Registration Statement for Securities Offered Pursuant to a Transaction — Form S-3
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-3 Registration Statement for Securities Offered 35 124K
Pursuant to a Transaction
2: EX-4 Instrument Defining the Rights of Security Holders 4± 16K
3: EX-5 Opinion re: Legality 2± 9K
4: EX-23 Consent of Experts or Counsel 1 6K
5: EX-99 Miscellaneous Exhibit 5 23K
6: EX-99 Miscellaneous Exhibit 1 9K
7: EX-99 Miscellaneous Exhibit 1 8K
8: EX-99 Miscellaneous Exhibit 1 6K
9: EX-99 Miscellaneous Exhibit 1 8K
10: EX-99 Miscellaneous Exhibit 1 6K
11: EX-99 Miscellaneous Exhibit 1 8K
S-3 — Registration Statement for Securities Offered Pursuant to a Transaction
Document Table of Contents
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
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PIONEER COMMERCIAL FUNDING CORP.
(Exact name of registrant as specified in charter)
Commission file number: 0-24940
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New York 13-3763437
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(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
One Rockefeller Plaza, Suite 2412, New York, NY 10020
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(Address of principal executive offices) (Zip Code)
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Copy to:
David W. Sass, Esq.
McLaughlin & Stern, LLP
260 Madison Avenue
New York, New York 10016
(212) 448-1100
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, please check the following box [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check 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 Registration Statement is expected to be made
pursuant to Rule 434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
TITLE OF CLASS AMOUNT TO BE PROPOSED PROPOSED AMOUNT OF
OF SECURITIES REGISTERED MAXIMUM MAXIMUM REGISTRATION
TO BE OFFERING PRICE AGGREGATE FEE
REGISTERED PER SHARE OFFERING PRICE
COMMON STOCK, 520,273 $2.00 $1,040,546 $260.14
PAR VALUE $.01
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR
TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
REGISTRATION STATEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY OR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAW OF ANY SUCH STATE.
CURRENT STOCKHOLDERS OF THE COMPANY WHO DO NOT PARTICIPATE IN THE RIGHTS
OFFERING WILL SUFFER SUBSTANTIAL DILUTION IN THEIR RELATIVE PERCENTAGE OWNERSHIP
IN THE COMPANY UPON ISSUANCE OF COMMON STOCK TO HOLDERS EXERCISING RIGHTS. SEE
"RISK FACTORS," BEGINNING ON PAGE 8, FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS IN CONNECTION WITH AN INVESTMENT
IN THE COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE RIGHTS AND OFFERED HEREBY.
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SUBSCRIPTION UNDERWRITING PROCEEDS TO
PRICE DISCOUNTS AND COMPANY (2)
COMMISSIONS (1)
PER SHARE $2.00 N/A $990,546
TOTAL MAXIMUM $2.00 N/A $990,546
(1) The shares of Common Stock are being offered and sold directly by the Company, and no
commissions or other renumeration is intended to be paid to any person for soliciting
purchases of the shares in the Rights Offering. See "Plan of Distribution."
(2) After deducting expenses payable by the Company estimated at $50,000.
PIONEER COMMERCIAL FUNDING CORP.
CROSS REFERENCE SHEET
Caption Location
Forepart of the Registration Statement and Outside Front Cover Page
Outside Front Cover Page of Prospectus
Inside Front and Outside Back Cover Inside Front and Outside Back Cover Page
Pages of Prospectus
Description of Business, Summary Summary, The Company, Risk Factors
Information, Risk Factors
Use of Proceeds Use of Proceeds
Determination of Offering Price Determination of Offering Price
Dilution Dilution
The Rights Offering The Rights Offering
Plan of Distribution Plan of Distribution
Description of Securities Description of Securities
Interests of Named Experts and Counsel Experts; Legal Matters
Incorporation of Certain Documents by Incorporation by Reference
Reference
Disclosure of Commission Position on Disclosure of Commission Position on
Indemnification for Securities Act Indemnification for Securities Act
Liabilities Liabilities
TABLE OF CONTENTS
Page
Summary ........................................................................................ 1..........
The Company ............................................................................... 2........
Summary of the Rights Offering ..................................................... 4
Risk Factors ........................................................................................ 8..........
Use of Proceeds ...............................................................................11........
Determination of Offering Price ..............................................................12..
Dilution ........................................................................................13...........
The Rights Offering ...............................................................................14........
Plan of Distribution ...............................................................................20........
Description of Securities ......................................................................21......
Experts; Legal Matters ......................................................................22......
Incorporation by Reference ......................................................................23......
Disclosure of Commission Position on Indemnification for
Securities Act Liabilities ......................................................................24......
Prospectus Summary
520,273 SHARES OF COMMON STOCK
PIONEER COMMERCIAL FUNDING CORP.
Pioneer Commercial Funding Corp., a New York Corporation ("Pioneer" or
the "Company") is distributing at no cost to holders of its common stock, par
value $.01 per share (the "Common Stock"), of record as of the close of business
on October 11, 2001 (the "Record Date"), non-transferable rights to purchase
shares of Common Stock (the "Rights"). Each such holder (a "Holder"), will
receive one Right for every seven (7) shares of Common Stock held on the Record
Date (the "Rights Offering"), with each Right entitling the Holder thereof to
subscribe for and purchase one (1) share of Common Stock (the "Basic
Subscription Privilege"), for a price of $2.00 per share (the "Subscription
Price"). In the event that all of the shares are not subscribed for pursuant to
the Basic Subscription Privilege, Leedan Business Development, LTD., a principal
shareholder of the Company, and/or any of its affiliates, (Leedan Business
Enterprise, LTD and/or its affiliates are hereinafter collectively referred to
as "Leedan"), shall have the obligation, and the members of the Board of
Directors of the Company (the "Board Members") shall have the right to purchase,
(the "Oversubscription Privilege"), any shares not subscribed for. If the Board
Members do not exercise the Oversubscription Privilege, or do not exercise the
Oversubscription Privilege in its entirety, Leedan shall be obligated to
purchase all remaining shares. The total amount of shares of Common Stock that
will be subscribed for pursuant to the Rights Offering will be 486,237. Leedan
shall also be obligated to purchase 34,036 additional shares of Common Stock at
a price of $2.00 per share, which amount represents seven percent (7%) of the
total amount of shares subscribed for in the Rights Offering. No fractional
shares or cash in lieu thereof will be issued or paid. The Common Stock is
traded on the OTC Bulletin Board (the "Bulletin Board") under the symbol
"PCFC.OB" On September 20, 2001, the last reported sales price for the Common
Stock on the Bulletin Board was $1.75 per share. The Rights will expire at 5:00
p.m. New York City time on November 2, 2001 unless extended as provided herein
(the "Expiration Date").
This Registration Statement relates to the Rights and the shares of
Common Stock issuable upon the exercise of the Rights. Accompanying this
Registration Statement are certain documents (collectively, the "Subscription
Documents") that must be completed and returned by a Holder in accordance with
the appropriate instructions in order to exercise the Basic Subscription
Privilege or the Oversubscription Privilege. Once a Holder has exercised any
Right, such exercise may not be revoked, unless there is a material amendment to
the terms of the Rights Offering. See "The Rights Offering--Amendment, Extension
and Termination." Holders exercising Rights should complete and return their
Subscription Documents with payment of the Subscription Price promptly to insure
timely receipt and the collection of any funds prior to the Expiration Date. See
"The Rights Offering--Exercise of Rights." Holders who do not exercise or sell
their Rights will relinquish any value inherent in the Rights. See "Risk
Factors--Dilution."
i
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE
OF RISK AND IMMEDIATE SUBSTANTIAL DILUTION OF THE BOOK VALUE OF THE COMMON STOCK
AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE
INVESTMENT. SEE "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS REGISTRATION STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE RIGHTS MAY NOT BE EXERCISED BY ANY PERSON, AND NEITHER THIS
REGISTRATION STATEMENT NOR ANY SUBSCRIPTION DOCUMENT SHALL CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE ANY SHARES OF COMMON STOCK, IN
ANY JURISDICTION IN WHICH SUCH TRANSACTIONS WOULD BE UNLAWFUL. SEE "THE RIGHTS
OFFERING--STATE AND FOREIGN SECURITIES LAWS."
The date of this Prospectus is September 21, 2001
ii
AVAILABLE INFORMATION
The Company is subject to the information 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"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza Building,
450 Fifth Street, N.W., Washington, DC 20549, or at the Commission's regional
offices: Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and 7 World Trade Center, 13th Floor, New York, New
York 10048. The Common Stock is traded on the Bulletin Board.
SUMMARY
The following summary is qualified in its entirety by the more detailed
information contained elsewhere in this Registration Statement or incorporated
by reference herein and does not purport to be complete. Reference is made to,
and this Registration Statement Summary is qualified in its entirety by and
should be read in conjunction with, the more detailed information contained
elsewhere in this Registration Statement or incorporated by reference herein.
Prospective investors should carefully consider the information set forth under
"Risk Factors."
This Registration Statement contains statements that constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act, and Section 21E of the Exchange Act, which generally can be identified by
the use of forward-looking terminology such as "may," "will," "expect,"
"estimate," "anticipate," "believe," "target," "plan," "project," or "continue"
or the negatives thereof or other variations thereon or similar terminology.
Such statements appear in a number of places in this Registration Statement and
include statements regarding the intent, belief or current expectations of the
Company, its directors or its officers with respect to, regarding, among other
items, (i) anticipated trends in the Company's business, (ii) future
expenditures for capital projects, (iii) the Company's ability to continue to
control costs and maintain quality, (iv) the Company's business strategies, and
(v) the Company's projected financial information. These forward-looking
statements are based largely on the Company's expectations and are subject to a
number of risks and uncertainties, certain of which are beyond the Company's
control. Actual results could differ materially from these forward-looking
statements as a result of the factors described in "Risk Factors" including,
among others, (a) changes in the Company's markets as a result of economic
influences, (b) the Company's history of losses, or (c) changes in the
competitive marketplace, including new products and pricing changes by the
Company's competitors. In light of these risks and uncertainties, there can be
no assurance that the forward-looking information contained in this Registration
Statement will in fact transpire. The Company does not undertake to publicly
update or revise its forward-looking statements even if experience or future
changes make it clear that any projected results expressed or implied therein
will not be realized.
1
THE COMPANY
The Company was engaged in the business of a mortgage warehouse lender
providing short-term (generally 10-90 days per loan) financing to small and
medium sized mortgage bankers who hold ("warehouse") mortgage loans which they
originate pending the nonrecourse sale of such loans to institutional investor
agencies in the secondary mortgage market such as the Government National
Mortgage Association ("GNMA"), the Federal National Mortgage Association
("FNMA"), and the Federal Home Loan Mortgage Corporation ("FHLMC"); each one
referred to herein as an "Agency") and/or accredited financial institutions such
as banks, thrifts, insurance carriers and large mortgage bankers (each one and
each Agency referred to herein as a "Financial Institution").
Pursuant to an Asset Purchase Agreement dated July 30, 1999 with
Princap Mortgage Warehouse, Inc., a California corporation, with its principal
office at 23550 Hawthorne Boulevard, Torrance, California ("PMW") the Company
sold to PMW all of its equipment, furniture and other physical assets, as well
as all of its computer operating systems, for the sum of $800,000. PMW also had
the right to purchase any or all of the customer accounts of the Company for an
amount equal to the aggregate outstanding principal balance and all accrued but
unpaid fees and interest on such accounts as of the Closing. PMW did not
exercise its right to purchase any of the customer contracts.
Management of the Company determined that the Company did not meet the
revenue objectives for its mortgage warehouse lending business as it was not
able to procure credit lines and did not expect the Company to be able to meet
these objectives in the foreseeable future. The Company therefore decided to
sell its hard assets and explore other business opportunities.
The Company found that the comparatively high cost to it for borrowed
funds and the inability to borrow enough funds to create a sufficient volume of
loan transactions resulted in rates of return and total returns that were
unacceptable in relation to the degree of risk inherent in lending in the
secondary market. In the Company's belief, this was a direct result of Core
States (First Union) converting funds that were a Pioneer asset, which reduced
the available capital of the Company, and reduced the Company's leverage for
possible additonal financing.
The high cost to the Company for available borrowed money is due, in
large measure, to the fact that, unlike its competitors which are, generally,
banking institutions or their affiliates, it was required to borrow funds at the
Prime Rate of interest rather than at LIBOR base. This difference often meant as
much as a 2% difference in the borrowing rates, thereby having a significant
negative effect on the margins for each loan transaction. In addition, unlike
banking institutions, which could generally obtain borrowed funds at up to ten
to fifteen times their capital, the Company was only able to borrow
approximately six times its capital. This resulted in less funds available to
make loans; therefore, the volume of transactions and the resulting revenues
have been significantly lower than that which could be achieved by the Company's
competitors. This problem was initially caused and continued to be significantly
exacerbated by a situation
2
which arose in October and November, 1997 in which the Company was unable to
gain access to over $1.7 Million of its own funds. This matter is the subject of
an ongoing litigation in the Philadelphia Court of Common Pleas, entitled
Pioneer Commercial Funding Corporation and Banc One, Texas, N.A. v. American
Financial Mortgage Corporation, Thomas F. Flately, Norwest Funding, Inc. and
Corestates Bank, N.A. (No. 0885, April Term, 1998) in which the Company has
alleged that the defendants have wrongfully diverted approximately $1.7 Million
belonging to the Company, representing amounts due for loans made by the Company
to a Company in the business of originating residential mortgage loans. In June
2000, the Company received a check in the amount of $219,828 which represented
payment for a settlement reached with Norwest Funding, Inc. After trial, on
December 4, 2000 a judgment was entered (a) against the bank and in favor of the
Company as follows: compensatory damages in the amount of $1,779,520 plus
interest of $78,854, consequential damages in the amount of $13,500,000,
punitive damages in the amount of $40,500,000, for a total of $55,858,374 and
(b) in favor of the Company against American Financial Mortgage Corp. and Thomas
F. Flatley as follows: compensatory damages on the contract and conversion in
the amount of $1,779,520 plus interest of $890,443 on the contract claims,
attorney's fees in the amount of $1,200,000, for a total of $3,869,963. The
defendants have appealed the judgment and the Company is waiting for the appeals
court to hear the matter. No assurance can be given as to the ultimate outcome
of this litigation.
As a result of the sale, the Company no longer has any continuing
business operation other than winding up of its operations. The Company is
seeking to engage in other business ventures, but there can be no assurance as
to when, or if, an economically viable business can be acquired or continued
successfully. Management is diligently seeking other opportunities for the
Company.
3
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SUMMARY OF THE RIGHTS OFFERING
Unless otherwise indicated, the share data contained in this Registration
Statement is based on the number of shares of Common Stock and other securities
outstanding as of September 21, 2001.
The Rights .................... Each Holder of Common Stock will receive one (1) non-
transferable Right for every seven (7) shares of Common Stock
held of record as of the Record Date, and each Right will be
exercisable for one (1) share of Common Stock. If all the Rights are
exercised, and including the additional 34,036 shares which Leedan
shall be obligated to purchase, an aggregate of 520,273 shares of
Common Stock (the "Underlying Shares") will be sold upon
exercise of the Rights. See "The Rights Offering-The Rights."
Transferability of Rights ..... The Rights offered in this transaction are not transferable. See "The
Rights Offering--Transferability of Rights."
Subscription Price ............ $2.00 per share of Common Stock, in cash, subscribed for pursuant
to the Basic Subscription Privilege, the Oversubscription Privilege.
Record Date ................... October 11, 2001.
Expiration Date ............... November 2, 2001 at 5:00 p.m., New York City time, unless
extended. The Company may extend the Expiration Date, will
announce any extension by not later than 9:00 a.m., New York City
time, on three business days prior to the scheduled
Expiration Date.
The Expiration Date may be extended for up
to an additonal thirty (30) days if the
Company files an amendment to its
Registration Statement relating to the
Rights Offering that includes a material
change in the Rights Offering. See "The
Rights Offering- Amendment, Extension and
Termination." Company will notify
stockholders of any extension of the
Expiration Date of the Rights Offering
through the issuance of a press release
indicating such extension. See "The Rights
Offering-Expiration Date."
Subscription Privilege ........ Each Right entitles a Holder to purchase an amount of Common
Stock of the Company upon payment of the Subscription Price for
each share purchase. See "The Rights Offering-Basic Subscription
Privilege."
4
Oversubscription Privilege ... The Board Members may, and shall shall be obligated to, subscribe
at the Subscription Price for any additional Shares of Common
Stock if there are any unexercised Rights. See "The Rights Offering
- Oversubscription Privilege."
Procedure for Exercising
Rights .................... Rights may be exercised by a Holder by properly completing and
signing the Subscription Documents and forwarding such
Subscription Documents (or following the Guaranteed Delivery
Procedures described herein and therein), with payment of the
Subscription Price for each share of Common Stock subscribed for
pursuant to the Basic Subscription Privilege and/or the
Oversubscription Privilege, if any, prior to the Expiration Date. If
the mails are used to forward Subscription Documents it is
recommended that insured, registered mail be used. No interest will
be paid on funds delivered in payment of the Subscription Price.
ONCE A HOLDER HAS EXERCISED ANY RIGHTS, SUCH
EXERCISE MAY NOT BE REVOKED UNLESS THE Company
FILES A POST-EFFECTIVE AMENDMENT TO ITS
REGISTRATION STATEMENT RELATED TO THE RIGHTS
OFFERING THAT INCLUDES A MATERIAL CHANGE IN
THE TERMS OF THE RIGHTS OFFERING (A "MATERIAL
AMENDMENT"), IN WHICH CASE A HOLDER WILL HAVE
THREE (3) DAYS TO EVALUATE THE MATERIAL
AMENDMENT AND TO REVOKE THE EXERCISE OF THEIR
RIGHTS, IF DESIRED. See "The Rights Offering--Exercise of
Rights "The Rights Offering--Amendment, Extension and
Termination," and "The Right Offering--No Revocation."
Persons Holding Common
Stock and Wishing to
Exercise Rights Through
Others ................ Holders who hold shares of the Common Stock for the account of
others, such as brokers, trustees or depositories for securities,
should notify the respective beneficial owners of such shares as
soon as possible to ascertain such beneficial owners' intentions and
to obtain instructions with respect to the Rights. If the beneficial
owner so instructs, the Holder shall complete the Subscription
Documents and submit them to the Subscription Agent with the
proper payment. See "The Rights Offering -- Exercise of Rights."
Issuance of Common Stock... Certificates representing the shares of Common Stock purchased
pursuant to the valid exercise of the Rights will be delivered to
5
subscribers as soon as practicable after the Expiration Date, and the
conditions to the Rights Offering have been satisfied. See "The
Rights Offering--Basic Subscription Privilege; Oversubscription
Privilege," and "The Rights Offering--Conditions to the Rights
Offering."
Subscription Agent ............ American Stock Transfer and Trust Company.
Symbol for the Common
Stock ..............................PCFC.OB
Use of Proceeds ............... The net proceeds received by the Company from the Rights
Offering, after payment of fees and expenses (estimated at
$50,000), will be approximately $990,546. The proceeds will be
applied towards working capital and general corporate purposes.
Amendment, Extension and
Termination ................... The Company may amend, or extend the Rights Offering at any
time prior to the Expiration Date, at the Board of Directors'
discretion, for up to an additional thirty (30) days. In addition, the
Rights Offering will terminate if the conditions to the Rights
Offering have not been satisfied on or prior to the Expiration Date.
If the Company amends the terms of the Rights Offering, a new
definitive Prospectus will be distributed to all Holders who had
previously exercised Rights and to all holders of record on the date
of such amendment, together with a form on which each exercising
Rights Holder can consent the amended terms. Any Rights Holder
who had previously exercised any Rights, or who exercises Rights
within four (4) business days after the mailing of the new definitive
Prospectus, and who does not so consent within ten (10) business
days after the mailing of the definitive Prospectus and form of
consent, will be deemed to have canceled such exercise and the
Company will refund as soon as practicable the amount of the
Subscription Price paid by such Holder, without interest. Any
completed Subscription Certificate received by the Subscription
Agent five (5) or more business days after the date of the
amendment will be deemed to constitute the consent of the Holder
who completed such Subscription Certificate to the amended terms.
See "The Rights Offering--Amendment, Extension and
Termination." The Company will issue a press release with respect
to any amendment, extension or termination of the Rights Offering.
6
State and Foreign Securities
Laws .......................... The Rights may not be exercised by any person, and neither this
Registration Statement nor any Subscription Document shall
constitute an offer to sell or a solicitation of an offer to purchase
any shares of Common Stock, in any jurisdiction in which such
transaction would be unlawful. See "The Rights Offering--State and
Foreign Securities Laws."
Federal Income Tax
Consequences .................. For United States federal income tax purposes, Holders generally
will not recognize taxable income in connection with the issuance to
them or exercise by them of Rights. Holders may recognize a gain
or loss upon the sale of the Common Stock acquired upon exercise
of the Rights. See "The Rights Offering-Federal Income Tax
Consequences."
Risk Factors .................. There are substantial risks in connection with the Rights Offering
that should be considered by prospective purchasers.
7
RISK FACTORS
In addition to the other information included in, or incorporated by
reference into this Registration Statement, the following risk factors should be
considered carefully in evaluating the Company and its business before
exercising the Rights and thereby purchasing the shares of Common Stock offered
hereby. An investment in the Rights and Common Stock offered hereby involves a
high degree of risk. Purchasers should carefully consider the following risk
factors, as well as all other information set forth or incorporated in the
Registration Statement before purchasing any Rights or Common Stock offered
hereby. Prospective investors are cautioned that the statements in this
Registration Statement that are not descriptive of historical facts may be
forward looking statements. Such statements are based on many assumptions and
are subject to risks and uncertainties. Actual results could differ materially
from the results discussed in the forward looking statements due to a number of
factors, including, but not limited to, those identified below.
The Company no longer has any continuing business operations
Pursuant to an Asset Purchase Agreement dated July 30, 1999 with
Princap Mortgage Warehouse, Inc., ("PMW") the Company sold to PMW all of its
equipment, furniture and other physical assets, all of its computer operating
systems, for the sum of $800,000. PMW also had the right to purchase any or all
of the customer accounts of the Company for an amount equal to the aggregate
outstanding principal balance and all accrued but unpaid fees and interest on
such accounts. The Company continues its collection activities with respect to
those accounts, however, PMW did not exercise its right to purchase any of the
customer contracts. The Company's shareholders approved the sale on September
21, 1999. As a result of the sale, the Company no longer has any continuing
business operation other than winding up of its operations. The Company is
seeking to engage in other business ventures, but there can be no assurance as
to when, or if, an economically viable business can be acquired or continued
successfully. Management is diligently seeking other opportunities for the
Company.
The recent verdict in favor of the Company is being appealed by the defendants.
In connection with the civil action Pioneer Commercial Funding Corporation
and Banc One, Texas, N.A. v. American Financial Mortgage Corporation,
Thomas F. Flately, Norwest
Funding, Inc. and Corestates Bank, N.A. (No. 0885, April Term, 1998) a
judgment was entered in favor of the Company on December 4, 2000. See "The
Company." The defendants have appealed the verdict and there can be no
assurance that the verdict will be affirmed. There can also be no assurance
that the verdict award will not be reduced, nor can there be assurance that
even if the verdict is affirmed, that the Company will be able to enforce
the judgment against the defendants.
8
The Company is, from time to time, a party to additional litigation.
The Company is, from time to time, a party to additional litigation. In
addition to the litigation against American Financial Mortgage Corporation and
others described above, the Company has instituted an action against an
individual in connection with his default of two promissory notes in the amounts
of $470,000 and $265,000, respectively. The individual is seeking to avoid
responsibility on the notes on the grounds that he executed the notes without a
full understanding of the possible verdict in the case the Company brought
against Corestates Bank. The Company is of the opinion that there is no merit to
the defense as full information had been provided to such individual prior to
execution of the notes.
Control by principal stockholder
Following the completion of the Rights Offering, in the event that
Leedan should only have exercised its Basic Subscription Privilege and including
the 34,036 additional share to be purchased by it, Leedan shall own 2,038,115
shares of Common Stock, or 52% of the issued and outstanding shares of Common
Stock of the Company. To the extent that Leedan exercises its Oversubscription
Privilege, this amount of shares and ownership percentage shall increase. As a
result of its ownership, Leedan will have a major influence in determining the
direction and policies of the Company, the election of the directors of the
Company, the outcome of any other matter submitted to a vote of stockholders,
and to prevent or cause a change in control of the Company.
Market considerations
There can be no assurance that the market price of the Common Stock
will not decline during the subscription period or that, following the issuance
of the Rights and the issuance of the Underlying Shares of Common Stock upon
exercise of the Rights, a subscribing Rights Holder will be able to sell the
Underlying Shares purchased in the Rights Offering at a price equal to or
greater than the Subscription Price.
Irrevocability of subscriptions
The election of a Holder to exercise the Rights in the Rights Offering
is irrevocable, except in the case of a material amendment. See "The Rights
Offering - No Revocation." Moreover, until certificates are delivered,
subscribing Rights Holders may not be able to sell the Common Stock that they
have purchased in the Rights Offering. Certificates for shares of Common Stock
issuable upon the exercise of the Basic Subscription Privilege and the
Oversubscription Privilege will be mailed as soon as practicable after the
Expiration Date. No interest will be paid on any funds delivered to exercise
Rights.
9
Determination of subscription price; market considerations and uncertain
market for rights
The Subscription Price was determined by management, and was
unanimously approved by the disinterested members of the Company's Board of
Directors. The Subscription Price does not necessarily bear any relationship to
the book value of the Company's assets, past operations, cash flow, earnings,
financial condition or any other established criteria for value and should not
be considered an indication of the underlying values of the Company. The market
price of the Common Stock could be subject to significant fluctuations in
response to the Company's operating results and other factors, including the
size of the public float of the Common Stock which will depend, in part, on the
percentage of the Rights that are exercised by Holders after the Rights
Offering. See "The Rights Offering - Determination of Subscription Price."
Dilution
Stockholders who do not exercise their Rights will experience a
significant further decrease in their proportionate interest in the equity
ownership and voting power of the Company.
The Company is no longer listed on the NASDAQ stock market
The Company is no longer listed on the NASDAQ stock market as a result
of its' no longer meeting NASDAQ's listing qualifications. There can be no
assurance that the Company will meet NASDAQ's requirements in the future so that
it may re-apply for listing, nor can there be assurance that, even if the
Company does meet NASDAQ's listing requirements, the Company will be accepted by
NASDAQ.
10
USE OF PROCEEDS
The net proceeds received by the Company from the Rights Offering after
payment of fees and expenses (estimated at $50,000) will be approximately
$990,546. These proceeds will be applied towards working capital and general
corporate purposes. The Company also anticipates that considerable legal fees
will be incurred with respect to ligation appeals.
11
DETERMINATION OF OFFERING PRICE
The Subscription Price of $2.00 per share was arbitrarily determined by
management, and was unanimously approved by the disinterested members of the
Company's Board of Directors. The Company's objective in establishing the
Subscription Price was to establish a fair price level for the shares, raise the
targeted proceeds, and provide all of the Company's stockholders with a
reasonable opportunity to make an additional investment in the Company and
minimize the involuntary dilution of their ownership and voting percentage in
the Company. The Rights Offering, was unanimously approved by the disinterested
members of the Company's Board of Directors. In approving the Subscription
Price, the Board of Directors considered such factors as the projected value of
the Company after giving effect to the Rights Offering, alternatives available
to the Company for raising capital, the market price of the Common Stock, the
pro rata nature of the offering, pricing of similar transactions, the business
prospects for the Company and the general condition of the securities markets.
There can be no assurance, however, that the market price of the Common Stock
will not decline during the subscription period or that, following the issuance
of the Rights and the Common Stock upon exercise of Rights, a subscribing Holder
will be able to sell the Common Stock purchased in the Rights Offering at a
price equal to or greater than the Subscription Price.
12
DILUTION
Based on the shares outstanding on the date of this Registration
Statement, and assuming that all 520,273 shares of Common Stock offered in the
Rights Offering are subscribed for, (including the 34,036 shares that Leedan
shall be obligated to purchase), the Company will have approximately 3,923,936
shares outstanding and a net negative tangible book value of ($1,470,189) or
($.38) per share of Common Stock. "Net Negative Tangible Book Value Per Share"
represents the total amount of the Company's total assets, less the total amount
of its liabilities, divided by the total number of shares of Common Stock
outstanding.
After giving effect to the sale of all 520,273 shares of Common Stock
in the Rights Offering, and after the deduction of offering expenses (estimated
at $50,000), the pro forma net tangible book value of the Company would be
($.38) per share of Common Stock. An immediate increase (the difference between
the pro forma net tangible book value per share of Common Stock as of June 30,
2001 and the pro forma net tangible book value per share of Common Stock as of
June 30, 2001 after giving effect to the issuance of the 520,273 shares of
Common Stock) of $.34 per share of Common Stock will be given to the Company's
stockholders. Such increase to the Company's current stockholders is solely
attributable to the cash price paid by purchasers of the securities offered for
sale in the Rights Offering.
The following table illustrates the per share valuation as of June 30,
2001:
Public offering price per share $2.00
Net tangible book value per share before giving effect $(.72)
to the Rights Offering
Increase per share attribute to the net proceeds of the $.34
Rights Offering
Pro forma net tangible book value per share as of $(.38)
June 30, 2001 reflecting the Rights Offering
13
THE RIGHTS OFFERING
The Rights
The Company is distributing Rights, to Holders, of record as of the
Record Date. Each Holder will receive one Right for every seven (7) shares of
Common Stock held on the Record Date with each Right entitling the Holder
thereof to subscribe for one share of Common Stock, for a subscription price of
$2.00 per share. On September 21, 2001, the average of the bid and asked prices
for the Common Stock on the Bulletin Board was $1.675. The Subscription Price
represents a premium of 14% from the closing price of $1.75 for the shares of
the Common Stock traded on the Bulletin Board. The Expiration Date will be
extended a reasonable period of time (at least three (3) business days) if the
Company files an amendment to its registration statement relating to the Rights
Offering which includes a material change in the Rights Offering. See "The
Rights Offering--Amendment, Extension and Termination." There can be no
assurance that shares of the Common Stock will trade at prices above the
Subscription Price. See "Risk Factors- Determination of Subscription Price;
Market Considerations and Uncertain Market for Rights." In addition, shares of
Common Stock were previously sold at a price of $3.00 per share pursuant to a
Private Placement which occurred in October, 2000.
No fractional shares or cash in lieu thereof will be issued or paid.
The issuance by the Company of shares of Common Stock pursuant to the
Rights Offering is not conditioned upon the subscription of any minimum number
of shares of Common Stock by Holders of the Rights. See "The Rights
Offering--Basic Subscription Privilege; Oversubscription Privilege."
Before exercising Rights, potential investors are urged to read
carefully the information set forth under "Risk Factors."
All fees and other expenses (including transfer taxes) incurred in
connection with the exercise of Rights are the responsibility of the Holder of
the Rights and none of such commissions, fees or expenses shall be paid by the
Company.
Expiration date
The Rights will expire at 5:00 p.m., New York City time, on November 2,
2001, unless extended by the Company as provided herein. See "The Rights
Offering -- Amendment, Extension and Termination." On and after the Expiration
Date, all unexercised Rights will be null and void. The Company will notify
stockholders of any extension of the Expiration Date of the Rights Offering
through the issuance of a press release indicating such extension. The Company
will not be obligated to honor any purported exercise of Rights received by the
Subscription Agent after 5:00 p.m. New York City time, on the Expiration Date,
regardless of when the documents relating to such exercise were transmitted,
except when timely transmitted pursuant to
14
the Guaranteed Delivery Procedures described below.
Basic subscription privilege; Oversubscription privilege
The Basic Subscription Privilege entitles the Holder to purchase one
(1) share of Common Stock for every seven (7) shares of Common Stock owned on
the Record Date upon payment of the Subscription Price. No interest will be paid
on funds delivered in connection with the payment of the Subscription Price. In
the event that all of the shares are not subscribed for pursuant to the Basic
Subscription Privilege, Leedan shall have the obligation, and the Board Members
shall have the right to purchase any such shares not subscribed for. If the
Board Members do not exercise its Oversubscription Privilege in its entirety, or
do not exercise the Oversubscription Privilege at all, Leedan shall be obligated
to purchase all remaining shares. Certificates representing shares of the Common
Stock purchased pursuant to the Basic Subscription Privilege and the
Oversubscription Privilege will be mailed as soon as practicable after the
subscriptions have been accepted by the Subscription Agent. The Company will
notify Leedan and the Board Members, of the Oversubscription Privilege promptly
after the Expiration Date of the number of Excess Shares available to Leedan for
oversubscription.
In order to exercise the Oversubscription Privilege, Leedan and/or the
Board Members will be required to certify to the Subscription Agent and the
Company that Leedan's and/or the Board Members' Basic Subscription Privilege has
been exercised in full.
Exercise of Rights
Rights may be exercised by a Holder, by delivering to the Subscription
Agent, at or prior to the Expiration Date, the properly completed and executed
Subscription Documents evidencing those Rights, with any required signature
guarantees, together with payment in full of the Subscription Price for each
share of the Common Stock subscribed for pursuant to the Basic Subscription
Privilege and the Oversubscription Privilege. Such payment must be made by (a)
check or bank draft drawn upon a U.S. bank or postal, telegraphic, or express
money order payable to American Stock Transfer Company, as Subscription Agent,
or (b) wire transfer of same day funds to the account maintained by the
Subscription Agent for such purpose at Chase Manhattan Bank , ABA No. 021000021,
Account No. 610093045. Payment of the Subscription Price will be deemed to have
been received by the Subscription Agent only upon (i) clearance of any
uncertified check, (ii) receipt by the Subscription Agent of any certified check
or bank draft drawn upon a U.S. bank or any postal, telegraphic or express money
order or (iii) receipt of good funds in the Subscription Agent's account
designated above. HOLDERS WISHING TO PAY BY UNCERTIFIED PERSONAL CHECK SHOULD
NOTE THAT SUCH A CHECK MAY TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR AND SHOULD
TRANSMIT THE CHECK SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO ENSURE THAT
IT IS RECEIVED AND CLEARED BY SUCH DATE OR CONSIDER PAYMENT BY MEANS OF
CERTIFIED OR CASHIER'S CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS.
The addresses to which the Subscription Documents and payment of the
15
Subscription Price should be delivered are:
By Mail, Hand or Overnight: American Stock Transfer and Trust Company
59 Maiden Lane
New York, New York 10038
If a Holder wishes to exercise Rights, but time will not permit such
Holder to cause the Subscription Documents evidencing such Rights to reach the
Subscription Agent on or prior to the Expiration Date, such Rights may
nevertheless be exercised if all of the following conditions (the "Guaranteed
Delivery Procedures") are met:
1. such Holder has caused payment in full of the Subscription Price for
each share of the Common Stock being subscribed for pursuant to the Basic
Subscription Privilege and Oversubscription Privilege to be received (in the
manner set forth above) by the Subscription Agent on or prior to the Expiration
Date;
2. the Subscription Agent receives, on or prior to the Expiration Date,
a guarantee notice (a "Notice of Guaranteed Delivery"). Instructions distributed
with the Subscription Documents (the "Subscription Cards") from a member firm of
a registered national securities exchange or a member of the National
Association of Securities Dealer, Inc. (the "NASD"), or from a commercial bank
or trust Company having an office or correspondent in the United States (each,
an "Eligible Institution"), stating the name of the exercising Rights Holder,
the number of Rights represented by the Subscription Documents held by such
exercising Rights Holder, the number of shares of the Common Stock being
subscribed for pursuant to the Basic Subscription Privilege and the
Oversubscription Privilege, and guaranteeing the delivery to the Subscription
Agent of any Subscription Documents evidencing such Rights within three trading
days following the date of the Notice of Guaranteed Delivery; and
3. the properly completed Subscription Documents evidencing the Rights
being exercised, with any required signatures guaranteed, are received by the
Subscription Agent within three trading days following the date of the Notice of
Guaranteed Delivery relating thereto. The Notice of Guaranteed Delivery may be
delivered to the Subscription Agent in the same manner as Subscription Documents
at the addresses set forth above, or may be transmitted to the Subscription
Agent by telegram or facsimile transmission (facsimile no. (718) 234-5001),
confirmed by telephone (telephone no. (212) 936-5100). Additional copies of the
form of Notice of Guaranteed Delivery are available upon request from the
Subscription Agent.
Funds received in payment of the Subscription Price for shares of
Common Stock subscribed for pursuant to the Rights will be held in a segregated
account pending issuance of such shares.
Unless a Subscription Document (i) provides that the shares of the
Common Stock to be issued pursuant to the exercise of Rights represented thereby
are to be delivered to a person
16
other than the record holder of such Rights, or (ii) is submitted for the
account of an Eligible Institution, signatures on such Subscription Document
must be guaranteed by a commercial bank, trust Company, securities broker or
dealer, credit union, savings association or other eligible guarantor
institution which is a member of or a participant in a signature guarantee
program acceptable to the Subscription Agent.
Holders who hold shares of the Common Stock for the account of others,
such as brokers, trustees or depositaries for securities, should notify the
respective beneficial owners of such shares as soon as possible to ascertain
such beneficial owners' intentions and to obtain instructions with respect to
the Rights. If the beneficial owner so instructs, the record holder of such
Right should complete Subscription Cards and submit them to the Subscription
Agent with the proper payment.
If an exercising Holder does not indicate the number of Rights being
exercised, or does not forward full payment of the aggregate Subscription Price
for the number of Rights that the Holder indicates are being exercised, then the
Holder will be deemed to have exercised the Basic Subscription Privilege with
respect to the maximum number of Rights that may be exercised for the aggregate
payment delivered by the Holder and, to the extent that the aggregate payment
delivered by the Holder exceeds the product of the Subscription Price multiplied
by the number of Rights evidenced by the Subscription Document delivered by the
Holder (such excess being the "Subscription Excess"), the Holder will be deemed
to have exercised the Oversubscription Privilege to purchase, to the extent
available, that number of whole Excess Shares equal to the quotient obtained by
dividing the Subscription Excess by the Subscription Price. Any amount remaining
after application of the foregoing procedures shall be returned to the Holder
promptly by mail without interest or deduction.
The instructions accompanying the Subscription Cards should be read
carefully and followed in detail. DO NOT SEND SUBSCRIPTION DOCUMENTS TO THE
COMPANY.
THE METHOD OF DELIVERY OF SUBSCRIPTION DOCUMENTS AND PAYMENT OF THE
SUBSCRIPTION PRICE TO THE SUBSCRIPTION AGENT WILL BE AT THE ELECTION AND RISK OF
HOLDERS, BUT IF SENT BY MAIL IT IS RECOMMENDED THAT SUCH SUBSCRIPTION DOCUMENTS
AND PAYMENTS ARE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT
REQUESTED, AND THAT A SUFFICIENT NUMBER OF DAYS BE ALLOWED TO ENSURE DELIVERY TO
THE SUBSCRIPTION AGENT AND CLEARANCE OF PAYMENT PRIOR TO THE EXPIRATION DATE.
BECAUSE UNCERTIFIED PERSONAL CHECKS MAY TAKE AT LEAST FIVE BUSINESS DAYS TO
CLEAR, YOU ARE STRONGLY URGED TO PAY, OR ARRANGE FOR PAYMENT, BY MEANS OF
CERTIFIED OR CASHIER'S CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS.
All questions concerning the timeliness, validity, form and eligibility of
any exercise of Rights will be determined by the Company, whose
determinations will be final and binding. The
17
Company in its sole discretion may waive any defect or irregularity, or permit a
defect or irregularity to be corrected within such time as it may determine, or
reject the purported exercise of any Right. Subscriptions will not be deemed to
have been received or accepted until all irregularities have been waived or
cured within such time as the Company determines in its sole discretion. Neither
the Company nor the Subscription Agent will be under any duty to give
notification of any defect or irregularity in connection with the submission of
Subscription Cards or incur any liability for failure to give notification.
The Company will pay the fees and expenses of the Subscription Agent.
Transferability of Rights
The rights are not transferable.
No revocation
ONCE A HOLDER OF RIGHTS HAS EXERCISED THE BASIC SUBSCRIPTION PRIVILEGE
OR THE OVERSUBSCRIPTION PRIVILEGE, SUCH EXERCISE MAY NOT BE REVOKED UNLESS THE
COMPANY FILES A POST-EFFECTIVE AMENDMENT TO ITS REGISTRATION STATEMENT RELATED
TO THE RIGHTS OFFERING THAT INCLUDES A MATERIAL AMENDMENT. IN WHICH CASE A
HOLDER WILL HAVE A REASONABLE PERIOD OF TIME (AT LEAST THREE (3) BULLETIN BOARD
TRADING DAYS) TO EVALUATE THE MATERIAL AMENDMENT AND TO REVOKE THE EXERCISE OF
THEIR RIGHTS, IF DESIRED.
Amendment, extension and termination
The Company reserves the right to extend the Expiration Date for up to
an additional thirty (30) days, and to amend the terms and conditions of the
Rights Offering at the Board of Director's discretion. In addition, the Rights
Offering will terminate if the conditions to the Rights Offering have not been
satisfied on or prior to the Expiration Date. If the Company amends the terms of
the Rights Offering, the Registration Statement will be amended, and a new
definitive Prospectus will be distributed to all Rights Holders who have
previously exercised Rights and to holders of record of unexercised Rights on
the date the Company amends such terms. In addition, all holders who have
previously exercised Rights, or who exercise Rights within four (4) business
days after the mailing of the new definitive Prospectus, will be provided with a
form of Consent to Amended Rights Offering Terms, on which such Rights Holders
can confirm their exercise of Rights and their subscriptions under the terms of
the Rights Offering as amended by the Company. Any Rights Holder who has
previously exercised any Rights, or who exercises Rights within four (4)
business days after the mailing of the new definitive Prospectus, and who does
not return such Consent within ten (10) business days after the mailing of such
Consent by the Company will be deemed to have canceled such Rights Holder's
exercise of Rights, and the full amount of the Subscription Price theretofore
paid by such Rights Holder will
18
be returned promptly after the Expiration Date by mail, without any interest
earned on such funds. Any completed Subscription Certificate received by the
Subscription Agent five (5) or more business days after the date of the
amendment will be deemed to constitute the consent of the Rights Holder who
completed such Subscription Certificate to the amended terms.
If the Company should terminate the Rights Offering, such termination
would be effected by the Company by giving oral or written notice of such
termination to the Subscription Agent and making a public announcement thereof.
If the Rights Offering is so terminated, the Subscription Price will be returned
promptly after the Expiration Date by mail, without any interest earned on such
funds.
State and foreign securities laws
The Rights Offering is not being made in any state or other
jurisdiction in which it is unlawful to do so, nor is the Company selling or
accepting any offers to purchase any shares of the Common Stock from Rights
Holders who are residents of any such state or other jurisdiction. The Company,
if it so determines in its sole discretion, may decline to make modifications to
the terms of the Rights Offering requested by certain states or other
jurisdictions or to qualify the Common Stock in any state or other jurisdiction,
in which event Rights Holders resident in those states or jurisdictions will not
be eligible to participate in the Rights Offering.
No Board recommendation
An investment in the Common Stock must be made pursuant to each Rights
Holder's or prospective investor's evaluation of his, her or its best interests.
Accordingly, the Board of Directors of the Company makes no recommendation to
any Rights Holder or prospective investor regarding the exercise of Rights.
Information available
Any questions or requests for assistance concerning the method of
exercising the Rights or additional copies of the Prospectus, the Subscription
Card or the Notice of Guaranteed Delivery may be directed to the Company at the
telephone number and address below.
Pioneer Commercial Funding Corp.
One Rockefeller Plaza, Suite 2412
New York, New York 10020
(212) 218-1850
Attn: M. Albert Nissim
19
PLAN OF DISTRIBUTION
The Rights Offering is being made directly by the officers and
directors of the Company. The Company will pay no underwriting discounts or
commissions, finders fees or other remuneration in connection with any
distribution of the Rights or sales of the shares of Common Stock offered
hereby, other than the fees paid to American Stock Transfer Company, as
Subscription Agent. The Company estimates that the expenses of the Rights
Offering will total approximately $50,000.
20
DESCRIPTION OF SECURITIES
The Company is authorized to issue 20,000,000 shares of Common Stock.
As of the date of this Registration Statement, 3,403,663 shares of Common Stock
are outstanding.
Common Stock
Each outstanding share of Common Stock entitles the holder to one vote
on all matters requiring a vote of stockholders. Since the Common Stock does not
have cumulative voting rights, the holders of shares having more than 50% of the
voting power, if they choose to do so, may elect all the directors of the
Company and the holders of the remaining shares would not be able to elect any
directors. Subject to the rights of holders of any series of preferred stock
that may be issued in the future, the holders of the Common Stock are entitled
to receive dividends when, as and if declared by the Board of Directors out of
funds legally available therefor. In the event of a voluntary or involuntary
liquidation of the Company, all stockholders are entitled to a pro rata
distribution of the assets of the Company remaining after payment of claims of
creditors. Holders of the Common Stock have no conversion, redemption or sinking
fund rights. Holders of the Common Stock do not hold preemptive rights, subject
to certain exceptions prescribed by the New York Business Corporation Law.
21
EXPERTS; LEGAL MATTERS
The financial statements incorporated by reference in this Registration
Statement by reference from the Company's 10-QSB for the fiscal quarter ending
June 30, 2001, as well as certain accounting matters in connection with the
Rights Offering, have been reviewed by Lazar Levine & Felix, LLP, the Company's
independent auditors.
Certain legal matters in connection with the Rights Offering will be
passed upon for the Company by McLaughlin & Stern, LLP, 260 Madison Avenue, New
York, New York 10016. David W. Sass, the Secretary of the Company, is a member
of said firm.
22
INCORPORATION BY REFERENCE
The following documents previously filed with the Commission are hereby
incorporated by reference into this Registration Statement:
1. The Company's Quarterly Report on Form 10-QSB for the fiscal quarter
ended June 30, 2001.
2. The certificate of incorporation of the Company, as amended.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the
Rights Offering shall be deemed to be incorporated by reference in this
Registration Statement and to be a part of this Registration Statement from the
date of filing thereof. Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is incorporated or deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement. The
Company hereby undertakes to provide without charge to each person, including
any beneficial owner, to whom a copy of this Registration Statement has been
delivered, upon the written or oral request of any such person, a copy of any
and all of the documents referred to above which have been or may be
incorporated in this Registration Statement by reference (other than exhibits).
Requests for such copies should be directed to: Pioneer Commercial Funding
Corp., One Rockefeller Plaza, Suite 2412, New York, New York 1001-20030,
Attention: M. Albert Nissim, President (212) 218-1850. In addition, the SEC
maintains an Internet site (www.sec.gov) where the Company's SEC filings are
available free of charge.
23
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
The Company's Certificate of Incorporation permits the Company to
indemnify directors, officers, employees and agents to the fullest extent
permissible under the New York Business Corporation Law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
corporations pursuant to state law, or otherwise, the Company 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.
24
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses payable by the Registrant in connection with the issuance
and distribution of the securities being registered are estimated as follows:
1 Securities & Exchange Commission fees ..........................$ 260.14
2. Accounting fees ....................................................$ 1,000.00
3. Legal fees .............................................................$ 20,000.00
4. Printing and Engraving fees ............................................$ 500.00
5. Miscellaneous fees .....................................................$ 25,000.00
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company's certificate of incorporation provides in Article Seventh
that (a) the corporation may, to the fullest extent permitted by Section 721
through 726 of the Business Corporation Law of New York, indemnify any and all
directors and officers whom it shall have power to indemnify under the said
sections from and against any and all of the expenses, liabilities or other
matters referred to in or covered by such section, and the indemnification
provided for herein shall not be deemed exclusive of any other rights to which
the persons so indemnified may be entitled under any By-Law, agreement, vote of
shareholders or disinterested directors or otherwise both as to action in
his/her official capacity and as to action in another capacity and as to action
in another capacity by holding such office, and shall continue as to a person
who has ceased to be a director or officer and shall inure to the benefits of
the heirs, executors and administrators of such a person; and (b) that a
director of the company shall not be personally liable to the company or its
shareholders for damages for any breach of duty in his/her capacity as a
director, unless a judgment or other final adjudication adverse to his her
establishes that (i) his/her acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law, or (ii) he/she personally
gained in fact a financial or other advantage to which he/she was not legally
entitled or (iii) his/her acts violated Section 719 of the Business Corporation
Law.
II-1
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EXHIBITS
4.1 Form of Subscription Certificate
5.1 Opinion Letter from McLaughlin & Stern, LLP
23.1 Consent from McLaughlin & Stern, LLP (included with Exhibit 5).
23.2 Consent Letter from Lazar Levine & Felix, LLP, independent certified public accountants
99.1 Subscription Agent Agreement between Pioneer and American Stock Transfer & Trust
Company
99.2 Notice to Shareholders of Rights Offering
99.3 Notice to Shareholders Regarding Appointment of Bank/Broker as Agent
99.4 Instructions as to Exercise of Rights
99.5 Form Indicating Method of Payment for Exercise of Rights.
99.6 Guarantee of Delivery
99.7 Notice of Guaranteed Delivery for Subscription Certificates
UNDERTAKINGS
The undersigned Registrant does hereby undertake to:
(a) (1) File, during any period in which it offers or sells
securities, a post-effective amendment to the 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; and
(iii) Include any additional or changed or material information on the
Plan of Distribution not previously disclosed in this Registration
Statement;
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement for 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; and
(b) The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of the exercise period, to set forth the
results of the Rights Offering.
II-2
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
PIONEER COMMERCIAL FUNDING CORP.
By: /s/ M. Albert Nissim
-------------------------------------------
Name: M. Albert Nissim
Title: President and Chief Financial Officer
Date: September 21, 2001
------------------------------
In accordance with the Exchange Act, this registration statement has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
By: /s/ M. Albert Nissim
-------------------------------------------
Name: M. Albert Nissim
Title: President and Chief Financial Officer
Date: September 21, 2001
-------------------------------
By: /s/ Richard Fried
-------------------------------------------
Name: Richard Fried
Title: Director
Date: September 21, 2001
-------------------------------
By: /s/ Boaz Harel
-----------------------------------
Name: Boaz Harel
Title: Chairman and Director
Date: September 21, 2001
-------------------------------
By: /s/ Tamar Lieber
------------------------------------
Name: Tamar Lieber
Title: Director
Date: September 21, 2001
-----------------------------
By: /s/ Lynda Davey
-----------------------------------
Name: Lynda Davey
Title: Director
Date: September 21, 2001
------------------------------
By: /s/ Joseph Samuels
--------------------------------------
Name: Joseph Samuels
Title: Director
Date: September 21, 2001
-----------------------------
Dates Referenced Herein and Documents Incorporated by Reference
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