UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
CONSOLIDATED DELIVERY & LOGISTICS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 22-3350958
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
380 Allwood Road
Clifton, New Jersey 07012
(973) 471-1005
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
-------------------------
Albert Van Ness, Jr., Chairman Copies to:
Consolidated Delivery & Logistics, Inc. Alan Wovsaniker, Esq.
380 Allwood Road Lowenstein Sandler PC
Clifton, New Jersey 07012 65 Livingston Avenue
(973) 471-1005 Roseland New Jersey 07068
(Name, Address, Including Zip Code, (973) 597-2500
and Telephone Number, Including
Area Code, of Agent for Service)
-------------------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement, as determined by
the Selling Securityholder.
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|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<TABLE>
<S> <C> <C> <C> <C>
CALCULATION OF REGISTRATION FEE
-------------------------- ----------------------- ------------------------- ------------------------- -------------------
Title of Each Class of Proposed Maximum Amount of
Securities to be Amount to be Proposed Maximum Aggregate Offering Registration Fee
Registered Registered(1) Offering Price Per Price (2)
Unit
-------------------------- ----------------------- ------------------------- ------------------------- -------------------
Common Stock ($.001 par
value) 361,517 $3.25 $1,174,930 $347
-------------------------- ----------------------- ------------------------- ------------------------- -------------------
</TABLE>
(1) The shares of Common Stock being offered hereby are issuable upon
conversion of the Registrant's Subordinated Convertible Notes due
2000 and 2001,respectively (the "Notes"). Pursuant to Rule 416, there
are also being registered an indeterminate number of shares of the
Registrant's Common Stock which may become issuable pursuant to the
antidilution provisions of such Notes.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon a price of $3.25 per share, which was
the average of the high and low sale prices of the Common Stock as
reported on the Nasdaq National Market on September 14, 1998.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Subject to Completion, Dated September 17, 1998
PROSPECTUS
361,517 Shares
CONSOLIDATED DELIVERY & LOGISTICS, INC.
Common Stock (par value $.001)
This Prospectus relates to up to 361,517 shares of common
stock, par value $.001 per share ("Common Stock"), of Consolidated Delivery &
Logistics, Inc. (the "Company") to be offered and sold from time to time for the
account of the selling securityholder set forth herein (the "Selling
Securityholder"). The shares of Common Stock offered hereby are issuable
pursuant to the Company's Subordinated Convertible Notes, as described below.
A total of up to 254,375 of the shares of Common Stock offered
hereby are issuable pursuant to the conversion provisions contained in the
Company's 7% Subordinated Convertible Note due 2001 (the "7% Note"). A total of
up to 107,142 of the shares of Common Stock offered hereby are issuable pursuant
to the conversion provisions contained in two Contingent Subordinated
Convertible Notes due 2000 and 2001, respectively, of the Company (the
"Contingent Notes" and, with the 7% Note, the "Notes") provided that certain
earn-out thresholds described in an Asset Purchase Agreement, dated July 2, 1998
(the "Agreement"), between the Company, Metro Courier Network, Inc. ("Metro" or
the "Selling Securityholder") and certain other parties, are achieved. The Notes
were issued on July 2, 1998 upon the Company's acquisition of all of the assets
of Metro in a private placement under Section 4(2) of the Securities Act of
1933, as amended (the "Securities Act").
The Company will not receive any of the proceeds from the sale
of the Common Stock by the Selling Securityholder. All of the proceeds from the
sale of the Common Stock will be paid directly to the Selling Securityholder.
The Company will be relieved of the obligation to repay the principal amount of
any of the Notes which are converted. The right to convert each Note may only be
exercised with respect to the entire amount due on the Note at the date of
conversion. The Company will bear all expenses in connection with the
registration of the Common Stock being registered hereby. The Selling
Securityholder will pay all underwriting discounts or brokerage commissions
incurred in connection with the sale of the shares of Common Stock.
The Selling Securityholder may sell the Common Stock to or
through underwriters, and also may sell the Common Stock directly to other
purchasers or through agents from time to time in private transactions, on the
Nasdaq National Market or otherwise. See "PLAN OF DISTRIBUTION."
The Common Stock is traded on the Nasdaq National Market. On
September 14, 1998, the last sale price of the Common Stock on the Nasdaq
National Market (symbol CDLI) was $3.125 per share.
SEE "RISK FACTORS" ON PAGE 3 FOR CERTAIN FACTORS WHICH SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON STOCK OFFERED
HEREBY.
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 PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is _____ ___, 1998.
<PAGE>
No person has been authorized to give any information or to
make any representations other than as contained in this Prospectus in
connection with the offer made hereby, and, if given or made, such information
or representations must not be relied upon as having been authorized by the
Company. The delivery of this Prospectus at any time does not imply that the
information herein is correct as of any time subsequent to the date hereof. This
Prospectus does not constitute an offer to sell securities in any jurisdiction
to any person to whom it is unlawful to make such offer in such jurisdiction.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934 (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 information filed by the Company with the Commission can 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 at 500 West Madison, Suite 1400, Chicago,
Illinois 60661; and at 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such material can be obtained from the Public Reference Section
of the Commission at its principal office at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission also maintains an
Internet web site that contains reports, proxy and information statements and
other information regarding issuers that file electronically with the
Commission. The address of that site is http://www.sec.gov.
The Company has filed with the Commission a Registration
Statement on Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act with respect to the Common
Stock offered hereby. This Prospectus does not contain all of the information
set forth in the Registration Statement and exhibits thereto, certain portions
of which have been omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the Common
Stock offered hereby reference is made to the Registration Statement and related
exhibits and to documents filed with the Commission. Any statements contained
herein concerning the provisions of any document are not necessarily complete
and, in each instance, reference is made to the copy of such document filed as
an exhibit to the Registration Statement. Each such statement is qualified in
its entirety by such reference. Copies of the Registration Statement and the
exhibits thereto are on file at the offices of the Commission and may be
obtained, upon payment of the fee prescribed by the Commission, or may be
examined without charge at the public reference facilities of the Commission
described above.
-------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company
with the Commission pursuant to the Exchange Act, are hereby incorporated by
reference in this Prospectus:
(i) The Company's Annual Report on Form 10-K for the year
ended December 31, 1997;
(ii) The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1998 and June 30, 1998;
(iii) The Company's Current Reports on Form 8-K filed with the
Commission on July 16, August 18 and August 19, 1998 and on Form 8-K/A filed
with the Commission on September 15, 1998;
(iv) The Company's definitive Proxy Statement for its
1998 Annual Meeting of Stockholders; and
(v) The description of the Common Stock set forth in the
Company's Registration Statement filed pursuant to Section 12 of the Exchange
Act and any amendment or report filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the completion of the Offering being made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein 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 statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company hereby undertakes to provide without charge to
each person, including any beneficial owner, to whom a copy of this Prospectus
has been delivered, upon the written or oral request of any such person, a copy
of any or all of the documents referred to above under "Incorporation of Certain
Documents by Reference" (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference in such documents). Requests
for such copies should be directed to: Consolidated Delivery & Logistics, Inc.,
380 Allwood Road, Clifton, New Jersey 07012 Attention: Secretary (telephone
(973) 471-1005).
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus, the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997, the Company's Quarterly Reports on Form
10-Q for the quarters ended March 31, and June 30, 1998, the Company's Current
Reports on Form 8-K filed with the Commission on July 16, August 18 and August
19, 1998 and on Form 8-K/A filed with the Commission on September 15, 1998, and
the Company's definitive Proxy Statement for its 1998 Annual Meeting of
Stockholders, which is incorporated by reference herein, include certain
statements that may be deemed to be "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. All statements, other than statements of historical facts, included in this
Prospectus that address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future, including, but
not limited to, such matters as future business development, business
strategies, expansion and growth of the Company's operations and other such
matters are forward-looking statements. These statements are based on certain
assumptions and analyses made by the Company in light of its experience and
perception of historical trends, current conditions, expected future
developments and other factors it believes are appropriate in the circumstances.
Such statements are subject to a number of assumptions, risks and uncertainties,
including the risk factors discussed below, general economic and business
conditions, the business opportunities (or lack thereof) that may be presented
to and pursued by the Company, changes in law or regulations and other factors,
many of which are beyond the control of the Company. Prospective investors are
cautioned that any such statements are not guarantees of future performance and
that actual results or developments may differ materially from those projected
in the forward-looking statements.
RISK FACTORS
Prospective purchasers should carefully consider the following risk
factors, in addition to the other information contained in this Prospectus,
before purchasing the shares of Common Stock offered hereby:
Limited Combined Operating History
The Company was founded in June 1994 and conducted no operations prior
to consummating the acquisition of 11 same-day courier companies in November
1995. Since that time, the Company has acquired several additional businesses.
The businesses acquired by the Company since its formation have all operated as
separate independent entities prior to their acquisition by the Company. The
process of integrating acquired businesses often involves unforeseen
difficulties and may require a significant amount of the Company's financial and
other resources, including management time. The Company may experience delays,
complications and unanticipated expenses in implementing, integrating and
operating the acquired businesses, any of which could have a material adverse
effect on the Company's business, financial condition and results of operations.
Management of Growth
The Company expects to expend significant time and effort in expanding
its existing businesses and identifying, acquiring and integrating acquisitions.
There can be no assurance that the Company's management and financial reporting
systems, procedures and controls will be adequate to support the Company's
operations as they expand. Any future growth also will impose significant added
responsibilities on members of senior management, including the need to
identify, recruit and integrate additional management and employees. There can
be no assurance that such additional management and employees will be identified
and retained by the Company. To the extent that the Company is unable to manage
its growth efficiently and effectively, or is unable to attract and retain
additional qualified personnel, the Company's business, financial condition and
results of operations could be materially adversely effected.
Risks Relating to the Company's Acquisition Strategy
In 1997 the Company curtailed its acquisition activity, however, one of
the Company's growth strategies for 1998 is to increase its revenues and
profitability and expand the markets it serves through the acquisition of
additional same-day air and ground delivery businesses. Several large, national
publicly traded companies have begun to consolidate the delivery industry. There
can be no assurance that the Company will be able to compete effectively for
acquisition candidates on terms deemed acceptable to the Company. There also can
be no assurance that the Company will be able to successfully convert the
systems of these businesses to the Company's existing systems and integrate such
businesses into the Company without substantial costs, delays or other
operational or financial problems. Acquisitions involve a number of special
risks, including possible adverse effects on the Company's operating results and
the timing of those results, diversion of management's attention, dependence on
retention, hiring and training of key personnel, risks associated with
unanticipated problems or legal liabilities, and the realization of intangible
assets, some or all of which could have a material adverse effect on the
Company's business, financial condition and results of operations, particularly
in the fiscal quarters immediately following the consummation of such
transactions. To the extent that the Company is unable to acquire additional
same-day delivery companies or integrate such businesses successfully, the
Company's ability to expand its operations and increase its revenues and
earnings to the degree desired could be reduced significantly.
<PAGE>
The Company currently intends to finance future acquisitions by using a
combination of shares of its Common Stock, notes and cash. In the event that the
Common Stock of the Company does not maintain a sufficient market value, or
potential acquisition candidates are unwilling to accept the Company's Common
Stock as part of or all of the consideration to be paid for their business, the
Company may be required to utilize its cash resources, if available, to maintain
its acquisition program. If the Company has insufficient cash resources to
pursue acquisitions, its growth could be limited unless it is able to obtain
additional capital through debt or equity financing. There can be no assurance
that the Company will be able to obtain such financing if and when it is needed
or that, if available, such financing can be obtained on terms the Company deems
acceptable. The inability to obtain such financing could negatively impact the
Company's acquisition program and could have a resulting material adverse effect
on the Company's business, financial condition and results of operations. The
terms of the Company's existing Revolving Credit Facility restricts the
Company's ability to make acquisitions.
Risks Associated With the Same-Day Delivery Industry; General Economic
Conditions
The Company's revenues and earnings are especially sensitive to events
that affect the delivery services industry, including extreme weather
conditions, economic factors affecting the Company's significant customers,
increases in fuel prices and shortages of or disputes with labor, any of which
could result in the Company's inability to service its clients effectively. In
addition, demand for the Company's services may be negatively impacted by
downturns in the level of general economic activity and employment. The
development and increased popularity of facsimile machines and electronic mail
via the Internet has reduced the demand for certain types of delivery services,
including those offered by the Company. As a result, same-day delivery
companies, including the Company, have changed focus to those delivery services
involving items that are unable to be delivered via alternative methods. There
can be no assurance that similar industry-wide developments will not have a
material adverse effect on the Company's business, financial condition or
results of operations.
Dependence on Technology
The Company's business is dependent upon a number of different
information and telecommunication technologies. Any impairment of the Company's
ability to process transactions on an accurate and timely basis could result in
the loss of customers and diminish the reputation of the Company. The Company
intends to integrate its subsidiaries' separate operating systems to an
integrated Company-wide system. There can be no assurance that the contemplated
integration and conversion of these systems will be successful or completed on a
timely basis or without unexpected costs. Any of the foregoing could have a
material adverse effect on the Company's business, financial condition and
results of operations.
Independent Contractors and Employee Owner/Operators
From time to time, federal and state authorities have sought to assert
that independent contractors in the transportation industry, including those
utilized by the Company, are employees, rather than independent contractors.
Similar assertions have been made against a subsidiary of the Company. The
Company believes that the independent contractors utilized by the Company are
not employees under existing interpretations of federal and state laws. However,
there can be no assurance that federal and state authorities will not challenge
this position, or that other laws or regulations, including tax laws, or
interpretations thereof, will not change. If, as a result of any of the
foregoing, the Company were required to pay for and administer added benefits to
independent contractors the Company's operating costs could substantially
increase.
In addition, certain of the Company's employees own and operate their
own vehicles in the course of their employment. In certain cases, the Company
pays those employees for all or a portion of the costs of operating those
vehicles. The Company believes that these arrangements do not represent
additional compensation to those employees. However, there can be no assurance
that federal and state taxing authorities will not seek to recharacterize some
or all of such payments as additional compensation. If such amounts were
recharacterized, the Company could have to pay additional employment-related
taxes on such amounts.
Claims Exposure
The Company utilizes the services of approximately 2,000 drivers. From
time to time such drivers are involved in accidents. The Company currently
carries liability insurance of $1 million for each such accident (subject to
applicable deductibles), carries umbrella coverage up to $25 million in the
aggregate and requires its independent contractors to maintain liability
insurance of at least the minimum amounts required by state and federal law.
However, there can be no assurance that claims against the Company will not
exceed the amount of coverage. If the Company were to experience a material
increase in the frequency or severity of accidents, liability claims or workers'
compensation claims, or unfavorable resolutions of claims, the Company's
operating results could be materially affected. In addition, significant
increases in insurance costs could reduce the Company's profitability.
Shares Eligible for Future Sale
The market price of the Common Stock could be adversely affected by the
sale of substantial amounts of Common Stock in the public market. As of August
31, 1998, 6,637,517 shares of Common Stock were issued and outstanding,
3,250,312 of which were registered for resale by the holders thereof. The
remaining shares may only be sold in transactions registered under the
Securities Act of 1933, as amended (the "Securities Act"), or pursuant to an
exemption from registration, including the exemption contained in Rule 144 under
the Securities Act.
Upon conversion of the Notes, the shares of Common Stock offered hereby
will be eligible for resale in the public market.
As of August 31, 1998, the Company had outstanding under its stock
option plans options to purchase an aggregate of 1,025,726 shares of Common
Stock, 720,108 of which were exercisable as of that date. The shares of Common
Stock issuable upon the exercise of such options have been registered under the
Securities Act and, as a result, will be eligible for resale in the public
market, unless held by affiliates of the Company.
The Company also intends to register for resale in the public market up
to 170,893 additional shares of Common Stock which are issuable upon the
conversion of the Company's Convertible Subordinated Debentures and up to
338,215 additional shares of Common Stock which are issuable upon the conversion
of certain notes issued by the Company in August 1998 upon its acquisition of
KBD Services Inc.
Reliance on Key Personnel
The Company's operations are dependent on the continued efforts of its
senior management. Furthermore, the Company will likely be dependent on the
senior management of companies that may be acquired in the future. If any of
these people elect not to continue in their present roles, or if the Company is
unable to attract and retain other skilled employees, the Company's business
could be adversely affected.
Permits and Licensing
The Company's delivery operations are subject to various state, local
and federal regulations that in many instances require permits and licenses.
Failure by the Company to maintain required permits or licenses, or to comply
with applicable regulations, could result in substantial fines or possible
revocation of the Company's authority to conduct certain of its operations.
No Future Dividends
The Company does not anticipate paying any cash dividends on shares of
the Common Stock in the foreseeable future and intends to retain future
earnings, if any, for use in its business. In addition, the Company's ability to
pay cash dividends on the Common Stock is limited by the terms of its Revolving
Credit Facility.
Effect of Certain Charter Provisions
The Board of Directors of the Company is empowered to issue preferred
stock without stockholder action. The existence of this "blank-check" preferred
stock could render more difficult or discourage an attempt to obtain control of
the Company by means of a tender offer, merger, proxy contest or otherwise and
may adversely affect the prevailing market price of the Common Stock. The
Company currently has no plans to issue shares of preferred stock. In addition,
Section 203 of the Delaware General Corporation Law restricts certain persons
from engaging in business combinations with the Company.
At the Company's 1998 Annual Meeting of Stockholders held in June 1998,
the stockholders ratified an amendment to the Company's By-laws which created
staggered terms for the Board of Directors. Pursuant to this amendment, only
one-third of the Board will be subject to election at each annual meeting of the
stockholders.
Competition
The markets for the Company's same-day ground air delivery and
logistics services are highly competitive. Price competition is often intense,
particularly in the market for basic delivery services where entry barriers are
low. In addition the Company competes with a large number of other entities and
while the Company believes that it competes effectively with these other
entities, there can be no assurances that the Company will maintain its
competitive position in its principal markets.
<PAGE>
THE COMPANY
Consolidated Delivery & Logistics, Inc. (the "Company") was founded in
June 1994 to create a national, full service, same-day ground and air delivery
and logistics company. The Company provides an extensive network of same-day
delivery services to a wide range of commercial, industrial and retail
customers. The Company's ground delivery operations are concentrated on the East
Coast, with a strategic presence in the Midwest and on the West Coast. The
Company's air delivery services are provided throughout the United States and to
major cities around the world.
The Company offers its customers a single source for their same-day
delivery needs. The Company's strategy is to achieve increased operating
efficiencies by consolidating operations, increasing the density of its delivery
routes and improving the productivity of existing personnel, equipment and
facilities. During 1997, the Company curtailed its acquisition activities to
focus on internal growth, strengthen its management structure and to improve
financial and operational systems. In connection therewith, and in accordance
with the Company's previously announced plans, the Company disposed of its
contract logistics subsidiary and its fulfillment and direct mail operation. In
1998, the Company began identifying suitable acquisition candidates where the
Company can improve its existing market position or can establish a stronger
market presence. Accordingly, the Company acquired certain assets and
liabilities of Metro in July 1998 and certain assets and liabilities of KBD
Services, Inc. in August 1998.
The Company was incorporated under the laws of the State of Delaware in
June 1994. The complete mailing address of the Company's principal executive
office is 380 Allwood Road, Clifton, New Jersey 07012, and its telephone number
is (973) 471-1005.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Common Stock offered hereby. All net proceeds from the sale of the Common Stock
will be paid directly to the Selling Securityholder. The Company will be
relieved of the burden of repaying the Notes to the extent they are converted.
SELLING SECURITYHOLDER
This Prospectus covers offers from time to time by Metro (the "Selling
Securityholder") (after Metro becomes a holder of Common Stock) of the Common
Stock owned by Metro. The Selling Securityholder will hold shares of Common
Stock issued upon the conversion of the Notes. The Notes were issued on July 2,
1998 in a private placement upon the closing of the Company's acquisition of
Metro. The 7% Note is convertible at the option of the Selling Securityholder at
any time up to and including July 1, 2001. The Company also has the right to
convert the 7% Note at any time after the average closing sales price for the
Common Stock over a 90 calendar day period exceeds $7.00. The 7% Note is
convertible into the number of shares of Common Stock which results from
dividing the principal amount of $1,750,000, plus accrued interest, by the
conversion price. The conversion price is $7.00, subject to adjustment in the
event of stock dividends, stock splits, combinations or other capital
reorganizations. The 7% Note accrues interest at the rate of 7% per annum.
Interest is payable quarterly. Accordingly, the 7% Note is convertible into a
maximum number of shares of Common Stock of 254,375.
The Contingent Notes are convertible into shares of Common Stock only
if earnings thresholds specified in the Agreement are achieved by the Metro
division of the Company, and if the fair market value per share at the time of
conversion equals or exceeds $7.00. The measurement periods for determining
whether the earnings thresholds are achieved end on June 1, 2000 and June 1,
2001, respectively. If these thresholds are achieved for the first measurement
period, one Contingent Note will be convertible by the holder or the Company at
any time up to and including September 1, 2000. If the specified earnings
thresholds are achieved for the second measurement period, the second Contingent
Note will be convertible by the holder or the Company at any time up to and
including September 1, 2001. Each Contingent Note is convertible into a maximum
number of shares of Common Stock determined by dividing the principal amount of
each Contingent Note ($375,000) by the then fair market value of the Common
Stock (provided such fair market value equals or exceeds $7.00). Accordingly,
assuming all earnings thresholds are achieved and the fair market value at the
times of conversion equals $7.00, the two Contingent Notes will be convertible
into up to an aggregate of 107,142 shares of Common Stock.
Accordingly, a total of 361,517 shares of Common Stock are being
registered for resale by the Selling Securityholder pursuant to this Prospectus.
The Selling Securityholder does not own any shares of Common Stock as of the
date of this Prospectus, and if all shares registered hereby are offered and
sold by the Selling Securityholder, the Selling Securityholder will own no
shares of Common Stock after this Offering is completed.
PLAN OF DISTRIBUTION
The distribution of the Common Stock by the Selling Securityholder, or
by the Selling Securityholder's successors in interest, may be effected from
time to time in one or more transactions on the Nasdaq National Market, in
special offerings, exchange distributions and/or secondary distributions
pursuant to and in accordance with the applicable rules of the National
Association of Securities Dealers, Inc. ("NASD"), in the over-the-counter
market, in negotiated transactions (including, without limitation, privately
negotiated transactions), through the writing of options on the Common Stock, or
through the issuance of other securities convertible into shares of the Common
Stock (whether such options or other securities are listed on an options or
securities exchange or otherwise), or a combination of such methods of
distribution, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices.
Any or all of the Common Stock may be sold from time to time to
purchasers directly by the Selling Securityholder. Sales of Common Stock may
also be made pursuant to Rules 144, 144A or 904 of the Securities Act, provided
that the requirements of such rules, including, without limitation, the holding
period and the manner of sale requirements, are met. Alternatively, the Selling
Securityholder may from time to time offer any or all of the Common Stock
through underwriters, dealers, brokers or agents, including in transactions in
which any such underwriters, dealers, brokers or agents solicit purchasers, and
in block transactions in which any such underwriters, dealers, brokers, or
agents will attempt to sell such shares of Common Stock as an agent but may
resell such shares of Common Stock as a principal pursuant to this Prospectus.
Any underwriters, dealers, brokers or agents participating in the
distribution of the Common Stock offered hereby may receive compensation in the
form of underwriting discounts, concessions, commissions or fees from the
Selling Securityholder and/or purchasers of Common Stock for whom they may act
as agents (which compensation may be in excess of customary commissions). In
addition, the Selling Securityholder and any such underwriters, dealers, brokers
or agents that participate in the distribution of Common Stock may be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities Act and
any commissions received by them and any profit on the resale of shares of the
Common Stock may be deemed to be underwriting compensation. Additionally, the
Selling Securityholder may pledge shares of the Common Stock, and in such event
agents or dealers may acquire the shares of the Common Stock or interests
therein, and may, from time to time, effect distributions of shares of the
Common Stock or interests therein in such capacity.
In order to comply with the securities laws of certain states, if
applicable, the Common Stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states, the Common Stock
may not be sold unless registered or qualified for sale in such state or unless
an exemption from registration or qualification is available and such sale is
made in compliance with such exemption.
LEGAL MATTERS
Certain matters with respect to the validity and legality of
the Common Stock offered hereby have been passed upon for the Company by
Lowenstein Sandler PC, Roseland, New Jersey.
EXPERTS
The financial statements and schedules incorporated by
reference in this Prospectus and elsewhere in the Registration Statement, to the
extent and for the periods set forth in their report, have been audited by
Arthur Andersen LLP, independent certified public accountants, and are
incorporated herein in reliance upon the authority of said firm as experts in
auditing and accounting in giving said report.
<PAGE>
<TABLE>
<S> <C>
No dealer, salesman or any other person has been
authorized to give any information or to make any 361,517 Shares
representations in connection with this offering other
than those contained in this Prospectus and, if given
or made, such other information and representations CONSOLIDATED DELIVERY & LOGISTICS, INC.
must not be relied upon as having been authorized by
the Company. Neither the delivery of this Prospectus
nor any sale made hereunder shall, under any
circumstances, create any implication that there has Common Stock
been no change in the affairs of the Company since the
date hereof or that the information contained herein is
correct as of any time subsequent to its date. This ______________
Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy such securities in any PROSPECTUS
circumstances in which such offer or solicitation is ______________
unlawful.
-------------------
TABLE OF CONTENTS
Page
Available Information....................... 2
Incorporation of Certain Documents
by Reference............................. 2
Disclosure Regarding Forward-
Looking Statements........................ 3
Risk Factors................................ 3
The Company................................. 7
Use of Proceeds............................. 7
Selling Securityholder...................... 7
Plan of Distribution........................ 8
Legal Matters............................... 9
Experts..................................... 9
......... ___________________, 1998
=====================================================
</TABLE>
<PAGE>
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution
The following table lists the expenses which will be incurred
in connection with the issuance and distribution of the Common Stock being
registered.
Expense
Securities and Exchange Commission
Registration Fee $ 406
Accounting Fees and Expenses 5,000
Legal Fees and Expenses 5,000
Miscellaneous 594
-------
Total $11,000
=======
All of the above amounts, other than the SEC filing fee, are
estimates only. All of the above expenses will be paid by the Company.
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("GCL")
provides generally that a person sued as a director, officer, employee or agent
of a corporation may be indemnified by the corporation in nonderivative suits
for expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation. In the case of criminal actions and proceedings, such person must
have had no reasonable cause to believe his or her conduct was unlawful.
Indemnification of expenses is authorized in stockholder derivative suits where
such person acted in good faith and in a manner reasonably believed to be in or
not opposed to the best interests of the corporation and so long as he or she
had not been found liable for negligence or misconduct in the performance of his
or her duty to the corporation. Even in this latter instance, the court may
determine that in view of all the circumstances such person is entitled to
indemnification for such expenses as the court deems proper. A person sued as a
director, officer, employee or agent of a corporation who has been successful in
defense of the action must be indemnified by the corporation against expenses.
Article Tenth of the Certificate of Incorporation and Section
10 of the Company's by-laws, as amended ("By-laws"), provide that the Company
shall, to the fullest extent permitted by law, indemnify each person (including
the heirs, executors, administrators and other personal representatives of such
person) against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, actually and reasonably incurred by such person in
connection with any threatened, pending or actual suit, action or proceeding
(whether civil, criminal, administrative or investigative in nature or
otherwise) in which such person may be involved by reason of the fact that he or
she is or was a director or officer of the Company or is serving any other
incorporated or unincorporated enterprise in any of such capacities at the
request of the Company.
Article Tenth of the Certificate of Incorporation also
contains a provision limiting the personal liability of directors to the fullest
extent permitted or authorized by the GCL or other applicable law. Under the
GCL, such provision would not limit liability of a director for (i) breach of
the director's duty of loyalty (i.e., a director's duty to refrain from
self-dealing in relation to the Company), (ii) acts or omissions not in good
faith or involving intentional misconduct or knowing violation of law, (iii)
payment of dividends or repurchases or redemptions of stock other than from
lawfully available funds, or (iv) any transactions from which the director
derives an improper benefit. This provision may have no effect on liability for
violations of the federal securities laws.
<PAGE>
Item 16. Exhibits
The following exhibits are filed as part of this Registration
Statement:
4.1* Second Restated Certificate of Incorporation of the Company,
as amended.
4.2** By-laws of the Company, as amended and restated.
4.3*** Form of Certificate evidencing ownership of the Company's
Common Stock.
4.4**** 7% Subordinated Convertible Note due 2001.
4.5***** First and Second Contingent Subordinated Convertible Notes due
2000 and 2001, respectively.
5.1 Opinion of Lowenstein Sandler PC.
23.1 Consent of Independent Public Accountants.
23.2 Consent of Lowenstein Sandler PC is included in Exhibit 5.1.
24.1 Power of Attorney.
- -----------------
* Incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (File No. 333-97008).
** Incorporated by reference to Exhibit 3.2 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998.
*** Incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-1 (File No. 333-97008).
**** Incorporated by reference to Exhibit 10.2 to the Company's Current
Report on Form 8-K filed with the Commission on July 16, 1998.
***** Incorporated by reference to Exhibit 10.1 to the Company's Current
Report on Form 8-K/A filed with the Commission on September 15, 1998.
Item 17. Undertakings
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. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may
be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement.
(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.
The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to 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.
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
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Consolidated Delivery & Logistics, Inc, 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 Clifton, State of New
Jersey, on September 17, 1998.
CONSOLIDATED DELIVERY & LOGISTICS, INC.
By: \s\ Albert W. Van Ness
Albert W. Van Ness, Jr., Chairman and CEO
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities indicated below on September 17, 1998.
Signature Capacity
\s\ Albert W. Van Ness, Jr. Chairman of the Board, Chief
____________________________ Executive Officer and Chief
Albert W. Van Ness, Jr. Financial Officer
*
_________________ President, Chief Operating Officer
William T. Brannan and Director
*
_________________ Director
William Beaury
*
_________________ Director
Michael Brooks
*
_________________ Director
Jon F. Hanson
*
_________________ Director
Labe Leibowitz
*
_________________ Director
Marilu Marshall
*
_________________ Director
Kenneth W. Tunnell
*
________________ Director
John S. Wehrle
*By: \s\ Albert W. Van Ness, Jr.
__________________________________________
Albert W. Van Ness, Jr., Attorney-in-Fact
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
5.1 Opinion of Lowenstein Sandler PC.
23.1 Consent of Independent Public Accountants.
23.2 Consent of Lowenstein Sandler PC is included in Exhibit 5.1.
24.1 Power of Attorney.
<PAGE>
Exhibit 5.1
LOWENSTEIN SANDLER PC
Attorneys at Law
Alan Wovsaniker Tel 973.597.2564 Fax 973.597.2565
Member of the Firm [email protected]
September 9, 1998
Consolidated Delivery & Logistics, Inc.
380 Allwood Road
Clifton, NJ 07012
Dear Gentlemen:
You have requested our opinion in connection with the registration with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
of 361,517 shares of the common stock ("Common Stock") of Consolidated Delivery
& Logistics, Inc. (the "Company") on a registration statement on Form S-3 (the
"Registration Statement"). The shares of Common Stock to which the Registration
Statement relates represent shares issuable upon the conversion of certain
promissory notes (the "Notes") issued to Metro Courier Network, Inc. ("Metro")
in connection with the Company's acquisition of all of the assets of Metro in
July 1998.
We have examined and relied upon originals or copies, authenticated or certified
to our satisfaction, of all such corporate records of the Company,
communications or certifications of public officials, certificates of officers,
directors and representatives of the Company, and such other documents as we
have deemed relevant and necessary as the basis of the opinions expressed
herein. In making such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents tendered to us as originals, and
the conformity to original documents of all documents submitted to us as
certified or photostatic copies.
Based upon the foregoing and relying upon statements of fact contained in the
documents which we have examined, we are of the opinion that the shares of
Common Stock covered by the Registration Statement will be, when issued pursuant
to the terms of the Notes, legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and any amendment thereto.
Very truly yours,
LOWENSTEIN SANDLER PC
\s\ Lowenstein Sandler PC
<PAGE>
Exhibit 23.1
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Consolidated Delivery & Logistics, Inc.:
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 25, 1998
included in Consolidated Delivery & Logistics, Inc.'s Form 10-K for the year
ended December 31, 1997 and to all references to our Firm included in this
registration statement.
\s\ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Roseland, New Jersey
September 16, 1998
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
WHEREAS, the undersigned officers and directors of
Consolidated Delivery & Logistics, Inc. (the "Company") desire to authorize
Albert W. Van Ness, Jr. and William T. Brannan to act as their
attorneys-in-fact and agents, for the purpose of executing and filing the
registration statement described below, including all amendments and
supplements thereto,
NOW, THEREFORE,
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Albert W. Van Ness, Jr. and
William T. Brannan, and each of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, to sign the
registrant's Registration Statement on Form S-3, pertaining to its Subordinated
Convertible Notes, including any and all amendments and supplements thereto, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this power
of attorney in the following capacities as of the 5th day of August, 1998.
SIGNATURE TITLE
\s\ Albert W. Van Ness, Jr. Chairman of the Board and Chief
Albert W. Van Ness, Jr. Executive Officer
\s\ William T. Brannan Chief Operating Officer and Director
William T. Brannan
\s\ William Beaury Director
William Beaury
\s\ Michael Brooks Director
Michael Brooks
\s\ Labe Leibowitz Director
Labe Leibowitz
\s\ Jon F. Hanson Director
Jon F. Hanson
\s\ Marilu Marshall Director
Marilu Marshall
\s\ Kenneth W. Tunnell Director
Kenneth W. Tunnell
\s\ John S. Wehrle Director
John S. Wehrle
