<PAGE> 1
As filed with the Securities and Exchange Commission on December 19, 1997.
Registration No. ____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
ACR GROUP, INC.
(Exact name of registrant as specified in charter)
Texas 74-2008473
----- ----------
(State or other Jurisdiction (I.R.S. Employer Identification
of Incorporation) Number)
ACR Group, Inc.
3200 Wilcrest, Suite 440
Houston, Texas 77042
(713) 780-8532
--------------
(Address and Telephone Number of Registrant's Principal
Executive Offices and Principal Place of Business)
Mr. Anthony R. Maresca
ACR Group, Inc.
3200 Wilcrest, Suite 440
Houston, Texas 77042
(713) 780-8532
--------------
(Name, Address, and Telephone Number of Agent for Service)
With copies to:
Robert D. Remy, Esq.
820 Gessner, Suite 1360
Houston, Texas 77024
(713) 465-8008
Approximate date of commencement of proposed sale to the public: From time to
time 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 only in connection with dividend or
interest reinvestment plans, check the following box.[X]
<PAGE> 2
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class of Proposed Maximum
Securities to be Amount to be Proposed Maximum Aggregate Offering Amount of Registration
Registered Registered (1) Offering Price Per Share (2) Price Fee
---------- -------------- ---------------------------- ----- ---
<S> <C> <C> <C> <C>
Common Stock 2,411,667 $2.00 $4,823,334 $1,422.88
</TABLE>
(1) In accordance with Rule 416 under the Securities Act of 1933, as amended,
this Registration Statement also covers such indeterminate number of
additional shares of Common Stock as may become issuable to the Selling
Shareholders pursuant to applicable anti-dilution provisions.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 by reference to the last sale reported on the NASDAQ
Small Cap Market on December 17, 1997.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAW OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS DATED DECEMBER 19, 1997
SUBJECT TO COMPLETION
ACR GROUP, INC.
2,411,667 Shares of Common Stock
($.01 Par Value)
This Prospectus relates to 2,411,667 shares of Common Stock, $.01 par value
("Common Stock") of ACR Group, Inc., a Texas corporation (the "Company"), being
registered on behalf of security holders ("Selling Shareholders"), which are
offering for sale the Common Stock which is presently outstanding or which
underlie certain warrants, options and convertible debt instruments issued by
the Company. The Company will not receive any of the proceeds of the sale of
the shares of Common Stock in this offering. The Company will receive up to
$1,477,500 from the exercise of such warrants and options. The Company will
use such proceeds for general working capital. The Selling Shareholders are
not restricted in the price or prices at which they may sell their shares of
Common Stock and sales of such shares may depress the market price of the
Company's Common Stock. (See "Selling Shareholders")
This offering is not being underwritten. The distribution of the shares of
Common Stock offered hereby by the Selling Shareholders may be effected in one
or more transactions that may take place on the NASDAQ Small Cap Market,
including ordinary brokers' transactions, privately negotiated transactions or
through sales to one or more dealers for resale of such securities as
principals, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. Usual and customary
or specifically negotiated brokerage fees or commissions may be paid by the
Selling Shareholders.
The Company is paying all of the expenses of registering the Common Stock being
offered by the Selling Shareholders under the Securities Act of 1933, as
amended ("Securities Act").
On December 17, 1997, the closing sales price of the Company's Common Stock as
reported on the NASDAQ Small Cap Market was $2.00 per share.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING
ON PAGE 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE> 4
NO DEALER, SALESMAN OR OTHER PERSON OR ENTITY HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR THE SELLING SHAREHOLDERS. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCE, CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS ACCURATE AND CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
THE DATE OF THIS PROSPECTUS IS DECEMBER 19, 1997
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
Room 1024 and at the Regional Offices of the Commission located at Seven World
Trade Center, Suite 1300, New York, New York 10048, and 500 West Madison, Suite
1400, Chicago, Illinois 60661. Copies of such material also can be obtained
at prescribed rates by writing to the Commission, Public Reference Section,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants, including
the Company, that file electronically with the Commission at
http//:www.sec.gov. In addition, copies of such documents and other
information are provided to NASDAQ and can be inspected at the NASDAQ offices
maintained at the National Association of Securities Dealers, Inc., 1735 K
Street, Washington, D.C. 20006.
This Prospectus constitutes a part of the Registration Statement on Form S-3
(together with all amendments and exhibits, herein referred to as the
"Registration Statement") filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act. This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information with respect to the Company and the
Common Stock, reference is hereby made to the Registration Statement.
Statements contained herein concerning the provisions of any document are not
necessarily complete, and in each instance reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, all of which were filed with the Commission (File No.
0-12490), are incorporated in this Prospectus by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended February 28, 1997.
(b) The Company's Quarterly Report on Form 10-Q for the quarter
ended May 31, 1997.
(c) The Company's Quarterly Report on Form 10-Q for the quarter
ended August 31, 1997.
(d) The Company's Current Report on Form 8-K dated September 9,
1997, as amended November 24, 1997.
(e) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A, Commission File No.
0-12490.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of shares of Common
Stock shall be deemed to be incorporated by reference to this Prospectus and to
be a part hereof from the respective dates of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for all purposes
to the extent that a statement contained in this Prospectus or any other
subsequently filed document that is also incorporated by reference herein,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
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The Company undertakes to provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated herein by reference (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Written or telephone requests
should be directed to ACR Group, Inc., 3200 Wilcrest, Suite 440, Houston, Texas
77042, Attention: Mr. Anthony R. Maresca, (713) 780-8532.
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<PAGE> 7
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including notes thereto, appearing
elsewhere in this prospectus or incorporated by reference herein. Each
prospective investor is urged to read this prospectus in its entirety.
THE COMPANY
ACR Group, Inc. is a Texas corporation. The Company maintains its principal
executive offices at 3200 Wilcrest, Suite 440, Houston, Texas 77042. The
Company's telephone number is (713) 780-8532.
Through its wholly-owned subsidiaries, the Company is primarily engaged in the
business of wholesale distribution of heating, air conditioning and
refrigeration ("HVACR") equipment and supplies. The Company sells such HVACR
supplies and equipment to installing contractors and dealers and to other
technically trained customers responsible for the installation, repair and
maintenance of HVACR systems.
RISK FACTORS
In addition to the other information in this Prospectus, the following factors
should be considered carefully in evaluating the Company and its business
before purchasing the Common Stock offered hereby.
SUBSTANTIAL COMPETITION
The HVACR business is highly fragmented and very competitive. The Company's
primary competitors include national and multi-regional companies, regional
competitors that operate in a small number of states, equipment manufacturers
and principally small, independent businesses with a limited number of local
branches. Certain of the Company's competitors have significantly greater
financial resources than the Company. The primary areas of competition in the
HVACR business include breadth and quality of product lines distributed,
ability to fill orders promptly, technical knowledge of sales personnel,
service and price. The Company believes that its ability to compete
effectively is dependent upon whether it can respond to the needs of its
customers through quality service and product availability. While home
centers, hardware stores and direct mail order companies do not currently
compete to a significant extent with the Company due to their limited ability
to supply a wide range of products and provide comparable expert technical
advice, the entrance of one or more of these companies into the Company's
business could have a material adverse effect on the Company's business and
results of operations.
SEASONALITY AND CYCLICALITY OF SALES
The Company's operating results vary significantly from quarter to quarter.
The Company's operations are concentrated in the Sunbelt region of the United
States. Sales typically increase during the warmer months and peak in the
months of June, July and August. Sales of HVACR equipment and replacement
components are also affected by atypical weather patterns in the regions served
by the Company. Warmer than normal summer temperatures or colder than normal
winter temperatures cause increased stress on cooling and heating equipment.
Increased stress on equipment produces higher failure rates and therefore
increased sales volume of replacement equipment. Further, end-users' demand for
HVACR products is cyclical, and a significant percentage of the overall demand
in certain of the Company's markets, particularly Nevada and Colorado, is
related to new construction. This demand is influenced by many of the same
national and regional economic and demographic factors which affect demand for
durable consumer goods, including consumer confidence, interest rates,
availability of financing, regional population, employment trends and general
economic conditions. There can be
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<PAGE> 8
no assurance that the Company will not experience future declines in sales due
to weather patterns or an economic downturn or that such declines will not have
a material adverse effect on the Company's business and results of operations.
RISK ASSOCIATED WITH GROWTH STRATEGY
The Company's growth strategy contemplates both expansion of existing
operations and additional acquisitions. As a result, the Company's ability to
sustain revenue growth is dependent, in part, upon whether it can develop
desirable expansion opportunities or acquire suitable acquisition candidates
and thereafter integrate or manage such expanded or acquired businesses
successfully. Acquisitions involve certain risks, including those associated
with diversion of management attention and possible adverse effects on earnings
resulting from financing costs, increased goodwill amortization, the issuance
of additional securities and difficulties related to the integration of the
acquired businesses. There can be no assurance that the Company will be able
to identify and complete or successfully integrate acquired businesses. The
Company has no present agreements, commitments or understandings to acquire
other businesses. Existing or future competitors may also seek to compete with
the Company for acquisition candidates, which could have the effect of
increasing the price for acquisitions or reducing the number of suitable
acquisition candidates.
In order to implement its growth strategy, the Company is likely to require
additional funding. Future acquisitions could be financed by incurring
additional indebtedness or by the issuance of additional equity securities,
which could result in dilution to the purchasers of the Common Stock offered
hereby. Any additional financing by the Company for any purpose, including
expansions or acquisitions, will generally require the consent of the Company's
existing lenders, and there can be no assurance that such consent will be
granted.
RISKS OF BORROWING
The Company has substantial borrowings under its credit facilities. In the
future, the Company may incur additional indebtedness under the credit
facilities or under additional facilities for working capital and to finance
expansions and acquisitions of additional businesses. Leverage increases the
risk to the Company of any variations in its results of operations or any other
factors affecting its cash flow or liquidity. In addition, the credit
facilities bear, and future indebtedness may bear, interest at variable
interest rates. Accordingly, increases in applicable interest rates may
adversely affect the Company's business and results of operations.
DEPENDENCE ON SUPPLIER RELATIONSHIPS
The Company operates with distribution rights for certain product lines in
several of its geographic markets. The Company depends upon these distribution
rights for a substantial portion of its business. Further, many of these
distribution rights may be terminated by the supplier upon short notice. The
termination or limitation by any key supplier of its relationship with the
Company could have a material adverse effect on the Company's business and
results of operations. The failure of a significant supplier to furnish quality
products on a timely basis for any reason could damage the Company's
relationship with its customers and have a material adverse effect on its
business and results of operations.
INCREASED PRESENCE OF BUYING GROUPS; POTENTIAL REDUCTION OF MARGINS
Management believes that a portion of the Company's customer base has begun to
consolidate into regional and national firms and buying groups in order to gain
increased purchasing power and greater product consistency. This increased
buying power could create a competitive bidding process for the Company's
products, thereby reducing the Company's margins. A significant reduction in
the Company's margins could have a material adverse effect on the Company's
business and results of operations.
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DEPENDENCE ON KEY PERSONNEL
The Company's operations depend on the continuing effort of its executive
officers and the senior management of the Company's subsidiaries, and the
Company will depend on the senior management of significant businesses it
acquires in the future. The business of the Company could be affected
adversely if any of these persons does not continue in his or her management
role with the Company or an acquired business and the Company is unable to
attract and retain qualified replacements.
ABSENCE OF DIVIDENDS
The Company intends to retain its earnings to finance its growth and for
general corporate purposes. Consequently, it does not anticipate paying any
cash dividends in the foreseeable future. In addition, the Company's credit
facilities contain, and future financing agreements may contain, limitations on
the payment of cash dividends and other distributions of assets.
SIGNIFICANT GOVERNMENT REGULATIONS
HVACR systems are subject to various environmental statutes and regulations,
including but not limited to laws and regulations implementing the Clean Air
Act, relating to minimum energy efficiency standards of HVACR systems and the
production, servicing and disposal of certain ozone-depleting refrigerants used
in such systems. As the owner or lessee of a significant amount of real
property, the Company is subject to a number of environmental statutes and
regulations and could under certain circumstances be responsible for the acts
or omissions of the prior owners or lessees of such property. The Company is
also subject to regulations concerning the transport of hazardous materials,
including regulations adopted pursuant to the Motor Carrier Safety Act of 1990.
The Company may become subject to compliance with additional regulations, and
there can be no assurance that the regulatory environment in which the Company
operates will not change significantly in the future.
EFFECTS OF CURRENT OFFERING ON MARKET PRICE
Future sales of Common Stock in the public market by the Selling Shareholders
pursuant to this offering, or by other existing shareholders, could have an
adverse effect on the price of the Company's Common Stock. Sales of Common
Stock, or the possibility of such sales, in the public market may adversely
affect the market price of the Common Stock offered hereby, Historically, the
Company's securities have been thinly traded. This low trading volume may have
had a significant effect on the market price of the Company's securities, which
may not be indicative of the market price in a more a liquid market.
SELLING SHAREHOLDERS
An aggregate of up to 2,411,667 shares of Common Stock may be offered and sold
pursuant to this Prospectus by the Selling Shareholders. The following table
sets forth certain information as of December 1, 1997 as to the ownership of
securities of the Company by the Selling Shareholders. Except as set forth
below, none of the Selling Shareholders has had a material relationship with
the Company or its affiliates within the past three years. Unless otherwise
indicated, each Selling Shareholder will hold less than one percent of the
Common Stock after the sale of all shares of Common Stock covered by this
offering and is selling all of its Common Stock pursuant to this offering.
Except as set forth below, all of the Common Stock offered by this Prospectus
underlie warrants which are exercisable as of the date of this Prospectus.
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<TABLE>
<CAPTION>
Shares of Common Stock Registered
Name Pursuant to this Offering
- ---- -------------------------
<S> <C>
St. James Capital Partners, L.P. 891,667 (1)
St. James Capital Corp. 56,001
SV Capital Partners 53,002
Charles E. Underbrink 37,101
Guadalupe Funding, Co 27,826
Thomas M. Vertin 19,280
Dennis LaValle 15,901
Ronald E. Clark 7,950
Equity Resource Group 6,625
Blake Liedtke 6,625
Harry H. Cullen 6,625
George Burkholder 3,313
1959 Trust for Robert Tilly Arnold 2,650
Isaac Arnold, Jr. 2,650
Pinkye Lou Blair Estate 1,325
The Lillie C. Cullen Estate
Trust for Isaac Arnold, Jr. 1,325
The Hugh Roy Cullen Estate
Trust for Isaac Arnold, Jr. 1,325
Todd Binet 1,325
James Hanson 1,325
Scott Crist 1,325
Titus H. Harris, Jr. 663
Alan Feinsilver 5,300
Michael Reilly 663
James G. Reilly 2,650
The Douglas B. Marshall Management Trust 5,300
The Robert J. Barnhart Revocable Trust 5,300
The Arnold Corporation 6,625
The Catalyst Fund, Ltd. 750,000 (2)
Alex Trevino, Jr. 450,000 (3)
Ronnie G. Floyd 40,000 (4)
------------
TOTAL 2,411,667
</TABLE>
(1) Includes 641,667 shares of Common Stock underlying certain
indebtedness of the Company which is convertible into Common Stock as
of the date of this Prospectus and 250,000 shares of Common Stock
underlying warrants which are exercisable as of the date of this
Prospectus.
(2) Represents Common Stock underlying warrants which are exercisable
as of the date of this Prospectus. Mr. Ronald T. Nixon, a
shareholder, director and officer of the general partner of The
Catalyst Fund, Ltd., has been a director of the Company since December
1992.
(3) Represents Common Stock underlying options which are exercisable
as of the date of this Prospectus. Mr. Trevino is the Chairman of
the Board of Directors and Chief Executive Officer of the Company. In
addition to the Common Stock offered hereby, Mr. Trevino owns 328,437
shares of
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Common Stock of the Company, or 2.6% of the outstanding Common Stock
(including the Common Stock offered hereby), as of the date of this
Prospectus.
(4) Represents Common Stock underlying options which are exercisable
as of the date of this Prospectus. Mr. Floyd is the general manager
of Total Supply, Inc., a wholly-owned subsidiary of the Company which
operates in Georgia.
PLAN OF DISTRIBUTION
The Selling Shareholders are not restricted as to the prices at which they may
sell their shares of Common Stock and sales of such shares at less than the
market price may depress the market price of the Company's Common Stock.
Further, except for sales volume limitations which may be applicable to Selling
Shareholders who are affiliates of the Company, the Selling Shareholders are
not restricted as to the number of shares which may be sold at any one time,
and it is possible that a significant number of shares could be sold at the
same time, which may also have a depressive effect on the market price of the
Company's Common Stock. However, it is anticipated that the sale of the Common
Stock being offered hereby will be made through customary brokerage channels
either through broker-dealers acting as agents or brokers for the seller, or
through broker-dealers acting as principals, who may then resell the shares in
the over-the- counter market, or a private sale in the over-the-counter market
or otherwise, at negotiated prices relating to prevailing market prices and
customary brokerage commissions at the time of the sales, or by a combination
of such methods. Thus, the period for sale of such shares by the Selling
Shareholders may occur over an extended period of time.
There are no contractual arrangements between or among any of the Selling
Shareholders and the Company with regard to the sale of the shares and no
professional underwriter in its capacity as such will be acting for the Selling
Shareholders.
EXPERTS
The consolidated financial statements and schedule of the Company and its
subsidiaries appearing in the Company's Annual Report (Form 10-K) for the
fiscal year ended February 28, 1997, have been audited by Ernst & Young, LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements and
schedule are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
LEGAL OPINION
The legality of the Common Stock offered hereby will be passed upon for the
Company by Robert D. Remy, Attorney at Law.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering, all of which are to be borne by the
Company, are as follows:
<TABLE>
<S> <C>
SEC Filing Fee $ 1,423
Printing Expenses $ 1,000 *
Accounting Fees and Expenses $ 5,000 *
Legal Fees and Expenses $ 12,000 *
Miscellaneous $ 1,577 *
--------
Total $ 21,000 *
</TABLE>
* Indicates expenses have been estimated for the purposes of filing.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act contains detailed
provisions for indemnification of directors and officers of Texas corporations
against any judgments, penalties, fines, settlements and reasonable expenses
which may be incurred in connection with any threatened, pending or completed
proceeding in which the director or officer is a named defendant or respondent.
The Company's Bylaws, as amended and restated, require the Company to indemnify
and advance expenses to the Company's directors and officers to the maximum
extent allowed by the Texas Business Corporation Act and expressly authorize
the Company to purchase directors and officers liability insurance.
The Articles of Incorporation of the Company, as amended and restated (the
"Articles"), expressly provide that no director shall be personally liable to
the Company or its shareholders for monetary damage for an act or omission in
the director's capacity as a director, except to the extent otherwise expressly
provided for by a statute of the State of Texas. The Articles obligate the
Company to indemnify its officers and directors against any and all judgments,
penalties (including excise and similar taxes), fines, settlements and
reasonable expenses incurred by that person to the full extent permitted under
Texas law.
ITEM 16. EXHIBITS.
The following Exhibits are filed as part of this Registration Statement
pursuant to Item 601 of Regulation S-K:
<TABLE>
<CAPTION>
Exhibit No. Title
- ----------- -----
<S> <C>
4.1 Restated Articles of Incorporation (Exhibit 3.1 to Annual Report on
Form 10-K for fiscal year ended June 30, 1991)
4.2 Articles of Amendment to Articles of Incorporation (Exhibit 3.2
to Annual Report on Form 10-K for fiscal year ended February 28,
1993)
4.3 Amended and Restated Bylaws (Exhibit 3.2 to Annual Report on Form
10-K for fiscal year ended June 30, 1991)
</TABLE>
II-1
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<TABLE>
<S> <C>
4.4 Amendment to Bylaws dated December 8, 1992 (Exhibit 3.4 to Annual
Report on Form 10-K for fiscal year ended February 28, 1993)
4.5 Specimen of Common Stock Certificate of ACR Group, Inc. (Exhibit
4.1 to Annual Report on Form 10-K for fiscal year ended February
28, 1993)
5.1 Opinion of Robert D. Remy, Attorney at Law, regarding the
legality of the securities being registered, dated December 19,
1997
23.1 Consent of Robert D. Remy, Attorney at Law, dated December 19,
1997 (included in Exhibit 5.1)
23.2 Consent of Ernst & Young, LLP, dated December 17, 1997
24.1 Power of Attorney (included on signature page)
</TABLE>
ITEM 17. UNDERTAKINGS.
A. INDEMNIFICATION
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
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 Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification
by the Registrant is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
B. RULE 415 OFFERING
The undersigned Registrant undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this 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 which remain
unsold at the termination of the offering.
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C. RULE 430A
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of
prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus 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.
II-3
<PAGE> 15
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on December 19, 1997.
ACR GROUP, INC.
By: /s/ Anthony R. Maresca
---------------------------
Anthony R. Maresca
Senior Vice President and
Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Alex Trevino, Jr. and Anthony R. Maresca his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto
and all other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite or necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or either of them,
or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement was signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature
<S> <C> <C>
/s/ Alex Trevino, Jr. Chairman of the Board, December 19, 1997
- -------------------------- President , Chief
Alex Trevino, Jr. Executive Officer and
Director
(Principal executive officer)
/s/ Anthony R. Maresca Senior Vice President, December 19, 1997
- -------------------------- Chief Financial Officer
Anthony R. Maresca and Director
(Principal financial and
accounting officer)
</TABLE>
II-4
<PAGE> 16
<TABLE>
<S> <C> <C>
/s/ A. Stephen Trevino Director December 19, 1997
- ---------------------------
A. Stephen Trevino
/s/ Ronald T. Nixon Director December 19, 1997
- ---------------------------
Ronald T. Nixon
</TABLE>
II-5
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Title
- ----------- -----
<S> <C>
4.1 Restated Articles of Incorporation (Exhibit 3.1 to Annual Report on
Form 10-K for fiscal year ended June 30, 1991)
4.2 Articles of Amendment to Articles of Incorporation (Exhibit 3.2
to Annual Report on Form 10-K for fiscal year ended February 28,
1993)
4.3 Amended and Restated Bylaws (Exhibit 3.2 to Annual Report on Form
10-K for fiscal year ended June 30, 1991)
4.4 Amendment to Bylaws dated December 8, 1992 (Exhibit 3.4 to Annual
Report on Form 10-K for fiscal year ended February 28, 1993)
4.5 Specimen of Common Stock Certificate of ACR Group, Inc. (Exhibit
4.1 to Annual Report on Form 10-K for fiscal year ended February
28, 1993)
5.1 Opinion of Robert D. Remy, Attorney at Law, regarding the
legality of the securities being registered, dated December 19,
1997
23.1 Consent of Robert D. Remy, Attorney at Law, dated December 19,
1997 (included in Exhibit 5.1)
23.2 Consent of Ernst & Young, LLP, dated December 17, 1997
24.1 Power of Attorney (included on signature page)
</TABLE>
<PAGE> 1
Exhibit 5.1
December 19, 1997
ACR Group, Inc.
3200 Wilcrest, Suite 440
Houston, Texas 77042
Re: Form S-3 Registration Statement Covering 2,411,667 Shares of Common
Stock of ACR Group, Inc.
Gentlemen:
We have represented ACR Group, Inc., a Texas corporation (the
"Company"), in connection with the proposed registration of 2,411,667 shares of
Common Stock, $.01 par value, of the Company on Form S-3 (the "Registration
Statement).
Based upon examination of such documents and records as we have deemed
necessary, we are of the opinion that:
(a) The Company has been duly incorporated under the laws of the
State of Texas and is a validly organized and existing corporation.
(b) The shares of Common Stock to be offered under the
Registration Statement, when issued, will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Robert D. Remy
-----------------------------
Robert D. Remy
RDR:clr
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and the related Prospectus of ACR Group, Inc.
for the registration of 2,411,667 shares of its common stock and to the
incorporation by reference therein of: (i) our report dated June 10, 1997, with
respect to the consolidated financial statements of ACR Group, Inc. and
subsidiaries included in its Annual Report (Form 10-K) for the fiscal year ended
February 28, 1997; and (ii) our report dated November 14, 1997, with respect to
the financial statements of Contractors Heating and Supply Company included in
ACR Group, Inc.'s Current Report (Form 8-K) dated November 24, 1997, both filed
with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Houston, Texas
December 17, 1997
