As filed with the Securities and Exchange Commission on November 6, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SMART CHOICE AUTOMOTIVE GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
FLORIDA
(State or Other Jurisdiction of Incorporation or Organization)
59-1469577
(I.R.S. Employer Identification Number)
5200 South Washington Avenue
Titusville, Florida 32780
(407) 269-9680
(Address, Including Zip Code, and Telephone Number,
including Area Code, of Registrant's Principal Executive Offices)
GARY R. SMITH
President and Chief Executive Officer
Smart Choice Automotive Group, Inc.
5200 South Washington Avenue
Titusville, Florida 32780
(407) 269-9680
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copies to:
RANDOLPH H. FIELDS, ESQ.
Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.
111 North Orange Avenue
Suite 2000
Orlando, Florida 32801
Telephone: (407) 420-1000
Telecopier: (407) 420-5909
Approximate date of commencement of proposed sale to the
public: As soon as practicable after this Registration Statement
becomes effective.
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>
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. [ ]
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Proposed Proposed
Title of Each Class Amount Maximum Maximum Amount
of Securities to be to be Offering Aggregate of
Registered Registered(1) Price per Offering Registration
Share(2) Price(2) Fee
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Common Stock, par 8,694,181 $5.44 $47,296,344.64 $14,332.23
value $.01 per share
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(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended (the
"Securities Act"), this Registration Statement also covers such
indeterminable additional shares of Common Stock as may become issuable as
a result of any future anti-dilution adjustment, conversion price or
interest rate fluctuations in accordance with the terms of any warrants,
stock options, preferred stock, and convertible notes, the underlying
shares of which are included for registration herein.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee in accordance with Rule 457(c) under the Securities Act.
Represents the average of the high/low price as quoted October 30, 1997 by
the NASDAQ SmallCap Market.
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
<PAGE>
PROSPECTUS
8,694,181 SHARES
SMART CHOICE AUTOMOTIVE GROUP, INC.
COMMON STOCK
This Prospectus relates to an offering (the "Offering") of up to 8,694,181
shares (the "Shares") of common stock, par value $.01 per share (the "Common
Stock"), of Smart Choice Automotive Group, Inc., a Florida corporation formerly
known as Eckler Industries, Inc. (the "Company"), which may be offered (the
"Offering") for sale by persons (the "Selling Shareholders") who have acquired
such Shares (or instruments exercisable for or convertible into Shares) in
certain acquisitions of businesses by the Company and other transactions not
involving a public offering. This Prospectus also relates to the offer and sale
by the Selling Shareholders, in accordance with Rule 416 under the Securities
Act of 1933, as amended (the "Securities Act"), of such presently indeterminate
number of additional Shares as may be issuable upon conversion of the shares of
the Company's Series A Redeemable Convertible Preferred Stock (the "Series A
Preferred Shares") held by certain of the Selling Shareholders, based upon
fluctuations in the conversion price of the Series A Preferred Shares. The
Shares are being registered under the Securities Act on behalf of the Selling
Shareholders in order to permit the public sale or other distribution of the
Shares.
The Shares are being registered as a result of (i) the Company's
acquisition of the following businesses: Smart Choice Holdings, Inc.; Liberty
Finance Company, Inc. and affiliates; Two Two Five North Military Trail
Corporation d/b/a Miracle Mile Motors, and Palm Beach Finance Company, Inc.;
Roman Fedo, Inc. and Fedo Finance, Inc.; B&B Enterprises, Inc., d/b/a Stuart
Nissan; and Jack Winters Enterprises, Inc. d/b/a Motorcars of Stuart (the
"Acquisitions"); (ii) a private placement of convertible notes and common stock
purchase warrants ("Note Private Placement"); (iii) a private placement of the
Series A Preferred Shares and common stock purchase warrants of the Company
("Series A Preferred Private Placement"); (iv) loans obtained from Finova
Capital Corporation, Sirrom Capital Corporation and Banker's Credit Insurance
Services ("Lenders"); and (v) other registration obligations of the Company to
certain security holders. Pursuant to the Acquisitions, the Company agreed to
register the Common Stock received and the Common Stock issuable upon conversion
of promissory notes received by sellers of those businesses. The Company is
obligated to register the Common Stock issuable upon conversion or exercise of
the securities issued in the Note Private Placement and the Series A Preferred
Private Placement, and to register the Common Stock underlying certain
convertible notes and warrants delivered to the Lenders in connection with loan
transactions. Further, the Company is including herein Common Stock beneficially
held by certain shareholders pursuant to registration rights agreements between
them and the Company.
The Shares may be sold or distributed from time to time by or for the
account of the Selling Shareholders or their pledgees through dealers, brokers
or other agents, or directly to one or more purchasers, including pledgees, at
market prices prevailing at the time of sale or at prices otherwise negotiated.
This Prospectus also may be used, with the Company's prior consent, by other
persons acquiring Shares and who wish to offer and sell such Shares under
circumstances requiring or making desirable its use. 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. See "Selling Shareholders" and "Plan of Distribution."
The Company will receive no portion of the proceeds from the sale of the
Shares offered hereby, and will pay all of the expenses, estimated to be
approximately $46,832.23 in connection with this Offering, other than
underwriting and brokerage commissions, discounts, fees and counsel fees and
expenses incurred by the Selling Shareholders. See "Use of Proceeds," "Selling
Shareholders," and "Plan of Distribution."
The Company's Common Stock is currently quoted on the Nasdaq SmallCap
Market ("Nasdaq") under the symbol "SMCH." On November 3, 1997, the last
reported sale price of the Common Stock as quoted on Nasdaq was $5.75 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 HEREOF FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED
IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK.
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.
THE DATE OF THIS PROSPECTUS IS NOVEMBER 6, 1997
<PAGE>
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 Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices located at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor, New York,
New York 10048. Copies of such materials can be obtained upon written request
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Quotations relating to the
Company's Common Stock appear on the NASDAQ SmallCap Market and such reports and
proxy statements and other information concerning the Company can also be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which have been omitted in accordance with the rules and regulations of
the Commission. For further information, reference is hereby made to the
Registration Statement. Each statement made in this Prospectus concerning a
document filed as part of the Registration Statement is qualified in its
entirety by reference to such document for a complete statement of its
provisions. Copies of the Registration Statement may be inspected, without
charge, at the offices of the Commission, or obtained at prescribed rates from
the Public Reference Section of the Commission, at the address set forth above,
or on the World Wide Web through the Commission's Internet address at
"http://www.sec.gov."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-14082)
pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1996;
2. All other reports filed by the Company pursuant to Section 13(a) or 15(d)
of the Exchange Act since September 30, 1996, consisting of (i) the
Company's Quarterly Reports on Form 10-QSB and Form 10-Q for the fiscal
quarters ended December 31, 1996, March 31, 1997 and June 30, 1997,
respectively, (ii) the Company's Current Reports on Form 8-K dated October
28, 1996, December 30, 1996, January 28, 1997, February 12, 1997, March 20,
1997, June 27, 1997, two current reports dated June 30, 1997, August 21,
1997, August 29, 1997, and September 24, 1997, and (iii) the Company's
Amendment on Form 8-K/A to the Current Report on Form 8-K dated February
12, 1997; the Company's amendment on Form 8-K/A to the Current Report on
Form 8-K dated June 27, 1997; and the Company's amendment on Form 8-K/A
to the current report on Form 8-K dated August 21, 1997;
3. The Company's definitive Proxy Statement filed on February 27, 1997; and
4. The description of the Common Stock contained in the Company's Registration
Statement on Form 8-A, filed on April 16, 1997.
All 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 shall be deemed incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference, or contained in this Prospectus, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified shall not
be deemed to constitute a part of this Prospectus except as so modified, and any
statement so superseded shall not be deemed to constitute a part of this
Prospectus.
The Company will provide, without charge, to each person, including any
beneficial owner of the Warrants or the Warrant Shares, to whom a copy of this
Prospectus is delivered, upon the written or oral request of any such person, a
copy of any or all of the documents which are incorporated herein by reference
(other than exhibits to the information that is incorporated by reference unless
such exhibits are specifically incorporated by reference into the information
that this Prospectus incorporates). Requests for such copies should be directed
to the Company's principal executive offices: Shareholder Relations Department,
Smart Choice Automotive Group, Inc., 5200 South Washington Avenue, Titusville,
Florida 32780, telephone: (407) 269-9680.
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the detailed information
and consolidated financial statements, including the notes thereto, appearing
elsewhere in this prospectus or incorporated herein by reference.
The Company. Smart Choice Automotive Group, Inc. (the "Company"), is an
active acquiror of new and used-car dealerships and used-car finance companies
in the southeastern United States. The Company currently operates in several
major markets in Florida and intends to expand into the southeastern United
States. The Company has contracted to purchase three new car dealerships with a
total of six factory franchises. The Company targets its used-car products and
services to the sub-prime segment of the automobile financing industry, which
focuses on selling and financing the sale of used-cars to persons who have
limited credit histories, low incomes, or past credit problems ("Sub-Prime
Borrowers"). In connection with its sale of used-cars, the Company underwrites,
finances, and services retail installment contracts ("Finance Contracts"). The
Company also operates insurance and dealer consulting divisions, as well as
Eckler Industries, Inc. ("Eckler's"), one of the nation's leaders in Corvette
parts and accessories sales with more than 95,000 customers.
The Company expanded significantly in the first three quarters of 1997
by acquiring two new car dealerships, five used-car dealerships and five
used-car finance companies, having an aggregate of $33.3 million in gross
Finance Contracts. The Company presently operates two new car dealerships, has
contracted to purchase one additional new car dealership, operates 19 used-car
dealerships, holds and services approximately $50 million in gross Finance
Contracts, and intends to continue its expansion through acquisitions and
internal growth. For the six months ended June 30, 1997, the Company incurred
losses of approximately $6.1 million, reflecting start up costs, development of
its infrastructure, and expansion of its operations.
Dealership Operations. In addition to the two Volvo and Nissan new car
dealerships recently acquired, the Company has contracted to purchase an
additional new car dealership in Florida that has franchises to sell Acura,
Audi, Volkswagen, and Subaru vehicles. The Company intends to focus its growth
during the remainder of 1997 on acquiring and opening new and used-car
dealerships. See "Growth Strategy" below.
The Company sells new and used-cars through 19 wholly owned used-car
dealerships and two wholly-owned new car dealerships in Florida, and finances
such sales through Finance Contracts that the Company originates and services.
The Company's competition for its used-car dealerships primarily consists of the
numerous independent used-car dealerships that sell and finance sales of
used-cars to Sub-Prime Borrowers ("Dealer/Financers"). The Company distinguishes
its dealerships from those of typical Dealer/Financers by providing multiple
locations, upgraded facilities, large inventories of used automobiles, a captive
finance company, centralized purchasing, value-added marketing programs, and
dedication to customer service. Most of the Company's dealerships maintain
inventories of approximately 50-125 used-cars and feature a wide selection of
makes and models (with ages generally ranging from three to six years). The
Company has developed underwriting guidelines and techniques that combine
established underwriting criteria with managerial discretion, to facilitate
prompt credit decisions and utilizes networked computer systems to monitor and
service large volumes of Finance Contracts.
The Company is seeking to develop widespread name recognition for its
"First Choice" used-cars through extensive television, radio, and billboard
advertising. The Company emphasizes its network of dealerships, its wide
selection of quality used-cars, and its ability to finance most Sub-Prime
Borrowers.
Growth Strategy. The Company's strategy has been to increase sales revenue
and finance income by opening additional used-car dealerships and acquiring
existing new and used-car dealerships and Dealer/Financers, in selected markets.
The Company intends to focus its growth in the remainder of 1997 on acquiring
new car dealerships and intends to expand its used-car dealerships by year end.
To facilitate inventory quality, the Company has opened used-car reconditioning
facilities in Lakeland and West Palm Beach, Florida. The Company expects to
finance its expansion through operating cash flow, supplemental borrowings, and
capital markets transactions. Although the Company believes its current
management team, monitoring and collection operations, and corporate
infrastructure are capable of supporting the planned expansion of its operations
and services, the start-up costs and incremental overhead created by such
expansion could adversely affect the Company's results of operations in the
short-term.
<PAGE>
RISK FACTORS
IN CONSIDERING THE MATTERS SET FORTH IN THIS PROSPECTUS, PROSPECTIVE
PURCHASERS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH BELOW AS WELL AS
OTHER INFORMATION SET FORTH AND INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
Forward Looking Statements
This Prospectus and/or certain documents incorporated herein by
reference contain certain "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
which represent the Company's expectations or beliefs and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). These
statements by their nature involve substantial risks and uncertainties, certain
of which are beyond the Company's control, and actual results may differ
materially depending on a variety of important factors, including the level of
acquisition opportunities available to the Company and the Company's ability to
efficiently price and negotiate such acquisitions on a favorable basis, sources
for sufficient additional capital to meet the Company's growth and operations,
the financial condition of the Company's customers, the failure to properly
manage growth and successfully integrate acquired companies and operations,
changes in economic conditions, demand for the Company's products and changes in
competitive environment.
The Company cautions that the factors described above could cause actual
results or outcomes to differ materially from those expressed in any
forward-looking statements of the Company made by or on behalf of the Company.
Any forward-looking statement speaks only as of the date on which such statement
is made, and the Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for
management to predict all of such factors. Further, management cannot assess the
effect of each such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.
Limited Combined Operating History and Losses
The Company began operations as a combined business unit with Eckler's
in January of 1997 and incurred a loss of approximately $6.1 million for the six
months ended June 30, 1997, reflecting startup costs, development of its
infrastructure, and expansion of its operations. In addition, for the year ended
September 30, 1996 and for the three months ended December 31, 1996, Eckler's
sustained losses of $866,568 and $196,209, respectively. There can be no
assurance that the Company will not continue to incur losses in the results of
its operations.
Risks Associated With Acquisitions
A significant component of the Company's recent growth has come through
acquisitions of existing car dealerships and related businesses, including
used-car Dealer/Financers lending primarily to Sub-Prime Borrowers. The
Company's future growth will depend in large part on its ability to acquire
additional dealerships, manage expansion, control costs in its operations and
consolidate acquisitions into existing operations. The Company will have to
review acquired dealership operations, management infrastructure and systems and
financial controls, and make those adjustments or complete reorganizations as
appropriate. Unforeseen capital and operating expenses, or other difficulties,
complications and delays frequently encountered in connection with the expansion
and integration of acquired operations could inhibit the Company's growth. The
full benefits of a significant acquisition will require the integration of
administrative, finance, sales and marketing organizations, as well as the
coordination of common sales and marketing efforts and the implementation of
appropriate operational, financial and management systems and controls.
Acquisitions and related integration issues will require substantial attention
from the Company's senior management team, whose acquisition experience to date
has consisted primarily of dealerships at single locations. The diversion of
management attention required by the acquisition and integration of multiple
dealerships, as well as any other difficulties which may be encountered in the
transition and integration process, could have an adverse effect on the revenue
and operating results of the Company. There can be no assurance that the Company
will identify suitable acquisition candidates, that manufacturers' consents will
be obtained (if required), that acquisitions will be consummated on acceptable
terms or that the Company will be able to integrate successfully the operations
of any acquisition. The Company's ability to continue to grow through the
acquisition of additional dealerships will also be dependent upon the
availability of suitable candidates, the Company's ability to attract and retain
competent management, and the availability of capital to complete the
acquisitions. The Company intends to finance acquisitions through a combination
of its available cash resources, borrowings from financial institutions and, in
appropriate circumstances, the issuance of equity and/or debt securities.
Acquiring additional dealerships and Dealer/Financers will have a significant
effect on the Company's financial position, and could cause substantial
fluctuations in the Company's quarterly and yearly operating results.
<PAGE>
Acquisitions are also likely to result in the recording of significant goodwill
and intangible assets on the Company's financial statements, the amortization of
which would reduce reported earnings in subsequent years. In addition, the
issuance of additional shares of Common Stock in connection with acquisitions
may substantially dilute the interests of existing shareholders.
Risks Associated With Entering New Industries
Although the Company has an operating history since 1973, it has a
limited history of operating car dealerships and financing the sales of
used-vehicles and related services, particularly to Sub-Prime Borrowers.
Consequently, the Company is subject to a variety of risks associated with
entering a new business, such as the lack of prior operating history in the
Sub-Prime lending and new and used-car sales markets, integrating the new
businesses into the Company, and hiring the necessary personnel. There can be no
assurance that the Company will achieve profitability in the future. The
Company's ability to become and remain profitable as it pursues its business
strategy will depend upon its ability to: (i) assimilate and manage its
acquisitions; (ii) expand its revenue generating operations while not
proportionately increasing its administrative overhead; (iii) originate Finance
Contracts with an acceptable level of credit risk; (iv) locate sufficient
financing with acceptable terms to fund the expansion of car sales and the
origination of additional Finance Contracts; (v) adapt to the increasingly
competitive market in which it operates; and (vi) obtain and purchase adequate
supplies of cars. Outside factors, such as the economic, regulatory, and
judicial environments in which it operates, also will have an effect on the
Company's business. The Company's inability to achieve or maintain any or all of
its goals could have a material adverse effect on the Company's operations,
profitability, and growth.
Need for Additional Capital
In order to grow its business, the Company will require significant
capital resources, both to fund acquisitions and for working capital. In the
past, the Company has utilized borrowings from financial institutions and its
Common Stock as a currency for acquiring businesses. Depending on the value of
an acquired business, the Company may be required to issue a large number of
additional shares of Common Stock, thereby diluting existing shareholders.
Potential sources of capital for the Company include existing and
proposed credit facilities as well as public and private offerings of the
Company's capital stock. There can be no assurance that the proceeds from these
sources of capital will be sufficient to satisfy all of the Company's cash
requirements or fund combined operating losses, should they occur, beyond the
next 12 months. Moreover, there can be no assurance that any additional
financing will be available to the Company on acceptable terms, or at all. To
the extent the Company is not able to generate sufficient cash flow or obtain
additional financing and its cash requirements were to exceed its available
capital and financing, the Company would be forced to reduce or delay additional
expenditures or otherwise delay, curtail or discontinue some or all of its
operations. Further, if the Company is able to access such capital through
borrowing, such debt will increase the already substantial obligations of the
Company, which could have a material adverse effect on the Company's financial
condition and results of operations.
The operation of automobile dealerships and Dealer/Financers is capital
intensive. The Company requires capital to acquire and maintain inventories of
vehicles and parts, to originate Finance Contracts, to purchase and maintain
service equipment, to maintain its facilities and, in the case of new car
dealerships, to satisfy manufacturers' minimum capital requirements. The Company
finances the purchase of all of its new and used-car inventory and leases all of
the properties underlying its dealerships. Consequently, the Company incurs
significant operating, borrowing and fixed occupancy costs. Should the Company's
expansion plans require additional funding or should its capital requirements
exceed current estimates, the Company could be required to seek additional
financing in the future. There can be no assurance that the Company will be able
to raise such financing when needed or on acceptable terms. As a result, the
Company may be unable to achieve its goals, including anticipated growth.
Creditworthiness of Sub-Prime Borrowers
The Sub-Prime Borrower automobile finance market is comprised of
customers who are deemed to be relatively high credit risk due to various
factors, including, among other things, the manner in which they have handled
previous credit, the absence or limited extent of their prior credit history
and/or their limited financial resources. Consequently, the Company's Finance
Contracts have a higher probability of delinquency and default and greater
servicing costs than loans made to consumers who pose lesser credit risks. The
Company's profitability depends in part upon its ability to evaluate properly
the creditworthiness of Sub-Prime Borrowers and efficiently service its loans.
There can be no assurance that satisfactory credit performance of Sub-Prime
Borrowers will be maintained or that the rate of future defaults and/or losses
will be consistent with prior experience or at levels that will allow the
Company to achieve profitability. Most borrowers' ability to remit payments in
accordance with the terms of the loans is dependent on their continued
<PAGE>
employment. An economic downturn resulting in increased unemployment could cause
a significant rise in delinquencies and defaults, which could materially
adversely affect the Company's financial condition and results of operations.
Moreover, increases in the delinquency and/or loss rates in the Company's loan
portfolio could adversely affect the Company's ability to obtain or maintain its
financing sources.
Competition and Market Conditions
The Company's competitors include local, regional and national
automobile dealers, Dealer/Financers and service and repair shops, many of which
are larger and have greater financial and marketing resources than the Company.
The Company also competes with private market buyers and sellers of used-cars,
used-car dealers, franchised dealers, service center chains and independent
shops for service, repair and parts business. Industry wide gross profit margins
on sales of new vehicles, used-vehicles and sales and service generally have
been declining since 1980, and the new and used-car market faces increasing
competition from non-traditional sources such as independent leasing companies,
brokers, buying services, internet companies and used-car "superstores." Some of
the recent market entrants may be capable of operating on smaller gross margins
than the Company. The Company expects that there will be increasing competition
in the acquisition of other dealerships as industry participants become larger.
There can be no assurance that the Company will be able to maintain or increase
its size relative to its competitors or to increase profit margins in the face
of increased competition.
The Sub-Prime Borrower automobile finance market is highly competitive.
The level of competition has increased significantly in recent years and this
trend is expected to continue. Historically, commercial banks, savings and loan
associations, credit unions, captive finance subsidiaries of automobile
manufacturers and other consumer lenders, many of which have significantly
greater resources than the Company, have not competed for Sub-Prime Borrower
business. To the extent that such lenders expand their activities in the
Sub-Prime Borrower market, the Company's financial condition and results of
operations could be materially adversely affected. During the past two years,
several companies have devoted considerable resources to the Sub-Prime Borrower
market, including well-capitalized public companies. Specifically, Ford Motor
Credit Company announced that it intends to finance Sub-Prime Borrowers; General
Electric Capital Corporation established alliances with several regional
Sub-Prime Borrower automobile Dealer/Financers; and KeyCorp acquired AutoFinance
Group, Inc., which is a Sub-Prime Borrower Dealer/Financer.
The Company, through its Eckler Industries Division, sells parts and
accessories for Corvettes. Under a Reproduction and Service Part Tooling License
Agreement (the "GM Agreement") between the Company and General Motors
Corporation ("GM"), the Company is permitted to manufacture Corvette parts under
the GM Restoration Parts label and to acquire additional inventory from GM.
However, the GM Agreement does not prohibit the Company's competitors from
manufacturing and selling parts that are compatible to those manufactured and
sold by the Company.
General Economic Conditions
The Company's business is directly related to sales of used-cars, which
is affected by employment rates, prevailing interest rates, and other general
economic conditions. A future economic slowdown or recession could lead to
increased delinquencies, repossessions, and credit losses that could hinder the
Company's business and planned expansion. Because of the Company's focus on
Sub-Prime Borrowers, its actual rate of delinquencies, repossessions, and credit
losses on Finance Contracts could be higher under adverse conditions than those
experienced in the used-car sales and finance industry in general. Economic
changes are uncertain, and sluggish sales of used-cars and weakness in the
economy could have an adverse effect on the Company's business.
Changing Nature of Automotive Retailing
The automobile retailing industry has experienced significant change in
the past several years. A number of dealership groups have conducted, or are in
the process of conducting, public offerings of capital stock to enhance their
capital structures and their ability to issue capital stock in acquisitions.
These companies and other well-capitalized dealership groups have begun to
acquire a significant number of other dealers, including dealers in the
Company's markets, in a trend toward the consolidation of the retail automobile
industry. In addition, several companies have opened chains of used-car
"superstores" that offer a large variety and number of used-cars at each of
their locations. A common goal for each of these groups is to create a
recognized national dealership brand. Further, several large, well capitalized
dealer groups are utilizing "one price" and other marketing strategies to
attract consumers away from smaller, more traditional dealers. Other dealers
have formed auto malls and multi-brand dealerships in which multiple makes and
models are sold side by side. Dealers also face increased competition in the
sale of new vehicles from independent brokers and leasing companies, on-line
purchasing services and warehouse clubs. In recent years the number of vehicles
coming off leases has increased significantly, resulting in an increased supply
of high-quality used-vehicles available for resale. These vehicles and vehicles
from other sources have become available to franchised new car dealers and
non-franchised dealers of used-cars, resulting in increased competition in the
<PAGE>
used-car market. Automobile dealers are also facing new forms of competition in
the sale of service and parts. In the 1980s, several new national chains of
service and repair shops and aftermarket parts stores appeared, offering faster
service and lower prices. The Company expects that the automobile retailing
industry will continue to experience significant change in the next several
years as new and stronger sources of competition affect the industry. There can
be no assurance that the Company will be able to respond effectively to changes
in the industry.
Geographic Concentration
As of June 30, 1997, the Company's car sales and financing operations
are concentrated in the southwest, central and southeast areas of Florida. An
economic slowdown or recession, or a change in the regulatory or legal
environment in Florida could have a material adverse effect on the Company's
financial condition and results of operations.
High Leverage
The Company is highly leveraged. At June 30, 1997, the Company's total
indebtedness was approximately $51.4 million. The majority of such debt is
collateralized by the Company's Finance Contracts, new and used car inventory
and all property, plant and equipment. The Company's substantial leverage could
have important consequences, including limiting its ability to obtain additional
financing, requiring the Company to use substantial portions of operating cash
flow to meet interest and principal repayment obligations, exposing the Company
to interest rate fluctuations due to floating interest rates, increasing the
Company's vulnerability to changes in general economic conditions and
competitive pressures, and limiting the Company's ability to realize some or all
of the benefits of significant business opportunities. In addition, various loan
agreements for the Company's obligations contain financial covenants and various
other covenants that limit, among other things, the Company's ability to engage
in certain mergers and acquisitions, incur additional indebtedness or further
encumber its assets, or pay dividends or make other distributions without the
prior consent of the lender(s). The covenants also require the Company to meet
certain financial tests. Although the Company believes that it is currently in
compliance with the terms and conditions of its borrowing arrangements, a
default thereunder could have a material adverse effect on the Company's
financial condition and results of operations.
Sensitivity to Interest Rates; Effect of Usury Laws
A substantial portion of the Company's Finance Contract income results
from the difference between the rate of interest it pays on the funds it borrows
and the rate of interest it earns under the Finance Contracts in its portfolio.
While the Finance Contracts the Company services bear interest at a fixed rate,
the Company's indebtedness and other credit arrangements bear interest at
floating rates. In the event the Company's interest expense increases, it would
seek to compensate for such increases by raising the interest rates on its
Finance Contracts, or raising the retail sales price of its cars. To the extent
the Company were unable to do so, the Company's net margins would decrease,
thereby adversely affecting the Company's results of operations.
Currently, the Company's used-car sales activities are conducted, and a
majority of the Finance Contracts the Company services are originated, in
Florida, which imposes limits on the rate which a lender may charge.
Seasonality
Historically, the Company's dealerships that sell and finance cars to
Sub-Prime Borrowers, have experienced higher revenues in the first two quarters
of the calendar year than in the latter half of the year. Management believes
that these results are due to seasonal buying patterns resulting in part from
the fact that many of the Company's customers receive income tax refunds during
the first half of the year, which are a primary source of down payments on
used-car purchases.
Eckler's, the Company's Corvette parts and accessories division, also is
subject to seasonal fluctuations. Historically, Eckler's business has realized a
higher portion of its revenues (on average, in excess of 55% of its revenues) in
the second and third quarters of the calendar year and the lowest portion of its
revenues in the fourth quarter. The business of Eckler's is particularly
dependent on sales to Corvette enthusiasts during the spring and summer months.
This is the time of year that Corvette enthusiasts are preparing for upcoming
car shows that are held in the late summer and early fall.
Cyclicality
Sales of motor vehicles, particularly new vehicles, historically have
been cyclical, fluctuating with general economic cycles. During economic
downturns, the automotive retailing industry tends to experience similar periods
of decline and recession as the general economy. The Company believes that the
industry is influenced by general economic conditions and particularly by
consumer confidence, the level of personal discretionary spending, interest
rates and credit availability. There can be no assurance that the industry will
not experience sustained periods of decline in vehicle sales in the future. Any
such decline would have a material adverse effect on the Company.
<PAGE>
Regulation and Litigation
The Company's business is subject to extensive federal, state and local
regulation and supervision. Such regulation, among other things, requires the
Company to obtain and maintain licenses and qualifications, to limit interest
rates, fees and other charges related to Finance Contracts, require specified
disclosures by dealers to consumers and to limit rights to repossess and sell
collateral. Such regulations exist primarily for the benefit of consumers,
rather than for the protection of dealers or Dealer/Financers, and could limit
the Company's discretion in operating its business. Various federal, state and
local regulatory agencies, such as the Occupational Safety & Health
Administration ("OSHA"), the Federal Trade Commission ("FTC") and their state
counterparts, have jurisdiction over the Company's operations with respect to
such matters as worker's safety and consumer protection. Future acquisitions by
the Company may also be subject to regulation, including antitrust review.
Noncompliance with any applicable statutes or regulations could result in
suspension or revocation of any license or registration at issue, as well as the
imposition of civil fines and criminal penalties. To the extent that the rates
charged by the Company are limited by the application of maximum allowable
interest rates that may be lower than those currently charged by the Company,
the Company will suffer adverse effects on its results of operations. In
addition, due to the consumer-oriented nature of the automobile finance
industry, Dealer/Financers are frequently named as defendants in litigation
involving alleged violations of federal and state consumer lending or other laws
and regulations. There can be no assurance that the Company will not become
subject to such litigation in the future. A significant judgment against the
Company could have a material adverse effect on the Company's financial
condition and results of operations.
Dependence Upon Key Personnel
The Company's future success will depend upon the continued services of
the Company's senior management as well as the Company's ability to attract
additional members to its management team with experience in the used-car sales
and financing industry. The unexpected loss of the services of any of the
Company's key management personnel or its inability to attract new management
when necessary, could have a material adverse effect upon the Company.
Control By Majority Shareholders
As of June 30, 1997, the Company's management currently beneficially
owns and/or has voting control of approximately 50.8% of the issued and
outstanding Common Stock of the Company. Assuming exercise of all of the Public
Warrants and Underwriter Unit Purchase Option, management would control
approximately 44.8% of the voting stock. Consequently, management may be able to
direct the election of the Company's directors, effect significant corporate
events and generally direct the affairs of the Company. Investors will have only
limited participation in the management of the Company. The concentration of
ownership by such holders may have the effect of preventing a sale or takeover
of the Company.
No Assurance of Continued Market for Securities; "Penny Stock" Regulations
Although the Company's Common Stock and Public Warrants are listed on
the Nasdaq SmallCap Market, there can be no assurance that a public trading
market for the securities will be sustained. If for any reason the Company fails
to maintain sufficient qualifications for continued listing on the Nasdaq
SmallCap Market, purchasers of the securities may have difficulty in selling
their securities should they desire to do so because certain restrictions (the
"penny stock" rules) may be placed upon the sale of securities unless the
securities qualify for an exemption from the "penny stock" rules. The Commission
has adopted regulations which generally define "penny stock" to be any equity
security that has a market price of less than $5 per share or an exercise price
of less than $5 per share, subject to certain exceptions. Since the Common Stock
and Public Warrants are quoted on Nasdaq, they are exempt from the definition of
"penny stock." If they are later removed from listing by Nasdaq and are traded
at a price below $5 per share, the securities may become subject to the "penny
stock" rules that impose burdensome sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and institutional accredited investors. The "penny stock" rules may
restrict the ability or desirability of broker-dealers to sell the Company's
Common Stock. Some brokerage firms will not effect transactions in the
securities if they trade below $5 per share and it is unlikely that any bank or
financial institution will accept the securities as collateral, which could have
an adverse effect in developing or sustaining any market for the securities and
may affect the ability of purchasers in this Offering to sell the Common Stock
in the secondary market.
Listing Maintenance Criteria For Nasdaq System
The Company's Common Stock and Public Warrants are listed on the Nasdaq
SmallCap Market. Continued inclusion on the Nasdaq SmallCap Market requires the
Company to maintain certain criteria such as among others market value, public
float, capital and surplus. Nasdaq has recently proposed revisions to its
listing and maintenance criteria which, if adopted, would make it more difficult
for the Company to maintain its listing. If the Company fails to maintain the
<PAGE>
Nasdaq minimum threshold requirements, it would lose Nasdaq listing and trading
in the securities would be conducted in the over-the-counter market known as the
NASD OTC Electronic Bulletin Board, or more commonly referred to as "pink
sheets", whereupon trading in the Company's securities will be subject to the
"penny stock" regulations. As a result, an investor may find it more difficult
to dispose of, or to obtain accurate quotations as to the market value of, the
Company's Common Stock if it were to lose its Nasdaq SmallCap Market listing.
Potential Volatility of Stock Price
The market price of the Common Stock has been and may continue to be
highly volatile, and could in the future be subject to wide fluctuations in
response to the timing and size of acquisitions, quarter to quarter variations
in operating results, changes in earnings estimates by analysts, market
conditions in the industry, and general economic conditions. Investors in the
Common Stock must be willing to bear the risk of such fluctuations in earnings
and stock price.
Environmental Matters
The Company is subject to federal, state and local laws, ordinances and
regulations which establish various health and environmental quality standards,
and liability related thereto, and provide penalties for violations of those
standards. Under certain laws and regulations, a current or previous owner or
operator of real property may be liable for the cost of removal and remediation
of hazardous or toxic substances or wastes on, under, in or emanating from such
property. Such laws typically impose liability whether or not the owner or
operator knew of, or was responsible for, the presence of such hazardous or
toxic substances or wastes. Certain laws, ordinances and regulations may impose
liability on an owner or operator of real property where onsite contamination
discharges into waters of the state, including groundwater. Under certain other
laws, generators of hazardous or toxic substances or wastes that send such
substances or wastes to disposal, recycling or treatment facilities may be
liable for remediation of contamination at such facilities. Other laws,
ordinances and regulations govern the generation, handling, storage,
transportation and disposal of hazardous and toxic substances or wastes, the
operation and removal of underground storage tanks, the discharge of pollutants
into surface waters and sewers, emissions of certain potentially harmful
substances into the air and employee health and safety. The business operations
of the Company are subject to such laws, ordinances and regulations including
the use, handling and contracting for recycling or disposal of hazardous or
toxic substances or wastes, including environmentally sensitive materials such
as motor oil, transmission fluid, antifreeze, freon, waste paint and lacquer
thinner, batteries, solvent, lubricants, degreasing agents, gasoline and diesel
fuels. The Company is subject to other laws, ordinances and regulations as the
result of the past or present existence of underground storage tanks at many of
the Company's properties.
Certain laws and regulations, including those governing air emissions
and underground storage tanks, have been amended to require compliance with new
or more stringent standards as of future dates. The Company cannot predict what
other environmental legislation or regulations will be enacted in the future,
how existing or future laws or regulations will be administered or interpreted
or what environmental conditions may be found to exist in the future. Compliance
with new or more stringent laws or regulations, stricter interpretation of
existing laws or the future discovery of environmental conditions may require
expenditures by the Company, some of which may be material.
Anti-Takeover Considerations
Certain provisions of Florida law and the Company's Articles of
Incorporation ("Articles") could, together or separately, discourage potential
acquisition proposals, delay or prevent a change in control of the Company, and
limit the price that certain investors might be willing to pay in the future for
the Company's Common Stock. The Company is subject to the "affiliated
transactions" and "control share acquisition" provisions of the Florida Business
Corporation Act and pursuant to its Articles. Those provisions require, subject
to certain exceptions, that an "affiliated transaction" be approved by the
holders of two-thirds of the voting shares other than those beneficially owned
by an "interested shareholder" or by a majority of disinterested directors.
Voting rights must also be conferred on "control shares" acquired in specified
control share acquisitions, generally only to the extent conferred by resolution
approval by the shareholders, excluding holders of shares defined as "interested
shares." In addition, the Company's Articles, among other things, provide that
(i) any action required or permitted to be taken by the shareholders of the
Company may be effected only at an annual or special meeting of shareholders,
and not by written consent of the shareholders, (ii) any special meeting of the
shareholders may be called only by the Chairman of the Board, the President or
Chief Executive Officer, or upon the written demand of the holders of not less
than 25% of the votes entitled to be cast at a special meeting, (iii) an advance
notice procedure must be followed for nomination of directors and for other
shareholder proposals to be considered at annual shareholders' meetings, and
(iv) a director may be removed only for cause upon approval of holders of not
less than 66-2/3% of the Company's voting stock. In addition, the Company is
<PAGE>
authorized to issue up to five million shares of preferred stock in one or more
series, having terms fixed by the Board of Directors without shareholder
approval, including voting, dividend or liquidation rights that could be greater
than or senior to the rights of holders of Common Stock. Issuance of additional
shares of Common Stock or new shares of preferred stock could also be used as an
anti-takeover device. Although the Company has no present intentions or plans to
issue preferred stock other than in connection with acquisitions, there can be
no assurance that the Company will not do so in the future.
No Anticipated Dividends
The Company does not intend to pay any dividends on its Common Stock for
the foreseeable future. Any earnings which the Company may realize in the
foreseeable future will be retained to finance the development and expansion of
its business. In addition, under certain loan covenants, the Company is
prohibited from paying dividends without the prior consent of the lender.
USE OF PROCEEDS
This Prospectus relates to Shares being offered and sold for the
accounts of the Selling Shareholders. The Company will not receive any proceeds
from the sale of the Shares but will pay all expenses related to the
registration of the Shares. See "Plan of Distribution."
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth certain information with respect to
persons for whom the Company is registering the Common Stock for resale to the
public. The Company will not receive any of the proceeds from the sale of Common
Stock by the Selling Shareholders.
<TABLE>
Number
of
Shares
Ownership Offered Ownership
Name Prior to Offering(1) Hereby(2) After Offering(1)
- ----------------------------- ---------------------- ---------- -------------------
Shares Shares Percentage
-------- ------- ----------
<S> <C> <C> <C> <C>
Robert E. Creger(3) 253,575 25,000 228,575 2.5%
R.C. Hill, II(4) 352,156 352,156 * *
David Bumgardner(5) 443,084 430,584(6) 12,500 *
Louis V. Cianfrogna 11,436 5,102(6) 6,334 *
Gary R. Ostoski 11,231 4,898(6) 6,333 *
Jack Winters Enterprises, Inc. 18,322 18,322(6) * *
Roman Fedo, Inc. & Fedo 225,000 225,000(6) * *
Finance, Inc.
Ralph H. Eckler(7) 1,661,000 366,666 1,294,334 13.4%
Thomas E. Conlan(8) 1,457,389 1,319,055 138,334 1.5%
Gerald C. Parker(9) 2,483,233 912,399 1,570,834 16.6%
Conlan Smart Choice Management 445,000 445,000 * *
Trust(10)
Conlan Smart Choice Finance Trust(10) 265,000 265,000 * *
Parker Smart Choice Management 445,000 445,000 * *
Trust(11)
Parker Smart Choice Finance Trust(11) 265,000 265,000 * *
Finova Capital Corporation 70,000 70,000(12) * *
Sirrom Capital Corporation 1,416,666 1,116,666(12) 300,000 2.8%
Banker's Credit Ins. Services 33,333 33,333(12) * *
Randolph H. Fields 50,000 50,000(13) * *
High Capital Funding, LLC 327,500 327,500(14)(15) * *
David H. & Joan S. Herskovits 27,500 27,500(14) * *
James E. Noonan 27,500 27,500(14) * *
The Bridge Fund, N.V. 27,500 27,500(14) * *
Steven Garber and Alfred E. Garber 55,000 55,000(14) * *
Howard Commander 55,000 55,000(14) * *
Mary L. Hart 110,000 110,000(14) * *
Themis Partners, L.P.(16) 243,750 243,750 * *
Heracles Fund (16) 162,500 162,500 * *
Leonardo, L.P.(16) 308,750 308,750 * *
GAM Arbitrage Investments, Inc.(16) 24,375 24,375 * *
AG Super Fund International 24,375 24,375 * *
Partners, L.P.(16)
Raphael, L.P.(16) 97,500 97,500 * *
</TABLE>
<PAGE>
<TABLE>
Number
of
Shares
Ownership Offered Ownership
Name Prior to Offering(1) Hereby(2) After Offering(1)
- ----------------------------- ---------------------- ---------- -------------------
Shares Shares Percentage
-------- ------- ----------
<S> <C> <C> <C> <C>
Ramius Fund, Ltd.(16) 130,000 130,000 * *
Hick Investments, Ltd.(16) 65,000 65,000 * *
Halifax Fund, L.P.(16) 243,750 243,750 * *
Gary R. Smith(17) 3,113,886 100,000 3,013,886 32.1%
Fred E. Whaley(18) 415,000 200,000 215,000 2.3%
Ronald W. Anderson(19) 75,000 55,000 20,000 *
Neal Hutchinson (20) 70,000 35,000 35,000 *
Joseph Alvarez(21) 105,000 25,000 80,000 *
TOTAL 15,615,311 8,694,181 6,921,130
========== ========= ==========
</TABLE>
* Less than 1%.
- ----------
(1) In accordance with Rule 13-d promulgated under the Exchange Act, the share
and percentage calculations were made on the basis of the amount of
outstanding securities plus, for each person or group, any securities that
person or group has the right to control the disposition or voting of, or to
acquire within 60 days pursuant to options, warrants, conversion privileges
or other rights. If the directors or officers do not own shares, or options
or warrants exercisable within the next 60 days, percentage ownership is
deemed to be zero.
(2) Pursuant to Rule 416 under the Securities Act of 1933, this Registration
Statement also covers such indeterminable additional shares of Common Stock
as may become issuable as a result of any future anti-dilution adjustment or
interest rate adjustment in accordance with the terms of common stock
purchase warrants, stock options, convertible notes and Series A Preferred
Shares held by certain Selling Shareholders.
(3) Mr. Creger is a former officer of First Choice Auto Finance, Inc., a
subsidiary of the Company.
(4) Mr. Hill has been an employee of the Company since February 12, 1997.
(5) Mr. Bumgardner has been a director of the Company since January 28, 1997.
The shares being offered for sale by Mr. Bumgardner represent issued and
outstanding shares or shares underlying convertible notes received by Mr.
Bumgardner in connection with the sale of his business to the Company.
(6) Shares offered in this prospectus represent issued and outstanding shares or
shares underlying notes or other convertible securities received by the
Selling Shareholders in connection with acquisitions by the Company of their
respective vehicle dealerships and related entities.
(7) Until September 30, 1997, Mr. Eckler was a director of the Company and the
Chairman of Eckler's. The shares of Common Stock beneficially owned
include (i) 1,141,000 shares, (ii) 315,000 shares underlying options, (iii)
5,000 shares underlying a warrant, and (iv) 200,000 shares underlying an
option Mr. Eckler owns jointly with Gerald C. Parker and Thomas E. Conlan.
The shares offered include 66,666 shares underlying the option owned
jointly by Mr. Eckler, Mr. Parker and Mr. Conlan.
(8) Mr. Conlan is an employee of the Company and beneficially owns 1,457,389
shares of Common Stock which include (i) a currently exercisable option for
200,000 shares of Common Stock underlying an option which he holds jointly
with Gerald C. Parker and Ralph H. Eckler, (ii) a currently exercisable
option for 75,000 shares of Common Stock, (iii) 5,000 shares of Common
Stock held in trust for which he is co-trustee with Mr. Parker, and (iv)
1,177,389 shares owned directly. However, the amount Mr. Conlan is deemed
to beneficially own does not include 710,000 shares held in trusts of which
he is a beneficiary but over which he does not have voting or dispositive
control. The shares offered include 66,666 shares and the 75,000 shares
underlying the options set forth in the foregoing clauses (i) and (ii) of
this footnote 8 and 1,177,389 shares of Company Common Stock.
<PAGE>
(9) Mr. Parker is a member of the Board of Directors of the Company and
beneficially owns 2,483,233 shares of Common Stock, which include (i) a
currently exercisable option for 200,000 shares of Common Stock underlying
an option which he holds jointly with Mr. Conlan and Mr. Eckler, (ii)
currently exercisable options for 87,500 shares of Common Stock, (iii)
5,000 shares of Common Stock held in trust for an unaffiliated party for
which he is co-trustee with Mr. Conlan, (iv) 710,000 shares of Common Stock
held in trusts of which Mr. Parker is a beneficiary and for which he is a
co-trustee with Gary R. Smith, an officer and director of the Company, (v)
710,000 shares of Common Stock held in trusts of which Mr. Conlan is the
beneficiary and for which Mr. Parker is a co-trustee with Gary R. Smith,
and (vi) 770,733 shares owned directly. The shares offered include 66,666
shares and the 75,000 shares underlying the options referenced in the
foregoing clauses (i) and (ii) of this footnote 9 and 770,733 shares of
Company Common Stock.
(10)Thomas E. Conlan, an employee of the Company, is the beneficiary of these
trusts, however, voting and dispositive control are held by the co-trustees,
Gerald C. Parker, a director of the Company, and Gary R.
Smith, an officer and director of the Company.
(11)Gerald C. Parker, a director of the Company, is the beneficiary of these
trusts and is a co-trustee with Gary R. Smith, an officer and director of
the Company.
(12)Represents additional consideration for or convertible features of certain
loans to the Company not associated with acquisition indebtedness, as
follows: (i) 70,000 shares of Common Stock underlying a common stock
purchase warrant issued to Finova Capital Corporation, (ii) a total of
1,116,666 shares of Common Stock underlying convertible promissory notes
issued to Sirrom Capital Corporation, (iii) and a total of 33,333 shares of
Common Stock underlying convertible promissory notes issued to Bankers
Credit Insurance Services.
(13)Includes 20,000 shares underlying a common stock purchase warrant. Mr.
Fields is a shareholder with the Company's counsel.
(14)Represents shares issuable upon conversion of outstanding convertible notes,
as may be adjusted in accordance with certain anti-dilution and conversion
price adjustment provisions contained therein.
(15)Includes 52,500 shares issuable upon exercise of a common stock purchase
warrant.
(16)Represents the number of shares of Common Stock issuable upon
conversion of the Series A Preferred Shares calculated using an
assumed conversion price of $5.25 (representing the lowest
closing bid price for the Common Stock during the seven consecutive
trading days ending November 3, 1997), with respect to the stated
value of the Series A Preferred Shares plus an accretion of 7% per
year, based upon certain conversion provisions of the Series A
Preferred Shares (which conversion price could fluctuate from time to
time based on changes in the market price of the Common Stock). Also
includes shares of Common Stock issuable upon the exercise of warrants
to purchase Common Stock issued in connection with the Series A
Preferred Shares (the "Series A Warrants"). This Prospectus also
covers the resale of such presently indeterminate number of additional
Shares as may be issuable upon conversion of the Series A Preferred
Shares, based upon fluctuations in the conversion price of the Series
A Preferred Shares. Pursuant to the terms the Series A Preferred
Shares and the Series A Warrants, no holder thereof can convert or
exercise any portion of such Series A Preferred Shares or Series A
Warrants, respectively, if, subject to certain conditions, such
conversion or exercise would increase such holder's beneficial
ownership of the Common Stock (other than shares owned through
ownership of the Series A Preferred Shares and the Series A Warrants)
to in excess of 4.9%.
(17)Mr. Smith is President, Chief Executive Officer and a director of the
Company and beneficially owns 3,113,886 shares of Common Stock, which
includes (i) a currently exerciseable option for 100,000 shares of Common
Stock, (ii) 710,000 shares of Common Stock held in trusts of which Mr.
Parker (a director of the Company), is a beneficiary and for which he is a
Co-trustee with Mr. Parker, a director of the Company, (iii) 710,000 shares
of Common Stock held in trusts of which Mr. Conlan (an employee of the
Company) is a beneficiary and for which he is a Co-trustee with Mr. Parker,
(iv) 285,714 shares of Common Stock acquired by Mr. Smith in connection with
acquisitions by the Company of Mr. Smith's vehicle dealerships and related
entities; (v) 125,783 shares of Common Stock, assuming the conversion of a
promissory note in the amount of $1,031,088.38 received by Mr. Smith in
connection with the acquisition by the Company of his businesses; and, (vi)
1,182,389 shares of Common Stock controlled by Mr. Smith pursuant to a
stockholders voting agreement and irrevocable proxy between Mr. Smith and
Mr. Conlan. Of the 1,420,000 trust shares of Common Stock controlled by Mr.
Smith, as identified in (ii) and (iii) above, Mr. Smith has the right to
acquire up to 202,500 of such shares pursuant to certain stock option
agreements.
<PAGE>
(18)Mr. Whaley is an employee of the Company, and until September 30, 1997,
also served as a director and officer. Does not include an option to
purchase up to 100,000 shares of Common stock which is not exercisable
within the next 60 days following the date of this Prospectus.
Ownership prior to the offering includes options to purchase up to
200,000 shares of Common Stock from the aforementioned Conlan and
Parker Trusts.
(19)Mr. Anderson is an officer of the Company. Ownership prior to offering
includes options to purchase up to 20,000 shares of Common Stock from the
aforementioned Conlan and Parker Trusts.
(20)Mr. Hutchinson is an officer of the Company. Ownership prior to Offering
includes options to purchase up to 35,000 shares of Common Stock from the
aforementioned Conlan and Parker Trusts.
(21)Mr. Alvarez is an officer of the Company. Ownership prior to offering
includes options to purchase up to 80,000 shares of Common Stock from the
aforementioned Conlan and Parker Trusts.
<PAGE>
PLAN OF DISTRIBUTION
This Prospectus relates to the offering of shares of Common Stock
beneficially held by certain shareholders of the Company.
Since the Selling Shareholders may offer all or part of the shares of
Common Stock which they hold pursuant to this Prospectus or may hold upon
exercise of options or warrants, and since this Offering is not being
underwritten on a firm commitment basis, no estimate can be given as to the
amount of shares of Common Stock to be offered for sale by the Selling
Shareholders.
The Selling Shareholders may sell or distribute some or all of the
Shares from time to time through underwriters or dealers or brokers or other
agents or directly to one or more purchasers, including pledgees, in
transactions (which may involve block transactions) on the Nasdaq SmallCap
Market, privately negotiated transactions (including sales pursuant to pledges)
or in the over-the-counter market, or in a combination of such transactions.
Such transactions may be effected by the Selling Shareholders at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be changed. Brokers,
dealers, agents or underwriters participating in such transactions as agent may
receive compensation in the form of discounts, concessions or commissions from
the Selling Shareholders (and, if they act as agent for the purchaser of such
shares, from such purchaser). Such discounts, concessions or commissions as to a
particular broker, dealer, agent or underwriter might be in excess of those
customary in the type of transaction involved. This Prospectus also may be used,
with the Company's consent, by donees of the Selling Shareholders, or by other
persons acquiring shares and who wish to offer and sell such shares under
circumstances requiring or making desirable its use. 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.
The Selling Shareholders and any such underwriters, brokers, dealers or
agents that participate in such distribution may be deemed to be "underwriters"
within the meaning of the Securities Act, and any discounts, commissions or
concessions received by any such underwriters, brokers, dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities Act.
Neither the Company nor the Selling Shareholders can presently estimate the
amount of such compensation. The Company knows of no existing arrangements
between any Selling Shareholders and any other Selling Shareholder, underwriter,
broker, dealer or other agent relating to the sale or distribution of the
shares.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of any of the shares may not simultaneously
engage in market activities with respect to the Common Stock for a period of
five business days prior to the commencement of such distribution. In addition
and without limiting the foregoing, the Selling Shareholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which provisions may limit the timing of
purchases and sales of any of the shares by the Selling Shareholders. All of the
foregoing may affect the marketing of the Common Stock.
The Company will pay substantially all of the expenses incident to this
Offering of the shares by the Selling Shareholders to the public other than
commissions and discounts of underwriters, brokers, dealers or agents. Each
Selling Shareholder may indemnify any broker, dealer, agent or underwriter that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act.
In order to comply with certain states' securities laws, if applicable,
the shares will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Stock may
not be sold unless the Common Stock has been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
is complied with.
The Company will receive no portion of the proceeds from the sale of the
shares of Common Stock and will bear all expenses related to the registration of
this offering of the shares of Common Stock. The Selling Shareholders will also
be indemnified by the Company against certain civil liabilities, including
certain liabilities which may arise under the Securities Act.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for
the Company by Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. The law
firm holds for its own account 11,429 shares of the Company's Common Stock and
attorneys within the law firm are the beneficial owners of 55,000 shares of the
Company's Common Stock.
<PAGE>
EXPERTS
The financial statements incorporated by reference in this Prospectus
have been audited by BDO Seidman, LLP, Osburn, Henning and Company, Certified
Public Accountants, P.A. and Spence, Marston, Bunch, Morris & Co., independent
certified public accountants, to the extent and for the periods set forth in the
respective reports of such firms incorporated herein by reference, and are
incorporated herein in reliance upon such reports given upon the authority of
such firms as experts in auditing and accounting.
No dealer, salesperson or other person is authorized to give any
information or to make any representation not contained in this Prospectus in
connection with this offering, and any information or representation not
contained herein must not be relied upon as having been authorized by the
Company or any other person. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any securities other than the
registered securities to which it relates or an offer to or solicitation of any
person in any jurisdiction where such an offer or solicitation would be
unlawful. Neither the delivery of this Prospectus at any time nor any sale made
hereunder shall, under any circumstances, create any implication that the
information herein contained is correct as of any time subsequent to the date of
this Prospectus.
-------------
TABLE OF CONTENTS
AVAILABLE INFORMATION..................5
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE.............5
SUMMARY................................6
RISK FACTORS...........................7
USE OF PROCEEDS.......................13
SELLING SHAREHOLDERS..................14
PLAN OF DISTRIBUTION..................18
LEGAL MATTERS.........................18
EXPERTS...............................19
8,694,181 SHARES
SMART CHOICE
AUTOMOTIVE GROUP, INC.
COMMON STOCK
--------------------------
PROSPECTUS
--------------------------
November 6, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company estimates that expenses in connection with the offering
described in this registration statement (other than underwriting and brokerage
discounts, commissions and fees and legal fees incurred by the Warrantholders
and the Selling Shareholders, if any, shall be payable by such Warrantholders
and Selling Shareholders) will be as follows:
Securities and Exchange Commission registration fee...........$14,332.23
Legal fees and expenses........................................25,000.00*
Accounting fees and expenses....................................5,000.00*
Printing Expenses...............................................2,500.00*
Total...........................................46,832.23*
=========
*All amounts shown, except the Securities and Exchange Commission registration
fee, are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has authority under the Florida Business Corporation Act
to indemnify its directors and officers to the extent provided in such statute.
The Registrant's Bylaws provide for indemnification of its executive officers,
directors, agents and employees to the fullest extent permitted by Florida law.
The Registrant also entered into agreements with its directors and certain of
its officers wherein it agreed to indemnify each of them to the fullest extent
permitted by law. In general, Florida law permits a Florida corporation to
indemnify its directors, officers, employees and agents, and persons serving at
the corporation's request in such capacities for another enterprise against
liabilities arising from conduct that such persons 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 their
conduct was unlawful.
The provisions of the Florida Business Corporation Act that authorize
indemnification do not eliminate the duty of care of a director and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of nonmonetary relief will remain available under Florida law. In addition, each
director will continue to be subject to liability for (a) violations of the
criminal law, unless the director had reasonable cause to believe his conduct
was not unlawful or had no reasonable cause to believe his conduct was unlawful,
(b) deriving an improper personal benefit from a transaction, (c) voting for or
assenting to an unlawful distribution, and (d) willful misconduct or a conscious
disregard for the best interests of the Company in a proceeding by or in the
right of the Company to procure a judgment in its favor or in a proceeding by or
in the right of a shareholder. The statute does not affect a director's
responsibilities under any other law, such as the Federal securities laws or
state or Federal environmental laws.
<PAGE>
ITEM 16. EXHIBITS
EXHIBIT DESCRIPTION
4.1 Specimen Form of Common Stock Certificate.(1)
4.2 Second Articles of Amendment to Articles of Incorporation (defining
the rights of rights of Series A Redeemable Convertible Preferred
Stock) (2)
5.1 Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.*
23.1 Consent of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.
(included in Exhibit 5.1).
23.2 Consent of BDO Seidman, LLP.*
23.3 Consent of BDO Seidman, LLP.*
23.4 Consent of Spence, Marston, Bunch, Morris & Co.*
23.5 Consent of Spence, Marston, Bunch, Morris & Co.*
23.6 Consent of Osburn, Henning and Company.*
24 Power of Attorney (Included on Signature Page).
- ----------
(1) Incorporated by reference to Exhibit 4.1 to Form 8-A Registration Statement,
filed on April 16, 1997, File No. 1-14082.
(2) Incorporated by reference to Exhibit 3.1 filed with the Current Report on
Form 8-K dated September 24, 1997, File No. 1-14082.
* Filed herewith.
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement;
(iii) 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 which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 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 be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Titusville, State of Florida on this 6th day of
November, 1997.
SMART CHOICE AUTOMOTIVE GROUP, INC.
By: /S/ Gary R. Smith
----------------------------------
Gary R. Smith,
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Gary R. Smith and James Neal Hutchinson,
Jr., his true and lawful attorneys-in-fact, each acting alone, with full powers
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 any
post-effective amendments, to this registration statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below on November 6, 1997 by the
following persons in their capacities.
SIGNATURE TITLE
/s/ Robert J. Abrahams Director (Chairman)
----------------------------
Robert J. Abrahams
/s/ Gary R. Smith President and Chief Executive Officer, and
---------------------------- a Director (Principal Executive Officer)
Gary R. Smith
/s/ Joseph E. Mohr Chief Financial Officer (Principal Financial
---------------------------- and Accounting Officer)
Joseph E. Mohr
/s/ Joseph Yossifon Director
----------------------------
Joseph Yossifon
/s/ David E. Bumgardner Director
----------------------------
David E. Bumgardner
/s/ Donald A. Wojnowski, Jr. Director
----------------------------
Donald A. Wojnowski, Jr.
/s/ Gerald C. Parker Director
----------------------------
Gerald C. Parker
/s/ Craig Macnab Director
----------------------------
Craig Mcnab
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
5.1 Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.
23.1 Consent of BDO Seidman, LLP.
23.2 Consent of BDO Seidman, LLP.
23.3 Consent of Spence, Marston, Bunch, Morris & Co.
23.4 Consent of Spence, Marston, Bunch, Morris & Co.
23.5 Consent of Osburn, Henning and Company.
EXHIBIT 5.1
November 6, 1997
Smart Choice Automotive Group, Inc.
5200 South Washington Avenue
Titusville, Florida 32780
Gentlemen:
You have requested our opinion in connection with the Registration
Statement on Form S-3 (the "Registration Statement") of Smart Choice Automotive
Group, Inc. (the "Company") relating to the following shares of Common Stock
(the "Shares"):
(a) 4,650,982 Shares held by certain Selling Shareholders
(as defined in the Registration Statement");
(b) An aggregate of 4,043,199 Shares issuable upon conversion of
convertible notes ("Notes") and Series A Redeemable Convertible Preferred Stock
("Series A Preferred Stock"), and upon exercise of common stock purchase
warrants ("Warrants") and stock options ("Options"), held by certain Selling
Shareholders;
We have made such examination of the corporate records and proceedings
of the Company and have taken such further action as we deemed necessary or
appropriate to the rendering of our opinion herein.
Based on the foregoing, we are of the opinion that the 4,650,982 Shares
referenced above were legally issued, fully paid and non-assessable. Further,
the 4,043,199 Shares underlying the Warrants, the Series A Preferred Stock, the
Notes and the Options, when paid for and issued as contemplated by their
respective governing instruments, will be legally issued, fully paid and
non-assessable. Therefore, the purchasers acquiring Shares upon subsequent
resale as contemplated in the Registration Statement will receive Shares that,
as applicable, have been or will be legally issued, fully paid and
non-assessable by the Company.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
reference to our firm under the heading "Legal Matters" therein.
/s/ GREENBERG TRAURIG HOFFMAN LIPOFF ROSEN & QUENTEL
----------------------------------------------------
GREENBERG TRAURIG HOFFMAN LIPOFF ROSEN
& QUENTEL, P.A.
EXHIBIT 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Eckler Industries, Inc.
Titusville, Florida
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated November
19, 1996, except for Note 13, which is as of December 30, 1996, relating to the
financial statements of Eckler Industries, Inc. appearing in the Company's
Annual Report on Form 10-KSB for the year ended September 30, 1996.
We also consent to the reference to us under the caption "Experts" in
the Prospectus.
/s/ BDO Seidman, LLP
--------------------
BDO Seidman, LLP
Orlando, Florida
November 5, 1997
EXHIBIT 23.2
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Smart Choice Holdings, Inc.
Titusville, Florida
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated April 3,
1997 relating to the financial statements of Smart Choice Holdings, Inc. for the
period ended December 31, 1996 appearing in Form 8-K/A dated February 12, 1997
filed by Smart Choice Automotive Group, Inc. (formerly Eckler Industries, Inc.).
We also consent to the reference to us under the caption "Experts" in
the Prospectus.
/s/ BDO Seidman, LLP
-------------------
BDO Seidman, LLP
Orlando, Florida
November 5, 1997
EXHIBIT 23.3
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Smart Choice Holdings, Inc.
Titusville, Florida
We hereby consent to the incorporation by reference in the Form S-3
Registration Statement, which is being filed by Smart Choice Automotive Group,
Inc., of our report dated March 28, 1997 relating to the financial statements of
Florida Finance Group, Inc., Suncoast Auto Brokers, Inc. and Suncoast Auto
Brokers Enterprises, Inc. which are incorporated by reference in that
Prospectus.
We also consent to the reference to us under the caption "Experts" in
the Prospectus.
/s/ Spence, Marston, Bunch, Morris & Co.
-------------------------------------------
Spence, Marston, Bunch, Morris & Co.
Certified Public Accountants
Clearwater, Florida
October 31, 1997
EXHIBIT 23.4
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Smart Choice Automotive Group, Inc.
Titusville, Florida
We hereby consent to the incorporation by reference in the Form S-3
Registration Statement, which is being filed by Smart Choice Automotive Group,
Inc., of our report dated April 10, 1997 relating to the financial statements of
225 North Military Corporation, d/b/a Miracle Mile Motors and Palm Beach Finance
Company, Inc. which are incorporated by reference in that Prospectus.
We also consent to the reference to us under the caption "Experts" in
the Prospectus.
/s/ Spence, Marston, Bunch, Morris & Co.
-------------------------------------------
Spence, Marston, Bunch, Morris & Co.
Certified Public Accountants
Clearwater, Florida
October 31, 1997
EXHIBIT 23.5
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Smart Choice Automotive Group, Inc.
Titusville, Florida
We consent to the incorporation by reference in this registration
statement of Smart Choice Automotive Group, Inc. on Form S-3 of our report dated
March 26, 1997, except for Note 6, as to which the date is April 12, 1997, on
our audit of the combined balance sheets of Liberty Finance company, Inc. and
Affiliates (consisting of Liberty Finance Company, Inc.; Wholesale Acquisitions,
Inc.; and Team Automobile Sales & Finance, Inc.), as of December 31, 1996 and
1995, and the related combined statements of operations, stockholders' equity,
and cash flows for the two years then ended, which is included in Smart Choice
Automotive Group, Inc.'s Current Report on Form 8K/A filed April 14, 1997.
We also consent to the reference to us under the caption "Experts" in
the prospectus which is a part of this registration statement.
/s/ Osburn, Henning and Company
----------------------------------
OSBURN, HENNING AND COMPANY
Orlando, Florida
November 5, 1997
