SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
November 17, 2003 (October 17, 2003)
RCG Companies Incorporated
(Exact name of registrant as specified in its charter)
Delaware
1-8662
(State or other jurisdiction of incorporation)
(Commission File Number)
23-2265039
(IRS Employer Identification Number)
6836 Morrison Blvd., Suite 200, Charlotte, NC 28211
(Address of principal executive offices) (Zip Code)
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ITEM 2. ACQUISITION
On October 31, 2003, VE Holdings, Inc. ("Vacation Express") and SunTrips Inc.
("SunTrips"), both wholly-owned subsidiaries of MyTravel USA Holdings, Inc.
("MyTravel" or the "Seller"), entered into an amended and restated Asset
Purchase Agreement ("Asset Purchase" or "Sale") with FS Tours, Inc. and FS
SunTours, Inc., collectively the ("Purchaser" or the "Company"), which are
wholly-owned direct subsidiaries of Flightserv, Inc. ("Flightserv"), which is a
wholly-owned indirect subsidiary of RCG Companies Incorporated, formerly known
as eResource Capital Group, Inc. ("RCG").
Under the terms of the asset purchase agreement, the Company will acquire
substantially all of the assets and liabilities of Vacation Express and
SunTrips, except for certain excluded items, in exchange for $12 million, of
which $10 million was in the form of a seven-year promissory note from
Flightserv secured by certain RCG investment holdings, and $2 million in the
form of a working capital deficit.
In conjunction with the Asset Purchase, the Company entered into a three-year
agreement with MyTravel Canada Holidays, Inc. ("MyTravel Canada"), for certain
services, including the purchasing of hotel accommodations for the Company on an
exclusive basis. MyTravel Canada will be paid approximately $4.5 million over
three years under this agreement.
Additionally, the Company was required to obtain replacement letters of credit
in the aggregate principal amount of $3 million.
With the closing of these acquisitions, SunTrips and Vacation Express will
continue to operate from their current locations, with FS Tours and FS SunTours
assuming operational control. Air and hotel vacation packages will continue to
be marketed and sold under the SunTrips and Vacation Express brands.
ITEM 5. OTHER EVENTS
On October 31, 2003, RCG completed a $4,000,000 private placement offering
("Private Placement") of RCG common stock to a group of private institutional
investors ("Investors"). The offering was made pursuant to Regulation D. RCG
issued 2,500,000 common shares at $1.60 per share. RCG has granted registration
rights to the Investors.
In connection with the Private Placement, RCG issued 3-year common stock
warrants, which are exercisable six months from closing, to purchase 2,500,000
common shares of RCG common stock. The common stock warrants have an exercise
price of $2.48 per, which was 110% of the closing bid price of RCG common stock
at the closing date. Additionally, the common stock warrants have anti-dilution
provisions.
In connection with the Private Placement transaction, RCG paid a $280,000 cash
commission and issued 200,000 RCG 5-year common stock warrants to its investment
bank, HPC Capital Management ("HPC"). Additionally, RCG paid legal fees and
expenses incurred in connection with the transaction.
The summary of the Asset Purchase and Private Placement described above is
qualified in its entirety by reference to the Asset Purchase Agreement, Stock
Purchase Agreement, and Common Stock Purchase Warrant Agreement, which are
attached as exhibits 10.1, 10.2, and 10.3 hereto and incorporated by reference
herein.
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The foregoing description is not a description of all of the material terms of
the transaction. You should read the documents that are attached as exhibits to
this report for a more complete understanding of the transaction.
This Current Report on Form 8-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act, as amended. All forward-looking statements
in this filing are based upon information available to the Company on the date
of this release. The forward-looking statements contained herein involve risks
and uncertainties, including the ability of the Purchaser to achieve the
anticipated benefits of the Asset Purchase. Actual results and developments may
differ materially from those described in this Report. Readers are cautioned not
to place undue reliance on these forward-looking statements. For more
information about the Company and risks arising when investing in or holding
shares of the Company, investors are directed to the Company's most recent
filings with the Securities and Exchange Commission.
Item 7. Financial Statements and Exhibits
(a) Financial information will be filed by an amendment to this
report within the time period required by the rules of the
Securities and Exchange Commission.
(b) Pro forma financial information will be filed by an amendment
to this report within the time period required by the rules of
the Securities and Exchange Commission.
(c) Exhibits
10.1 Amended and Restated Asset Purchase Agreement dated October
31, 2003, by and among FS Tours, Inc., FS SunTours, Inc., VE
Holdings Inc. and SunTrips Inc*
10.2 Stock Purchase Agreement dated October 31, 2003*
10.3 Common Stock Purchase Warrant Agreement dated October 31,
2003*
99.1 Press release dated November 3, 2003*
* Previously filed
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Company has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
RCG Companies Incorporated
/s/ MICHAEL PRUITT
----------------------------
Michael Pruitt
Date: January 9, 2004
By: Chief Executive Officer
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