interboro, TAP administrators disallowed
approximately $4,800,000 of grants previously disbursed to Interboro for
academic years 1989/1990 through 1991/1992. After protracted litigation,
Interboro was required to repay approximately $5,850,000, including $1,050,000
of interest, to the New York State Higher Education Services Corporation. The
entire amount has been fully paid and all but approximately $700,000 was paid
prior to our purchase of Interboro. However, funds disbursed to Interboro
subsequent to academic year 1992 are still subject to audit by TAP
administrators as are future disbursements. In addition, Pell administrators
could suspend or disallow Pell grants.
11
<PAGE>
OUR CHAIRMAN AND OTHER PRINCIPAL STOCKHOLDERS CAN ACT TOGETHER TO CONTROL OUR
BUSINESS AND POLICIES WITHOUT THE APPROVAL OF OTHER STOCKHOLDERS.
Our officers and directors as a group, together with Tayside Trading,
Ltd., DEWI Investments Limited and B&H Investments Ltd. can vote more than 40%
of our currently outstanding common stock, before giving effect to this
offering. This is probably sufficient to control the outcome of any stockholder
vote except where the vote of our Series B preferred stock is required on
matters that include:
o any increase or decrease in our authorized capital stock;
o the sale of all or substantially all of our assets or the assets of any
of our subsidiaries; or
o any merger involving us or any of our subsidiaries.
In addition, as a result of voting agreements our chairman has with our
president and chief financial officer, our chairman has the power to direct the
vote of more than 20% of our common stock. This may be sufficient for Dr.
Buntzman to alone control the outcome of any stockholder vote not requiring the
vote of holders of our Series B preferred stock.
SALES, OR THE EXPECTATION OF SALES, OF SUBSTANTIAL AMOUNTS OF OUR COMMON STOCK
IN THIS OFFERING OR OTHERWISE COULD DECREASE OUR STOCK PRICE.
There will be no underwriter or coordinating broker to manage the
distribution of the up to 1,962,891 shares offered and sold in this offering.
Accordingly, there will be no control over the timing and amount of shares sold
by selling stockholders. In addition, as of December 1, 2000, approximately
2,700,000 shares that are not included in this offering can be sold from time to
time under Rule 144 or our S-3 registration statement effective June 2, 2000.
Also, up to 354,250 shares are eligible for resale publicly from time to time
following exercise of options granted to our employees.
THE ISSUANCE OF SHARES OF OUR COMMON STOCK BY US TO THE SELLING STOCKHOLDERS
WILL DILUTE OUR OTHER STOCKHOLDERS.
The 809,928 shares covered by this prospectus that underlie warrants are
issuable by us at between $6.00 and $25.00 per share, or an average of $19.82
per share. The shares issuable to holders of Series B preferred stock would
total approximately 962,963 shares, assuming conversion occurs at the initial
conversion price of $13.50.
OUR SHARE PRICE HAS RANGED GREATLY SINCE WE WENT PUBLIC AND MAY BE VERY VOLATILE
IN THE FUTURE.
Since our public offering in February 1999, the market price of our
common stock has ranged between $1.75 and $40.94.
In the future, our share price could be affected by a number of factors,
including:
o actual or anticipated fluctuations in our operating results;
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<PAGE>
o changes in expectations as to our future financial performance or
changes in financial estimates of securities analysts;
o increased competition from major corporations or well-known colleges,
universities and professional training organizations;
o announcements of technological innovations;
o the operating and stock price performance of other comparable
companies;
o general stock market or economic conditions; and
o sales of stock by the selling stockholders pursuant to this
prospectus or otherwise.
In addition, the stock market in general has experienced volatility that
often has been unrelated to the operating performance of particular companies.
These broad market and industry fluctuations may adversely affect the trading
price of the common stock regardless of our actual operating performance.
PROVISIONS OF LAW AND TWO AGREEMENTS MAY PREVENT TAKEOVERS AND DEPRESS THE PRICE
OF OUR SHARES.
Certain provisions of Delaware law, an agreement with our chief executive
officer and an agreement with holders of our Series B preferred stock could make
it more difficult for a third party to acquire, or discourage a third party from
attempting to acquire, control of us. The provisions of these agreements
include:
o Our chairman is entitled to certain payments if his employment is
terminated following a change of control of our company.
o Series B preferred stockholders can require redemption of their
shares if there is a change of control of our company.
o Series B preferred stockholders must consent to transactions that, in
addition to those referred to above, include:
o paying dividends on our common stock;
o incurring indebtedness in excess of $15,000,000; or
o issuing additional shares of our capital stock at a discount to
the then current market price of our common stock, other than
excluded shares (as defined in the certificate of designations).
Such provisions could limit the price that investors might be willing to
pay in the future for the common stock because they believe our management and
holders of our Series B preferred can defeat a takeover of our company that
could be beneficial to non-management stockholders.
OUR CLASSIFIED BOARD LIMITS STOCKHOLDER VOTING FOR ELECTION AND REMOVAL OF
DIRECTORS.
Our board of directors is divided into three classes. The directors in
each class will be elected for three year terms when their class stands for
election at a stockholders meeting. This staggering of director terms protects
directors from being removed from office by anyone engaged in a proxy contest
for control of the board and dilutes the ability of stockholders to
13
<PAGE>
influence corporate governance policies. Furthermore, a director may only be
removed, with or without cause, by the holders of 66 2/3% of the shares entitled
to vote at an election of directors.
INDEMNIFICATION AND LIMITATION OF LIABILITY OF OUR OFFICERS AND DIRECTORS MAY
INSULATE THEM FROM ACCOUNTABILITY TO STOCKHOLDERS AT SUBSTANTIAL COST TO US.
Our certificate of incorporation and by-laws include provisions whereby
our officers and directors are to be indemnified against liabilities to the
fullest extent permissible under Delaware law. Our certificate of incorporation
also limits a director's liability for monetary damages for breach of fiduciary
duty, including gross negligence. In addition, we have agreed to advance the
legal expenses of our officers and directors who are required to defend against
claims. These provisions and agreements may have the effect of reducing the
likelihood of suits against directors and officers even though such suits, if
successful, might benefit us and our stockholders. Furthermore, a stockholder's
investment in our company may be adversely affected if we pay the cost of
settlement and damage awards against directors and officers.
FORWARD LOOKING INFORMATION
This prospectus contains, and incorporates by reference, forward-looking
statements that involve assumptions, risks and uncertainties. The words
"anticipate," "estimate," "expect," "will," "could," "may," "is targeting" and
similar words are intended to identify forward-looking statements. Our actual
results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including the risk factors set forth
above. Should any one of these or other risks and uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated by forward-looking statements. We undertake no
obligation to update forward-looking statements.
USE OF PROCEEDS FROM EXERCISE OF WARRANTS
We will not realize any proceeds from the sale of the shares pursuant to
this prospectus. At most, we will receive a total of $16,050,246 if all warrants
to purchase 809,928 shares offered by this prospectus are exercised by selling
stockholders who do not utilize cashless exercise provisions of their warrants.
These proceeds will be available to us for working capital and general corporate
purposes.
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<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the name, and total number of shares of
common stock owned and offered by, each selling stockholder. We know of no
material relationship between any selling stockholder and us during the past
three years. After the offering is complete, none of the selling stockholders
will own more than one percent of our outstanding common stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES BENEFICIALLY NUMBER OF SHARES
SELLING STOCKHOLDER OWNED AS OF JANUARY 5, 2001 OFFERED
------------------- -------------------------- -------
<S> <C> <C>
Amaranth Trading LLC 493,6691 1,296,297
Seneca Capital International, Ltd. 169,5562 169,556
Seneca Capital L.P. 89,7033 89,703
Merced Partners Limited Partnership 64,8154 64,815
Lakeshore International, Ltd. 64,8155 64,815
Tayside Trading, Ltd. 417,7056 17,705
Timmy D. James 20,000 20,000
Epifano Almodovar 10,000 10,000
PJSC F6 2000 LLC 25,0007 25,000
Century America Promotions, Inc. 15,000 15,000
Monarch Capital Holdings, Ltd. 190,000 190,000
--------- ---------
1,560,263 1,962,891
========= =========
</TABLE>
---------------------
1 Also owned beneficially by Amaranth Advisors, L.L.C., the managing
member of Amaranth Trading, and Nicholas M. Maounis, the managing member of
Amaranth Advisors. Includes 65,000 shares that are not being offered pursuant to
this prospectus, of which 45,000 shares are owned by Amaranth Securities LLC, an
affiliate of Amaranth Trading, and 20,000 shares are owned by Mr. Maounis. The
remaining 428,669 shares underlie a portion of the 100,000 shares of Series B
preferred stock and related warrants issued initially to Paloma Strategic Fund
L.P. and subsequently transferred to its affiliate, Amaranth Trading. Except for
the ownership limitation described below, the 100,000 shares of Series B
preferred stock would be convertible into 740,741 shares of common stock, based
on the initial conversion price of $13.50 per share, and the related warrants
would be exercisable for 555,556 shares of common stock, or the total of
1,296,297 shares being offered by Amaranth Trading pursuant to this prospectus.
However, the number of shares of common stock into which the shares of Series B
preferred stock and warrants are convertible and exercisable is limited to the
number which would result in Amaranth Trading and its affiliates beneficially
owning, together, not more than 9.99% of all the outstanding shares of our
common stock. Amaranth Trading and its affiliates expressly disclaim beneficial
ownership of any shares of our common stock in excess of this limitation.
Amaranth Trading, Amaranth Advisors and Amaranth Securities also disclaim any
beneficial ownership of the 20,000 shares owned by Mr. Maounis.
2 Also owned beneficially by Seneca Capital Advisors LLC, the general
partner of Seneca Capital International.
3 Also owned beneficially by Seneca Capital Investment LLC, the advisor
of Seneca Capital L.P.
4 Also owned beneficially by its general partner, Global Capital
Management, Inc., which has selected EBF & Associates, L.P. as advisor to the
selling stockholder. EBF's general partner is Global Capital Management, Inc.
5 Also owned beneficially by the selling stockholder's investment
manager, Hunter Capital Management, LLC, which has delegated investment
decisions to EBF & Associates, L.P. EBF's general partner is Global Capital
Management, Inc.
6 Includes 400,000 shares that are registered for resale pursuant to our
Form S-3, effective June 2, 2000.
7 Excludes 50,000 shares underlying warrants that are beneficially owned
by its affiliate, PJSC F6 1999 LLC, and are registered for resale pursuant to
our Form S-3, effective June 2, 2000.
8 Includes, and Monarch Capital Holdings, Ltd., may be deemed to
beneficially own, the shares held by the following: Monarch Partners, L.P.
(113,747 shares), Monarch Capital, Ltd. (30,333 shares), Monarch Capital, L.P.
(35,388 shares), Acorn Overseas Securities Co.(5,898 shares)and ZPG Securities,
LLC (4,634 shares). Acquired December 2000 from our president, Dr. John J.
McGrath, who has advised us that he needed the proceeds to pay his personal
indebtedness.
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<PAGE>
PLAN OF DISTRIBUTION
We will receive no part of the proceeds of any sales made by the selling
stockholders. We will pay all expenses of registration incurred in connection
with this offering and the offering and sale of the shares, other than
commissions, discounts and fees of brokers, dealers or agents.
The selling stockholders and any broker-dealers participating in the
distribution of the shares may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933, and any commissions or discounts given to any
such broker-dealer may be regarded as underwriting commissions or discounts
under that Act. Since the selling stockholder may be deemed "underwriters"
within the meaning of the Securities Act, the selling stockholders will be
subject to the prospectus delivery requirements of the Securities Act.
The selling stockholders may from time to time sell all or a portion of
their shares in the over-the-counter market or on any national securities
exchange on which our common stock may be listed or traded, in transactions
directly with market makers, at prices then prevailing or related to the then
current market price or at negotiated prices. The shares will not be sold in an
underwritten public offering. The shares may be sold directly or through brokers
or dealers. The methods by which the shares may be sold include:
o a block trade (which may involve crosses) in which the broker or dealer so
engaged will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o privately negotiated transactions;
o put or call option transactions;
o short sales;
o any combination of such methods of sale described above; or
o any other lawful transaction.
In effecting sales, brokers and dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions or discounts from the selling stockholders (or,
if any such broker-dealer acts as agent for the purchaser of such shares, from
such purchaser) in amounts to be negotiated which are not expected to exceed
those customary in the types of transactions involved. Broker-dealers may agree
with selling stockholders to sell a specified number of such shares at a
stipulated price per share, and, to the extent the broker-dealer is unable to do
so acting as agent for a selling stockholder, to purchase as principal any
unsold shares at the price required to fulfill the broker-dealer is commitment
to the selling stockholder.
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Upon notification of us by a selling stockholder that any material
arrangement has been entered into with a broker or dealer for the sale of our
common stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act of 1933, disclosing
o the name of each such selling stockholder and of each participating
broker or dealer;
o the number of shares of our common stock involved;
o the price at which such shares were sold;
o the commissions paid or discounts or concessions allowed to such
brokers or dealers, where applicable;
o that such brokers or dealers did not conduct any investigation to
verify the information set out or incorporated by reference in this
prospectus; and
o other facts material to the transaction.
Broker-dealers who acquire shares as principals may thereafter resell
such shares from time to time in the over-the-counter market, in negotiated
transactions 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 selling stockholders will be subject to applicable SEC rules and
regulations, including Regulation M, which may limit the timing of purchases and
sales of shares of our common stock by them.
The selling stockholders may enter into hedging transactions with
broker-dealers. Broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with the selling stockholders.
Except as specified in the next sentence, the selling stockholders may also sell
the shares short and redeliver the shares to close out the short positions. Each
holder of our Series B preferred stock has agreed that neither it nor its
affiliates will sell our common stock publicly less than specified prices during
the 10 trading days prior to September 22, 2001 and 2003.
The shares covered by this prospectus that have been paid for and held
for at least one year may also be sold pursuant to Rule 144.
We have agreed to keep this prospectus current until the earlier of:
o the date of which the selling stockholders may sell all of their
shares of common stock offered by this prospectus without restriction
pursuant to Rule 144(k);
o the date on which the selling stockholders have sold all of their
shares of common stock offered by this prospectus; and
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<PAGE>
o the date which is two years after the warrants to purchase shares of
the common stock offered by this prospectus have been exercised in
full.
We have agreed to indemnify the selling stockholders against certain
liabilities, including liabilities under the Securities Act of 1933.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our certificate of incorporation and by-laws provide that we will
indemnify to the fullest extent permitted by law any person made or threatened
to be made a party to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such person or such
person's testator or intestate is or was a director, officer or employee of our
company or serves or served at our request as a director, officer or employee of
another corporation or entity.
We have has entered into agreements to indemnify our directors and
officers, in addition to the indemnification provided for in our certificate of
incorporation and by-laws. These agreements, among other things, indemnify our
directors and officers for certain expenses (including advancing expenses for
attorneys' fees), judgments, fines and settlement amounts incurred by any such
person in any action or proceeding, including any action by us or in our right,
arising out of such person's services as a director or officer of our company,
any subsidiary of ours or any other company or enterprise to which the person
provides services at our request. In addition, we have insurance providing
indemnification for our directors and officers for certain liabilities. We
believe that these indemnification provisions and agreements and related
insurance are necessary to attract and retain qualified directors and officers.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that, in the
opinion of the SEC, such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable.
LEGAL MATTERS
Our counsel, FischbeinoBadillooWagneroHarding, New York, New York, will
issue an opinion on the legality of the shares of common stock offered by this
prospectus.
EXPERTS
Our financial statements for the years ended December 31, 1999 and 1998
that are incorporated by reference in this prospectus have been so incorporated
in reliance upon the report of Goldstein Golub Kessler LLP, independent
auditors, given upon the authority of such firm as experts in accounting and
auditing.
18
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses (other than
underwriting discounts and commissions) payable by the Registrant in connection
with the issuance and distribution of the securities being registered. Except
for the SEC filing fee, all expenses have been estimated and are subject to
future contingencies.
SEC registration fee................................ $ 3,922.48
PCX and BSE listing fees............................ 8,842.00
Legal fees and expenses............................. 60,000.00
Blue sky fees and expenses.......................... 500.00
Miscellaneous....................................... 1,735.52
---------
Total $75,000.00
=========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Amended and Restated Certificate of Incorporation and By-Laws of the
Registrant provide that the Registrant shall indemnify any person to the full
extent permitted by the Delaware General Corporation Law (the "GCL"). Section
145 of the GCL, relating to indemnification, is hereby incorporated herein by
reference.
In accordance with Section 102(a)(7) of the GCL, the Restated Certificate
of Incorporation of the Registrant eliminates the personal liability of
directors to the Registrant or its stockholders for monetary damage for breach
of fiduciary duty as a director with certain limited exceptions set forth in
Section 102(a)(7) of the GCL.
The Registrant also has indemnification agreements with each of its
officers and directors, the form of which is filed as Exhibit 10.21, to which
reference is hereby made.
II-1
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ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO.* DESCRIPTION OF EXHIBIT
<S> <C>
3.1[1] -- Certificate of Incorporation of the Registrant.
3.1(a)[6] -- Certificate of Amendment to Certificate of Incorporation of the Registrant.
3.2[6] -- Amended and Restated By-Laws of the Registrant.
3.3[1] -- Certificate of Merger of Educational Video Conferencing, Inc. (a New York Corporation) into the
Registrant (a Delaware Corporation).
3.4[1] -- Certificate of Correction of the Certificate of Incorporation of the Registrant.
3.5 -- Intentionally omitted.
3.5(a) -- Intentionally omitted.
3.5(b) -- Certificate Eliminating Reference to Series A 7.5% Convertible Preferred Stock from the Certificate of
Incorporation of the Registrant.
3.6[15] -- Certificate of Designations of Series B 7% Convertible Preferred of the Registrant.
3.6(a)[15] -- Certificate of Correction of Certificate of Designations of the Series B 7% Convertible Preferred of the
Registrant.
4.1[1] -- Form of Common Stock Purchase Warrant issued to investors in private placements and for services
provided in connection with such private placements.
4.2[1] -- Tayside Common Stock Purchase Warrant.
4.3[5] -- Adelphi Common Stock Purchase Warrant.
4.4[5] -- Form of Representative's Warrant Agreement (including Form of Representative's Warrant).
4.5[5] -- Form of Common Stock Certificate.
4.6[5] -- Amended and Restated 1998 Incentive Stock Option Plan of the Registrant.
4.7[9] -- Warrant Agreement, dated January 14, 2000, between the Registrant and Bruce R. Kalisch.
II-2
<PAGE>
4.7[14] -- Warrant Agreement, dated April 18, 2000, between the Registrant and Peter J. Solomon Company Limited.
4.8[10] -- Common Stock Purchase Warrant, dated February 3, 2000, issued to The Shaar Fund Ltd.
4.9[10] -- Form of Finders' Warrant (relating to the issuance of warrants to purchase 3,870 shares of the
Registrant's common stock).
4.9[15] -- Form of Common Stock Purchase Warrant
5.1 -- Opinion of Fischbeino Badilloo Wagnero Harding.
+10.1[3] -- Agreement between the Registrant and Adelphi University for the Offering of Interactive Televideo
Courses, dated May 13, 1997.
+10.2[2] -- Agreement between the Registrant and The College of Insurance for the Offering of Interactive Televideo
Courses, dated September 16, 1997.
+10.3[2] -- Agreement between the Registrant and Mercy College for the Offering of Interactive Video Conferenced and
Computer Courses, dated March 10, 1998.
10.4[1] -- Agreement between the Registrant and Reliance National for the Offering of Interactive Televideo
Courses and Distance Learning Programs, dated October 7, 1998.
10.5[1] -- Agreement between the Registrant and Citibank, dated May 20, 1997.
10.6[1] -- Agreement between the Registrant and American International Group, dated May 21, 1997.
10.7[1] -- Agreement between the Registrant and Merrill Lynch for the Offering of Interactive Televideo Courses and
Distance Learning Programs, dated June 3, 1998.
10.7(a)[8] -- Agreement between the Registrant and Merrill Lynch, Pierce, Fenner & Smith Incorporated for the Offering
of Interactive Televideo Courses and Distance Learning Programs, dated June 30, 1999.
10.8[5] -- Agreement for Interactive Televideo Courses and Distance Learning Programs between the Registrant and
Travelers Indemnity Company, dated July 24, 1998.
10.9[1] -- Agreement between the Registrant and Zurich Insurance Company, U.S. Branch for the Offering of
Interactive Televideo Courses and Distance Learning Programs, dated August 12, 1998.
II-3
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10.11[6] -- Lease Agreement between the Registrant and Realty Co. (doing business as Royal Realty), dated December
15, 1998.
10.12[1] -- Employment Agreement between the Registrant and Dr. Arol I. Buntzman, dated October 1, 1998.
10.13[1] -- Employment Agreement between the Registrant and Dr. John J. McGrath, dated October 1, 1998.
10.14[1] -- Employment Agreement between the Registrant and Richard Goldenberg, dated October 1, 1998.
10.15 -- Intentionally omitted.
10.16[1] -- Employment Agreement between the Registrant and James H. Mollitor, dated October 1, 1998.
10.17[1] -- Consulting Agreement between the Registrant and Arthur H. Goldberg, dated March 4, 1998.
10.18[4] -- Consulting Agreement between the Registrant and William R. Coda, dated May 10, 1998.
10.19 -- Intentionally omitted.
10.20[1] -- Chief Executive Officer Change in Control Agreement between the Registrant and Dr. Arol I. Buntzman,
dated October 1, 1998.
10.21[1] -- Form of Indemnification Agreement.
10.22 -- Intentionally omitted.
10.23[4] -- ICS Network Systems Equipment Collocation and Services Agreement, dated November 20, 1997.
10.24[4] -- Agreement between the Registrant and General Reinsurance Corporation for the Offering of Interactive
Televideo Courses and Distance Learning Programs, dated November 6, 1998.
+10.25[4] -- Agreement between the Registrant and Manhattan College for the Offering of Interactive Video
Conferenced Courses, dated November 23, 1998.
10.26[4] -- Co-marketing Agreements between AT&T Corp. and the Registrant.
10.27[4] -- Tariff agreement between the Registrant and AT&T Corp., dated in June 1998.
II-4
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10.28[12] -- Agreement between Arol I. Buntzman and Richard and Bonnie Goldenberg, dated March 1, 2000.
10.29[12] -- Agreement between Arol I. Buntzman and John J. McGrath, dated March 1, 2000.
10.30 -- Intentionally omitted.
10.31[6] -- Agreement between the Rochester City School District and the Registrant, dated December 22, 1998.
10.32[6] -- National Agreement between Lockheed Martin Corporation and the Registrant dated February 17, 1999.
+10.33[6] -- Educational Provider Agreement between Kaplan Educational Centers, Inc. and the Registrant dated March
23, 1999.
10.34[7] -- EVC and CWE Co-Marketing Agreement, dated May 21, 1999, between the Registrant and the Consortium for
Workers Education.
10.35[8] -- Video Conferencing and Telecommunications Services Agreement, dated July 1, 1999, between the Board of
Education of the City School District of the City of New York on behalf of Community School District No.
10 and the Registrant.
10.36[8] -- Agreement between the Registrant and Atlantic District Lutheran Church Missouri Synod for the Offering
of Interactive Televideo Courses, dated July 21, 1999.
10.37[8] -- Letter Agreement between Excite @Home Network and the Registrant, dated July 26, 1999.
+10.38[8] -- Agreement between the Registrant and Concordia College for the Offering of Interactive Video
Conferenced Courses, dated August 19, 1999.
+10.39(a)[8] -- Agreement, dated August 26, 1999, between We Media, Inc. and the Registrant.
+10.39(b)[8] -- Agreement, dated September 22, 1999, between We Media, Inc. and the Registrant.
+10.40[8] -- Co-Marketing Agreement, dated September 1, 1999, between the Registrant and Bell Atlantic Network
Services, Inc.
+10.41[8] -- Agreement, dated September 1, 1999, between the Registrant and Touro College and Touro University
College and Touro University International.
II-5
<PAGE>
+10.42[8] -- Agreement, between the Registrant and St. John's University for the Offering of Interactive Video
Conferenced and Internet-Based Courses, dated September 24, 1999.
10.43[9] -- Stock Purchase Agreement, dated January 14, 2000, among Bruce R. Kalisch, Interboro Holding, Inc. and
Interboro Institute, Inc.
10.44[9] -- Escrow Agreement, dated January 14, 2000, among Bruce R. Kalisch, Interboro Holding, Inc. and
FischbeinoBadillooWagneroHarding.
10.45 -- Intentionally omitted.
10.46 -- Intentionally omitted.
+10.50[12] -- Agreement between the Registrant and Golden Gate University for the Offering of Interactive video
conference courses, dated March 3, 2000.
10.51[12] -- Intentionally omitted.
10.52[12] -- Educational Provider/Co-Marketing Agreement between the Registrant and Computer Generated Solutions,
Inc. dated January 13, 2000.
10.53[12] -- Stock Subscription and Stockholders' Agreement, dated November 29, 1999 among the Registrant, Visiocom
Worldwide, S.A., the individuals set forth in Exhibit A to such agreement, and Visiocom USA
Incorporated, including Exhibits.
+10.53[14] -- Agreement, dated April 27, 2000, between the Registrant and Telecommunications Research Associates for
the Offering of Interactive Video Conferenced Courses
10.54[13] -- Summary of Transaction Terms between edcor and the Registrant, dated January 3, 2000.
10.54[14] -- Agreement, dated May 30, 2000, between Correction Officers' Benevolent Association (Association), City
of New York and the Registrant.
10.55[13] -- Agreement, dated January 25, 2000, between the Registrant and Clemson University for the Offering of
Non-Credit Interactive Video Conferenced Courses.
+10.55[14] -- Agreement, dated June 1, 2000, between the Registrant and American Academy of Professional Coders, Inc.
10.56[13] -- Agreement, dated March 13, 2000, between the Registrant and California State Baptist Association for
the Offering of Interactive Televideo Courses.
10.56[15] -- Form of Series B Stock Purchase Agreement.
II-6
<PAGE>
10.57[15] -- Amended and Restated Registration Rights Agreements, dated September 27, 2000, among Paloma Strategic
Fund L.P. ("Paloma"), Seneca Capital International, Ltd. ("Seneca Ltd."), Seneca Capital, L.P. ("Seneca
L.P."), Merced Partners Limited Partnership ("Merced") , Lakeshore International, Ltd. ("Lakeshore") and
the Registrant.
10.58[15] -- Amended and Restated Co-Sale Agreement, dated September 29, 2000, among Dr. Arol I. Buntzman, the
Registrant, Paloma, Seneca Ltd., Seneca L.P., Merced and Lakeshore.
10.59[16] -- Agreement, dated August 31, 2000, between the Registrant and YAI National Institute for People with
Disabilities.
++10.60[16] -- IP Services and Dedicated Access Agreement, dated
September 15, 2000, between At Home Corporation,
through its @Work division, and the Registrant.
23.1 -- Consent of Goldstein Golub Kessler LLP.
23.2** -- Consent of Fischbeino Badilloo Wagnero Harding (included in Exhibit 5.1).
24.1** -- Power of Attorney (set forth on page II-10 of the initial filing of this registration statement).
27[16] -- Financial Data Schedule.
99.1[9] -- Press Release of the Registrant, dated January 20, 2000.
</TABLE>
------------------------------
* Numbers inside brackets indicate documents from which exhibits have been
incorporated by reference.
** Previously filed.
+ Confidential treatment has been granted with respect to the redacted
portions of this exhibit.
++ Confidential treatment has been requested with respect to the redacted
portions of this exhibit.
[1] Incorporated by reference to the Registrant's Registration Statement on
Form SB-2, dated October 23, 1998, registration no. 333-66085.
[2] Incorporated by reference to Amendment No. 1, dated November 12, 1998, to
the Registrant's Form SB-2, Registration no. 333-66085.
[3] Incorporated by reference to Amendment No. 2, dated November 20, 1998, to
the Registrant's Form SB-2, Registration No. 333-66085.
II-7
<PAGE>
[4] Incorporated by reference to Amendment No. 3, dated December 23, 1998, to
the Registrant's Form SB-2, Registration No. 333-66085.
[5] Incorporated by reference to Amendment No. 4, dated February 10, 1999, to
the Registrant's Form SB-2, Registration No. 333-66085.
[6] Incorporated by reference to Registrant's Form 10-QSB, for the quarter
ended March 31, 1999.
[7] Incorporated by reference to Registrant's Form 10-QSB, for the quarter
ended June 30, 1999.
[8] Incorporated by reference to Registrant's Form 10-QSB for the quarter ended
September 30, 1999.
[9] Incorporated by reference to the Registrant's Form 8-K dated January 14,
2000.
[10] Incorporated by reference to the Registrant's Form 8-K dated February 3,
2000.
[11] Incorporated by reference to the Registrant's Form 8-K/A dated March 3,
2000.
[12] Incorporated by reference to the Registrant's Form 10-KSB for the year
ended December 31, 1999.
[13] Incorporated by reference to the Registrant's Form 10-QSB for the quarter
ended March 31, 2000.
[14] Incorporated by reference to the Registrant's Form 10-QSB for the quarter
ended June 30, 2000.
[15] Incorporated by reference to the Registrant's Form 8-K dated October 6,
2000.
[16] Incorporated by reference to the Registrant's Form 10-QSB for the quarter
ended September 30, 2000.
II-8
<PAGE>
ITEM 17. UNDERTAKINGS
(a) The Registrant will:
(1) File during any period in which selling stockholders offer or
sell securities, a post-effective amendment to this registration
statement to include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to be
the initial BONA FIDE offering.
(3) File a post effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the small business issuer pursuant to
the foregoing provisions, or otherwise, the small business issuer has
been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the small business issuer of
expenses incurred or paid by a director, officer or controlling person of
the small business issuer 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 small
business issuer 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 Act and will be governed by the final
adjudication of such issue.
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Yonkers, State of New York, on the 18th day of
January, 2001. EDUCATIONAL VIDEO CONFERENCING, INC.
By: /s/ Dr. Arol I. Buntzman
--------------------------------------
Dr. Arol I. Buntzman, Chairman of the
Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed by the following persons
in the capacities and on the date indicated:
SIGNATURE TITLE DATE
/s/ Dr. Arol I Buntzman Chairman of the Board and January 18, 2001
------------------------- Chief Executive Officer
Dr. Arol I. Buntzman
/s/ Dr. John J. McGrath President and Director January 18, 2001
-------------------------
Dr. John J. McGrath
/s/ Richard Goldenberg Chief Financial Officer, January 18, 2001
------------------------- Secretary and Director
Richard Goldenberg (Principal Financial
and Accounting Officer)
* Director January 18, 2001
-------------------------
Royce N. Flippin, Jr.
* Director January 18, 2001
-------------------------
Philip M. Getter
* Director January 18, 2001
-------------------------
Arthur H. Goldberg
*/s/ Dr. Arol I. Buntzman
-------------------------
Attorney-in-Fact
II-10
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C>
EXHIBIT NO.* DESCRIPTION OF EXHIBIT
3.1[1] -- Certificate of Incorporation of the Registrant.
3.1(a)[6] -- Certificate of Amendment to Certificate of Incorporation of the Registrant.
3.2[6] -- Amended and Restated By-Laws of the Registrant.
3.3[1] -- Certificate of Merger of Educational Video Conferencing, Inc. (a New York Corporation) into the
Registrant (a Delaware Corporation).
3.4[1] -- Certificate of Correction of the Certificate of Incorporation of the Registrant.
3.5 -- Intentionally omitted.
3.5(a) -- Intentionally omitted.
3.5(b) -- Certificate Eliminating Reference to Series A 7.5% Convertible Preferred Stock from the Certificate of
Incorporation of the Registrant.
3.6[15] -- Certificate of Designations of Series B 7% Convertible Preferred of the Registrant.
3.6(a)[15] -- Certificate of Correction of Certificate of Designations of the Series B 7% Convertible Preferred of the
Registrant.
4.1[1] -- Form of Common Stock Purchase Warrant issued to investors in private placements and for services
provided in connection with such private placements.
4.2[1] -- Tayside Common Stock Purchase Warrant.
4.3[5] -- Adelphi Common Stock Purchase Warrant.
4.4[5] -- Form of Representative's Warrant Agreement (including Form of Representative's Warrant).
4.5[5] -- Form of Common Stock Certificate.
4.6[5] -- Amended and Restated 1998 Incentive Stock Option Plan of the Registrant.
4.7[9] -- Warrant Agreement, dated January 14, 2000, between the Registrant and Bruce R. Kalisch.
E-1
<PAGE>
4.7[14] -- Warrant Agreement, dated April 18, 2000, between the Registrant and Peter J. Solomon Company Limited.
4.8[10] -- Common Stock Purchase Warrant, dated February 3, 2000, issued to The Shaar Fund Ltd.
4.9[10] -- Form of Finders' Warrant (relating to the issuance of warrants to purchase 3,870 shares of the
Registrant's common stock).
4.9[15] -- Form of Common Stock Purchase Warrant
5.1 -- Opinion of Fischbeino Badilloo Wagnero Harding.
+10.1[3] -- Agreement between the Registrant and Adelphi University for the Offering of Interactive Televideo
Courses, dated May 13, 1997.
+10.2[2] -- Agreement between the Registrant and The College of Insurance for the Offering of Interactive Televideo
Courses, dated September 16, 1997.
+10.3[2] -- Agreement between the Registrant and Mercy College for the Offering of Interactive Video Conferenced
and Computer Courses, dated March 10, 1998.
10.4[1] -- Agreement between the Registrant and Reliance National for the Offering of Interactive Televideo
Courses and Distance Learning Programs, dated October 7, 1998.
10.5[1] -- Agreement between the Registrant and Citibank, dated May 20, 1997.
10.6[1] -- Agreement between the Registrant and American International Group, dated May 21, 1997.
10.7[1] -- Agreement between the Registrant and Merrill Lynch for the Offering of Interactive Televideo Courses
and Distance Learning Programs, dated June 3, 1998.
10.7(a)[8] -- Agreement between the Registrant and Merrill Lynch, Pierce, Fenner & Smith Incorporated for the
Offering of Interactive Televideo Courses and Distance Learning Programs, dated June 30, 1999.
10.8[5] -- Agreement for Interactive Televideo Courses and Distance Learning Programs between the Registrant and
Travelers Indemnity Company, dated July 24, 1998.
10.9[1] -- Agreement between the Registrant and Zurich Insurance Company, U.S. Branch for the Offering of
Interactive Televideo Courses and Distance Learning Programs, dated August 12, 1998.
E-2
<PAGE>
10.11[6] -- Lease Agreement between the Registrant and Realty Co. (doing business as Royal Realty), dated December
15, 1998.
10.12[1] -- Employment Agreement between the Registrant and Dr. Arol I. Buntzman, dated October 1, 1998.
10.13[1] -- Employment Agreement between the Registrant and Dr. John J. McGrath, dated October 1, 1998.
10.14[1] -- Employment Agreement between the Registrant and Richard Goldenberg, dated October 1, 1998.
10.15 -- Intentionally omitted.
10.16[1] -- Employment Agreement between the Registrant and James H. Mollitor, dated October 1, 1998.
10.17[1] -- Consulting Agreement between the Registrant and Arthur H. Goldberg, dated March 4, 1998.
10.18[4] -- Consulting Agreement between the Registrant and William R. Coda, dated May 10, 1998.
10.19 -- Intentionally omitted.
10.20[1] -- Chief Executive Officer Change in Control Agreement between the Registrant and Dr. Arol I. Buntzman,
dated October 1, 1998.
10.21[1] -- Form of Indemnification Agreement.
10.22 -- Intentionally omitted.
10.23[4] -- ICS Network Systems Equipment Collocation and Services Agreement, dated November 20, 1997.
10.24[4] -- Agreement between the Registrant and General Reinsurance Corporation for the Offering of Interactive
Televideo Courses and Distance Learning Programs, dated November 6, 1998.
+10.25[4] -- Agreement between the Registrant and Manhattan College for the Offering of Interactive Video
Conferenced Courses, dated November 23, 1998.
10.26[4] -- Co-marketing Agreements between AT&T Corp. and the Registrant.
10.27[4] -- Tariff agreement between the Registrant and AT&T Corp., dated in June 1998.
E-3
<PAGE>
10.28[12] -- Agreement between Arol I. Buntzman and Richard and Bonnie Goldenberg, dated March 1, 2000.
10.29[12] -- Agreement between Arol I. Buntzman and John J. McGrath, dated March 1, 2000.
10.30 -- Intentionally omitted.
10.31[6] -- Agreement between the Rochester City School District and the Registrant, dated December 22, 1998.
10.32[6] -- National Agreement between Lockheed Martin Corporation and the Registrant dated February 17, 1999.
+10.33[6] -- Educational Provider Agreement between Kaplan Educational Centers, Inc. and the Registrant dated March
23, 1999.
10.34[7] -- EVC and CWE Co-Marketing Agreement, dated May 21, 1999, between the Registrant and the Consortium for
Workers Education.
10.35[8] -- Video Conferencing and Telecommunications Services Agreement, dated July 1, 1999, between the Board of
Education of the City School District of the City of New York on behalf of Community School District No.
10 and the Registrant.
10.36[8] -- Agreement between the Registrant and Atlantic District Lutheran Church Missouri Synod for the Offering
of Interactive Televideo Courses, dated July 21, 1999.
10.37[8] -- Letter Agreement between Excite @Home Network and the Registrant, dated July 26, 1999.
+10.38[8] -- Agreement between the Registrant and Concordia College for the Offering of Interactive Video
Conferenced Courses, dated August 19, 1999.
+10.39(a)[8] -- Agreement, dated August 26, 1999, between We Media, Inc. and the Registrant.
+10.39(b)[8] -- Agreement, dated September 22, 1999, between We Media, Inc. and the Registrant.
+10.40[8] -- Co-Marketing Agreement, dated September 1, 1999, between the Registrant and Bell Atlantic Network
Services, Inc.
+10.41[8] -- Agreement, dated September 1, 1999, between the Registrant and Touro College and Touro University
College and Touro University International.
E-4
<PAGE>
+10.42[8] -- Agreement, between the Registrant and St. John's University for the Offering of Interactive Video
Conferenced and Internet-Based Courses, dated September 24, 1999.
10.43[9] -- Stock Purchase Agreement, dated January 14, 2000, among Bruce R. Kalisch, Interboro Holding, Inc. and
Interboro Institute, Inc.
10.44[9] -- Escrow Agreement, dated January 14, 2000, among Bruce R. Kalisch, Interboro Holding, Inc. and
FischbeinoBadillooWagneroHarding.
10.45 -- Intentionally omitted.
10.46 -- Intentionally omitted.
+10.50[12] -- Agreement between the Registrant and Golden Gate University for the Offering of Interactive video
conference courses, dated March 3, 2000.
10.51[12] -- Intentionally omitted.
10.52[12] -- Educational Provider/Co-Marketing Agreement between the Registrant and Computer Generated Solutions,
Inc. dated January 13, 2000.
10.53[12] -- Stock Subscription and Stockholders' Agreement, dated November 29, 1999 among the Registrant, Visiocom
Worldwide, S.A., the individuals set forth in Exhibit A to such agreement, and Visiocom USA
Incorporated, including Exhibits.
+10.53[14] -- Agreement, dated April 27, 2000, between the Registrant and Telecommunications Research Associates for
the Offering of Interactive Video Conferenced Courses
10.54[13] -- Summary of Transaction Terms between edcor and the Registrant, dated January 3, 2000.
10.54[14] -- Agreement, dated May 30, 2000, between Correction Officers' Benevolent Association (Association), City
of New York and the Registrant.
10.55[13] -- Agreement, dated January 25, 2000, between the Registrant and Clemson University for the Offering of
Non-Credit Interactive Video Conferenced Courses. +10.55[14] -- Agreement, dated June 1, 2000, between
the Registrant and American Academy of Professional Coders, Inc.
10.56[13] -- Agreement, dated March 13, 2000, between the Registrant and California State Baptist Association for
the Offering of Interactive Televideo Courses.
E-5
<PAGE>
10.56[15] -- Form of Series B Stock Purchase Agreement.
10.57[15] -- Amended and Restated Registration Rights Agreements, dated September 27, 2000, among Paloma Strategic
Fund L.P. ("Paloma"), Seneca Capital International, Ltd. ("Seneca Ltd."), Seneca Capital, L.P. ("Seneca
L.P."), Merced Partners Limited Partnership ("Merced") , Lakeshore International, Ltd. ("Lakeshore") and
the Registrant.
10.58[15] -- Amended and Restated Co-Sale Agreement, dated September 29, 2000, among Dr. Arol I. Buntzman, the
Registrant, Paloma, Seneca Ltd., Seneca L.P., Merced and Lakeshore.
10.59[16] -- Agreement, dated August 31, 2000, between the Registrant and YAI National Institute for People with
Disabilities.
++10.60[16] -- IP Services and Dedicated Access Agreement, dated September 15, 2000, between At Home Corporation,
through its @Work division, and the Registrant.
23.1 -- Consent of Goldstein Golub Kessler LLP.
23.2** -- Consent of Fischbeino Badilloo Wagnero Harding (included in Exhibit 5.1).
24.1** -- Power of Attorney (set forth on page II-10 of the initial filing of this registration statement).
27[16] -- Financial Data Schedule.
99.1[9] -- Press Release of the Registrant, dated January 20, 2000.
</TABLE>
------------------------------
* Numbers inside brackets indicate documents from which exhibits have been
incorporated by reference.
** Previously filed.
+ Confidential treatment has been granted with respect to the redacted
portions of this exhibit.
++ Confidential treatment has been requested with respect to the redacted
portions of this exhibit.
[1] Incorporated by reference to the Registrant's Registration Statement on
Form SB-2, dated October 23, 1998, registration no. 333-66085.
[2] Incorporated by reference to Amendment No. 1, dated November 12, 1998, to
the Registrant's Form SB-2, Registration no. 333-66085.
E-6
<PAGE>
[3] Incorporated by reference to Amendment No. 2, dated November 20, 1998, to
the Registrant's Form SB-2, Registration No. 333-66085.
[4] Incorporated by reference to Amendment No. 3, dated December 23, 1998, to
the Registrant's Form SB-2, Registration No. 333-66085.
[5] Incorporated by reference to Amendment No. 4, dated February 10, 1999, to
the Registrant's Form SB-2, Registration No. 333-66085.
[6] Incorporated by reference to Registrant's Form 10-QSB, for the quarter
ended March 31, 1999.
[7] Incorporated by reference to Registrant's Form 10-QSB, for the quarter
ended June 30, 1999.
[8] Incorporated by reference to Registrant's Form 10-QSB for the quarter ended
September 30, 1999.
[9] Incorporated by reference to the Registrant's Form 8-K dated January 14,
2000.
[10] Incorporated by reference to the Registrant's Form 8-K dated February 3,
2000.
[11] Incorporated by reference to the Registrant's Form 8-K/A dated March 3,
2000.
[12] Incorporated by reference to the Registrant's Form 10-KSB for the year
ended December 31, 1999.
[13] Incorporated by reference to the Registrant's Form 10-QSB for the quarter
ended March 31, 2000.
[14] Incorporated by reference to the Registrant's Form 10-QSB for the quarter
ended June 30, 2000.
[15] Incorporated by reference to the Registrant's Form 8-K dated October 6,
2000.
[16] Incorporated by reference to the Registrant's Form 10-QSB for the quarter
ended September 30, 2000.
E-7
