October 22, 1999
via EDGAR
Securities and Exchange Commission
ATTN: Filing Desk
450 Fifth Street, NW
Judiciary Plaza
Washington, DC 20549
Re: Enercorp, Inc. ("Enercorp")
Ladies and Gentlemen:
Transmitted with this letter for filing is Enercorp's Registration
Statement on Form S-3 covering the resale by certain selling securityholders
named in the Registration Statement of certain shares of the Enercorp's common
stock. Manually executed signature pages and consents have been executed prior
to the time of this filing and will be retained by Enercorp in accordance with
Rule 302 of Regulation S-T.
If you have any questions, please call either me or Jerry Raskin of this
firm at (303) 571-1400.
Sincerely,
/s/ John W. Kellogg
-------------------------
John W. Kellogg
For the Firm
Attachments
cc: Robert R. Hebard, Chairman of the Board, Chief Executive Officer, President,
Treasurer and Director, Enercorp, Inc.
Hirsch Silberstein & Subelsky, P.C.
<PAGE>
As filed with the Securities and Exchange Commission on October 22, 1999
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ENERCORP, INC.
(Exact name of Registrant specified in charter)
COLORADO 84-0768802
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
7001 Orchard Lake Road
Suite 424
West Bloomfield, Michigan 48322
(248) 851-5651
(Address, including zip code, and telephone number, including area code,
Registrant's principal executive offices)
ROBERT R. HEBARD
CHIEF FINANCIAL OFFICER
7001 Orchard Lake Road
Suite 424
West Bloomfield, Michigan 48322
(248) 851-5651
(Name, address and telephone number, including area code, of agent for service)
Copies of communication, including all communication sent to
the agent for service, should be sent to:
GERALD RASKIN, ESQ.
JOHN W. KELLOGG, ESQ.
TIMOTHY R. SPIEL, ESQ.
FRIEDLOB SANDERSON RASKIN PAULSON & TOURTILLOTT, LLC
1400 GLENARM PLACE, SUITE 300
DENVER, COLORADO 80202
(303) 571-1400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement as determined by
market conditions.
<PAGE>
If the only securities being registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box:
---
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 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 this following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering.
---
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
---
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
---
- -------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
Title of each class of Amount to Proposed Proposed Amount of
securities to be registered be Maximum Maximum Registration
Registered Offering Aggregate Fee
Price Per Offering
Share Price
(1)
- -------------------------------------------------------------------------------
Common Stock, no par value 105,000 $2.81 $295,050 $82
- -------------------------------------------------------------------------------
TOTAL 105,000 $2.81 $295,050 $82
- -------------------------------------------------------------------------------
(1) In accordance with Rule 457(c) the average of the high and low price of
Enercorp common stock as quoted on the Over-The-Counter Bulletin Board on
Friday, October 15, 1999.
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 Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
--------------------
ii
<PAGE>
Preliminary Prospectus, Subject to Completion dated October 22, 1999
Prospectus
ENERCORP, INC.
7001 Orchard Lake Road
Suite 424
West Bloomfield, Michigan 48322
(248) 851-5651
105,000 Shares of Common Stock to be Offered and Sold by Selling Securityholders
This is a public offering of shares of common stock of Enercorp, Inc.
("Enercorp") by the selling securityholders identified on pages 10-11 of this
prospectus. The selling securityholders will offer the shares from time to time
at prevailing market prices. Enercorp will not receive any of the proceeds from
the offering.
Enercorp's common stock trades on the Over-The-Counter Bulletin Board
under the symbol ENCP.
- --------------------------------------------------------------------------------
An investment in the stock of Enercorp involves a high degree of risk. The
shares should only be purchased by persons who can afford a complete loss. See
"Risk Factors" beginning on page 3.
- --------------------------------------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined that this
prospectus is truthful or complete. A representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed.
These securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
The date of this Prospectus is October __, 1999
<PAGE>
Table of Contents
Risk factors -3-
Where you can find more information -6-
Forward-looking statements -7-
Information about Enercorp, Inc. -8-
Recent developments -11-
Use of proceeds -11-
Description of the offering -11-
Selling securityholders -11-
Plan of distribution -12-
Description of the securities -14-
Indemnification provided in connection with the offering by
the selling securityholders -15-
Legal matters -15-
Experts -15-
2
<PAGE>
Risk Factors
Prospective investors should consider carefully the following risk
factors, as well as the other information contained in this prospectus, before
making an investment in the common stock of Enercorp.
Enercorp Will Need Additional Capital; However, It is Uncertain Whether
Continued Financing Will Be Available
Enercorp's ability to carry out its business strategy and expand its
investments greatly depends on its ability to obtain additional loans. Enercorp
has no commitments for borrowing other than its current loan obligations.
Enercorp may not be successful in consummating any future financing transactions
on terms satisfactory to Enercorp, if at all. Factors which could affect
Enercorp's access to capital, or the costs of such capital, include changes in
interest rates, general economic conditions and the perception in the capital
markets of Enercorp's business, results of operations, leverage, financial
condition and business prospects. Each of these factors is to a large extent
subject to economic, financial and competitive factors beyond Enercorp's
control. In addition to restrictions imposed by law, covenants in Enercorp's
current and future credit facilities may significantly restrict Enercorp's
ability to incur additional indebtedness and to issue preferred stock.
Enercorp's ability to repay its outstanding indebtedness may depend on its
ability to refinance that indebtedness, which may be difficult if Enercorp does
not have access to the capital markets for the sale of additional debt or equity
securities through public offerings or private placements on terms reasonably
satisfactory to Enercorp.
Enercorp Has Substantial Bank Indebtedness which is Subject
to Fluctuating Interest Rates
Enercorp has significant bank indebtedness that bears interest at rates
that fluctuate with the prime rate. Enercorp would be adversely affected by any
significant increase in the prime rate and, additionally, Enercorp could
experience:
o lower cash flows
o less liquidity
o trouble meeting debt requirements
Enercorp's Borrowing Against its Bank Credit is Approaching its Maximum Limit
and the Bank Holds all of Enercorp's Securities of Its Investee
Companies as Collateral
Enercorp's borrowing against its bank credit lines are approaching the
maximum advances under its loan agreement. Enercorp may not be able to extend
this credit line to a higher amount and may have to sell some of the portfolio
securities of its investee companies to pay down the debt. In addition, the bank
holds all of Enercorp's investee company securities as collateral and it is up
to the bank whether the collateral is released to allow for sale or distribution
of the securities of the investee companies.
3
<PAGE>
Investment in Business Development is a High-Risk Activity and Can Result
in Substantial Losses
Business development is by nature a high-risk activity that can result in
substantial losses. The companies in which Enercorp invests and will invest,
especially in the early stages of an investment, often lack effective
management, face operating problems and incur substantial losses. Although
Enercorp diversifies its investments, its operations have been and continue to
be subject to all the risks inherent in investing and establishing new business
enterprises, including the limited operating histories of its investee
companies, and the risk it will be unable to obtain any return on its
investments. Potential investees include established businesses which may be
experiencing severe financial or operating difficulties or may, in the opinion
of management, be managed ineffectively and have the potential for substantial
growth or for reorganization into separate independent companies.
Enercorp's Investments are Heavily Concentrated in One Company
Enercorp's investee portfolio is heavily concentrated in one security -
Williams Controls, Inc. Over 90% of Enercorp's assets consist of the securities
of Williams Controls, Inc. If the market value of Williams Controls, Inc. goes
down, Enercorp's business and operations could be severely affected and,
additionally, Enercorp could experience:
o lower cash flows
o less liquidity
o trouble meeting debt requirements
A Downturn in the General Economy Could Affect Enercorp's Business
Fluctuating interest rates, uncertainty and volatility in the capital
markets, periods of economic slowdown, recession or inflation, are among the
factors that may adversely affect Enercorp's business. Events or periods such as
these may be accompanied by increased delinquencies, defaults or losses on
obligations owed to Enercorp.
Enercorp is Subject to Government Regulation and Potentially New Regulation
Many aspects of Enercorp's business, are subject to regulation,
examination and licensing under various federal, state and local statutes and
regulations that impose requirements and restrictions affecting Enercorp's
business. Enercorp believes it is currently in compliance in all material
respects with applicable laws and regulations; however, Enercorp might not be
able to maintain compliance. Failure to comply with, or changes in, these laws
or regulations, or the enforcement of more stringent regulatory requirements
than those now in effect, could have an adverse effect on Enercorp by limiting
the types of investments Enercorp can make or the amount Enercorp can invest.
4
<PAGE>
Regulations Could Affect Where Enercorp's Shares are Traded and Could Affect
the Trading and Price of Enercorp Stock.
Enercorp's shares were listed on the Nasdaq SmallCap market from 1996 to
1998. Prior to that time, Enercorp's shares were listed on the Over-the-Counter
Bulletin Board. Since 1998 Enercorp's shares have been listed on the
Over-the-Counter Bulletin Board. Changing regulations and requirements may
affect where Enercorp's shares are listed.
Enercorp's Investee Companies Face Significant Competition
All of the businesses in which Enercorp has investments are highly
competitive. The principal competitors to Enercorp's investee companies are
substantially larger and better capitalized than the investee companies. Because
of superior resources, these competitors may be better able than the investee
companies to obtain new customers, to pursue new business opportunities or to
survive periods of industry consolidation. Access to and the cost of capital are
critical to the ability of the investee companies to compete. Many of their
competitors have superior access to capital sources and can arrange or obtain
lower cost of capital, resulting in a competitive disadvantage to the investee
companies with respect to such competitors. If the investee companies can not
remain competitive, it would have a material adverse affect on Enercorp and,
additionally, Enercorp could experience:
o defaults from investee companies on loans from or loans guaranteed by
Enercorp
o substantial losses associated with a decline in the stock value of
investee companies
Enercorp and/or the Investee Companies Could be Held Liable for Violations of
Securities, Consumer Protection, Warranty, Environmental, Health and Safety and
Other Similar Laws and Regulations
Industry participants in Enercorp's lines business from time to time are
named as defendants in litigation involving alleged violations of federal and
state securities laws or other similar laws and regulations, in particular, the
Investment Company Act of 1940. A judgment against Enercorp in connection with
any such litigation could have a material adverse effect on Enercorp's financial
condition, results of operations and business prospects. Furthermore, Enercorp's
investee companies could be subject to consumer protection, warranty,
environmental, health and safety and other similar federal and state laws and
regulations. A judgment against any of Enercorp's investee companies could
negatively affect the investees' stock value.
5
<PAGE>
Year 2000 Problems Could Potentially Affect Enercorp
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process date field containing a
two-digit year is commonly referred to as the "Year 2000 Issue." As the year
2000 approaches, such systems may recognize a date using "00" as the year 1900
rather than the year 2000 and be unable to accurately process certain date-based
information. This error could potentially result in a system failure or
miscalculation causing disruptions of operations, including, among other things,
a temporary inability to process transactions or engage in similar normal
business activities.
Enercorp has reviewed its computer system in order to evaluate necessary
modifications for the Year 2000 readiness. In addition, Enercorp is in the
process of communicating with others with whom it does significant business to
determine their Year 2000 readiness status and the extent to which Enercorp
could be affected by any third party Year 2000 readiness issues. Although
Enercorp has not received responses from all third parties with which it does
business, Enercorp does not anticipate significant problems from any third party
Year 2000 readiness issues. However, the systems of Enercorp or those of other
companies on which Enercorp's systems rely may not be timely converted. A
failure to convert by another company, or a conversion that is incompatible with
Enercorp's systems, could disable Enercorp's computer systems or even
potentially loose information stored on those computers.
The anticipated costs and timeliness of completion of Year 2000
modifications are based on management's best estimates, which were derived using
numerous assumptions relating to future events, including, without limitation,
the continued availability of certain resources and third party modification
plans. However, these estimates and assumptions may turn out to be inaccurate.
Enercorp's Success is Heavily Dependent on Its Current Management
Enercorp is dependent upon the services of Robert R. Hebard. Mr. Hebard is
Chairman of the Board, Chief Executive Officer, President, Treasurer and a
Director of Enercorp. If Mr. Hebard's services were to become unavailable to
Enercorp for any reason, Enercorp's success could be materially and adversely
affected. Enercorp does not carry key-man life insurance.
Where You Can Find More Information
Federal securities law requires Enercorp to file information with the
Securities and Exchange Commission concerning its business and operations.
Accordingly, Enercorp files annual, quarterly, and special reports, proxy
statements and other information with the Commission. You can inspect and copy
of this information at the Public Reference Facility maintained by the
Commission at Judiciary Plaza, 450 5th Street, N.W., Room 1024, Washington, D.C.
20549. You can also do so at the following regional offices of the Commission:
o New York Regional Office, 7 World Trade Center, Suite 1300, New York,
New York 10048
o Chicago Regional Office, Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661.
6
<PAGE>
You can receive additional information about the operation of the
Commission's Public Reference Facilities by calling the Commission at 1-(800)
SEC-0330. The Commission also maintains a website at that contains reports,
proxy and information statements and other information regarding companies that,
like Enercorp, file information electronically with the Commission.
The Commission allows Enercorp to "incorporate by reference" the
information we file with them, which means we can disclose important information
to you by referring you to the other information we have filed with the
Commission. The information that we incorporate by reference is considered to be
part of this prospectus, and related information that we file with the
Commission will automatically update and supersede information we have included
in this prospectus. We also incorporate by reference any future filings we make
with the Commission under Sections 13(a), 13(c) or 15(d) of the Securities
Exchange Act of 1934, as amended, until the selling securityholders sell all of
their shares or until the registration rights of the selling securityholders
expire. This prospectus is part of a Registration Statement that we filed with
the Commission (Registration No. 333-______).
Filing Period
Annual Report on Form 10-K Year ended June 30, 1999 and June
30, 1998
Quarterly Reports on Form 10-Q Quarters Ended: March 31, 1999,
December 31, 1998, and September 30,
1998
Current reports on Form 8-K Dated: September 25, 1998, August 14,
1998
Proxy Statement on Schedule 14A Proxy Statement dated December 23,
1998, as supplemented February 15,
1999
You can request a free copy of the above filings or any filings
subsequently incorporated by reference into this prospectus by writing or
calling us at the following address:
Enercorp, Inc.
7001 Orchard Lake Road
Suite 424
West Bloomfield, Michigan 48322
Telephone: (248) 851-5651
Facsimile: (248) 851-9080
7
<PAGE>
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement or amendment to this prospectus.
We have not authorized anyone else to provide you with different information or
additional information. Selling securityholders will not make an offer of
Enercorp's Common Stock in any state where the offer is not permitted. You
should not assume that the information in this prospectus, or any supplement or
amendment to this prospectus, is accurate at any date other than the date
indicated on the cover page of such documents.
Forward-Looking Statements
Certain statements contained in this prospectus and in the documents
incorporated by reference herein, constitute "forward-looking statements" within
the meaning of Section 27A of the Securities Act, as amended, and Section 21E of
the Exchange Act, as amended. These forward-looking statements can be identified
by the use of predictive, future-tense or forward-looking terminology, such as
"believes," "anticipates," "expects," "estimates," "may," "will" or similar
terms. Forward-looking statements also include projections of financial
performance, statements regarding management's plans and objectives and
statements concerning any assumption relating to the foregoing. Certain
important factors regarding Enercorp's business, operations and competitive
environment that may cause actual results to vary materially from these
forward-looking statements are discussed above under the caption "Risk Factors."
Information About Enercorp, Inc.
Enercorp and its Operations
Enercorp, is a closed-end, non-diversified investment company under the
Investment Company Act of 1940. Enercorp was incorporated under the laws of the
State of Colorado on June 30, 1978. Enercorp elected to become a Business
Development Company under the Investment Company Act on June 30, 1982. A
Business Development Company is a type of investment company that generally must
maintain 70% of its assets in new, financially troubled or otherwise qualified
companies and offer significant managerial assistance to those companies.
Enercorp has four investee companies to which it currently provides management
assistance, Williams Controls, Inc., Ajay Sports, Inc., CompuSonics Video
Corporation, and ProGolf International, Inc. Business development companies are
not subject to the full extent of regulation under the Investment Company Act.
(See "Regulation - Business Development Companies" below). Enercorp is primarily
engaged in the business of investing in and providing managerial assistance to
developing companies that, in its opinion, would have a significant potential
for growth. Enercorp's investment objective is to achieve long-term capital
appreciation, rather than current income, on its investments. Currently,
Enercorp's investment activity is limited by its working capital. There is no
assurance that Enercorp's objective will be achieved. Enercorp's investment
decisions are made by its management in accordance with policies approved by its
Board of Directors. Enercorp is not a registered investment advisor nor does it
operate pursuant to a written investment advisory agreement that must be
approved periodically by stockholders. Enercorp relies solely upon its
management, particularly its officers, on a day-to-day basis, and also on the
experience of its directors in making investment decisions.
8
<PAGE>
In accordance with the objective of long term capital appreciation,
Enercorp consults with its investees with respect to obtaining capital and
offers managerial assistance to selected businesses that, in the opinion of
Enercorp's management, have a significant potential for growth.
In addition to acquiring investment positions in new and developing
companies, Enercorp also plans occasionally to invest in more mature privately
and publicly-held companies, some of which may be experiencing financial
difficulties, which Enercorp believes could be further developed or revitalized.
Enercorp plans to take advantage of other opportunities to maintain and
create independent companies with a significant potential for growth. Enercorp's
priorities for the future will be to (1) maximize the value and liquidity of its
present investees, (2) increase its cash flow and intermediate term value
through the acquisition of securities or assets of more established companies,
and (3) make new higher risk investments in new and developing companies.
Enercorp has no fixed policy as to the business or industry group in which
it may invest or as to the amount or type of securities or assets that it may
acquire. To date, Enercorp has made investments primarily in new and developing
companies whose securities had no established public market. Most of these
companies were unable to obtain significant capital on reasonable terms from
conventional sources. Enercorp endeavors to assist its investee companies and
management teams in devising realistic business strategies and obtaining
necessary financing.
Enercorp does not currently intend to pay cash dividends. Enercorp has not
made any distributions of its investment portfolio to date, although the company
has recently considered the possibility of doing so. In the future, if
Enercorp's management believes it is in the best interests of Enercorp and its
shareholders, Enercorp may make distributions of its investment portfolio if
Enercorp's bank agrees to release some of the securities in Enercorp's
investment portfolio held by the bank as collateral.
Enercorp believes that the key to achieving its objectives is finding and
supporting business executives who have the ability, entrepreneurial motivation
and experience required to build independent companies with a significant
potential for growth. In Enercorp's view, it is more difficult to locate and
attract capable executives than to identify, select and finance promising
investment opportunities. Enercorp believes that its ability to attract capable
executives is enhanced by its policy for maintaining the independence of its
investee companies, supporting them when appropriate in contracts, arranging or
supplying necessary financing and assisting the investee's management in
obtaining a meaningful equity participation in the investee.
9
<PAGE>
Investment Policies
Enercorp has elected to be regulated as a Business Development Company and
is subject to the provisions of Sections 55 through 65 of the Investment Company
Act and also is subject to those provisions of the Investment Company Act made
applicable to business development companies by Section 59 of the Investment
Company Act. In accordance with those provisions of the Investment Company Act,
Enercorp's investment policies are defined and subject to certain limitations.
See "Regulation-Business Development Companies." Furthermore, under Section 58
of the Investment Company Act, Enercorp may not withdraw its election to be so
regulated without the consent of a majority of its outstanding voting
securities.
Enercorp has no fixed policy as to business or industry group in which it
may invest or as to the amount or type of securities or assets that it may
acquire. Enercorp has in the past and may continue to invest in assets that are
not qualifying assets under Section 55 of the Investment Company Act; however,
no such additional assets have been identified as of June 30, 1999, and Enercorp
does not intend to fall below the 70% requirement as set forth in Section 55.
Enercorp endeavors to achieve its objectives in accordance with the
following general policies:
(1) Enercorp acquires securities through negotiated private placement
transactions directly from the investee company, its affiliates, or third
parties, or through open market transactions.
(2) Enercorp attempts to acquire, if possible and consistent with
Enercorp's capital resources, a large or controlling interest in its investees
through purchases of equity securities, including warrants, options, and other
rights to acquire such securities combined, if appropriate, with debt
securities, including demand notes, term loans and guarantees or debt
instruments or preferred stock convertible into, or with warrants to purchase,
equity securities.
(3) Enercorp may make additional or "follow-on" investments in its
investees when appropriate to sustain the investees or to enhance or protect the
Enercorp's existing investment.
(4) Enercorp determines the length of time it will retain its investment
by evaluating the facts and circumstances of each investee and its relationship
with such investee. Enercorp generally retains its investments for a relatively
long period, sometimes many years, with the result that its rate of portfolio
turnover is low. Investments are retained until, in the opinion of Enercorp, the
investee company has a demonstrated record of successful operations and there is
a meaningful public market for its securities which reflects the investment
value Enercorp sought (or such a market can be readily established) or until
Enercorp decides that its investment is not likely to result in future long-term
capital appreciation.
10
<PAGE>
Enercorp will attempt to reduce the level of its investment risks through one or
more of the following:
o carefully investigating potential investees
o financing only what it believes to be practical business opportunities,
as contrasted with research projects
o selecting effective, entrepreneurial management for its investees
o providing active managerial assistance and support to investees
o obtaining, alone or with others, actual or working control of its
investees
o supporting the investees in obtaining necessary financing and arranging
major contracts, joint ventures or mergers and acquisitions where
feasible
o maintaining sufficient capital resources to make follow-on investments
where necessary, appropriate and feasible
Address and Telephone Number
Enercorp's executive offices are located at 7001 Orchard Lake Road, Suite
424, West Bloomfield, Michigan 48322, and its telephone number is (248)
851-5651.
Recent Developments
Recently Ronald N. Silberstein, of the accounting firm Hirsch Silberstein &
Subelsky, P.C., was appointed the Chief Financial Officer of Ajay Sports, Inc.
and ProGolf International, Inc. Hirsch Silberstein & Subelsky, P.C. was
Enercorp's accounting firm. Hirsch Silberstein & Subelsky, P.C. determined that
Mr. Silberstein's position as Chief Financial Officer of two of Enercorp's
investee companies presented a potential conflict of interest if the firm
remained as Enercorp's accounting firm. Therefore, on August 26, 1999, Hirsch
Silberstein & Subelsky, P.C. resigned as Enercorp's accounting firm. The
resignation of Enercorp's accountants was due solely to this potential conflict
of interest and not as a result of any disagreements regarding Enercorp's audit
or Enercorp's operations. Enercorp has hired the accounting firm of J L Stephan
Co, P.C. to replace Hirsch Silberstein & Subelsky, P.C.
11
<PAGE>
Use of Proceeds
Enercorp will not receive any proceeds from the sale of securities by the
selling shareholders.
Description of the Offering
The selling securityholders are offering an aggregate of 105,000 shares of
Enercorp's common stock.
Selling Securityholders
The following tables list the total number of shares of common stock of
Enercorp owned by each of the selling securityholders and registered hereunder.
All of the selling securityholders are the beneficial owner of one percent or
more of the outstanding shares of common stock (including the shares of common
stock offered by this prospectus).
Because the selling securityholders may offer all or part of the shares of
common stock currently owned, which they own pursuant to the offering
contemplated by this prospectus, and because their offering is not being
underwritten on a firm commitment basis, no estimate can be given as to the
amount of stock that will be held upon termination of this offering. The shares
of common stock currently owned and offered by this prospectus may be offered
from time to time by the selling securityholders named below.
---------------------------------------------------------------------
Table I - Shares Offered by the Selling Securityholders
---------------------------------------------------------------------
Number of Number of Number of
Selling Shares Shares Shares to Percentage
Securityholder Beneficially Offered by be Held of Shares
Owned this After to be Held
Prospectus Offering After
Offering
---------------------------------------------------------------------
Vasant Chheda 0 50,000 0 0%
---------------------------------------------------------------------
Dana Burmann 0 15,000 0 0%
---------------------------------------------------------------------
Charles Maginnis 35,000 25,000 35,000 5%
---------------------------------------------------------------------
Inga Ellzey 0 15,000 0 0%
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TOTALS 35,000 105,000 35,000 5%
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12
<PAGE>
Plan of Distribution
Enercorp is registering the shares of common stock on behalf of the
selling securityholders. As used in this prospectus, "selling securityholders"
includes donees and pledgees selling shares received from a named selling
securityholder after the date of this prospectus. All costs, expenses and fees
in connection with the registration of the shares of common stock offered will
be borne by Enercorp. Brokerage commission and similar selling expenses, if any,
attributable to the sale of shares of common stock will be borne by the selling
securityholders. Sales of shares of common stock may be effected by selling
securityholders from time to time in one or more types of transactions (which
may include block transactions), in the over-the-counter market, in negotiated
transactions, through put or call options transactions relating to the shares of
common stock, through short sales of shares of common stock, or a combination of
these methods of sale, at market prices prevailing at the time of sale, or at
negotiated prices. Any of these transactions may or may not involve brokers or
dealers. The selling securityholders have advised Enercorp that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities, nor is
there any underwriter or coordinating broker acting in connection with the
proposed sale of shares of common stock by the selling securityholders.
The selling securityholders may effect transactions by selling shares of
common stock directly to purchasers or to or through broker-dealers, which may
act as agents or principals. Broker-dealers may receive compensation in the form
of discounts, concessions, or commissions from the selling securityholders
and/or the purchasers of shares of common stock for whom those broker-dealers
may act as agents or to whom they sell as principal, or both (which compensation
as to a particular broker-dealer might be in excess of customary commissions).
The selling securityholders and any broker-dealers that act in connection
with the sale of shares of common stock might be deemed to be underwriters
within the meaning of Section 2(a)(11) of the Securities Act, and any
commissions received by those broker-dealers and any profit on the resale of the
shares of common stock sold by them while acting as principals might be deemed
to be underwriting discounts or commissions under the Securities Act. Enercorp
has agreed to indemnify each selling securityholder against certain liabilities,
including liabilities arising under the Securities Act. The selling
securityholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares of common stock
against certain liabilities, including liabilities arising under the Securities
Act.
Because selling securityholders may be deemed to be underwriters within
the meaning of Section 2(a)(11) of the Securities Act, the selling
securityholders will be subject to the prospectus delivery requirements of the
Securities Act. Enercorp has informed the selling securityholders that the
anti-manipulative provisions of Regulation M issued under the Exchange Act may
apply to their sales in the market.
13
<PAGE>
Selling securityholders also may resell all or a portion of the shares of
common stock in open market transactions in reliance upon Rule 144 under the
Securities Act, provided they meet the criteria and conform to the requirements
of that Rule.
Upon Enercorp being notified by a selling securityholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares of
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, under Rule 424(b) to the Securities Act,
disclosing (a) the name of each such selling securityholder and of the
participating broker-dealer(s), (b) the number of shares of common stock
involved, (c) the price at which those shares of common stock were sold, (d) the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (e) that such broker-dealer(s) did not conduct any
investigation to verify the information contained or incorporated by reference
in this prospectus and (f) other facts material to the transaction. In addition,
upon Enercorp being notified by the selling securityholder that a donee or
pledgee intends to sell more than 500 shares of common stock, a supplement to
this prospectus will be filed.
Enercorp is unable to predict the effect which sales of the shares of
common stock offered by this prospectus might have upon Enercorp's ability to
raise further capital.
In order to comply with certain states' securities laws, if applicable,
the shares of common stock will be sold in those jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states, the
shares of common stock may not be sold unless they have been registered or
qualified for sale in those states or an exemption from registration or
qualification is available and complied with.
Description of Securities
Common Stock
Enercorp has 10,000,000 shares of common stock authorized with no par
value. Each share of common stock is entitled to share pro rata in dividends and
distributions, if any, with respect to the common stock when, as and if declared
by the Board of Directors from funds legally available therefor. No holder of
any shares of common stock has any preemptive rights to subscribe for any
securities of Enercorp. Upon liquidation, dissolution or winding up of Enercorp,
each share of the common stock is entitled to share ratably in the amount
available for distribution to holders of common stock. All shares of common
stock outstanding are fully paid and non-assessable and the common stock offered
hereby will, upon payment therefor as contemplated hereby, be fully paid and
non-assessable.
Each stockholder is entitled to one vote for each share of common stock
held. There is no right to cumulative votes for the election of directors. This
means that the holders of more than 50% of the shares voting for the election of
directors can elect 100% of the directors if they choose to do so; and, in such
event, the holders of the remaining less than 50% of the shares voting for the
election of directors will not be able to elect any person or persons to the
Enercorp's Board of Directors.
14
<PAGE>
Enercorp has not paid any cash dividends on its common stock and intends
to retain earnings, if any, to finance the development and expansion of its
business. Future dividend policy is subject to the discretion of Enercorp's
Board of Directors and will depend upon a number of factors, including future
earnings, capital requirements and financial condition of the Enercorp.
Preferred Stock
Enercorp's authorized preferred stock consists of 1,000,000 shares with no
par value of which no shares of preferred stock have been issued. Enercorp's
Board of Directors may, without further action by the Enercorp's shareholders,
from time to time, direct the issuance of preferred stock in series and may, at
the time of issuance, determine the rights, preferences and limitations of each
series. Satisfaction of any dividend preferences of outstanding preferred stock
would reduce the amount of funds available for the payment of dividends on the
common stock. Also, the holders of preferred stock would normally be entitled to
receive a preference payment in the event of any liquidation or other
dissolution or winding-up of the Enercorp before any payment is made to the
holders of the common stock. In addition, if the Board of Directors authorizes
the issuance of preferred stock with conversion rights, the number of shares of
common stock outstanding would potentially be increased.
Transfer Agent
The transfer agent for the common stock is American Securities Transfer &
Trust, Inc., 12039 West Alameda Parkway, Lakewood, Colorado 80228.
Indemnification Provided in Connection with the Offering by the Selling
Securityholders
With respect to a registration statement relating to the shares of common
stock, the selling securityholders have agreed to indemnify, to the extent
permitted by law, Enercorp, its directors, certain of its officers and each
person who controls Enercorp (within the meaning of the Securities Act) against
any losses, claims, damages, liabilities and expenses resulting from any untrue
or alleged untrue statement of material fact or any omission or alleged omission
of a material fact required to be stated in a registration statement or
prospectus, or any amendment thereof or supplement thereto or necessary to make
the statements therein (in the case of a prospectus, in the light of the
circumstances under which they were made) not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information or affidavits relating to the selling
securityholders furnished by the selling securityholders to Enercorp for use
therein.
15
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, or persons controlling Enercorp
pursuant to the foregoing provisions Enercorp has been informed that in the
opinion of the Commission, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
Legal Matters
The legality of the shares of common stock being offered will be passed on
for Enercorp by Friedlob Sanderson Raskin Paulson & Tourtillott, LLC, Denver,
Colorado.
Experts
The consolidated balance sheets of Enercorp, Inc. as of June 30, 1999 and
the related consolidated statements of operations, stockholders' equity and cash
flows for each of the two years in the period ended June 30, 1999, which appear
in Enercorp's Form 10-K for the fiscal year ended June 30, 1999 have been
incorporated by reference herein in reliance upon the report dated September 14,
1999 of J L Stephan Co, P.C., Traverse City, Michigan, independent certified
public accountants, and upon the authority of said firm as experts in accounting
and auditing.
16
<PAGE>
ENERCORP, INC.
105,000 SHARES OF COMMON STOCK
October 22, 1999
------------------------------------
PROSPECTUS
------------------------------------
- --------------------------------------------------------------------------------
No dealer, salesman or other person has been authorized to give any information
or to make any representations other than those contained in this prospectus.
Any information or representations not herein contained, if given or made, must
not be relied upon as having been authorized by Enercorp. This prospectus does
not constitute an offer or solicitation in respect to these securities in any
jurisdiction in which such offer or solicitation would be unlawful. The delivery
of this prospectus shall not, under any circumstances, create any implication
that there has been no change in the affairs of Enercorp or that the information
contained herein is correct as of any time subsequent to the date of their
prospectus. However, in the event of a material change, this prospectus will be
amended or supplemented accordingly.
- --------------------------------------------------------------------------------
17
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14 - OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemization of all expenses (subject to future
contingencies) incurred or to be incurred by the Enercorp in connection with the
issuance and distribution of the securities being offered. All expenses are
estimated except the registration fee.
Registration and filing fee $ 82
Printing and engraving 500
Accounting fees and expenses 1,500
Legal fees and expenses 7,500
Blue sky fees and expenses 500
Transfer and Warrant Agent 500
Other 418
----------
Total $ 11,000
==========
ITEM 15 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
INDEMNIFICATION PROVIDED UNDER THE COMPANY'S ARTICLES OF INCORPORATION
The Colorado Business Corporation Act (the "CBCA") authorizes the
indemnification of and advancement of expenses to directors, officers,
employees, fiduciaries and agents of a Colorado corporation against liabilities
that they may incur in such capacities. Article II of the Enercorp's Amended and
Restated Articles of Incorporation provides that Enercorp shall indemnify and
may advance expenses to its directors to the maximum extent permitted by the
CBCA and shall indemnify its officers, employees or agents who are not directors
to the maximum extent permitted by the CBCA or to a greater extent as may be
consistent with law and provided for by resolution of Enercorp's shareholders or
directors, or in a contract. A summary of the circumstances in which such
indemnification is allowable under the CBCA is provided below, but that
description is qualified in its entirety by reference to the relevant section of
the CBCA.
In general, the CBCA provides that any director may be indemnified against
liabilities (including the obligation to pay a judgment, settlement, penalty,
fine or reasonable expense) incurred in a proceeding and have expenses advanced
for such a proceeding (including any civil, criminal or investigative proceeding
whether threatened, pending or completed) to which the director was made a party
because he is or was a director, except that, if the proceeding is brought by or
in the right of the company, indemnification is permitted only with respect to
reasonable expenses incurred in connection with the proceeding. The CBCA
prohibits indemnification of a director in connection with a proceeding brought
by or in the right of the company in which a director is adjudged liable to the
company, or in connection with any proceeding charging improper personal benefit
to the director in which the director is adjudged liable for receipt of an
improper personal benefit.
18
<PAGE>
Indemnity may be provided only if the director's actions resulting in the
liability: (i) were taken in good faith; (ii) were reasonably believed to have
been in the company's best interest with respect to actions taken in the
director's official capacity; (iii) were reasonably believed not to be opposed
to the company's best interest with respect to actions other than those taken in
the director's official capacity; and (iv) with respect to any criminal action,
the director had no reasonable cause to believe his or her conduct was unlawful.
Indemnification may be awarded only after the applicable standard of conduct has
been met by the director to be indemnified as determined by (i) a majority vote
of directors not party to the proceeding comprising a quorum of the Board of
Directors or, if a quorum cannot be obtained, by committee thereof consisting of
two or more directors not party to the proceeding; (ii) by independent legal
counsel selected by the Board of Directors; or (iii) by the shareholders.
The CBCA further provides that unless limited by the company's articles of
incorporation, a director or officer who is wholly successful, on the merits or
otherwise, in defense of any proceeding to which he was a party, is entitled to
receive indemnification against reasonable expenses, including attorneys' fees,
incurred in connection with the proceeding. Enercorp's Amended and Restated
Articles of Incorporation do not limit the foregoing provisions.
Enercorp may indemnify or advance expenses to an officer, employee,
fiduciary or agent who is not a director to a greater extent than permitted for
indemnification of directors, if consistent with law and if provided for by its
articles of incorporation, bylaws, resolution of its shareholders or directors
or in a contract. The provision of indemnification to persons other than
directors is subject to such limitations as may be imposed on general public
policy grounds.
Upon petition by a director or officer, a court may order Enercorp to
indemnify such director or officer against liabilities arising in connection
with any proceeding. A court may order Enercorp to provide such indemnification,
whether or not he was entitled to indemnification by the Company. To order
indemnification, the court must determine that the director or officer is fairly
and reasonably entitled to indemnification in light of the circumstances. With
respect to liability incurred by a director or officer, or in any proceeding
where liability results on the basis that a personal benefit was received
improperly, a court may only require that the director or officer be indemnified
as to reasonable expenses incurred.
The CBCA specifies that any provisions for indemnification of or advances
for expenses to directors which may be contained in a company's articles of
incorporation, bylaws, resolutions of its shareholders or directors, or in a
contract (except for insurance policies) shall be valid only to the extent such
provisions are consistent with the CBCA and any limitations upon indemnification
set forth in the articles of incorporation.
19
<PAGE>
The CBCA also grants the power to the Company to purchase and maintain
insurance policies which protect any director, officer, employee, fiduciary or
agent against any liability asserted against or incurred by them in such
capacity arising out of their status as such. Such policies may provide for
indemnification whether or not the corporation would otherwise have the power to
provide for it. No such policies have been obtained by the Company.
Article II of Enercorp's Amended and Restated Articles of Incorporation
provides for the elimination of personal liability for monetary damages for the
breach of fiduciary duty as a director except for liability (i) resulting from a
breach of the director's duty of loyalty to the Company or its shareholders;
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law; (iii) for approving payment of a
dividend, a stock repurchase, a distribution of assets to shareholders during
liquidation or the making or guaranteeing of a loan to a director, to the extent
that any such actions are illegal under the CBCA; or (iv) for any transaction
from which a director derives an improper personal benefit. This Article further
provides that the personal liability of the Company's directors shall be
eliminated or limited to the fullest extent permitted by the CBCA.
ITEM 16 EXHIBITS
The following is a complete list of exhibits filed as part of this
Registration Statement:
EXHIBIT
NUMBER DESCRIPTION
- ------------------------------------------------------------------------------
4.1 Article II of the Amended and Restated Articles of Incorporation of
Enercorp, Inc.**
4.2 Articles VI and VII of the By-Laws of Enercorp, Inc.***
5.1 Opinion of Friedlob Sanderson Raskin Paulson & Tourtillott, LLC.*
23.1 Consent of Friedlob Sanderson Raskin Paulson & Tourtillott, LLC. *
23.2 Consent of J L Stephan Co., P.C. *
23.3 Consent of Hirsch Silberstein & Subelsky, P.C. *
24. Power of Attorney - See Signature Page of Registration Statement *
- ----------------------------
* Filed herewith.
** Incorporated by reference to Enercorp's Form 10-K for the fiscal year ended
June 30, 1996.
*** Incorporated by reference to Enercorp's Form 10-K for the fiscal year ended
June 30, 1981.
20
<PAGE>
ITEM 17 - UNDERTAKINGS
The undersigned Enercorp hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered that remain unsold at the termination of the
offering.
4. That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Enercorp's annual report pursuant to section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to the initial bona fide offering thereof.
5. The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Enercorp
certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of West Bloomfield, State of Michigan, on September 17,
1999.
ENERCORP, INC.
By /s/ Robert R. Hebard
-----------------------------------------
Robert R. Hebard, Chairman of the Board, Chief Executive
Officer, President, Treasurer and Director
KNOW ALL MEN BY THESE PRESENCE, THAT THE UNDERSIGNED OFFICERS AND/OR
DIRECTORS OF ENERCORP, INC., BY VIRTUE OF THEIR SIGNATURES APPEARING BELOW,
HEREBY CONSTITUTE AND APPOINT ROBERT R. HEBARD, WITH FULL POWER OF SUBSTITUTION,
AS ATTORNEY-IN-FACT IN THEIR NAMES, PLACES AND STEAD TO EXECUTE ANY AND ALL
AMENDMENTS TO THIS REGISTRATION STATEMENT ON FORM S-3 IN THE CAPACITIES SET
FORTH OPPOSITE THEIR NAMES BELOW AND HEREBY RATIFY ALL THAT SAID
ATTORNEY-IN-FACT MAY DO BY VIRTUE HEREOF.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURES TITLE DATE
- -------------------------------------------------------------------------------
/s/ Robert R. Hebard Chairman of the Board, October 22, 1999
- -------------------- Chief Executive Officer,
Robert R. Hebard President, Treasurer and
Director
/s/ Carl W. Forsythe Director October 22, 1999
- --------------------
Carl W. Forsythe
/s/ H. Samuel Greenawalt Director October 22, 1999
- ------------------------
H. Samuel Greenawalt
22
Exhibit 5.1 and 23.1
October 22, 1999
Enercorp, Inc.
7001 Orchard Lake Road
Suite 424
West Bloomfield, Michigan 48322
Re: Registration Statement on Form S-3
Opinion of Counsel
Gentlemen:
As counsel for Enercorp, Inc., a Colorado corporation (the "Corporation"),
we have examined the Articles of Incorporation, as amended, the Bylaws and
minutes of the Corporation and such other corporate records, documents,
certificates and other instruments as, in our judgment, we deemed relevant for
the purposes of this opinion. We have also, as such counsel, examined the
Corporation's Registration Statement on Form S-3, Commission File No. 333-_____,
as amended to date (the "Registration Statement"), covering the resale by
certain selling securityholders named in the Registration Statement (the
"selling securityholders") of shares of the Corporation's Common Stock, no par
value per share (the "Common Stock") included in the Registration Statement.
Based upon the foregoing, we are of the opinion that the Common Stock to
be sold by the selling securityholders constitutes legally issued, fully paid
and nonassessable shares of Common Stock.
We know that we are referred to under the caption "Legal Matters" included
in the Prospectus forming a part of the Registration Statement. We hereby
consent to such use of our name in the Registration Statement and to the filing
of this opinion as Exhibit 5.1 thereto. In giving this consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the Rules
and Regulations of the Securities and Exchange Commission promulgated
thereunder.
Very truly yours,
23
Exhibit 23.2
J L Stephan Co, P.C.
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Enercorp, Inc.
West Bloomfield, Michigan
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement, of our report dated
September 14, 1999, relating to the consolidated financial statements of
Enercorp, Inc. appearing in Enercorp's Annual Report on Form 10-K for its fiscal
year ended June 30, 1999 and to the reference to our Firm under the heading
"Experts" in the Prospectus.
J L Stephan Co, P.C.
Traverse City, Michigan
October 18, 1999
24
Exhibit 23.3
Hirsch Silberstein & Subelsky, P.C.
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Eirectors
Enercorp, Inc.
West Bloomfield, Michigan
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement, of our report dated
September 22, 1998, relating to the consolidated financial statements of
Enercorp, Inc. appearing in Enercorp's Annual Report on Form 10-KSB for its
fiscal year ended June 30, 1998 and to the reference to our Firm under the
heading "Experts" in the Prospectus.
HIRSCH, SILBERSTEIN & SUBELSKY, P.C.
Farmington Hills, Michigan
September 17, 1999
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