<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
---------
drkoop.com, Inc.
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
--------------------------------------------------------------------------------
(Title of Class of Securities)
262098106
--------------------------------------------------------------------------------
(CUSIP Number)
Joseph P. Wynne
Commonwealth Associates, L.P.
830 Third Avenue
New York, New York 10022
(212) 829-5839
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
August 22, 2000
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
(Page 1of 18)
---------------------
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
<PAGE> 2
SCHEDULE 13D
--------------------- ------------------------------------
CUSIP NO. 262098106 PAGE 2 OF 18 PAGES
---------- -----------
--------------------- ------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
COMMONWEALTH ASSOCIATES, L.P. (13-3467952)
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX OF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(c) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 3,416,957
-------------------------------------------------------
REPORTING
9 SOLE DISPOSITIVE POWER
PERSON WITH
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,416,957
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,416,957
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.9%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT*
<PAGE> 3
SCHEDULE 13D
--------------------- ------------------------------------
CUSIP NO. 262098106 PAGE 3 OF 18 PAGES
---------- -----------
--------------------- ------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
COMMONWEALTH ASSOCIATES MANAGEMENT CORP. (13-3468747)
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
--------------------------------------------------------------------------------
5 CHECK BOX OF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(c) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 3,416,957
-------------------------------------------------------
REPORTING
9 SOLE DISPOSITIVE POWER
PERSON WITH
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,416,957
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,416,957
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.9%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT*
<PAGE> 4
SCHEDULE 13D
--------------------- ------------------------------------
CUSIP NO. 262098106 PAGE 4 OF 18 PAGES
---------- -----------
--------------------- ------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
COMVEST VENTURE PARTNERS LP (13-4124841)
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX OF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(c) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 19,071,429
-------------------------------------------------------
REPORTING
9 SOLE DISPOSITIVE POWER
PERSON WITH
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
19,071,429
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,071,429
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.4%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT*
<PAGE> 5
SCHEDULE 13D
--------------------- ------------------------------------
CUSIP NO. 262098106 PAGE 5 OF 18 PAGES
---------- -----------
--------------------- ------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
COMVEST MANAGEMENT LLC (06-1588640)
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
--------------------------------------------------------------------------------
5 CHECK BOX OF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(c) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 19,071,429
-------------------------------------------------------
REPORTING
9 SOLE DISPOSITIVE POWER
PERSON WITH
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
19,071,429
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,071,429
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.4%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT*
<PAGE> 6
SCHEDULE 13D
--------------------- ------------------------------------
CUSIP NO. 262098106 PAGE 6 OF 18 PAGES
---------- -----------
--------------------- ------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MICHAEL S. FALK
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
--------------------------------------------------------------------------------
5 CHECK BOX OF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(c) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 2,132,650
-------------------------------------------------------
BENEFICIALLY
8 SHARED VOTING POWER
OWNED BY EACH
22,488,386
REPORTING -------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
2,132,650
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
22,488,386
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,621,036
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
41.4%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT*
<PAGE> 7
SCHEDULE 13D
--------------------- ------------------------------------
CUSIP NO. 262098106 PAGE 7 OF 18 PAGES
---------- -----------
--------------------- ------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ROBERT PRIDDY
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
--------------------------------------------------------------------------------
5 CHECK BOX OF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(c) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 5,714,286
-------------------------------------------------------
REPORTING
9 SOLE DISPOSITIVE POWER
PERSON WITH
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,714,286
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,714,286
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT*
<PAGE> 8
SCHEDULE 13D
--------------------- ------------------------------------
CUSIP NO. 262098106 PAGE 8 OF 18 PAGES
---------- -----------
--------------------- ------------------------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RMC CAPITAL, LLC (58-2391586)
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX OF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(c) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
GEORGIA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 5,714,286
-------------------------------------------------------
REPORTING
9 SOLE DISPOSITIVE POWER
PERSON WITH
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,714,286
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,714,286
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT*
<PAGE> 9
Page 9 of 18 pages
Item 1. Security and Issuer.
This statement relates to the common stock, par value $.001 per share
("Common Stock") of drkoop.com, Inc. (the "Issuer"). The address of the Issuer's
principal executive office is 7000 North Mopac, Suite 400, Austin, Texas 78731.
Item 2. Identity and Background.
This statement is filed jointly by Commonwealth Associates, L.P.
("Commonwealth"), a limited partnership organized under the laws of New York,
whose principal business is venture capital and merchant banking, Commonwealth
Associates Management Corp. ("CAMC"), a corporation organized under the laws of
New York and the corporate general partner of Commonwealth, ComVest Venture
Partners LP, ("ComVest") a limited partnership organized under the laws of
Delaware whose principal business is investing in securities, ComVest Management
LLC ("ComVest Management"), a limited liability company organized under the laws
of Delaware whose principal business is investing in securities, RMC Capital,
LLC ("RMC"), a limited liability company organized under the laws of Georgia
whose principal business is investing in securities, Michael S. Falk ("Falk")
and Robert Priddy ("Priddy"). Commonwealth, CAMC, ComVest, ComVest Management,
RMC, Falk and Priddy are the "Reporting Persons."
Priddy, Keith Rosenbloom and Basil Ascuitto are directors, and Falk is
Chairman, of CAMC. Mr. Falk is also the principal stockholder of CAMC. The sole
officer of CAMC is Joseph Wynne, Chief Financial Officer. ComVest Management is
the general partner of ComVest. The managers of ComVest Management are Priddy,
Falk and Keith Rosenbloom, and ComVest Management is wholly-owned by CAMC. The
managers of RMC (the "RMC Managers") are Priddy, Kikie Priddy, Shanon Acks and
Michael Acks. Mr. Priddy is also the Chairman and principal member of RMC.
Michael Acks is the President of RMC.
All of the individuals identified in this Item 2 are United States
citizens. The business address for all of the Reporting Persons and other
individuals identified in this Item 2, other than the RMC Managers and RMC, is
830 Third Avenue, New York, New York 10022. The business address for the RMC
Managers and RMC is RMC Capital, LLC, 1640 Powers Ferry, Suite 125, Marietta,
Georgia 30067.
During the last five years, none of the individuals or entities
identified in this Item 2 has been convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors) or been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding, was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws of finding any violation with
respect to such laws.
<PAGE> 10
Page 10 of 18 pages
Item 3. Source and Amount of Funds or Other Consideration.
On June 23, 2000, ComVest and Commonwealth entered into a Bridge Loan
Agreement with the Issuer pursuant to which ComVest and Commonwealth loaned the
Issuer $1,200,000 and $300,000 respectively. In connection with this financing,
the Issuer granted ComVest and Commonwealth five-year warrants to purchase
6,857,143 and 1,714,286 shares of Common Stock, respectively, at a price of
$0.35 per share (the "Bridge Warrants"). Commonwealth subsequently transferred
its interest in the loans it made under the Bridge Loan Agreement, together with
its Bridge Warrants, to ComVest as a capital contribution.
On July 19, 2000, ComVest entered into a $3,000,000 Line of Credit
Agreement, and on August 14, 2000 loaned the Issuer $400,000 under such
agreement. In connection with entering into the Line of Credit Agreement, the
Issuer granted ComVest five-year warrants to purchase 5,357,143 shares of Common
Stock at a price of $ 0.35 per share (the "Line of Credit Warrants"), and upon
the $400,000 advance, the Issuer granted ComVest Line of Credit Warrants to
purchase an additional 857,143 shares of Common Stock.
On August 22, 2000 (with a subsequent smaller closing on August 29,
2000), the Issuer sold units at a price of $100,000 per unit, each unit
consisting of 10,000 shares of Series D 8% Convertible Preferred Stock
("Preferred Stock") in a private placement (the "Placement"). Each share of
Preferred Stock is convertible into approximately 28.57 shares of Common Stock
at the holder's option (subject to certain limitations) and on the occurrence of
specified events. Commonwealth acted as placement agent to the Issuer in
connection with the Placement pursuant to a Placement Agency Agreement dated
June 23, 2000, as amended (the "Agency Agreement").
As compensation for services rendered to the Issuer in connection with
the Placement, Commonwealth was issued five-year warrants to purchase Common
Stock at a price of $0.35 per share (the "Agents Warrants"). Certain of the
Agents Warrants were distributed by Commonwealth to certain of its employees,
including Messrs. Falk, Rosenbloom, Asciutto and Wynne. Commonwealth disclaims
beneficial ownership of the Agents Warrants it distributed to other persons,
including the Reporting Persons.
ComVest, Falk, Wynne and RMC were investors in the Placement. ComVest
invested $1,500,000 in the Placement for which it received 150,000 shares of
Preferred Stock, Falk invested $250,000 in the Placement for which he received
25,000 shares of Preferred Stock, Wynne invested $5,000 in the Placement for
which he received 500 shares of Preferred Stock, and RMC invested $2,000,000 in
the Placement for which it received 200,000 shares of Preferred Stock. The
sources of the funds for the purchases by ComVest and RMC were the respective
working capital of such entities, and the source of the funds for the purchases
by Falk and Wynne were their respective personal funds.
Upon the closing of the Placement, the Issuer entered into employment
agreements with certain officers of Prime Ventures, LLC ("Prime Ventures"). In
connection therewith, for no cash consideration, the Issuer issued to Prime
Ventures and its members five-year warrants to
<PAGE> 11
Page 11 of 18 pages
purchase shares of Common Stock at a price of $0.35 per share (the "Prime
Ventures Warrants"). Mr. Falk, as a member of Prime Ventures, is the beneficial
owner of certain of the Prime Ventures Warrants.
Item 4. Purpose of Transaction.
The Agents Warrants were acquired as compensation for services rendered
to the Issuer, solely for investment purposes and not for the purpose of
acquiring control of the Issuer. The Preferred Stock, Bridge Warrants, Line of
Credit Warrants, and Prime Ventures Warrants were acquired to make a profitable
investment and not for the purpose of acquiring control of the Issuer.
Pursuant to the Agency Agreement, the Issuer agreed that upon the
initial closing of the Placement, its board of directors would consist of seven
directors, which would include two directors designated by Commonwealth and two
directors designated by the investors in the Placement as a class, which class
includes Falk and RMC. Under the Agency Agreement, the Issuer is required to
maintain such composition in its board of directors as long as at least 400,000
shares of Preferred Stock are outstanding. To enforce these provisions of the
Agency Agreement, the directors and officers of the Issuer have granted
Commonwealth a proxy to vote their shares of Common Stock for the election of
the directors designated by Commonwealth and the investors in the Placement.
Other than as set forth above, the Reporting Persons have no present
plans or proposals which relate to, or could result in, any of the matters
referred to in paragraphs (a) through (j) of Item 4 of Schedule 13D. The
Reporting Persons may, at any time and from time to time, renew or reconsider
their position and formulate plans or proposals with respect thereto, but have
no present intention of doing so.
Item 5. Interest in Securities of the Issuer.
(a) Commonwealth may be deemed to be the beneficial owner of an
aggregate of 3,416,957 shares of Common Stock, representing approximately 8.9%
of the issued and outstanding shares of Common Stock of the Issuer, which are
issuable upon the exercise of the Agents Warrants owned by Commonwealth.
CAMC, as the general partner of Commonwealth, may be deemed to
beneficially own the 3,416,957 shares of Common Stock, representing
approximately 8.9% of the issued and outstanding shares of Common Stock of the
Issuer, beneficially owned by Commonwealth.
ComVest may be deemed to be the beneficial owner of an aggregate of
19,071,429 shares of Common Stock, representing approximately 35.4% of the
issued and outstanding shares of Common Stock of the Issuer, which represents
the right to acquire (i) 8,571,429 shares of Common Stock upon exercise of the
Bridge Warrants, (ii) 6,214,286 shares of Common Stock
<PAGE> 12
Page 12 of 18 pages
upon exercise of the Line of Credit Warrants, and (iii) 4,285,714 shares of
Common Stock upon conversion of Preferred Stock.
ComVest Management, as the general partner of ComVest, may be deemed to
beneficially own the 19,071,429 shares of Common Stock, representing
approximately 35.4% of the issued and outstanding shares of Common Stock of the
Issuer, beneficially owned by ComVest.
Mr. Falk may be deemed to be the beneficial owner of an aggregate of
24,621,036 shares of Common Stock, representing approximately 41.4% of the
issued and outstanding shares of Common Stock of the Issuer. In addition to the
3,416,957 and 19,071,429 shares beneficially owned respectively by Commonwealth
and ComVest, which Mr. Falk may be deemed to beneficially own, Falk may be
deemed to beneficially own an additional 2,132,650 shares of Common Stock,
representing the right to acquire (i) 714,286 shares of Common Stock issuable
upon the conversion of Preferred Stock, (ii) 1,346,935 shares of Common Stock
issuable upon exercise of Agents Warrants (distributed to him by Commonwealth),
and (iii) 71,427 shares of Common Stock issuable upon exercise of the Prime
Ventures Warrants. In his capacity as Chairman and controlling equity owner of
CAMC, which is the general partner of, and owner of all the interests in,
ComVest Management (the general partner of ComVest), Mr. Falk may be deemed to
share indirect voting and dispositive power with respect to such entities'
shares and may therefore be deemed to be the beneficial owner of such
securities.
RMC may be deemed to be the beneficial owner of 5,714,286 shares of
Common Stock, representing approximately 14.1% of the issued and outstanding
shares of Common Stock of the Issuer, which are issuable upon the conversion of
Preferred Stock.
Priddy as a manager and principal member of RMC, may be deemed to be
the beneficial owner of 5,714,286 shares of Common Stock, representing
approximately 14.1% of the issued and outstanding shares of Common Stock of the
Issuer, beneficially owned by RMC.
Keith Rosenbloom may be deemed to be the beneficial owner of 159,792
shares of Common Stock, representing less than one percent of the issued and
outstanding shares of Common Stock of the Issuer, which represents the right to
acquire such shares of Common Stock upon exercise of the Agents Warrants,
(distributed to him by Commonwealth).
Basil Ascuitto may be deemed to be the beneficial owner of 23,711
shares of Common Stock, representing less than one percent of the issued and
outstanding shares of Common Stock of the Issuer, which represents the right to
acquire such shares of Common Stock upon exercise of the Agents Warrants,
(distributed to him by Commonwealth).
Joseph Wynne may be deemed to beneficially own 94,794 shares of Common
Stock, representing less than one percent of the issued and outstanding shares
of Common Stock of the Issuer, which represents the right to acquire (i) 14,286
shares of Common Stock issuable upon
<PAGE> 13
Page 13 of 18 pages
the conversion of Preferred Stock, and (ii) 80,508 shares of Common Stock
issuable upon exercise of Agents Warrants (distributed to him by Commonwealth).
(b) Number of shares as to which each such person has:
(1) Sole power to vote or to direct the vote, and sole power to dispose or
direct the disposition of:
<TABLE>
<CAPTION>
Name Number of Shares
---- ----------------
<S> <C>
Michael S. Falk 2,132,650 shares
Keith Rosenbloom 159, 792 shares
Basil Ascuitto 23,711 shares
Joseph Wynne 94,794 shares
</TABLE>
(2) Shared power to vote or to direct the vote, and shared power to dispose or
direct the disposition of:
(i) Commonwealth, CAMC and Mr. Falk may be deemed to share such voting
and disposition powers with respect to the 3,416,957 shares of Common Stock
beneficially held by Commonwealth.
(ii) ComVest, ComVest Management and Mr. Falk may be deemed to share
such voting and disposition powers with respect to the 19,071,429 shares of
Common Stock beneficially held by ComVest.
(iii) RMC and Priddy may be deemed to share such voting and disposition
powers with respect to the 5,714,286 shares of Common Stock beneficially held by
RMC.
(c) As more fully described above, the Bridge Warrants were acquired
on June 23, 2000, the Line of Credit Warrants were acquired on July 19, 2000 and
August 14, 2000, the Preferred Stock and the Prime Venture Warrants were
acquired on August 22, 2000, and the Agents Warrants were acquired on August 22,
2000 and August 29, 2000.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
As described more fully in Item 4 above, Commonwealth and the Issuer
entered into the Agency Agreement, which requires certain persons to be elected
to the Issuer's board of directors.
Item 7. Material to be Filed as Exhibits.
(i) Joint Filing Agreement, as required by Rule 13d-1 under the
Securities Exchange Act of 1934.
<PAGE> 14
Page 14 of 18 pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
<TABLE>
<S> <C>
Dated: August 31, 2000 Commonwealth Associates, L.P.
By: Commonwealth Associates
Management Corp., its general partner
By: /s/ Joseph P. Wynne
----------------------------------
Name: Joseph P. Wynne
Title: Chief Financial Officer
Dated: August 31, 2000 Commonwealth Associates Management Corp.
By: /s/ Joseph P. Wynne
---------------------------------------
Name: Joseph P. Wynne
Title: Chief Financial Officer
Dated: August 31, 2000 ComVest Venture Partners LP
By: ComVest Management, LLC, its general
partner
By: /s/ Michael S. Falk
----------------------------------
Name: Michael S. Falk
Title: Manager
Dated: August 31, 2000 ComVest Management, LLC,
By: /s/ Michael S. Falk
---------------------------------------
Name: Michael S. Falk
Title: Manager
Dated: August 31, 2000 RMC Capital, LLC
By: /s/ Robert Priddy
---------------------------------------
Name: Robert Priddy
Title: Manager
</TABLE>
<PAGE> 15
Page 15 of 18 pages
Dated: August 31, 2000 /s/ Michael S. Falk
------------------------------------
Michael S. Falk
Dated: August 31, 2000 /s/ Robert Priddy
-----------------------------------
Robert Priddy
<PAGE> 16
Page 16 of 18 pages
EXHIBIT INDEX
1. Joint Filing Agreement
