As filed with the Securities and Exchange Commission on August 13, 1997
Registration No. 333-30351
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMERTRANZ WORLDWIDE HOLDING CORP.
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
Delaware 4731 11-3309110
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer Identification
of incorporation or organization) Classification Code Number) Number)
</TABLE>
2001 Marcus Avenue
Lake Success, New York 11042
(516) 326-9000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Stuart Hettleman, President
Amertranz Worldwide Holding Corp.
2001 Marcus Avenue
Lake Success, New York 11042
(516) 326-9000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
Hillel Tendler, Esquire
Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC
233 East Redwood Street
Baltimore, Maryland 21202
(410) 576-4071
Approximate date of commencement of proposed sale to public: From
time to time after Registration Statement becomes effective.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, 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, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. |_|
____________________
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_| ____________________
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. |_|
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(Continuation of Cover Page)
CALCULATION OF REGISTRATION FEE
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<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of each Class of Amount being Price Per Offering Registration
Security being registered Registered(1) Share(2) Price(2) Fee
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Shares of Common Stock, $.01 par value
("Common Stock")(3)........................... 7,324,750 Shares $1.6875 $12,360,515 $3,746
- ---------------------------------------------------------------------------------------------------------------------------
Redeemable Common Stock Purchase Warrants
("Warrants") issued in connection with Private
Placement (4)................................. 1,387,500 Warrants 0.25 346,875 105
- ---------------------------------------------------------------------------------------------------------------------------
Shares of Common Stock underlying Warrants
issued in connection with Private Placement(5) 1,387,500 Shares 1.6875 2,341,406 710
- ---------------------------------------------------------------------------------------------------------------------------
Shares of Common Stock underlying Warrants
issued in connection with Private Placement(6) 1,387,500 Shares 1.6875 2,341,406 710
- ---------------------------------------------------------------------------------------------------------------------------
Shares of Common Stock included as part of
the Private Placement Purchase Option(7)...... 257,500 Shares 1.6875 434,531 132
- ---------------------------------------------------------------------------------------------------------------------------
Warrants included as part of the Private
Placement Purchase Option(8).................. 128,750 Warrants 0.25 32,188 10
- ---------------------------------------------------------------------------------------------------------------------------
Shares of Common Stock underlying Warrants
included in the Private Placement Purchase
Option(9)..................................... 128,750 Shares 1.6875 217,266 66
- ---------------------------------------------------------------------------------------------------------------------------
Shares of Common Stock underlying Warrants
included in the Private Placement Purchase
Option(10).................................... 128,750 Shares 1.6875 217,266 66
- ---------------------------------------------------------------------------------------------------------------------------
Total Registration Fee.................... $18,291,453 $5,545
- ---------------------------------------------------------------------------------------------------------------------------
Previously Paid.......................... $4,803
- ---------------------------------------------------------------------------------------------------------------------------
Amount Due................................ $ 742
==========
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<FN>
(1) Pursuant to Rule 416, there are also being registered for resale such
indeterminable additional shares of Common Stock as may be issued as a
result of anti-dilution provisions of the Registrant's Class A Preferred
Stock, Class B Preferred Stock, Class C Preferred Stock, and the Private
Placement Purchase Option .
(2) Based on the market price, as reported on the Nasdaq SmallCap Market, on
June 25, 1997, in accordance with Rule 457(c).
(3) Represents the resale by certain securityholders of (i) 2,000,000 shares
of Common Stock issuable upon conversion of outstanding shares of the
Registrant's Class A Preferred Stock, (ii) up to 800,000 shares of Common
Stock issuable upon conversion of the Registrant's Class A Preferred Stock
issued and issuable as dividends on outstanding shares of the Class A
Preferred Stock, (iii) 200,000 shares of Common Stock issuable upon
conversion of outstanding shares of the Registrant's Class B Preferred
Stock issued in connection with the October 1996 acquisition of a
subsidiary, (iv) 2,575,000 shares of Common Stock issuable upon conversion
of outstanding shares of the Registrant's Class C Preferred Stock issued
in a June 1997 Private Placement, (v) up to 772,500 shares of Common Stock
issuable as dividends on outstanding shares of the Class C Preferred
Stock, (vi) up to 77,250 shares of Common Stock issuable as dividends on
shares of the Class C Preferred Stock issuable upon exercise of a Private
Placement Purchase Option issued to the Placement Agent in connection with
a June 1997 Private Placement, and (vii) 900,000 shares of Common Stock
issued in connection with the May 1997 acquisition of a subsidiary.
(4) Represents the resale by certain securityholders of Warrants issued in
connection with a June 1997 private placement.
(5) Represents the resale by certain securityholders of shares of Common Stock
issuable upon exercise of the Warrants issued in connection with a June
1997 private placement.
(6) Represents the issuance of shares of Common Stock to Warrant holders who
purchase such Warrants from the investors who were issued such Warrants in
connection with a June 1997 private placement.
(7) Represents shares of Common Stock issuable upon conversion of shares of
the Registrant's Class C Preferred Stock issuable upon exercise of a
Private Placement Purchase Option issued to the Placement Agent in
connection with a June 1997 Private Placement.
(8) Represents the resale by the Placement Agent of Warrants issuable upon
exercise of a Private Placement Purchase Option issued to the Placement
Agent in connection with a June 1997 Private Placement.
(9) Represents the resale by the Placement Agent of shares of Common Stock
issuable upon exercise of the Warrants issuable upon exercise of a Private
Placement Purchase Option issued to the Placement Agent in connection with
a June 1997 Private Placement.
(10) Represents the issuance of shares of Common Stock to Warrant holders who
purchase such Warrants from the Placement Agent which was issued such
Warrants upon exercise of a Private Placement Purchase Option issued to
the Placement Agent in connection with a June 1997 Private Placement.
[/FN]
</TABLE>
----------------
<PAGE>
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
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 Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor 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 laws of any such State.
SUBJECT TO COMPLETION DATED August 12, 1997
PROSPECTUS
AMERTRANZ WORLDWIDE HOLDING CORP.
6,132,500 Shares of Common Stock, Par Value $.01 per Share
1,516,250 Redeemable Common Stock Purchase Warrants
The 6,132,500 shares of common stock ("Common Stock") and 1,516,250 Redeemable
Common Stock Purchase Warrants ("Warrants") offered hereby (collectively, the
"Securities") were issued by Amertranz Worldwide Holding Corp. ("Company"). The
Securities may be offered from time to time by certain persons ("Selling
Securityholders") identified herein. See "Selling Securityholders". The Company
will not receive any part of the proceeds from the sale of the Securities;
however, the Company will receive the exercise price of the Warrants that are
exercised. There is no assurance that any Warrants will be exercised resulting
in any proceeds to the Company. All expenses of registration incurred in
connection herewith are being borne by the Company, but all selling and other
expenses incurred by the Selling Securityholders will be borne by the Selling
Securityholders.
Each Warrant entitles the holder to purchase one share of Common Stock for $6.00
at any time until June 27, 2001. In the event the Registration Statement of
which this Prospectus is a part is effective and current, and provided that not
less than 30 days' notice of redemption is given and the last sale date of the
Common Stock has been at least $10.00 for each of the 20 trading days ending on
the third business day prior to the day on which notice is given, the Company
has the right to call the Warrants for redemption at a redemption price of $.01
per Warrant.
Of the shares of Common Stock and Warrants offered for resale by the Selling
Securityholders, (i) 900,000 shares of Common Stock were issued in connection
with the Company's May 1997 acquisition of a subsidiary and are currently
outstanding, (ii) 2,200,000 shares of Common Stock are issuable upon conversion
of 220,000 outstanding shares of the Company's Class A Preferred Stock, issued
in July 1996 upon conversion of $2,000,000 principal amount of long-term
indebtedness, (iii) 200,000 shares of Common Stock are issuable upon conversion
of 20,000 outstanding shares of the Company's Class B Preferred Stock, issued in
connection with the Company's October 1996 acquisition of a subsidiary, (iv)
2,575,000 shares of Common Stock are issuable upon conversion of 257,500
outstanding shares of the Company's Class C Preferred Stock, issued in
connection with a June 1997 private placement ("Private Placement"), (v)
1,387,500 Warrants were issued in connection with the Private Placement and are
currently outstanding, (vi) 1,387,500 shares of Common Stock are issuable upon
exercise of the Warrants issued in the Private Placement, (vii) 257,500 shares
of Common Stock are issuable upon conversion of shares of the Company's Class C
Preferred Stock, to be issued to the placement agent in the Private Placement
upon exercise of the Placement Agent Purchase Option granted in connection with
the Private Placement (the "Private Placement Purchase Option"), (viii) 128,750
Warrants are issuable upon exercise of the Private Placement Purchase Option,
and (ix) 128,750 shares of Common Stock are issuable upon exercise of the
Warrants to be issued upon exercise of the Private Placement Purchase Option. In
addition, this Prospectus relates to the resale of (i) up to 600,000 shares of
Common Stock issuable upon conversion of shares of the Company's Class A
Preferred Stock issuable as dividends on the outstanding shares of Class A
Preferred Stock, (ii) up to 772,500 shares of Common Stock issuable as dividends
on the outstanding shares of Class C Preferred Stock, (iii) up to 77,250 shares
of Common Stock issuable as dividends on shares of Class C Preferred Stock to be
issued upon exercise of the Private Placement Purchase Option. All Warrants,
outstanding shares of the Company's Class A Preferred Stock and Class C
Preferred Stock, and the Private Placement Purchase Option and underlying shares
of Class C Preferred Stock and Warrants are immediately exercisable for shares
of Common Stock.
Sale of the Securities may be effected from time to time in transactions (which
may include block transactions) on the Nasdaq SmallCap Market, in negotiated
transactions, or a combination of such methods of sale, at fixed prices which
may be changed, at market prices prevailing at the time of sale or at negotiated
prices. None of the Selling Securityholders has entered into agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of their Shares. The Selling Securityholders may effect such
transactions by selling their shares of Common Stock and/or Warrants directly to
purchasers or to or through broker-dealers, which may act as agents or
principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Securityholders and/or
the purchasers of the Securities for whom such broker/dealers may act as agents
or to whom they sell as principals, or both (which compensation as to a
particular broker/dealer might be in excess of customary commissions). See "Plan
of Distribution".
On August 1, 1997, the last sale prices per share of Common Stock and per
Warrant, as reported by the Nasdaq SmallCap Market, were $1.375 and $0.375,
respectively.
The Selling Securityholders and any broker-dealers or agents that participate
with the Selling Securityholders in the distribution of the Securities may be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933, as amended (the "Securities Act") and, as
"underwriters", may be liable for material omissions or misrepresentations in
this Prospectus. The Selling Securityholders may agree to indemnify any agent,
dealer, or broker-dealer that participates in transactions involving sales of
the securities against certain liabilities, including liabilities arising under
the Securities Act.
The securities offered hereby are speculative in nature and involve a high
degree of risk and substantial dilution. See "Risk Factors" at page 4.
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 , 1997
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or to make any representations, other than those contained or
incorporated by reference in this Prospectus, in connection with the offering
contained herein and, if given or made, such information must not be relied upon
as having been authorized by the Company or the Selling Securityholders. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby in any jurisdiction to any person to
whom it is unlawful to make such offer in such jurisdiction. Neither the
delivery of this Prospectus nor any sale made hereunder shall under any
circumstances create any implication that there has been no change in the
affairs of the Company since the date hereof.
UNCERTAINTY OF FORWARD LOOKING STATEMENTS
This Prospectus, including any documents that are incorporated by reference as
set forth in "Available Information," contains forward looking statements. Such
statements are typically punctuated by words or phrases such as "anticipate,"
"estimate," "projects," "should," "may," "management believes," and words or
phrases of similar import. Such statements are subject to certain risks,
uncertainties or assumptions. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those anticipated, estimated or projected. Among the
key factors that may have a direct bearing on the Company's results of
operations and financial condition are: (i) the Company's recent losses and
ability to achieve profitability, (ii) competitive practices in the industries
in which the Company competes, (iii) the Company's dependence on current
management, (iv) the impact of current and future laws and governmental
regulations affecting the transportation industry in general and the Company's
operations in particular, and (v) general economic conditions. See "Risk
Factors."
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's
Regional Offices at 7 World Trade Center, 13th Floor, New York, New York 10048,
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and copies may
be obtained at the prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. The
Commission also maintains a Web site that contains reports, proxy statements and
other information regarding registrants that file electronically with the
Commission. The address of such site is http:\\www.sec.gov.
The Company has filed with the Commission a Registration Statement (the
"Registration Statement") on Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Securities offered by this
Prospectus. This Prospectus, which constitutes part of the Registration
Statement, omits certain of the information contained in the Registration
Statement and the exhibits thereto on file with the Commission pursuant to the
Securities Act and the rules and regulations of the Commission thereunder. For
further information with respect to the Company and the Securities, reference is
made to the Registration Statement. Copies of the Registration Statement,
including all exhibits thereto, may be obtained from the Commission's principal
office in Washington, D.C. upon payment of the fees prescribed by the Commission
or may be examined without charge at the offices of the Commission or Web site
as described above.
2
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company (File No. 001-14474)
with the Commission are incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1996, and amendments thereto, filed January 2, 1997 and
August 12, 1997.
(b) the Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30 and December 31, 1996, and March 31, 1997;
(c) amendment to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996, filed January 7, 1997;
(d) amendment to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997, filed August 12, 1997;
(e) the Company's Current Report on Form 8-K dated October 10, 1996, and
amendment thereto, filed November 26, 1996;
(f) the Company's Proxy Statement, filed with the Commission on November
6, 1996;
(g) the Company's Information Statement, filed with the Commission on
June 20, 1997; and
(h) the description of the Common Stock and the warrants included in the
Company's Registration Statement on Form 8-A, dated June 17, 1996 and
the information thereby incorporated by reference contained in the
Company's Registration Statement on Form S-1, Registration No.
333-03613, dated June 28, 1996 are hereby incorporated by reference
into this Prospectus.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering made hereby shall be deemed to be incorporated
by reference into this Prospectus and to be part hereof from the date of filing
such documents. Any statement contained in a document all or a portion of which
is incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of the Registration Statement and this
Prospectus to the extent that a statement contained in the Registration
Statement, this Prospectus, or any other subsequently filed document that is
also incorporated by reference herein modifies or supersedes that 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 Prospectus is delivered, upon written
or oral request of that person, a copy of any document incorporated herein by
reference (other than exhibits to those documents unless the exhibits are
specifically incorporated by reference into the documents that this Prospectus
incorporates by reference). Requests should be directed to the Secretary, 2001
Marcus Avenue, Lake Success, New York 11042, telephone number (516) 326-9000.
3
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THE COMPANY
The Company provides freight forwarding services through its wholly owned
subsidiaries, Amertranz Worldwide, Inc. ("Amertranz"), Caribbean Air Services,
Inc. ("CAS"), Consolidated Air Services, Inc. ("Consolidated Air") and Target
Airfreight, Inc. ("Target"). The Company has a network of offices in 17 cities
throughout the United States and Puerto Rico, including exclusive agency
relationships in eight cities. The Company has international freight forwarding
operations consisting of strategic relationships in over 20 countries. The
Company believes that it is one of the dominant freight forwarders between the
continental United States and Puerto Rico.
The Company's freight forwarding services involve arranging for the total
transport of customers' freight from the shippers' location to the designated
recipients, including the preparation of shipping documents and the providing of
handling, packing and containerization services. The Company concentrates on
cargo shipments weighing more than 50 pounds and generally requiring second-day
delivery. The Company also assembles bulk cargo and arranges for insurance.
The Company was incorporated in Delaware in January 1996 as the successor to
operations commenced in 1970. Unless otherwise expressly stated, all references
to the "Company" in this Prospectus include the Company, Amertranz, CAS,
Consolidated Air and Target. The Company's executive offices are located at 2001
Marcus Avenue, Lake Success, New York 11042, and its telephone number is (516)
326- 9000.
RISK FACTORS
An investment in the Company is speculative and involves a high degree of risk,
and is not appropriate for persons who cannot afford the loss of their entire
investment. The following risk factors should be considered carefully in
addition to the other information in this Prospectus before purchasing the
Securities.
Substantial Losses; Accumulated Deficit. While the businesses of the Company's
CAS and Consolidated Air subsidiaries have generated positive cash flows for
several years, the business of the Company's Amertranz subsidiary has incurred
operating losses for each of its operating periods and continues to incur
losses. For the nine-months ended March 31, 1997, the Company, on a consolidated
basis, generated approximately $53.3 million in operating revenues, and incurred
operating losses of approximately $3.9 million. As of March 31, 1997, total
stockholders' equity in the Company was $2,044,188, and excluding intangible
assets such as goodwill, the Company had a tangible net worth deficit of
$10,145,670. Because of continuing losses in the Company's Amertranz subsidiary,
the Company has commenced actions to close the operations of the Amertranz
subsidiary and transfer its customer accounts to the Company's other
subsidiaries for fair consideration. The Company will be unable to achieve and
sustain profitability unless it improves its operating results. There can be no
assurance that the Company will be able to increase revenues or achieve
profitability. See "Risk Factors -- Amertranz Subsidiary Losses" and "Recent
Developments -- Amertranz Subsidiary Losses".
Working Capital Deficit; Need for Additional Funding. As of the date hereof,
the Company's current liabilities exceed its current assets. Although the CAS
and Consolidated Air businesses have generated positive cash flow from
operations for the past three fiscal years, the cash flow from the operations of
the Amertranz business has not been sufficient to finance trade payables,
capital equipment requirements and new office expansion and development. As a
result, Amertranz has engaged in interim borrowing from various sources,
including the Company and its affiliates. The Company is currently negotiating
with the
4
<PAGE>
trade creditors of the Amertranz subsidiary to allow Amertranz to satisfy those
obligations on a payment schedule based on existing resources and cash generated
from operations. There can be no assurance that the Company will be successful
in these negotiations. Although the Company anticipates, based on current plans
and assumptions relating to its operations, that existing resources and cash
generated from operations should be sufficient to satisfy the Company's
contemplated cash requirements for at least 12 months after the date of this
Prospectus, the Company expects that it will experience periods of significant
negative cash flow whether or not the Company succeeds in restructuring the
trade payables of the Amertranz subsidiary. After such 12-month period, the
Company anticipates that cash generated from operations will be sufficient to
meet its capital requirements. However, there can be no assurance that the
Company will not require additional cash during or subsequent to such 12-month
period. The Company currently has no commitments from any prospective lenders
with respect to any such financing. The terms of the Company's current
borrowings substantially limit the Company's flexibility in obtaining additional
financing. There can be no assurance that any additional financing will be
available to the Company upon acceptable terms, if at all. The inability to
obtain additional financing if and when needed, would have a material adverse
effect on the Company's operating results. See "Risk Factors -- Amertranz
Subsidiary Losses" and "Recent Developments -- Amertranz Subsidiary Losses".
Amertranz Subsidiary Losses. While the businesses of the Company's CAS and
Consolidated Air subsidiaries have generated positive cash flows for several
years, the business of the Company's Amertranz subsidiary has incurred operating
losses for each of its operating periods. For the six months ended June 30, 1996
the Amertranz subsidiary incurred losses of $4,758,918, and for the nine months
ended March 31, 1997 the Amertranz subsidiary incurred losses of $5,252,688.
These losses in the Amertranz subsidiary have resulted in losses for the
Company, on a consolidated basis, of $6,396,524 for the six months ended June
30, 1996, and $3,928,463 for the nine months ended March 31, 1997. Because of
continuing losses in the Company's Amertranz subsidiary, the Company has
commenced actions to close the operations of the Amertranz subsidiary and
transfer its customer accounts to the Company's other subsidiaries for fair
consideration. The Company is currently negotiating with the trade creditors of
the Amertranz subsidiary to allow Amertranz to satisfy those obligations on a
payment schedule based on existing resources and cash generated from operations.
There can be no assurance that the Company will be successful in these
negotiations. In connection with the closing of the Amertranz subsidiary,
Amertranz has also incurred certain obligations to terminated employees. While
the Company projects that if it is successful in these negotiations with these
trade creditors, the closing of the Amertranz subsidiary will have a positive
affect on the Company's operations, there can be no assurance that the Company
will be successful in these negotiations, that the business of the Amertranz
subsidiary will be preserved and transferred to the Company's other operating
subsidiaries, or that the closing of Amertranz will produce positive operating
results. If the Company is not successful in these negotiations with these trade
creditors, or if the desired results are not achieved for the Amertranz
subsidiary, the continued losses in Amertranz could have a material adverse
effect on the Company's operating results, and the Company may consider other
options, including seeking protection for the Amertranz subsidiary under the
Bankruptcy Code. See "Recent Developments -- Amertranz Subsidiary Losses".
Pledge of Assets. Substantially all of the Company's assets are pledged to
secure its indebtedness. If one or more of the Company's secured creditors
foreclose upon its security interest in the Company's assets, such action would,
in all likelihood, result in the inability of the Company to continue in
business. The Company may also be required to obtain the consent of these
creditors in order to complete future financings, and there can be no assurance
that these consents would be forthcoming.
5
<PAGE>
Control of the Company by Principal Stockholders; Conflicts of Interest. TIA,
Inc. ("TIA") and Caribbean Freight System, Inc. ("CFS") together own
approximately 32% of the outstanding shares of the Company's Common Stock. In
addition, certain stockholders of the Company have given irrevocable proxies to
TIA and CFS to vote a portion or all of such stockholders' shares of Common
Stock until 2001 for the election of directors, and the proxy granted by one
such stockholder includes all matters submitted to stockholders for a vote. The
stock ownership of TIA and CFS, together with such proxies, allow TIA and CFS to
control 40.7% of the issued and outstanding shares of Common Stock. As a result,
TIA and CFS will be in a position to control the Company through their combined
ability to determine the outcome of elections of the Company's directors and to
prevail in matters submitted to a vote of stockholders. In addition, the Company
has significant outstanding indebtedness owed to TIA and CFS which is secured by
the Company's assets. The Company's indebtedness to TIA and CFS is subordinated
to the Company's obligations under its accounts receivable financing facility
with BNY Financial Corp. While, under Delaware corporate law, a majority
stockholder owes certain fiduciary duties to minority stockholders, there may be
circumstances in which these different relationships create material conflicts
of interest which TIA and CFS are under no obligation to resolve in favor of
other stockholders or the Company. Stuart Hettleman, a director and President of
the Company owns a non-controlling indirect minority interest in TIA and is an
executive officer of TIA and CFS. Richard A. Faieta, a director and Executive
Vice President of the Company is a non-controlling minority stockholder of TIA
and is an executive officer of TIA and CFS. The Company's officers and directors
owe a fiduciary duty to the Company and its shareholders to act in the best
interests of the Company and its shareholders. In the event of a conflict of
interest between the Company and TIA and CFS, Messrs. Hettleman and Faieta will
act on behalf of the Company and will abstain from taking any action on behalf
of TIA and CFS.
Delay in Payment of Trade Creditors. In order to manage its working capital
resources, the Amertranz subsidiary has in the past and is currently paying many
of its trade creditors and service providers at rates slower than provided in
their respective invoices or agreements. Failure to pay these trade creditors in
a timely fashion has in the past adversely affected and in the future could
adversely affect, the Company's relationships with these trade creditors or
result in a default under its agreements with such trade creditors.
Competition. The Company competes with a large number of firms, many of which
have facilities and financial resources far greater than the Company.
Competition within the freight industry is intense. In the freight forwarding
industry, the Company competes with a large and diverse group of national
freight forwarding concerns, commercial air and ocean carriers and a large
number of locally established companies in geographic areas where the Company
does business or intends to do business in the future. Insofar as inter-city
trucking is a portion of the Company's method of freight transport, the Company
competes with a large number of long-haul, medium-haul, truckload and less than
truckload carriers, and railroads. While the Company does not consider itself to
be competing with traditional small package delivery services such as Federal
Express Corporation, United Parcel Service of America, Inc., Airborne Freight
Corporation and DHL Worldwide Express, Inc., in the event that any of these
established businesses, with their goodwill, name, resources and trade
recognition, decide to expand into the heavy freight business, such
circumstances could have a material adverse effect upon the business of the
Company.
Expansion of Business. The Company has grown through acquisitions of other
freight forwarders and intends to continue its program of business expansion
through acquisitions. There can be no assurance that its financial condition
will be sufficient to support the funding needs of an expansion program, that
acquisitions will be successfully consummated or will enhance profitability, or
that any expansion opportunities will be available upon reasonable terms. Past
acquisitions by the Company as well as future
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acquisitions have risks commonly encountered in acquisitions of businesses. Such
risks include, among other things, the difficulty of assimilating the operations
and personnel of the acquired businesses, the potential disruption of the
Company's ongoing business, the inability of management to realize the projected
operational and financial benefits from the acquisition or to maximize the
financial and strategic position of the Company through the successful
incorporation of acquired personnel and clients, the maintenance of uniform
standards, controls, procedures and policies and the impairment of relationships
with employees and clients as a result of any integration of new management
personnel. The Company expects that future acquisitions, if any, could provide
for consideration to be paid in cash, stock or a combination of cash and stock.
There can be no assurance that any of these acquisitions will be accomplished.
If an entity is acquired by the Company and such entity is not efficiently or
completely integrated with the Company, then the Company's business, financial
condition and operating results could be materially adversely affected.
Dependence on Key Personnel. The Company believes that its future success will
be highly dependent upon its ability to attract and retain skilled managers,
salespersons, and other personnel. The inability to attract and retain such
managers and personnel could have a material adverse effect on the Company's
operating results. In addition, the Company believes that its success will
depend to a significant extent on the efforts and abilities of its senior
management, in particular those of Stuart Hettleman, President and Chief
Executive Officer of the Company, and Richard A. Faieta, Executive Vice
President of the Company. Although the Company has entered into an employment
agreement with each of Messrs. Hettleman and Faieta which expire in June 1999,
the loss of the services of either Mr. Hettleman or Mr. Faieta could have a
material adverse effect on the Company's operating results. Currently there is
no "key person" life insurance in place for Messrs. Hettleman and Faieta.
However the Company intends to obtain such insurance policies in the amount of
$1 million on each of their lives.
Potential Reduction of Business in Puerto Rico. There are significant United
States income tax benefits available to United States mainland companies
engaging in business in Puerto Rico. The CAS business historically has derived
substantial operating revenues from such companies. Therefore, the profitability
of the Company's CAS business is largely dependent on such customers. On a
historic basis the approximate amount and percentage of the Company's total
operating revenue derived from such business was $33.5 million or 83% in
calendar 1993, $39.6 million or 69% in calendar 1994, $39.2 million or 63% in
calendar 1995 and $36.9 million or 57.5% in calendar 1996. Congress reduced
these benefits in 1993, and legislation enacted in 1996 contains a 10-year
phaseout of these tax benefits. This legislation, or in the event that there is
any further modification to these tax benefits available to United States
companies doing business in Puerto Rico, could result in those companies
reducing the level of the business which they had been doing in Puerto Rico,
which would have a material adverse effect upon the Company's operating results.
Dependence on Carriers; Inability to Control Transportation Facilities. The
Company does not own or operate any trucks, nor does it own or operate any
aircraft (although it will have certain exclusive rights to the use of an L-1011
aircraft in connection with its CAS business until June 1998) for the movement
of either domestic or international freight. The Company does not have any
present or anticipated future plans to acquire, by lease or otherwise, or own or
operate any freight transportation equipment. The Company's ability to service
its customers depends on the availability of space on air passenger and cargo
airlines and trucking carriers. The quality and timeliness of the Company's
freight forwarding services will be dependent upon the services of these
independent contractors, over which the Company has no control. Shortages of
freight space are most likely to develop around holidays and on routes upon
which traffic is especially heavy. Furthermore, the Company will be competing
with others for the availability and
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utilization of freight space. In addition, available air cargo space on
passenger airlines could be reduced as a result of changes in the types of
aircraft or decreases in the number of passenger airlines serving particular
routes at particular times, which could occur as a result of economic conditions
and other factors beyond the control of the Company. While the Company has not
experienced shortages of freight space in the past, significant shortages of
suitable space in the future, if any, and associated increases in rates charged
by carriers could have a material adverse affect on the Company's future
operating results.
Vulnerability to Economic Conditions. The Company's future operating results
are dependent upon the economic environments in which it operates. Demand for
the Company's services could be adversely affected by economic conditions in the
industries of the Company's customers. A number of the principal customers of
the Company's business are in the fashion, computer, electronics and
pharmaceutical industries. Adverse conditions in any of these industries or loss
of the major customers in such industries could have a material adverse impact
upon the Company. The Company expects the demand for its services (and
consequently its results of operations) to continue to be sensitive to domestic
and, increasingly, global economic conditions and other factors beyond its
control. In addition, the transport of freight, both domestically and
internationally, is highly competitive and price sensitive. Changes in the
volume of freight transported, shippers preferences as to the timing of
deliveries as a means to control shipping costs, economic and political
conditions, both in the United States and abroad, work stoppages, United States
and foreign laws relating to tariffs, trade restrictions, foreign investments
and taxation may all have significant impact on the overall business of the
Company, its growth and profitability.
Dividends Unlikely. The Company has never declared or paid dividends on its
Common Stock and does not intend to pay dividends in the foreseeable future. The
payment of dividends in the future will be at the discretion of the Board of
Directors.
Regulatory Compliance. The Company's freight forwarding business as an
indirect air cargo carrier is subject to regulation by the United States
Department of Transportation (DOT) under the Federal Aviation Act. However, air
freight forwarders (including the Company) are exempted from most of such Act's
requirements by the Economic Aviation Regulations promulgated thereunder. The
Company's foreign air freight forwarding operations are subject to regulation by
the regulatory authorities of the respective foreign jurisdictions. The air
freight forwarding industry is subject to regulatory and legislative changes
which can affect the economics of the industry by requiring changes in operating
practices or influencing the demand for, and the costs of providing, services to
customers. The Company does not believe that costs of regulatory compliance have
had a material adverse impact on its operations to date. However, failure of the
Company to comply with any applicable regulations could have an adverse effect
on the Company. There can be no assurance that the adoption of future
regulations would not have a material adverse effect on the Company's business.
Current Prospectus and State Blue Sky Registration Required to Exercise
Warrants. The Company will be able to issue shares of its Common Stock upon
exercise of the Warrants only if there is then a current prospectus relating to
such shares of Common Stock and only if such shares of Common Stock are
qualified for sale or exempt from qualification under applicable state
securities laws of the jurisdictions in which the various holders of the
Warrants reside. The Company has undertaken and intends to file and keep current
a prospectus which will permit the purchase and sale of the shares of Common
Stock underlying the Warrants, but there can be no assurance that the Company
will be able to do so. Although the Company intends to seek to qualify for sale
the shares of Common Stock underlying the Warrants in those states in which the
securities are to be offered, no assurance can be given that such qualification
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will occur. The Warrants may be deprived of any value and the market for the
Warrants may be limited if a current prospectus covering the shares of Common
Stock issuable upon exercise of the Warrants is not kept effective or if such
shares of Common Stock are not qualified or exempt from qualification in the
jurisdictions in which the holders of the Warrants then reside. See "Description
of Securities--Warrants".
Effect of Outstanding Rights, Options and Warrants. As of the date of this
Prospectus, there are outstanding options to purchase an aggregate of 1,448,399
shares of Common Stock at per share exercise prices ranging from $.16 to $6.00.
The Company also has outstanding 5,074,283 Warrants (including the Warrants
offered by this Prospectus). Furthermore, outstanding shares of the Company's
Class A Preferred Stock may be converted into an aggregate of at least 2,000,000
shares of Common Stock at any time, outstanding shares of the Company's Class B
Preferred Stock may be converted into 200,000 shares of Common Stock at any time
after October 10, 1997, and outstanding shares of the Company's Class C
Preferred Stock may be converted into 2,575,000 shares of Common Stock at any
time. In addition, the Company may issue additional shares of Common Stock in
respect of dividends paid on outstanding shares of its Class A Preferred Stock
and Class C Preferred Stock. The exercise of such outstanding options, Warrants
and conversion rights will dilute the percentage ownership of the Company's
stockholders, and any sales in the public market of shares of Common Stock
underlying such options, Warrants and conversion rights may adversely affect
prevailing market prices for the Common Stock. Moreover, the terms upon which
the Company will be able to obtain additional equity capital may be adversely
affected since the holders of such outstanding securities can be expected to
exercise their respective rights therein at a time when the Company would, in
all likelihood, be able to obtain any needed capital on terms more favorable to
the Company than those provided in such options, warrants and conversion rights.
Potential Adverse Effect of Warrant Redemption. The Warrants may be called for
redemption by the Company at any time when the Registration Statement is current
and effective at a redemption price of $.01 per Warrant upon not less than 30
days' prior written notice if the last sale price of the Common Stock has been
at least $10.00 per share (subject to adjustment in certain circumstances) on
each of the 20 consecutive trading days ending on the third day prior to the
date on which notice is given. Notice of redemption of the warrants could force
the holders to exercise the Warrants and pay the exercise price at a time when
it may be disadvantageous for them to do so, to sell the Warrants at the current
market price when they may otherwise wish to hold the Warrants, or to accept the
redemption price, which may be substantially less than the market value of the
Warrants at the time of redemption.
Possible Volatility of Securities Prices. The market price of Common Stock and
Warrants has in the past been, and may in the future continue to be, volatile. A
variety of events, including quarter to quarter variations in operating results
or news announcements by the Company or its competitors, as well as market
conditions in the freight forwarding industry or changes in earnings estimates
by securities analysts may cause the market price of the Common Stock to
fluctuate significantly. In addition, the stock market in recent months has
experienced significant price and volume fluctuations which have particularly
affected the market prices of equity securities of many companies and which
often have been unrelated to the operating performance of such companies. These
market fluctuations may adversely affect the price of the Common Stock and
Warrants.
Sales by Selling Securityholders. All of the Securities offered hereby are
offered solely by the Selling Securityholders who are not restricted as to the
prices at which they may sell the Securities. Sales of shares of Common Stock or
Warrants below the then current trading prices may adversely affect the market
price of the Common Stock and Warrants.
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Potential Limited Trading Market and Nasdaq SmallCap Market Delisting. The
Common Stock and Warrants trade on the Nasdaq SmallCap Market although there can
be no assurance that an active trading market in the Company's securities will
be maintained. On November 6, 1996, the Board of Directors of the Nasdaq Stock
Market, Inc. approved revisions to the maintenance criteria for listing on the
SmallCap Market which are anticipated to be effective later in 1997. One of such
revised maintenance criteria is the requirement that a listed company maintain a
tangible net worth of at least $2 million. As of March 31, 1997, the Company's
net worth, including goodwill, was approximately $2 million, and its tangible
net worth was approximately negative $10.1 million. TIA and CFS have agreed to
convert all or part of the indebtedness owed by the Company to them into shares
of Class D Preferred Stock if such action is necessary to meet such revised
maintenance criteria and if such conversion, together with other plans, allows
the Company to meet such criteria. The Class D Preferred Stock will have terms
similar to the Company's Class A Preferred Stock but will be pari passu with the
Preferred Stock with respect to dividend and liquidation preferences. As of May
31, 1997, after giving effect to the conversion of the aforementioned debt, the
Company would still require additional financing to meet the Nasdaq maintenance
criteria. Accordingly, the Company currently would not be able to force
conversion of debt held by TIA and CFS into Class D Preferred Stock. The failure
to meet the Nasdaq SmallCap Market revised maintenance criteria after they
become effective may result in the Common Stock or the Warrants not being
eligible for quotations on the Nasdaq SmallCap Market. If this should occur,
trading, if any, in the Common Stock and Warrants, would then continue to be
conducted in the over-the-counter market on the OTC Bulletin Board, as
NASD-sponsored inter-dealer quotation system, or in what are commonly referred
to as "pink sheets." As a result, an investor may find it more difficult to
dispose of or to obtain accurate quotations as to the market value of the Common
Stock and Warrants.
Penny Stock Regulations; Illiquid Securities. The regulations of the
Securities and Exchange Commission promulgated under the Exchange Act require
additional disclosure relating to the market for penny stocks in connection with
trades in any stock defined as a penny stock. Such regulations generally define
a penny stock to be an equity security that has a market price of less than
$5.00 per share, subject to certain exceptions. One exception is quotation on
Nasdaq. Accordingly, if the Company is not quoted on Nasdaq and the market price
of a share of Common Stock is less than $5.00 per share, then the Company would
be subject to the penny stock regulations (unless it satisfied other exceptions,
which it currently does not), including those regulations that require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated therewith
and which impose various sales practice requirements on broker-dealers who sell
penny stocks to persons other than established customers and accredited
investors (generally, institutional investors). In addition, under penny stock
regulations, the broker-dealer must provide the customer with current bid and
offer quotations for the penny stock, the compensation of the broker-dealer and
its salesperson in the transaction and monthly account statements showing the
market value of each penny stock held in the customer's account. Moreover,
broker-dealers who recommend "penny stocks" to persons other than established
customers and accredited investors must make a special written suitability
determination for the purchaser and receive the purchaser's written agreement to
a transaction prior to sale. If the Company's securities become subject to the
regulations applicable to penny stocks, the market liquidity for the Company's
securities could be severely affected. In such an event, these regulations could
limit the ability of broker-dealers to sell the Company's securities and thus
the ability of purchasers of the Company's securities to sell their securities
in the secondary market.
Limited Liability of Directors. The Company's Articles of Incorporation limit
the liability of directors to the maximum extent permitted by Delaware law.
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Issuance of Preferred Stock. Pursuant to its Certificate of Incorporation, the
Company has authority to issue 2,500,000 shares of Preferred Stock which may be
issued by the Board of Directors with such preferences, limitations and relative
rights as the Board may determine without any vote of the stockholders. As of
the date of this Prospectus, 477,500 shares of preferred stock, in three
classes, are outstanding. Issuance of additional shares of preferred stock,
depending upon the preferences, limitations and relative rights thereof, may
have the effect of delaying, deterring or preventing a change in control of the
Company. See "Description of Securities -- Preferred Stock".
RECENT DEVELOPMENTS
Acquisition of Target Air Freight, Inc.
On May 8, 1997, the Company acquired (by merger into the Company's Target
subsidiary) Target Air Freight, Inc. (a California corporation), a Los
Angeles-based freight forwarder ("Air Freight"). Under the terms of the merger
(the "Target Merger"), the Company issued 900,000 shares of Common Stock and
paid $400,000 to Air Freight's stockholders. Following the Target Merger,
Christopher A. Coppersmith, the principal shareholder of Air Freight, became a
director of the Company.
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Private Placement
On June 13, 1997, the Company completed a $2,575,000 private placement of
equity securities to individual investors (the "Private Placement"). Under the
terms of the Private Placement, each $100,000 investment purchased 10,000 shares
of the Company's Class C Preferred Stock and 50,000 Warrants. See "Description
of Securities".
Shares of Class C Preferred Stock and Warrants acquired in the Private
Placement and all shares of Common Stock underlying such securities or issued as
dividends on the Class C Preferred Stock may not be sold until June 13, 1998
without the approval of GKN Securities Corp. ("GKN"), the placement agent for
the Private Placement.
The Company received $2,276,747 in net proceeds from the Private Placement. Of
these proceeds, $400,000 was used to acquire Air Freight (which currently
operates as the Company's Target subsidiary), $200,000 was used to repay a
short-term loan, and the balance was used for working capital and general
corporate purposes.
Amertranz Subsidiary Losses
While the businesses of the Company's and Consolidated Air subsidiaries have
generated positive cash flows for several years, the business of the Company's
Amertranz subsidiary has incurred operating losses for each of its operating
periods. Because of continuing losses in the Amertranz subsidiary, the Company
has commenced actions to close the operations of the Amertranz subsidiary and
transfer its customer accounts to the Company's other subsidiaries for fair
consideration.
The Company is currently negotiating with the trade creditors of the Amertranz
subsidiary to allow Amertranz to satisfy its trade payable obligations on a
payment schedule based on existing resources and cash generated from operations.
There can be no assurance that the Company will be successful in these
negotiations. In connection with the closing of the Amertranz subsidiary,
Amertranz will also incur obligations to terminated employees in an amount
currently estimated to be $350,000. While the Company projects that if it is
successful in these negotiations with the Amertranz trade creditors, the closing
of the Amertranz subsidiary will have a positive affect on the Company's
operations, there can be no assurance that the Company will be successful in
these negotiations, that the business of the Amertranz subsidiary will be
preserved and transferred to the Company's other operating subsidiaries, or that
the closing of Amertranz will produce positive operating results. If the Company
is not successful in these negotiations with these trade creditors, or if the
desired results are not achieved for the Amertranz subsidiary, the continued
losses in Amertranz could have a material adverse effect on the Company's
operating results, and the Company may consider other options, including seeking
protection for the Amertranz subsidiary under the Bankruptcy Code.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Securities by
the Selling Securityholders; however, the Company will receive the exercise
price of the Warrants that are exercised. There is no assurance that any
Warrants will be exercised resulting in any proceeds to the Company.
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DESCRIPTION OF SECURITIES
General
The authorized capital stock of the Company is 17,500,000 shares, consisting
of 15,000,000 shares of Common Stock, and 2,500,000 shares of preferred stock.
As of the date of this Prospectus, 6,826,504 shares of Common Stock are
outstanding and 477,500 shares of preferred stock are outstanding. Additionally,
as of the date hereof, there are 5,074,283 Warrants outstanding.
Common Stock
The shares of Common Stock are currently quoted on the Nasdaq SmallCap Market
under the symbol "AMTZ". The holders of Common Stock are entitled to one vote
for each share held of record on all matters to be voted on by shareholders.
There is no cumulative voting with respect to the election of directors, with
the result that the holders of more than 50% of the shares voted can elect all
of the directors then being elected. The holders of Common Stock are entitled to
receive dividends when, as and if declared by the Board of Directors out of
funds legally available. In the event of liquidation, dissolution or winding up
of the Company, the holders of Common Stock are entitled to share ratably in all
assets remaining available for distribution to them after payment of liabilities
and after provision has been made for each class of stock, if any, having
preference over the Common Stock. Holders of shares of Common Stock, as such,
have no redemption, preemptive or other subscription rights, and there are no
conversion provisions applicable to the Common Stock. All of the outstanding
shares of Common Stock are fully paid and nonassessable. The transfer agent and
registrar for the Common Stock is American Stock Transfer & Trust Company, New
York, New York 10005, and its telephone number is (212) 936-5100.
Warrants
The Warrants are currently quoted on the Nasdaq SmallCap Market under the
symbol "AMTZW". Each Warrant entitles the registered holder to purchase one
share of the Common Stock at an exercise price equal to $6.00 during the
four-year period commencing June 28, 1997. No fractional shares of Common stock
will be issued in connection with the exercise of the Warrants and the holder of
any Warrant shall instead receive the number of shares of Common Stock rounded
off to the nearest whole number.
Unless extended by the Company at its discretion, the Warrants will expire at
5:00 p.m., New York time, on June 28, 2001. In the event that a holder of
Warrants fails to exercise the Warrants prior to their expiration, the Warrants
will expire and the holder thereof will have no further rights with respect to
the Warrants.
In the event the Registration Statement is effective and current, and provided
that not less than 30 days' notice of redemption is given and the last sale
price of the Common Stock has been at least $10.00 for each of the 20 trading
days ending on the third business day prior to the day on which notice is given,
the Company has the right to call the Warrants for redemption at a redemption
price of $.01 per Warrant.
No Warrants will be exercisable unless at the time of exercise there is a
current prospectus covering the shares of Common Stock issuable upon exercise of
such Warrants under an effective registration statement filed with the
Commission and such shares have been qualified for sale or are exempt from
qualification under the securities laws of the state of residence of the holder
of such Warrants. Although
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the Company intends to have all shares so qualified for sale in those states
where the Securities are being offered and to maintain a current prospectus
relating thereto until the expiration of the Warrants, subject to the terms of
the Warrant Agreement between the Company and American Stock Transfer & Trust
Company (the Warrant Agent with respect to the Warrants), there can be no
assurance that it will do so.
A holder of the Warrants will not have any rights, privileges or liabilities
as a stockholder of the Company prior to exercise of the Warrants. The Company
is required to keep reserved a sufficient number of authorized shares of Common
Stock to permit the exercise of the Warrants.
The exercise price of the Warrants will be subject to adjustment to protect
against dilution in the event of stock dividends, stock splits, combinations,
subdivisions and reclassifications. No assurance can be given that the market
price of the Common Stock will exceed the exercise price of the Warrants at any
time during the exercise period.
This Prospectus covers the resale of the Warrants and all shares of Common
Stock issued upon exercise of the Warrants.
Preferred Stock
The Company's Board of Directors has the authority, without further action by
the stockholders, to issue 2,500,000 shares of preferred stock, in one or more
series and to fix the rights, preferences, privileges and restrictions thereof,
including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, and the number of shares constituting any
series or the designation of such series. To date, the Company has designated;
(i) 500,000 shares of preferred stock as Class A Preferred Stock and has issued
200,000 shares of Class A Preferred Stock; (ii) 25,000 shares of preferred stock
as Class B Preferred Stock and has issued 20,000 shares of Class B Preferred
Stock; and (iii) 400,000 shares of preferred stock as Class C Preferred Stock
and has issued 257,500 shares of Class C Preferred Stock. The issuance of
preferred stock in the future could adversely affect the voting power of holders
of the Common Stock and could have the effect of delaying, deferring or
preventing a change in control of the Company. Other than creating a new class
of preferred stock to be designated Class D Preferred Stock for the purpose of
converting certain outstanding indebtedness of the Company, as described below,
the Company has no present plan to issue any additional shares of preferred
stock.
Class A Preferred Stock. The shares of Class A Preferred Stock have a par or
stated value of $10.00 per share. Dividends on Class A Preferred Stock accrue at
an annual rate of $1.00 per share, and are payable semi-annually in arrears on
June 30 and December 31 of each year, in cash or, at the option of the Company,
in shares of Class A Preferred Stock at the rate of $10.00 per share. The Class
A Preferred Stock has priority as to dividends over the Common Stock and all
other series or classes of the Company's stock that rank junior to the Class A
Preferred Stock. On liquidation, holders of shares of Class A Preferred Stock
will be entitled to receive a preferred distribution equal to $10.00 per share,
plus an amount equal to any accrued and unpaid dividends before any payment or
distribution is made to the holders of Common Stock or any other series or class
of stock that ranks junior as to liquidation rights to the Class A Preferred
Stock. The holders of Class A Preferred Stock have no voting rights except as
required by law. Each share of Class A Preferred Stock is convertible into
Common Stock at any time at a conversion price (subject to adjustment) of the
lower of (i) $6.00 per share, or (ii) 80% of the average of the closing bid and
asked price per share of Common Stock on the day prior to the conversion date.
In connection with the Private Placement, the Company has agreed that each share
of Class A Preferred Stock may be converted, until August 12, 1997, into 10
shares of Common Stock. This Prospectus covers
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the resale of all shares of Common Stock issued and issuable upon conversion of
shares of the Class A Preferred Stock.
Class B Preferred Stock. The shares of Class B Preferred Stock have a par or
stated value of $10.00 per share. No dividends are paid on shares of Class B
Preferred Stock, and the shares do not carry a liquidation preference or any
voting rights (except as required by law). Each share of Class B Preferred Stock
is convertible into 10 shares of Common Stock (subject to adjustment) from and
after October 10, 1997. This Prospectus covers the resale of all shares of
Common Stock issued and issuable upon conversion of shares of the Class B
Preferred Stock.
Class C Preferred Stock. Each share of Class C Preferred Stock has a Stated
Value of $10.00 and earns cumulative dividends at 10% per annum (pro rated for
shorter periods) payable quarterly, in arrears, in cash or, at the Company's
option if the Registration Statement is effective and current, in shares of
Common Stock (based on the average closing bid price per share of Common Stock
on the five trading days ending two business days prior to the respective
dividend payment date). Upon a liquidation of the Company (including, at the
option of the holder, a merger or consolidation in which the Company is not the
surviving entity or a sale by the Company of all or substantially all of its
assets), the holders of the Class C Preferred Stock are entitled to receive,
prior to the distribution to the holders of the Company's Common Stock, Class A
Preferred Stock and Class B Preferred Stock, an amount per share equal to the
greater of (i) the Stated Value plus any accrued and unpaid dividends, or (ii)
the amount they would have received had they converted the Class C Preferred
Stock into Common Stock on the business day immediately prior to the record date
with respect to such liquidation. The holders of the Class C Preferred Stock
have the right, at any time, to convert each share of Class C Preferred Stock
into 10 shares of Common Stock. Subject to the conversion right, the Company may
redeem the Class C Preferred Stock at its Stated Value plus all accrued and
unpaid dividends if the Registration Statement is effective and current, upon 30
days' written notice given at any time if the last sale price of the Common
Stock has been at least $2.50 on all 20 of the trading days ending on the third
date prior to the date on which written notice of redemption is given. The Class
C Preferred Stock ranks senior to all classes of the Company's capital stock now
existing or which may be created in the future; provided, however, that the
Company is entitled to create a Class D Preferred Stock, which would rank pari
passu with the Class C Preferred Stock with respect to dividend and liquidation
preferences, for issuance solely to certain holders of Company debt upon the
occurrence of certain events. The holders of the Class C Preferred Stock do not
have voting rights until such time as they convert their Class C Preferred Stock
into Common Stock, except as provided by law. This Prospectus covers the resale
of all shares of Common Stock issued and issuable upon conversion of shares of
the Class C Preferred Stock and all shares of Common Stock issued and issuable
as dividends on the Class C Preferred Stock.
Class D Preferred Stock. The Class D Preferred Stock, if created by the
Company, will have the same terms as the Class A Preferred Stock, except that it
will rank pari passu with the Class C Preferred Stock with respect to dividend
and liquidation preferences. The Class D Preferred Stock will be created by the
Company only in certain circumstances under which certain debt held by
stockholders of the Company is converted into Class D Preferred Stock. See "Risk
Factors -- Potential Limited Trading Market."
SELLING SECURITYHOLDERS
The Securities offered hereby consist of (i) 2,000,000 shares of Common Stock
which may be issued upon conversion of 200,000 outstanding shares of the
Company's Class A Preferred Stock, issued to TIA
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and CFS in July 1996 upon conversion of $2,000,000 principal amount of long-term
indebtedness, (ii) 200,000 shares of Common Stock which may be issued upon
conversion of 20,000 shares of the Company's Class A Preferred Stock issued as
dividends accrued to date on the outstanding shares of Class A Preferred Stock,
(iii) up to 600,000 shares of Common Stock which may be issued upon conversion
of shares of the Company's Class A Preferred Stock which may be issued as
dividends accruing hereafter on the outstanding shares of Class A Preferred
Stock, (iv) 200,000 shares of Common Stock which may be issued upon conversion
of 20,000 outstanding shares of the Company's Class B Preferred Stock, issued in
connection with the Company's October 1996 acquisition of its Consolidated Air
subsidiary, (v) 2,575,000 shares of Common Stock which may be issued upon
conversion of 257,500 outstanding shares of the Company's Class C Preferred
Stock, issued in connection with the Private Placement, (vi) up to 772,500
shares of Common Stock which may be issued as dividends on the outstanding
shares of Class C Preferred Stock, (vii) 1,387,500 Warrants issued in connection
with the Private Placement, (viii) 1,387,500 shares of Common Stock issuable
upon exercise of the Warrants issued in the Private Placement, (ix) 257,500
shares of Common Stock which may be issued upon conversion of 25,750 shares of
the Company's Class C Preferred Stock, to be issued to GKN upon exercise of the
Placement Agent Purchase Option granted to GKN in connection with the Private
Placement (the "Private Placement Purchase Option"), (x) up to 77,250 shares of
Common Stock which may be issued as dividends on shares of Class C Preferred
Stock, to be issued to GKN upon exercise of the Private Placement Purchase
Option, (xi) 128,750 Warrants to be issued to GKN upon exercise of the Private
Placement Purchase Option, (xii) 128,750 shares of Common Stock issuable upon
exercise of the Warrants to be issued to GKN upon exercise of the Private
Placement Purchase Option, and (xiii) 900,000 shares of Common Stock issued in
connection with the Target Merger. All Warrants, outstanding shares of the
Company's Class A Preferred Stock and Class C Preferred Stock, and the Private
Placement Purchase Option and underlying shares of Class C Preferred Stock and
Warrants are immediately exercisable for shares of Common Stock.
The following table sets forth information as of June 30, 1997 regarding the
beneficial ownership of shares of Common Stock held by each Selling
Securityholder (including shares of Common Stock which such Selling
Securityholder has the right to acquire within 60 days following the date of
this Prospectus), and Warrants held by each Selling Securityholder. Except as
indicated, (i) all of such shares and Warrants are being registered for sale
under the Registration Statement of which this Prospectus forms a part, (ii)
none of such shares and Warrants will be owned by such Selling Securityholder
following the sale of the Securities offered pursuant to this Prospectus, and
(iii) the percentage ownership of each Selling Securityholder will be less than
one percent of the respective class of Securities following the sale of the
Securities offered pursuant to this Prospectus.
Number of Number of
Selling Securityholders Shares(1) Warrants
Class A Preferred Holders(2)
TIA, Inc.(3) 3,740,000 200,000
Caribbean Freight System, Inc.(4) 860,000 --
Class B Preferred Holders(5)
David W. Hockersmith 100,000 --
Douglas E. Hockersmith 100,000 --
Class C Preferred Holders(6)
John Aletti(7) 48,750 20,000
Jean M. Barsa(8) 145,965 55,000
Stanley A. Blum(17) 97,500 40,000
Centrum Bank 300,000 100,000
Comox Co. Ltd. 75,000 25,000
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Dolphin Offshore Partners, L.P. 600,000 200,000
Jean M. Etra 37,500 12,500
Richard & Kenneth Etra JTIC(9) 86,250 32,500
Richard, Kenneth, Steven & Bernard Etra JTIC 75,000 25,000
Steven Etra(10) 67,500 26,250
Richard A. Faieta(11) 75,000 12,500
David H. Fink 75,000 25,000
David A. Golden 37,500 12,500
Ernest Gottdiener(9) 86,250 32,500
Stuart Hettleman(11) 75,000 12,500
Gloria Hindes 75,000 25,000
Richard C. Kaufman & Elaine J. Lenart JTWROS(9) 86,250 32,500
Jody Ann Miller 41,250 13,750
Daniel R. Pisani 37,250 12,500
RJB Partners L.P.(9) 86,250 32,500
South Ferry #2, L.P. 525,000 175,000
B. Roberta Swirnow Trust 650,000 250,000
David E. Swirnow 37,500 12,500
T+M Trusteeship & Management Services SA 90,000 30,000
Gregory Trobowitsch 37,500 12,500
Vei Carnay LLC 150,000 50,000
Aaron Wolfson 75,000 25,000
William Wolfson(12) 120,000 55,000
Woodland Partners(13) 545,000 280,000
Target Merger Holders
Christopher A. Coppersmith(14) 810,000 --
Lew E. Coppersmith 90,000 --
Private Placement Purchase Option Holders
GKN Securities Corp.(15) 356,415 142,805
David N. Nussbaum(16) 117,945 49,315
Roger N. Gladstone(16) 117,945 49,315
Robert H. Gladstone(16) 117,945 49,315
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(1) These numbers include all shares of Common Stock owned by the Selling
Securityholder and all shares of Common Stock which such Selling
Securityholder has the right to acquire within 60 days following the date
of this Prospectus, including pursuant to the exercise of Warrants. These
numbers do not include any shares of Common Stock which may be issued (i)
upon conversion of shares of the Company's Class A Preferred Stock to be
accrued and issued as dividends on the outstanding shares of Class A
Preferred Stock, or (ii) as dividends on the outstanding shares of Class C
Preferred Stock, although all of such shares are being registered for sale
under the Registration Statement of which this Prospectus forms a part.
(2) Based on a conversion rate of 10 shares of Common Stock for each share of
Class A Preferred Stock. See "Description of Securities - Preferred Stock
- Class A Preferred Stock".
(3) Only 1,760,000 shares of Common Stock and none of the Warrants and shares
of Common Stock underlying such Warrants are being registered for sale
under the Registration Statement of which this Prospectus forms a part.
1,980,000 shares of Common Stock and 200,000 Warrants, representing 28.2%
of the outstanding shares of Common Stock and 3.9% of the outstanding
Warrants, will be owned following the sale of the Securities offered
pursuant to this Prospectus. Does not include 860,000 shares owned by CFS
and 580,370 shares with respect to which TIA and CFS have been granted
proxies. 51% of the issued and outstanding stock of CFS, and voting
control of all of the issued and outstanding stock of CFS, is held by TIA.
Stuart Hettleman, a director and President of the Company owns a non-
controlling indirect minority interest in TIA and is an executive officer
of TIA and CFS. Richard A. Faieta, a director and Executive Vice President
of the Company is a non-controlling minority stockholder of TIA and is an
executive officer of TIA and CFS. Messrs. Hettleman and Faieta disclaim
beneficial ownership of all shares of Common Stock and Warrants owned by
TIA and CFS.
(4) Only 440,000 shares of Common Stock are being registered for sale under
the Registration Statement of which this Prospectus forms a part. 420,000
shares of Common Stock, representing 6.2% of the outstanding shares of
Common Stock, will be owned following the sale of the Securities offered
pursuant to this Prospectus. Does not include 3,740,000 shares owned by
TIA. See footnote (2) above.
(5) See "Description of Securities - Preferred Stock - Class B Preferred
Stock".
(6) See "Description of Securities - Preferred Stock - Class C Preferred
Stock".
(7) Only 25,000 shares of Common Stock and 12,500 Warrants and shares of
Common Stock underlying such Warrants are being registered for sale under
the Registration Statement of which this Prospectus forms a part. 11,250
shares of Common Stock and 7,500 Warrants will be owned following the sale
of the Securities offered pursuant to this Prospectus.
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(8) Only 50,000 shares of Common Stock and 25,000 Warrants and shares of
Common Stock underlying such Warrants are being registered for sale under
the Registration Statement of which this Prospectus forms a part. 70,965
shares of Common Stock, representing 1% of the outstanding shares of
Common Stock, and 30,000 Warrants will be owned following the sale of the
Securities offered pursuant to this Prospectus.
(9) Only 50,000 shares of Common Stock and 25,000 Warrants and shares of
Common Stock underlying such Warrants are being registered for sale under
the Registration Statement of which this Prospectus forms a part. 11,250
shares of Common Stock and 7,500 Warrants will be owned following the sale
of the Securities offered pursuant to this Prospectus.
(10) Only 37,500 shares of Common Stock and 18,750 Warrants and shares of
Common Stock underlying such Warrants are being registered for sale under
the Registration Statement of which this Prospectus forms a part. 11,250
shares of Common Stock and 7,500 Warrants will be owned following the sale
of the Securities offered pursuant to this Prospectus.
(11) Only 25,000 of the shares of Common Stock and all of the Warrants and
shares of Common Stock underlying such Warrants are being registered for
sale under the Registration Statement of which this Prospectus forms a
part. See footnotes (3) and (4) above. Includes exercisable options to
purchase 37,500 shares of Common Stock which will be owned following the
sale of the Securities offered pursuant to this Prospectus.
(12) Only 50,000 shares of Common Stock and 25,000 Warrants and shares of
Common Stock underlying such Warrants are being registered for sale under
the Registration Statement of which this Prospectus forms a part. 45,000
shares of Common Stock and 30,000 Warrants will be owned following the
sale of the Securities offered pursuant to this Prospectus.
(13) Only 200,000 shares of Common Stock and 150,000 Warrants and shares of
Common Stock underlying such Warrants are being registered for sale under
the Registration Statement of which this Prospectus forms a part. 195,000
shares of Common Stock and 130,000 Warrants, representing 2.8% of the
outstanding shares of Common Stock and 2.6% of the outstanding Warrants,
will be owned following the sale of the Securities offered pursuant to
this Prospectus.
(14) Mr. Coppersmith is a director of the Company and President of the
Company's Target subsidiary.
(15) Only 141,610 shares of Common Stock and 70,805 Warrants and shares of
Common Stock underlying such Warrants are being registered for sale under
the Registration Statement of which this Prospectus forms a part. 144,000
shares of Common Stock and 72,000 Warrants, representing 2.1% of the
outstanding shares of Common Stock and 1.4% of the outstanding Warrants,
will be owned following the sale of the Securities offered pursuant to
this Prospectus.
(16) Only 38,630 shares of Common Stock and 19,315 Warrants and shares of
Common Stock underlying such Warrants are being registered for sale under
the Registration Statement of which this Prospectus forms a part. 60,000
shares of Common Stock and 30,000 Warrants will be owned following the
sale of the Securities offered pursuant to this Prospectus.
(17) Only 50,000 shares of Common Stock and 25,000 Warrants and shares of
Common Stock underlying such Warrants are being registered for sale under
the Registration Statement of which this Prospectus forms a part. 22,500
shares of Common Stock and 15,000 Warrants will be owned following the
sale of the Securities offered pursuant to this Prospectus.
PLAN OF DISTRIBUTION
The shares of Common Stock and the Warrants registered for sale on behalf of
the Selling Securityholders under the Registration Statement of which this
Prospectus forms a part may be offered and sold from time to time in
transactions (which may include block transactions) on the Nasdaq SmallCap
Market, in negotiated transactions, or a combination of such methods of sale, at
fixed prices which may be changed, at market prices prevailing at the time of
sale, or at negotiated prices. Two of the Selling Securityholders, Stuart
Hettleman, President and Chief Executive Officer of the Company, and Richard A.
Faieta, Executive Vice President of the Company, have agreed that until June 13,
2000, GKN has the first right to purchase for its account or to sell for the
account of Messrs. Hettleman and Faieta, as the case may be, any Securities sold
by them on the open market. None of the other Selling Securityholders have
advised the Company that they have entered into any agreements, understandings
or arrangements with any underwriters or broker-dealers regarding the sale of
their Securities. The Selling Securityholders may effect such transactions by
selling their shares directly to purchasers or to or through broker-dealers
(including GKN), which may act as agents or principals. Such broker-dealers may
receive compensation in the form of discounts, concessions, or commissions from
the Selling Securityholders and/or the purchasers of the Shares for whom such
broker-dealers may act as agents or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions). GKN is one of several market makers in the Company's
Common Stock and Warrants. The Selling Securityholders and any broker-dealers
that act in connection with the sale of the shares might be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act. The
Selling
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Securityholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the securities against certain
liabilities, including liabilities arising under the Securities Act.
In order to comply with the applicable securities laws of certain states, if
any, the shares of Common Stock and Warrants will be offered or sold through
registered or licensed brokers or dealers in those states. In addition, in
certain states the Securities may not be offered or sold unless they have been
registered or qualified for sale in such states or an exemption from such
registration or qualification requirement is available and such offering or sale
is in compliance therewith.
The Selling Securityholders also may sell some or all of the Securities
directly to purchasers without the assistance of any broker/dealer or, if a
Selling Securityholder is an entity, distribute such Securities to one or more
of its equity owners and such equity owners may, in turn, distribute such
Securities as described above.
The Company is bearing all costs relating to the registration of the
Securities, provided that any commissions or other fees payable to
broker/dealers in connection with any sale of the Securities will be borne by
the Selling Securityholders or other party selling such Securities.
Pursuant to applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Securities may not simultaneously engage
in market making activities with respect to the Securities for a period
beginning when such person becomes a distribution participant and ending upon
such person's completion of participation in such distribution, including
stabilization activities in the Securities to effect syndicate covering
transactions, to impose penalty bids or to effect passive market making bids. In
addition, and without limiting the foregoing, in connection with activities in
the Securities, the Selling Securityholders will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, Regulation M and Rules 100, 101, 102, 103, 104
and 105 thereof. All of the foregoing may affect the marketability of the
Securities.
Notwithstanding that such Securities are being registered: (i) TIA and CFS
have agreed that they will not sell an aggregate of 2,100,000 shares of Common
Stock without the prior written approval of GKN (the underwriter in the
Company's June 1996 initial public offering) until June 28, 1998; (ii) the
holders of Class B Preferred Stock have agreed that they will not sell the
200,000 shares of Common Stock to be acquired upon conversion of the shares of
Class B Preferred Stock until October 10, 1997; (iii) the holders of Class C
Preferred Stock have agreed that they will not sell the 2,575,000 shares of
Common Stock to be acquired upon conversion of the shares of Class C Preferred
Stock, any shares of Common Stock paid as dividends on the Class C Preferred
Stock, and the 1,287,500 Warrants acquired in the Private Placement and the
1,287,500 shares of Common Stock issuable upon exercise of such Warrants without
the prior written approval of GKN until June 13, 1998; and (iv) the holders of
the shares of Common Stock issued in the Target Merger have agreed that they
will not sell (a) any of the 900,000 shares of Common Stock issued to them in
the Target Merger until May 8, 1998, and (b) more than 100,000 shares issued to
them in the Target Merger during the period May 8, 1998 through May 8, 1999.
19
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INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's By-laws provide that the Company shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as amended from time to time, indemnify all person whom it may
indemnify pursuant thereto.
Section 145 of the General Corporation Law of the State of Delaware permits a
corporation, under specified circumstances, to indemnify its directors,
officers, employees or agents against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by them in connection with any action, suit or proceeding brought by third
parties by reason of the fact that they were or are directors, officers,
employees or agents of the corporation, if such directors, officers, employees
or agents acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent that
the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
Article Seventh of the Company's Certificate of Incorporation provides that
the Company's directors will not be personally liable to the Company or its
stockholders for monetary damages resulting from breaches of their fiduciary
duty as directors except (a) for any breach of the duty of loyalty to the
Company or its stockholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) under
Section 174 of the General Corporation Law of the State of Delaware, which makes
directors liable for unlawful dividends or unlawful stock repurchases or
redemptions, or (d) for transactions from which directors derive improper
personal benefit.
Section 13 of the Agreement of Merger filed as Exhibit 4.3 to the Registration
Statement of which this Prospectus forms a part provides that the David W.
Hockersmith and Douglas E. Hockersmith (the holders of all of the issued and
outstanding shares of the Company's Class B Preferred Stock and Selling
Securityholders) will indemnify and hold harmless the Company and each director,
officer or controlling person of the Company from and against certain
liabilities, including liabilities under the Securities Act. Section 13 of such
Agreement of Merger also provides that such Selling Securityholders will
contribute to certain liabilities under the Securities Act.
Section 13 of the Agreement of Merger filed as Exhibit 4.4 to the Registration
Statement of which this Prospectus forms a part provides that the Christopher A.
Coppersmith (a Selling Securityholder) will indemnify and hold harmless the
Company and each director, officer or controlling person of the Company from and
against certain liabilities, including liabilities under the Securities Act.
Section 13 of such Agreement of Merger also provides that such Selling
Securityholder will contribute to certain liabilities under the Securities Act.
Section 7 of the Agency Agreement filed as Exhibit 4.5 to the Registration
Statement of which this Prospectus forms a part provides that the GKN Securities
Corp. (a Selling Securityholder) will indemnify
20
<PAGE>
and hold harmless the Company and each director, officer or controlling person
of the Company from and against certain liabilities, including liabilities under
the Securities Act. Section 7 of such Agency Agreement also provides that such
Selling Securityholder will contribute to certain liabilities under the
Securities Act.
Section 9 of the Subscription Agreement filed as Exhibit 4.6 to the
Registration Statement of which this Prospectus forms a part provides that the
investors in the Private Placement (all of whom are Selling Securityholders)
will indemnify and hold harmless the Company and each director, officer or
controlling person of the Company from and against certain liabilities,
including liabilities under the Securities Act.
The Company also maintains director and officer insurance coverage.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed upon
for the Company by Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC,
Baltimore, Maryland.
EXPERTS
The consolidated financial statements of Amertranz Worldwide Holding Corp. as
of June 30, 1996 incorporated by reference in this Prospectus have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
The financial statements of Amertranz Worldwide Holding Corp. (formerly, The
Freight Forwarding Business of TIA and CFS) as of December 31, 1994 and 1995 and
for each of the years in the three-year period ended December 31, 1995, have
been incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
21
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses to be paid by the Company in
connection with the offering described in this Registration Statement. All of
such amounts (except the SEC Registration Fee, the NASD Filing Fee and the
Nasdaq SmallCap Listing Fee) are estimated.
SEC Registration Fee...................................................$ 5,545
NASD Filing Fee........................................................ 2,085
Printing Expense ...................................................... 12,000
Legal Fees and Expenses................................................ 20,000
Accounting Fees and Expenses........................................... 10,000
Blue Sky Fees and Expenses............................................. 2,500
Miscellaneous.......................................................... 8,000
-------
Total.........................................................$ 60,130
Item 15. Indemnification of Directors and Officers.
The Company's By-laws provide that the Company shall, to the fullest
extent permitted by Section 145 of the General Corporation Law of the State of
Delaware, as amended from time to time, indemnify all person whom it may
indemnify pursuant thereto.
Section 145 of the General Corporation Law of the State of Delaware
permits a corporation, under specified circumstances, to indemnify its
directors, officers, employees or agents against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties by reason of the fact that they were or are directors, officers,
employees or agents of the corporation, if such directors, officers, employees
or agents acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent that
the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
Article Seventh of the Company's Certificate of Incorporation provides
that the Company's directors will not be personally liable to the Company or its
stockholders for monetary damages resulting from breaches of their fiduciary
duty as directors except (a) for any breach of the duty of loyalty to the
Company or its stockholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) under
Section 174 of the General Corporation Law of the State of Delaware, which makes
directors liable for unlawful dividends or unlawful stock repurchases or
redemptions, or (d) for transactions from which directors derive improper
personal benefit.
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Section 13 of the Agreement of Merger filed as Exhibit 4.3 provides
that the David W. Hockersmith and Douglas E. Hockersmith (the holders of all of
the issued and outstanding shares of the Company's Class B Preferred Stock and
Selling Securityholders) will indemnify and hold harmless the Company and each
director, officer or controlling person of the Company from and against certain
liabilities, including liabilities under the Securities Act. Section 13 of such
Agreement of Merger also provides that such Selling Securityholders will
contribute to certain liabilities under the Securities Act.
Section 13 of the Agreement of Merger filed as Exhibit 4.4 provides
that the Christopher A. Coppersmith (a Selling Securityholder) will indemnify
and hold harmless the Company and each director, officer or controlling person
of the Company from and against certain liabilities, including liabilities under
the Securities Act. Section 13 of such Agreement of Merger also provides that
such Selling Securityholder will contribute to certain liabilities under the
Securities Act.
Section 7 of the Agency Agreement filed as Exhibit 4.5, provides that
the GKN Securities Corp. (a Selling Securityholder) will indemnify and hold
harmless the Company and each director, officer or controlling person of the
Company from and against certain liabilities, including liabilities under the
Securities Act. Section 7 of such Agency Agreement also provides that such
Selling Securityholder will contribute to certain liabilities under the
Securities Act.
Section 9 of the Subscription Agreement filed as Exhibit 4.6 provides
that the investors in the Private Placement (all of whom are Selling
Securityholders) will indemnify and hold harmless the Company and each director,
officer or controlling person of the Company from and against certain
liabilities, including liabilities under the Securities Act.
The Company also maintains director and officer insurance coverage.
Item 16. Exhibits.
3.1 Certificate of Incorporation of Registrant, as amended*
4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit
4.1 to the Registrant's Registration Statement on Form S-1,
Registration No. 333-03613)
4.2 Specimen Warrant Certificate (incorporated by reference to Exhibit 4.1
to the Registrant's Registration Statement on Form S-1, Registration
No. 333-03613)
4.3 Agreement of Merger, dated as of September 30, 1996, by and between the
Registrant, Amertranz Worldwide, Inc., Consolidated Air Services, Inc.,
David W. Hockersmith and Douglas E. Hockersmith (incorporated by
reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K
filed on October 21, 1996, File No. 001-14474)
4.4 Agreement of Merger, dated as of April 17, 1997, by and between the
Registrant, Target International Services, Inc. (name subsequently
changed to Target Airfreight, Inc.), Target Air Freight, Inc., and
Christopher A. Coppersmith*
4.5 Agency Agreement, dated May 8, 1997, by and between the Registrant and
GKN Securities Corp. with respect to the Registrant's June 13, 1997
Private Placement*
4.6 Form of Subscription Agreement, dated June 13, 1997, with respect to
the Registrant's June 13, 1997 Private Placement*
4.7 Form of Amendment No. 1 to Warrant Agent Agreement dated June 13, 1997*
4.8 Certificate of Designations with respect to the Registrant's Class A
Preferred Stock (contained in Exhibit 3.1)
4.9 Certificate of Designations with respect to the Registrant's Class B
Preferred Stock (contained in Exhibit 3.1)
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4.10 Certificate of Designations with respect to the Registrant's Class C
Preferred Stock (contained in Exhibit 3.1)
4.11 Warrant Agent Agreement (incorporated by reference to Exhibit 4.3 to
the Registrant's Registration Statement on Form S-1, Registration No.
333-03613)
5.1 Opinion of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC
regarding the legality of securities*
23.1 Consent of Arthur Andersen LLP
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC
(contained in Exhibit 5.1)
24.1 Power of Attorney*
- ------------------------------------
*previously filed
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;
(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;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
section 13 or section 15(d) of the Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for purposes 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 Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration
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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 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 court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Lake Success, New York, on this 12th day of August, 1997.
AMERTRANZ WORLDWIDE HOLDING CORP.
By: /s/ Stuart Hettleman
Stuart Hettleman
President and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Stuart Hettleman Director, President and Chief August 12, 1997
- ------------------------- Executive OFficer
Stuart Hettleman
* Director and Executive Vice August 12, 1997
- ------------------------- President
Richard A. Faieta
* Director August 12, 1997
- -------------------------
Michael Barsa
* Director August 12, 1997
- -------------------------
Brian K. Coventry
* Director August 12, 1997
- -------------------------
Christopher A. Coppersmith
* Chief Financial Officer and August 12, 1997
- ------------------------- Principal Accounting Officer
Philip J. Dubato
*By: /s/ Stuart Hettleman August 12, 1997
Stuart Hettleman
Attorney-in-fact
II-5
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
3.1 Certificate of Incorporation of Registrant, as amended*
4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit
4.1 to the Registrant's Registration Statement on Form S-1,
Registration No. 333-03613)
4.2 Specimen Warrant Certificate (incorporated by reference to Exhibit 4.1
to the Registrant's Registration Statement on Form S-1, Registration
No. 333-03613)
4.3 Agreement of Merger, dated as of September 30, 1996, by and between the
Registrant, Amertranz Worldwide, Inc., Consolidated Air Services, Inc.,
David W. Hockersmith and Douglas E. Hockersmith (incorporated by
reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K
filed on October 21, 1996, File No. 001-14474)
4.4 Agreement of Merger, dated as of April 17, 1997, by and between the
Registrant, Target International Services, Inc. (name subsequently
changed to Target Airfreight, Inc.), Target Air Freight, Inc., and
Christopher A. Coppersmith*
4.5 Agency Agreement, dated May 8, 1997, by and between the Registrant and
GKN Securities Corp. with respect to the Registrant's June 13, 1997
Private Placement*
4.6 Form of Subscription Agreement, dated June 13, 1997, with respect to
the Registrant's June 13, 1997 Private Placement*
4.7 Form of Amendment No. 1 to Warrant Agent Agreement dated June 13, 1997*
4.8 Certificate of Designations with respect to the Registrant's Class A
Preferred Stock (contained in Exhibit 3.1)
4.9 Certificate of Designations with respect to the Registrant's Class B
Preferred Stock (contained in Exhibit 3.1)
4.10 Certificate of Designations with respect to the Registrant's Class C
Preferred Stock (contained in Exhibit 3.1)
4.11 Warrant Agent Agreement (incorporated by reference to Exhibit 4.3 to
the Registrant's Registration Statement on Form S-1, Registration No.
333-03613)
5.1 Opinion of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC
regarding the legality of securities*
23.1 Consent of Arthur Andersen LLP
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC
(contained in Exhibit 5.1)
24.1 Power of Attorney*
- ----------------------------------
* Previously filed
<PAGE>
EXHIBIT 23.1
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-3 of our report dated August 28, 1996.
It should be noted that we have not audited any financial statements of the
company subsequent to June 30, 1996 or performed any audit procedures subsequent
to the date of our report.
ARTHUR ANDERSEN LLP
New York, New York
August 11, 1997
<PAGE>
EXHIBIT 23.2
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Amertranz Worldwide Holding Corp.
We consent to the use of our report incorporated herein by reference
and to the reference to our firm under the heading "Experts" in the prospectus.
KPMG PEAT MARWICK LLP
Greensboro, North Carolina
August 11, 1997
<PAGE>
