<PAGE>
PROSPECTUS SUPPLEMENT
2,351,779 SHARES
PRECEPT BUSINESS SERVICES, INC.
CLASS A COMMON STOCK
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This Prospectus Supplement relates to the offer and issuance of 2,351,779
shares of Class A Common Stock, par value $0.01 per share (the "Class A Common
Stock"), of Precept Business Services, Inc., a Texas corporation (the "Company"
or "Precept"), in connection with the merger of Garden State Leasing and
Rent-A-Car Corporation, a New Jersey corporation ("Garden State"), with and
into Garden State Acquisition Corporation, a Texas corporation ("Sub") and
wholly-owned subsidiary of Precept, pursuant to that certain Agreement and
Plan of Merger dated as of October 1, 1998 by and between Precept, Garden
State, Sub, Precept Transportation Services, LLC, a wholly-owned subsidiary
of Precept, and the shareholder of Garden State. This Prospectus Supplement
constitutes a supplement to that certain prospectus of Precept dated February
9, 1998 (the "Original Prospectus"), with respect to an aggregate of up to
19,887,500 shares of Class A Common Stock which may be offered and issued by
the Company from time to time in connection with the future direct and
indirect acquisitions of other businesses, properties or securities in one or
more business combination transactions in accordance with Rule 415(a)(1)(viii)
of Regulation C under the Securities Act of 1933, as amended (the "Securities
Act") or as otherwise permitted under the Securities Act.
The Original Prospectus (under a different cover page) was also used in
connection with the acquisition by a subsidiary of the Company of substantially
all of the assets and business as a going concern of U. S. Transportation
Systems, Inc. ("USTS"). Therefore, certain information contained in the
Original Prospectus is not directly related to the issuance of shares by the
Company hereunder. The acquisition of USTS as contemplated in the Original
Prospectus (and the issuance of 9,612,500 shares of Class A Common Stock in
connection with such acquisition) was consummated on March 19, 1998, and the
information contained in the Original Prospectus should be viewed accordingly.
In addition foregoing, the Original prospectus was supplemented and used in
connection with (i) the issuance on April 13, 1998 of 2,058,077 shares of Class
A Common Stock in connection with the acquisition by a subsidiary of the Company
of all of the outstanding capital stock of InfoGraphix, Inc., a Massachusetts
corporation, (ii) the issuance in June 1998 of 4,086,459 shares of Class A
Common Stock in connection with the acquisitions of all of the outstanding
capital stock of MBF Corporation and Mail/Source, Inc., each a Louisiana
corporation, (iii) the issuance on September 4, 1998 of 2,463,844 shares of
Class A Common Stock in connection with the acquisition of Creative, a Maine
corporation (iv) the issuance on September 17, 1998 of 1,809,160 shares of Class
A Common Stock in connection with the acquisition of Southern Systems Business
Forms & Data Supplies, Inc., a South Carolina corporation.
The Class A Common Stock is traded on the Nasdaq SmallCap Market under the
symbol "PBSIA." As reported on the Nasdaq SmallCap Market on October 1, 1998,
the closing price of the Class A Common Stock was $1.375.
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Investors should consider the information under "Risk Factors" in
evaluating an investment in this Class A Common Stock offered hereby.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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October 1, 1998
This document constitutes part of a prospectus covering securities that
have been registered under the Securities Act of 1933.
<PAGE>
AVAILABLE INFORMATION
Precept is subject to the informational requirements of the Exchange Act
and in accordance therewith will file reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and
at the Commission's regional offices at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, New York,
New York 10048. Copies of these materials can also be obtained from the
Commission at prescribed rates by writing to the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission and that is located at http://www.sec.gov. The Company intends to
furnish to its shareholders annual reports containing financial statements
audited by independent certified public accountants following the end of each
fiscal year.
Precept has filed with the Commission a Registration Statement on Form S-4
(together with any amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
securities to be issued pursuant to the Plan of Reorganization. This Prospectus
does not contain all the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. Statements contained in this Prospectus or in any document
incorporated by reference in this Prospectus as to the contents of any contract
or other document referred to herein or therein are not necessarily complete,
and in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement or such other
document, each such statement being qualified in all respects by such reference.
The Registration Statement, including exhibits filed as part thereof, are
available for inspection and copying at the Commission's offices as described
above.
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING OF SECURITIES MADE HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY PRECEPT
OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES, IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL OR TO OR FROM ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
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<PAGE>
RECENT DEVELOPMENTS
SALE OF U.S. TRUCKING, INC.
On June 1, 1998, the Company sold its interest in 75% of the common stock
of U.S. Trucking, Inc., a Nevada corporation ("USTI"), pursuant to that certain
First Amended and Restated Stock Purchase Agreement, dated as of May 29, 1998,
by and among Precept Transportation Services, L.L.C., a Nevada limited liability
company and a wholly owned subsidiary of the Company ("Precept Transportation"),
Logistics Management LLC, a Kentucky limited liability company, Association
Services, Inc., a Kentucky corporation, Roxanne Pixler, Dan Pixler and Anthony
Huff. Precept Transportation had acquired its interests in USTI from USTS on
March 19, 1998. USTI is in the long-haul trucking business. Prior to the
aforementioned divestiture, Precept Transportation owned an interest in 75% of
the common stock of USTI and Logistics Management owned the remaining 25% of the
common stock of USTI. Dan Pixler is the President of USTI and Anthony Huff is
the Manager of Logistics Management, LLC.
The aggregate consideration received by the Company as a result of the
divestiture was $1,950,000, composed of $200,000 in cash and a promissory note
with an original principal balance of $1,750,000, payable in monthly
installments of principal and interest equal to $15,000 commencing July 1, 1998
with the total outstanding principal and interest coming due on April 1, 2000.
The note carries an interest rate equal to the prime rate of Wells Fargo Bank
(Texas), N.A. adjusted annually. The consideration received by the Company in
this divestiture was determined by arms-length negotiations between the parties
to the First Amended and Restated Stock Purchase Agreement.
ACQUISITION OF INFOGRAPHIX
On April 13, 1998, PBP acquired all of the issued and outstanding stock of
InfoGraphix, Inc., a Massachusetts corporation ("InfoGraphix"), pursuant to that
certain Stock Purchase Agreement dated as of April 8, 1998 by and among the
Company, PBP, InfoGraphix and James Gorin, the President and sole stockholder
of InfoGraphix. Boston-based InfoGraphix is a single source provider of
products and services to corporate marketing departments and a distributor of
document management services. The aggregate consideration paid by the Company as
a result of the acquisition of InfoGraphix was $9,125,000, payable by the
issuance of 2,058,077 shares of the Company's Class A Common Stock, par value
$.01. The consideration for the acquisition was determined by arms-length
negotiations between the parties to the Stock Purchase Agreement.
ACQUISITION OF MBF AND MAIL/SOURCE
On June 19, 1998 PBP, acquired all of the issued and outstanding stock of
MBF Corporation, a Louisiana corporation ("MBF"), pursuant to that certain Stock
Purchase Agreement dated as of June 13, 1998 by and among the Company, Precept
Business Products, Inc. a Delaware corporation and a wholly owned subsidiary of
the Company, MBF and J.D. Greco, the President and sole stockholder of MBF.
Louisiana-based MBF is a single source distributor of printed products,
distribution services and information solutions.
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<PAGE>
The aggregate consideration paid by the Company as a result of the
acquisition of MBF was $10,570,111 payable by the issuance of 3,796,735
registered shares of the Company's Class A Common Stock, par value $.01. The
consideration for the acquisition was determined by arms-length negotiations
between the parties to the Stock Purchase Agreement.
ACQUISITION OF CREATIVE
On September 4, 1998, Precept, through a wholly-owned subsidiary, acquired
Creative, a Maine corporation ("Creative"), pursuant to that certain Agreement
and Plan of Merger dated as of September 1, 1998, by and among Precept, Creative
Acquisition Corp. (a wholly-owned subsidiary of Precept), Creative and the
stockholders of Creative. Prior to the merger, in which Creative was merged
with and into Creative Acquisition Corp., Creative operated a business providing
printed business forms, distribution services and information solutions to
business customers throughout the New England states and had three
sales/distribution offices in Maine and two in Massachusetts. The aggregate
consideration paid by Precept in connection with the acquisition was
$10,819,441, (consisting of $4,359,241 in cash and $6,460,200 in the form of
2,463,844 fully registered shares of Precept's Class A Common Stock).
ACQUISITION OF SOUTHERN
On September 17, 1998, Precept, through a wholly-owned subsidiary, acquired
Southern Systems Business Forms & Data Supplies, Inc., a South Carolina
corporation ("Southern"), pursuant to that certain Agreement and Plan of Merger
dated as of August 26, 1998, by and among Precept, Precept Acquisition
Corporation (a wholly-owned subsidiary of Precept), Southern and the
shareholders of Southern. Prior to acquisition, in which Southern was merged
with and into Precept Acquisition Corporation, Southern was a Florence, South
Carolina-based provider of printed products, distribution services and
information solutions with yearly revenues of approximately $14 million.
The aggregate consideration paid by Precept in connection with the
acquisition was $7,500,000, (consisting of $1,380,000 in cash, $1,380,000 in
promissory notes, and $4,740,000 in the form of 2,106,675 fully registered
shares of Precept's Class A Common Stock). The promissory notes are unsecured,
have a maturity date of September 1, 2003, and interest thereon is payable at a
rate of 8.5% per annum. The promissory notes are convertible into shares of
Precept's Class A Common Stock based on a per share price equal to the closing
price of the Class A Common Stock on the date of conversion (the "Closing
Price"), or, in the event the Closing Price is less than $2.75, 75% of the
Closing Price.
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<PAGE>
<TABLE>
<CAPTION>
THE OFFERING
<S> <C>
Number of shares of Class A Common Stock
offered hereby . . . . . . . . . . . . . . . . 2,351,779
Class A Common Stock to be outstanding after
the Offering . . . . . . . . . . . . . . . . . 55,064,335
Total Common Stock (including Class B) to be
outstanding after the Offering . . . . . . . . 59,208,558
Nasdaq SmallCap Market Symbol . . . . . . . . PBSIA
</TABLE>
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<PAGE>
PLAN OF DISTRIBUTION
THE OFFERING
This Prospectus relates to the issuance of 2,351,779 shares of Class A
Common Stock in connection with the acquisition of Garden State through its
merger with and into a wholly-owned subsidiary of Precept.
In addition to the shares issued hereunder, the Company may issue up to
6,753,999 shares of Class A Common Stock in connection with the future direct
and indirect acquisitions of other businesses, properties or securities in one
or more business combination transactions in accordance with Rule
415(a)(1)(viii) of Regulation C under the Securities Act, or as otherwise
permitted under the Securities Act, and as further described in the Original
Prospectus. The Company expects that the terms upon which it may issue such
shares will be determined through negotiations with the securityholders or
principal owners of the businesses whose securities or assets are acquired. It
is expected that the shares that are issued will be valued at prices reasonably
related to market prices for the Common Stock prevailing either at the time an
acquisition agreement is executed or at the time an acquisition is consummated.
GENERAL
All expenses of this Offering will be paid by the Company. No underwriting
discounts or commissions will be paid in connection with the issuance of shares
by the Company in business combination transactions, although finder's fees may
be paid with respect to specific acquisitions. Any person receiving a finder's
fee may be deemed to be an Underwriter within the meaning of the Securities Act.
The shares of the Company's Class A Common Stock offered hereunder are
listed for trading on the Nasdaq SmallCap Market.
VALIDITY OF SHARES
The validity of the Class A Common Stock issued hereunder will be passed
upon for the Company by Jackson Walker L.L.P., Dallas, Texas.
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<PAGE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON
STOCK OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY THE SHARES OF COMMON STOCK BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
Prospectus Summary...................... 3 (Original Prospectus)
Business of Precept..................... 64 (Original Prospectus)
Risk Factors............................ 14 (Original Prospectus)
Plan of Distribution.................... 4 (Prospectus Supplement)
Validity of Shares...................... 4 (Prospectus Supplement)
Experts................................. 98 (Prospectus Supplement)
Available Information................... 2 (Prospectus Supplement)
</TABLE>
2,351,779 SHARES
PRECEPT BUSINESS SERVICES, INC.
CLASS A
COMMON STOCK
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PROSPECTUS
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October 1, 1998
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