<PAGE>
As filed with the Securities and Exchange Commission on December 28, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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ECOS Group, Inc.
(Exact name of registrant as specified in charter)
Florida 84-1061207
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14505 Commerce Way, Suite 400
Miami Lakes, Florida 33016
(305) 374-8300
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
--------------------
Charles C. Evans
Chief Executive Officer
14505 Commerce Way, Suite 400
Miami Lakes, Florida 33016
(305) 374-8300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Kara L. MacCullough, Esq.
Akerman, Senterfitt & Eidson, P.A.
One S.E. 3rd Avenue, 28th Floor
Miami, Florida 33131-1714
(305) 374-5600
--------------------
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this registration statement.
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, check the following box. [x]
If the registrant elects to deliver its latest annual report to
security holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this Form, 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, 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 this Form is a post-effective amendment filed pursuant to
Rule 462(d) 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, check the following box. [ ]
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<TABLE>
<CAPTION>
Calculation of Registration Fee
Proposed maximum Proposed maximum
Title of each class Amount to be offering price aggregate Amount of
of securities to be registered registered per unit (1) offering price (1) registration fee (1)
------------------------------ ---------- ------------ ------------------ --------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.012
per share..................... 1,000,000 $.039 $39,000 $9.75
</TABLE>
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(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended and
based upon the average of the high and low prices for the common stock as
reported on the Over the Counter Bulletin Board on December 21, 2000.
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 this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. The prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to completion, dated December 28, 2000
Prospectus
1,000,000 Shares
ECOS Group, Inc.
Common Stock
----------------
This prospectus relates to the resale of 1,000,000 shares of our common
stock by the selling shareholder identified in the table on page 5 of this
prospectus. The common stock was originally issued to the selling shareholder as
consideration for its agreement to make a $250,000 loan to us evidenced by a
convertible promissory note. We will not receive any proceeds from the sale of
the shares of common stock offered through this prospectus.
----------------
Our common stock is listed on the Over the Counter Bulletin Board under
the symbol "ECOS.OB". On December 21, 2000, the closing sale price of our common
stock was $.047 per share.
----------------
Investing in our common stock involves risks. See "Risk Factors"
beginning on page 2 of this prospectus.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
<PAGE>
Table of Contents
Page
Where You Can Find More Information............................................i
Information Incorporated by Reference..........................................i
Disclosure Regarding Forward-Looking Statements..............................iii
Prospectus Summary.............................................................1
Risk Factors...................................................................2
Use of Proceeds................................................................5
Selling Shareholder............................................................5
Plan of Distribution...........................................................6
Description of Securities to be Registered.....................................7
Transfer Agent and Registration................................................7
Legal Matters..................................................................8
Experts........................................................................8
Where You Can Find More Information
We file annual, quarterly and special reports and other information
with the Securities and Exchange Commission. You may read our SEC filings over
the Internet at the Commission's website at http://www.sec.gov. You may also
read and copy documents at the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549 or at its regional offices located at 7 World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Please call the
Commission at 1-800-SEC-0330 for further information on the public reference
rooms.
We have filed with the Commission a registration statement on Form S-2
under the Securities Act of 1933, as amended (the "Securities Act") to register
with the Commission the shares of common stock described herein. This
prospectus, which is a part of the registration statement, does not contain all
of the information set forth in the registration statement. For further
information about us and our common stock, you should refer to the registration
statement.
Information Incorporated by Reference
The Commission allows us to provide information about our business and
other important information to you by "incorporating by reference" the
information we file with the Commission, which means that we can disclose the
information to you by referring in this prospectus to the documents we file with
the Commission. Under the Commission's regulations, any statement contained in a
document incorporated by reference in this prospectus is automatically updated
and superseded by any information contained in this prospectus, or in any
subsequently filed document of the types described below.
i
<PAGE>
We incorporate by reference into this prospectus the following
documents filed by us with the Commission. You should consider each document
incorporated by reference an important part of this prospectus:
<TABLE>
<CAPTION>
Commission Filing (File No. 000-16322) Period Covered or Date of Filing
-------------------------------------- --------------------------------
<S> <C>
Annual Report on Form 10-KSB....................... Year ended March 31, 2000
Quarterly Reports on Form 10-QSB................... Quarter ended June 30, 2000 and
September 30, 2000
</TABLE>
We are delivering along with this prospectus a copy of our most recent
Annual Report on Form 10-KSB and Quarterly Report on Form 10-QSB. You may
request a copy of each of our other filings that we are incorporating by
reference in this prospectus, but are not delivering with this prospectus, at no
cost, by writing or telephoning us at the following address, telephone or
facsimile number:
ECOS Group, Inc.
14505 Commerce Way, Suite 400
Miami Lakes, Florida 33016
Phone: (305) 374-8300
Fax: (305) 374-7555
Exhibits to a document will not be provided unless they are
specifically incorporated by reference in that document.
You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with information different from
that contained in this prospectus. If anyone provides you with different or
inconsistent information, you should not rely on it.
We are not making an offer to sell these shares of common stock in any
jurisdiction where the offer or sale is not permitted.
ii
<PAGE>
Disclosure Regarding Forward-Looking Statements
This prospectus contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934. Discussions containing forward-looking statements may be
found in the material set forth in this section and under "Prospectus Summary,"
"Risk Factors" and in the prospectus generally. These statements concern
expectations, beliefs, projections, future plans and strategies, anticipated
events or trends and similar expressions concerning matters that are not
historical facts. Specifically, this prospectus and the documents incorporated
into this prospectus by reference contain forward-looking statements regarding:
- our expectation that demand for asbestos services will
continue to decline;
- our expectation that the construction/demolition/electrical
practice area will be our primary source of significant
internal growth during fiscal year 2001;
- our ability to control our expenditures during fiscal year
2001;
- our estimates of the manner in which we will fund our current
operations and our ability to fund our current operations
through March 31, 2001; and
- our ability to experience sustained and profitable revenue
growth in the future.
These forward-looking statements reflect our current views
about future events and are subject to risks, uncertainties and assumptions. We
wish to caution readers that certain important factors may have affected and
could in the future affect our actual results and could cause actual results to
differ significantly from those expressed in any forward-looking statement. The
most important factors that could prevent us from achieving our goals, and cause
the assumptions underlying forward-looking statements and the actual results to
differ materially from those expressed in or implied by those forward-looking
statements include, but are not limited to, the following:
- changes in legislative enforcement and direction with respect
to or affecting the asbestos/indoor air quality, hazardous
substances, and construction/demolition/electrical practice
areas;
- natural disasters such as hurricanes and tornadoes;
- unanticipated delays in contract execution;
- sudden loss of key personnel;
- changes with respect to our competitors or the market for
environmental consulting, testing and engineering
specifically; and
- decisions by our lenders to demand the repayment of our
indebtedness.
iii
<PAGE>
Prospectus Summary
In this prospectus, "ECOS," "we," "us" and "our" refer to ECOS Group,
Inc. and its subsidiary. We are engaged, through our wholly-owned subsidiary,
Evans Environmental and Geological Science and Management, Inc. ("EE&G") in
environmental consulting and other environmental related services. EE&G is a
regional supplier of environmental and engineering consulting and testing
services to both private clients and government clients. Within the broad scope
of environmental consulting, testing and engineering services, EE&G offers
specialized services in three practice areas: (i) asbestos/indoor air quality;
(ii) hazardous substances; and (iii) construction/demolition/electrical. We
continue to focus on the growth and maintenance of EE&G, while continuing to
explore a variety of merger and acquisition opportunities as a means of
increasing our growth rate. We began transitioning our operations at the
beginning of this fiscal year with the establishment of the
construction/demolition/electrical practice and the combination of the asbestos
and indoor air quality practice. We believe that the
construction/demolition/electrical practice will be the primary source of
significant internal growth during this fiscal year. The Company anticipates
that the asbestos market will continue to gradually weaken.
For the fiscal year ended March 31, 2000, we had revenue of $5,042,353
and net income of $766,206. For the three months ended September 30, 2000, we
had revenues of $1,371,701 and net income of $42,501. For the six months ended
September 30, 2000, we had revenues of $2,803,940 and net income of $112,023.
Principal Executive Offices
Our principal executive offices are located at 14505 Commerce Way,
Suite 400, Miami Lakes, Florida 33016, our telephone number is (305) 374-8300.
We were founded in 1993 and incorporated in Florida in 2000.
1
<PAGE>
Risk Factors
Developing the construction/demolition/electrical practice may strain our
resources and cause us to seek additional financing.
The development of the construction/demolition/electrical practice has,
over the last year, proven to be a cash intensive effort. This type of work
typically requires significant cash expenditures at the outset of a project that
may not be recouped until collection on the final invoice for that project some
time later. The rapid expansion of the construction/demolition/electrical
practice has significantly impacted the overall cash flow of our operations. We
have obtained a small line of credit for short-term cash flow difficulties in
order to allow us to approach larger, potentially more lucrative projects. We
may have to request an increase to this line of credit or seek additional
financing.
The decline in the demand for asbestos services may negatively affect our
business.
We expect that the asbestos market will continue to gradually weaken.
The decline in the demand for asbestos services could lead to a decrease in our
revenues. We anticipate that the revenues from the
construction/demolition/electrical practice will offset any decrease in our
revenues, resulting from the decline in demand for asbestos services, and will
increase our total revenues. We cannot assure you that this will be the result.
Our business is dependent on environmental regulations and government
enforcement and funding of these regulations.
The demand for environmental consulting, testing, management and
remediation services, as well as their nature and performance has substantially
benefited from the existence and enforcement of federal, state and local
environmental regulation. The nature and extent of future regulatory enforcement
and funding as well as any amendments to federal, state and local environmental
regulation, and their impact on the demand for our services, cannot be
predicted. There can be no assurance that changes in the environmental
regulations or the level of governmental enforcement and funding of these
regulations will not have a material adverse effect on our business.
We may need to seek additional financing to fund our business plan.
Our business strategy contemplates substantial capital expenditures. We
intend to continue to fund our current operations from a combination of cash on
hand, cash generated from operations, cost savings generated from continued cost
reduction measures, potential increased sales, as well as the procurement of
additional financing, as to which no assurance can be given. These sources of
capital are expected to fund our current operations through March 31, 2001. We
believe that we can experience sustained and profitable revenue growth in the
future, although no assurances can be given. However, if we do not continue with
our current rate of profitability, or we cannot obtain alternative sources of
financing, there would be a material adverse effect on our financial condition,
operations and business prospects. We have no arrangements in place for
alternative sources of financing, and no assurance can be given that such
financing will be available at all or on terms acceptable to us.
Our dependence on our subsidiary for cash flow may negatively affect our
business.
We are a holding company with no business operations of our own. Our
dependence on our subsidiary, EE&G, for cash flow may have a material adverse
effect on our operations. Our only significant asset is and is expected to be
the outstanding capital stock of EE&G. Accordingly, our only source of cash to
pay our obligations is distributions from our subsidiary of its net earnings and
cash flow. We currently expect that the earnings and cash flow of our subsidiary
will be retained and used by it in their operations. Even if our subsidiary
determined to make a distribution to us, applicable state law may not permit
these dividends or distributions.
2
<PAGE>
The environmental, engineering consulting and testing services industry is very
competitive and we may not attract sufficient customers to meet our business
plan.
We operate in a highly competitive and volatile industry in which many
companies have greater resources and facilities than we do. In addition,
numerous independent operators can collaborate with other companies to provide
similar services. We may not be able to attract or retain sufficient customers
needing environmental, engineering consulting and testing services.
If we are unable to merge with or acquire other environmental companies, our
business plan may be negatively affected.
We continue to explore a variety of merger and acquisition
opportunities as a means of increasing our growth rate, revenue stream and
shareholder value. There is no assurance that we will be able to enter into a
merger or acquisition transaction in the foreseeable future.
Our stock price is volatile.
The market price for our common stock has been and may continue to be
volatile and may be affected by a number of factors, including the announcement
of acquisitions or other developments by us or our competitors, quarterly
variations in our or competitor's results of operations, changes in earnings
estimates or recommendations by securities analysts, developments in the
environmental industry, sales of a substantial number of shares of our common
stock in the public market, general market conditions, general economic
conditions and other factors. Some of these factors may be beyond our control or
may be unrelated to our results of operations or financial condition.
Historically, the market price of the common stock has been volatile. Such
factors may lead to further volatility in the market price of our common stock.
Our stock price has fluctuated from $0.0312 during the quarter ended December
31, 1999 to $.3906 during the quarter ended March 31, 2000. Our stock price was
$.047 as of December 21, 2000.
We may have to reimburse funders for costs of remediation work under the Florida
Inland Protection Trust Fund if the State of Florida fails to reimburse them.
We provide environmental consulting services through our wholly-owned
subsidiary EE&G. We have entered into contracts in the past with third parties
for the purpose of funding remediation work under the Florida Inland Protection
Trust Fund (the "Program"), subject to payment of a markup or handling fee to
such funders. While we no longer enter into these contracts, we have several
contracts that are currently in effect which were made pursuant to the Program.
In the event that the State of Florida was to determine that certain costs are
not reimbursable, these contracts generally provide that we are required to
reimburse such funders for all costs not reimbursed by the State of Florida. We
have reserved a sufficient amount of money to cover any reimbursement required
under these contracts. Furthermore, the refusal of claims for reimbursable costs
may affect our ability to obtain additional advances for reimbursable costs
under the same or other projects. There can be no assurance that the State of
Florida will reimburse all costs in the currently ending applications or that
reimbursements will be timely made. There can be no assurance that changes to
the Program by the Florida legislature or Governor will not have a material
adverse effect on our business or that the Program will not be eliminated
altogether.
3
<PAGE>
We may incur unexpected liabilities if we acquire other companies in the
environmental, engineering, consulting and testing services industry.
If we acquire other companies in the environmental, engineering,
consulting and testing services industry, we may not discover some of the
liabilities or contingencies these companies have. These liabilities may result
from a prior owner's non-compliance with applicable federal, state or local
laws. For example, we may be liable after an acquisition of a company for the
prior owner's failure to pay taxes or comply with environmental regulations.
Environmental liabilities could arise regardless of whether we own or lease our
properties. While we will try to minimize our potential exposure by conducting
investigations during the acquisition process, we may not be able to identify
all existing or potential liabilities. We also generally will require each
seller of an acquired business to indemnify us against undisclosed liabilities.
In most cases, this indemnification obligation will be supported by deferring
payment of a portion of the purchase price or other appropriate security.
However, this indemnification may not be adequate to fully offset any
undisclosed liabilities associated with the acquired business.
The loss of the services of our senior management may negatively affect our
business.
We believe that our success depends to a significant extent upon the
continued services of Charles C. Evans, our Chairman and Chief Executive Officer
and Timothy R. Gipe, a director of ECOS and President of EE&G and our other
executive officers and senior management. Although we have entered into
employment agreements with Dr. Evans and Mr. Gipe, their employment agreements
terminate in June 2001. If we lose the services of one or more of these key
officers before we are able to attract qualified replacement personnel, our
business could be adversely affected.
If we are unable to attract, retain or manage skilled employees it could
negatively affect our business.
Our business involves the delivery of environmental, engineering
consulting and testing services and is labor-intensive. The loss of a
significant number of employees, our inability to hire a sufficient number of
qualified employees or adequately develop and motivate the skilled employees we
have hired could have a material adverse effect on our business. We compete with
other firms and enterprises engaged in environmental, engineering consulting and
testing services for employees with the skills required to perform our services.
We cannot assure you that we will be able to attract and retain a sufficient
number of highly skilled employees in the future or that we will continue to be
successful in training, retaining and motivating employees.
Future issuances of our common stock may cause dilution.
We may issue additional shares of common stock pursuant to option
grants, earn-out arrangements and future acquisitions. As a result, purchasers
of our common stock may experience dilution in the net tangible book value per
share of the common stock. In addition, because our shareholders do not have any
preemptive right to purchase additional shares in the future, their voting power
will be diluted by any issuance of shares.
Anti-takeover provisions.
Our Board of Directors has the authority to issue shares of preferred
stock and to determine the designations, preferences and rights and the
qualifications or restrictions of those shares without any further vote or
action by the shareholders. The rights of the holders of common stock will be
subject to, and may be adversely affected by, the rights of the holders of any
preferred stock that may be issued in the future. The issuance of preferred
stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate actions, could have the effect of making it
more difficult for a third party to acquire a majority of our outstanding voting
common stock. We are subject to Section 607.0902 of the Florida Business
Corporation Act relating to control-share acquisitions.
4
<PAGE>
Use of Proceeds
We will not receive any proceeds from the sale of shares offered by the
selling shareholder pursuant to this prospectus.
Selling Shareholder
The following table sets forth as of December 21, 2000, certain
information with respect to the beneficial ownership of our common stock by the
selling shareholder. Of the 1,000,000 shares of common stock being offered,
1,000,000 shares were issued and outstanding as of the date of this prospectus.
The information below is based on information provided by or on behalf of the
selling shareholder. The selling shareholder may offer all, some or none of the
common stock. In addition, the selling shareholder identified below may have
sold, transferred or otherwise disposed of all or a portion of its common stock
since the date on which it provided the information regarding its common stock.
<TABLE>
<CAPTION>
Nature of Number of Shares Number of Shares to Percent of Shares to
Selling Relationship Owned Before the Number of Shares be Owned After the be Owned After the
Shareholder with ECOS Title of Class Offering(1) to be Sold Offering Offering
----------- --------- -------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Shareholder Common Stock 6,681,818(2),(3) 1,000,000 5,681,818 15.4%
O'Connell, Jr.
and Walter
Crumbley, Jr.
d/b/a Safe
Harbour Marina
</TABLE>
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(1) Pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, shares
of common stock which may be acquired pursuant to options, warrants,
rights or conversion privileges within 60 days of December 21, 2000 are
deemed outstanding for purposes of determining the total number of
shares beneficially owned by the selling shareholder.
(2) Safe Harbour Marina was issued 1,000,000 shares of our common stock
as consideration for its agreement to make the $250,000 loan evidenced
by a convertible promissory note.
(3) Safe Harbour Marina is the holder of a $250,000 convertible promissory
note executed by us on January 17, 2000. Safe Harbour Marina has the
right, at its option, at any time prior to the maturity date of January
17, 2002 to convert the entire principal amount of the convertible
promissory note plus accrued interest thereon into shares of our
common stock at a conversion price equal to 80% of the average of the
closing price of the common stock on the Over the Counter Bulletin
Board for 30 business days immediately preceding the date on which we
receive Safe Harbour Marina's written notice of conversion. As of
December 21, 2000, this convertible promissory note was convertible
into approximately 5,681,818 shares of our common stock, based on a
conversion price of $.044, calculated on the basis of 80% of the
average of the closing price of our common stock for the thirty
business days immediately preceding December 21, 2000.
5
<PAGE>
Plan of Distribution
The selling shareholder and its successor, which term includes its
transferees, pledgees or donees or their successors, may sell the common stock
directly to purchasers or through underwriters, broker-dealers or agents, who
may receive compensation in the form of discounts, concessions or commissions
from the selling shareholder or the purchasers, which discounts, concessions or
commissions as to any particular underwriter, broker-dealer or agent may be in
excess of those customary in the types of transactions involved.
The common stock may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at prices related to
such prevailing market prices, at varying prices determined at the time of sale,
or at negotiated prices. The common stock may be sold by one or more of, or a
combination of the following:
o a block trade in which the broker-dealer so engaged will
attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
o purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
o in privately negotiated transactions.
In connection with the sale of the common stock, the selling
shareholder may enter into hedging transactions with broker-dealers or other
financial institutions which may in turn engage in short sales of the common
stock and deliver these securities to close out such short positions, or loan or
pledge the common stock to broker-dealers that in turn may sell these
securities.
The aggregate proceeds to the selling shareholder from the sale of the
common stock offered by them hereby will be the purchase price of such common
stock less discounts and commissions, if any. The selling shareholder reserves
the right to accept and, together with its agents from time to time, to reject,
in whole or in part, any proposed purchase of common stock to be made directly
or through agents. We will not receive any of the proceeds from this offering.
Our common stock is listed on the Over the Counter Bulletin Board of
the National Association of Securities Dealers Automated Quotation System.
In order to comply with the securities laws of some states, if
applicable, the common stock may be sold in such jurisdictions only through
registered or licensed brokers or dealers, In addition, in some states the
common stock may not be sold unless it has been registered or qualified for sale
in the applicable state or an exemption from registration or qualification
requirements is available and is complied with.
The selling shareholder and any underwriters, broker-dealers or agents
that participate in the sale of common stock, may be "underwriters" within the
meaning of Section 2(11) of the Securities Act. Any discounts, commissions,
concessions or profit they earn on any resale of the shares may be underwriting
discounts and commissions under the Securities Act. If the selling shareholder
is an "underwriter" within the meaning of Section 2(11) of the Securities Act,
it will be subject to the prospectus delivery requirements of the Securities
Act. The selling shareholder has acknowledged that it understands its
obligations to comply with the provisions of the Securities Exchange Act of 1934
and the rules thereunder relating to stock manipulation, particularly Regulation
M, and has agreed that it will not engage in any transaction in violation of
such provision.
6
<PAGE>
In addition, any securities covered by this prospectus which qualify
for sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus. A selling shareholder may not sell any
common stock described herein and may not transfer, devise or gift such
securities by other means not described in this prospectus.
Description of Securities to be Registered
Our authorized capital stock consists of 75,000,000 shares of common
stock, par value $.012 per share, and 5,000,000 shares of preferred stock, par
value $.001 per share. Of the preferred stock authorized, 1,200,000 shares have
been designated as Series A convertible preferred stock and 1,000,000 shares
have been designated as Series B convertible preferred stock. As of November 3,
2000, 31,271,860 shares of common stock were outstanding and 0 shares of
preferred stock were outstanding.
Common Stock
------------
Voting Rights
Each holder of common stock is entitled to one vote for each share
held. Shareholders do not have the right to cumulate their votes. Accordingly,
holders of a majority of the issued and outstanding shares of common stock will
have the right to elect all of our directors and otherwise control the affairs
of our company.
Dividends
Holders of common stock are entitled to dividends on a pro rata basis
upon declaration of dividends by the Board of Directors. Dividends are payable
only out of funds legally available for the payment of dividends. The Board of
Directors is not required to declare dividends, and it currently expects to
reinvest earnings, if any, into our growth and expansion. The payment of cash
dividends, if any, will be at the discretion of our Board of Directors and will
depend upon our earnings, financial requirements and such other factors as our
Board of Directors may deem relevant. Payment of dividends on common stock is
subject to prior payment of accrued and unpaid dividends on outstanding shares
of preferred stock.
Liquidation Rights
In the event of our liquidation, holders of our common stock will be
entitled to a pro rata distribution of our assets, after payment of all amounts
owed to our creditors, and subject to any preferential amount payable to holders
of our preferred stock.
Other Provisions
There are no preemptive, subscription, conversion, redemption or
sinking fund provisions applicable to the common stock.
The rights and preferences of holders of common stock are subject to
the rights of any series of preferred stock which we may issue in the future.
Preferred Stock
---------------
Our board of directors is authorized by our articles of incorporation
to provide for the issuance of shares of preferred stock, in one or more series,
to establish the number of shares to be included in each series, to fix the
designation, rights, preferences, privileges and restrictions of the shares of
each series and to increase or decrease the number of shares of any series of
preferred stock, all without any further vote or action by our shareholders. Any
issuance of preferred stock could be used to discourage, delay or make more
difficult a change in control of ECOS.
Transfer Agent and Registration
Corporate Stock Transfer
3200 Cherry Creek Drive South, Suite 430
Denver, Colorado 80209
Tel (303) 282-4800
Fax (303) 282-5800
7
<PAGE>
Legal Matters
Certain legal matters relating to the offering will be passed upon for
us by Akerman, Senterfitt & Eidson, P.A., Miami, Florida.
Experts
Morrison, Brown, Argiz & Company, independent certified public accounts
have audited our consolidated financial statements and schedule included in our
Annual Report on Form 10-KSB for the fiscal year ended March 31, 2000, as set
forth in their report, which is incorporated by reference in this prospectus and
elsewhere in the registration statement. Our financial statements and schedule
are incorporated by reference in reliance on Morrison, Brown, Argiz & Company's
report, given on their authority as experts in accounting.
8
<PAGE>
Part II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth an estimate of the fees and expenses in
connection with the resale of the securities being registered hereunder. All
such fees and expenses shall be borne by ECOS.
Commission Registration Fee..................................... $ 9.75
Legal Fees and Expenses......................................... $ 5,000.00
Accounting Fees and Expenses.................................... $ 1,000.00
Printing, Engraving and Mailing Expenses........................ $ 2,000.00
Miscellaneous................................................... $ 1,000.00
Total........................................................... $ 9,009.75
Item 15. Indemnification of Directors and Officers
Under Section 607.0831 of the Florida Business Corporation Act (the
"FBCA"), a director is not personally liable for monetary damages to the
corporation or any other person for any statement, vote, decision, or failure to
act regarding corporate management or policy unless (1) the director breached or
failed to perform his duties as a director; and (2) the director's breach of, or
failure to perform, those duties constitutes: (a) a violation of the criminal
law, unless the director had reasonable cause to believe his conduct was lawful
or had no reasonable cause to believe his conduct was unlawful. A judgment or
other final adjudication against a director in any criminal proceeding for a
violation of the criminal law estops that director from contesting the fact that
his or her breach, or failure to perform, constitutes a violation of the
criminal law; but does not estop the director from establishing that he or she
had reasonable cause to believe that his or her conduct was lawful or had no
reasonable cause to believe that his or her conduct was unlawful; (b) a
transaction from which the director derived an improper personal benefit, either
directly or indirectly; (c) a circumstance under which the liability provisions
of s. 607.0834 are applicable; (d) in a proceeding by or in the right of the
corporation to procure a judgment in its favor or by or in the right of a
shareholder, conscious disregard for the best interest of the corporation, or
willful misconduct; or (e) in a proceeding by or in the right of someone other
than the corporation or a shareholder, recklessness or an act or omission which
was committed in bad faith or with malicious purpose or in a manner exhibiting
wanton and willful disregard of human rights, safety, or property.
Under Section 607.0850 of the FBCA, a corporation has the power to
indemnify any person who was or is a party to any proceeding (other than an
action by, or in the right of, the corporation), by reason of the fact that he
or she is or was a director, officer, employee or agent of the corporation or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against liability incurred in connection with such proceeding,
including any appeal thereof, if he or she acted in good faith and in a manner
he or she reasonably believed to be in, or not opposed to, the best interests of
the corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any proceeding by judgment, order, settlement or conviction or upon a plea of
nolo contendere or its equivalent shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
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In addition, under Section 607.0850 of the FBCA, a corporation has the
power to indemnify any person, who was or is a party to any proceeding by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that the person is or was a director, officer, employee, or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses and amounts paid in
settlement not exceeding, in the judgment of the board of directors, the
estimated expense of litigating the proceeding to conclusion, actually and
reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof. Such indemnification shall be
authorized if such person acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation, except that no indemnification shall be made under this subsection
in respect of any claim, issue, or matter as to which such person shall have
been adjudged to be liable unless, and only to the extent that, the court in
which such proceeding was brought, or any other court of competent jurisdiction,
shall determine upon application that, despite the adjudication of liability but
in view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
Under Section 607.0850 of the FBCA, the indemnification and advancement
of expenses provided pursuant to Section 607.0850 of the FBCA are not exclusive,
and a corporation may make any other or further indemnification or advancement
of expenses of any of its directors, officers, employees, or agents, under any
bylaw, agreement, vote of shareholders or disinterested directors, or otherwise,
both as to action in his or her official capacity and as to action in another
capacity while holding such office. However, indemnification or advancement of
expenses shall not be made to or on behalf of any director, officer, employee or
agent if a judgment or other final adjudication establishes that his or her
actions, or omissions to act, were material to the cause of action so
adjudicated and constitute: (a) a violation of the criminal law, unless the
director, officer, employee or agent had reasonable cause to believe his or her
conduct was unlawful; (b) a transaction from which the director, officer,
employee or agent derived an improper personal benefit; (c) in the case of a
director, a circumstance under which the liability provisions of s. 607.0834 are
applicable; or (d) willful misconduct or a conscious disregard for the best
interests of the corporation in a proceeding by or in the right of the
corporation to procure a judgment in its favor or in a proceeding by or in the
right of a shareholder.
The Bylaws of the Company provide that the Company shall, to the
fullest extent permitted by the FBCA or any similar provision of applicable law
at the time in effect, indemnify all officers and directors of the Company.
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 Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
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<PAGE>
Item 16. Exhibits
Exhibit Number Description
-------------- -----------
5.1 Opinion of Akerman, Senterfitt & Eidson, P.A. regarding the
legality of the common stock being registered.
13.1 Form 10-KSB for the period ended March 31, 2000.
13.2 Form 10-QSB for the period ended September 30, 2000.
15.1 Letter from Morrison, Brown, Argiz & Company on unaudited
interim financial information.
23.1 Consent of Morrison, Brown, Argiz & Company.
23.2 Consent of Akerman, Senterfitt & Eidson, P.A. (included in
Exhibit 5.1).
24.1 Power of Attorney (included on signature page to this
registration statement on Form S-2).
27.1 Financial Data Schedule.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes to:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement
to:
(i) Include any prospectus required by section 10(a)(3)
of the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental
change in the information in the registration
statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high end of the estimated
maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act,
treat each post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at that time
to be the initial bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act 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
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-2 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Miami Lakes, State of Florida, on December 28, 2000.
ECOS Group, Inc.
By: /s/ Charles C. Evans
-------------------------------
Charles C. Evans
Chief Executive Officer and
Chairman of the Board
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Charles C. Evans and Timothy R.
Gipe, or either of them, each acting alone, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for such person and in his or her name, place and stead, in any and all
capacities, in connection with the registrant's registration statement on Form
S-2 under the Securities Act of 1933, including to sign the registration
statement in the name and on behalf of the registrant or on behalf of the
undersigned as a director or officer of the registrant, and any and all
amendments or supplements to the registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Commission and any applicable securities exchange or securities self-regulatory
body, granting unto said attorneys-in-fact and agents, each acting alone, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes or
substitute, may lawfully do or cause to be done by virtue hereof.
-----------
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been duly signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Charles C. Evans Chief Executive Officer and December 28, 2000
----------------------- Chairman
Charles C. Evans
/s/ Timothy R. Gipe President of EE&G and Director December 28, 2000
-----------------------
Timothy R. Gipe
/s/ Ana R. Caminas Chief Financial Officer December 28, 2000
-----------------------
Ana R. Caminas
/s/ Wendell R. Anderson Director December 28, 2000
-----------------------
Wendell R. Anderson
/s/ Luis De La Cruz Director December 28, 2000
-----------------------
Luis De la Cruz
/s/ Leon S. Eplan Director December 28, 2000
-----------------------
Leon S. Eplan
/s/ Joseph F. Startari Director December 28, 2000
-----------------------
Joseph F. Startari
<PAGE>
Exhibit Index
Exhibit Number Description
-------------- -----------
5.1 Opinion of Akerman, Senterfitt & Eidson, P.A. regarding the
legality of the common stock being registered.
13.1 Form 10-KSB for the period ended March 31, 2000.
13.2 Form 10-QSB for the period ended September 30, 2000.
15.1 Letter from Morrison, Brown, Argiz & Company on unaudited
interim financial information.
23.1 Consent of Morrison, Brown, Argiz & Company.
27.1 Financial Data Schedule.
