<PAGE>
PROSPECTUS SUPPLEMENT
4,086,459 SHARES
PRECEPT BUSINESS SERVICES, INC.
CLASS A COMMON STOCK
__________
This Prospectus Supplement relates to the offer and issuance of
4,086,459 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 acquisition
of all of the outstanding capital stock of each of (i) MBF Corporation, a
Louisiana corporation ("MBF"), pursuant to that certain Stock Purchase
Agreement dated as of June 13, 1998 by and between Precept, Precept Business
Products, Inc., a Delaware corporation ("PBP") and wholly-owned subsidiary of
Precept, and J.D. Greco (the sole shareholder of MBF) (the "MBF Stock
Purchase Agreement") and (ii) Mail/Source, Inc., a Louisiana corporation
("MS"), pursuant to that certain Stock Purchase Agreement dated as of June
30, 1998, by and between Precept, PBP, MS and each of the Joseph D. Greco II
Trust, the Laurie Jan Greco Trust, and the Natalie Ann Greco Trust (the three
shareholders of MS) (the "MS Stock Purchase Agreement" and collectively with
the MBF Stock Purchase Agreement, the "Stock Purchase Agreements"). 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 (i) the issuance on March 19, 1998 of 9,612,500 shares of
Class A Common Stock 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. In addition, the
acquisition of U. S. Transportation Systems, Inc. contemplated in the
Original Prospectus was consummated on March 19, 1998, and the information
contained in the Original Prospectus should be viewed accordingly. In
addition to the foregoing, the Original prospectus was supplemented and used
in connection with 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. See "Recent Developments." Any statement
contained in the Original Prospectus shall be deemed to be modified or
superseded by any inconsistent statement contained in this Prospectus
Supplement. Headings referred to herein but not included herein shall refer
to such headings contained in the Original Prospectus. This Prospectus
Supplement should be reviewed in conjunction with the Original Prospectus.
This Prospectus Supplement, together with the Original Prospectus, are
sometimes referred to collectively herein as the "Prospectus".
The Class A Common Stock is traded on the Nasdaq SmallCap Market under
the symbol "PBSIA." As reported on the Nasdaq SmallCap Market on July 10,
1998, the closing price of the Class A Common Stock was $3.03.
__________
Investors should consider the information under "Risk Factors" in
evaluating an investment in this Class A Common Stock offered hereby.
__________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
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.
__________
July 13, 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
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.
To the best knowledge of the Company and except as described below, at
the time of the divestiture of its interest in USTI there was no material
relationship between (i) Logistics Management LLC, Association Services,
Inc., Roxanne Pixler, Dan Pixler and Anthony Huff on the one hand and (ii)
the Company, or any of its affiliates, shareholders, any director or officer
of the Company, or any associate of such director or officer on the other.
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.
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.
To the best knowledge of the Company, at the time of the acquisition of
InfoGraphix there was no material relationship between (i) InfoGraphix on the
one hand and (ii) the Company, or any of its affiliates, its shareholders,
any director or officer of the Company, or any associate of such director or
officer on the other.
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.
3
<PAGE>
THE OFFERING
Number of shares of Class A
Common Stock offered hereby 4,086,459
Class A Common Stock to be
outstanding after the Offering 47,612,036
Total Common Stock to be
outstanding after the Offering 51,757,036
Nasdaq SmallCap Market Symbol PBSIA
4
<PAGE>
PLAN OF DISTRIBUTION
THE OFFERING
This Prospectus relates to the issuance of 4,086,459 shares of Class A
Common Stock in connection with the acquisition by PBP of 100% of the
outstanding common stock of MBF and MS on the terms and conditions set forth
in the respective Stock Purchase Agreements.
In addition to the shares issued hereunder, the Company may issue up to
13,742,964 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.
5
<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
Page
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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)
4,086,459 SHARES
PRECEPT BUSINESS SERVICES, INC.
CLASS A
COMMON STOCK
------------
PROSPECTUS
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July 13, 1998
