<PAGE>
PROSPECTUS SUPPLEMENT
1,809,160 SHARES
PRECEPT BUSINESS SERVICES, INC.
CLASS A COMMON STOCK
__________
This Prospectus Supplement relates to the offer and issuance of 1,809,160
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 Southern Systems Business Forms
& Data Supplies, Inc., a South Carolina corporation ("Southern") with and into
Southern Acquisition Corporation, a Texas corporation and wholly-owned
subsidiary of Precept ("Sub"), pursuant to that certain Agreement and Plan of
Merger dated as of August 26, 1998 by and between Precept, Sub, Southern, and
the shareholders of Southern (the "Plan of Merger"). 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, and (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.
The Class A Common Stock is traded on the Nasdaq SmallCap Market under the
symbol "PBSIA." As reported on the Nasdaq SmallCap Market on September 11,
1998, the closing price of the Class A Common Stock was $2.03125.
__________
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.
__________
September 11, 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 to be paid by Precept in connection with the acquisition is
$10,819,441, payable $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.
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<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Number of shares of Class A Common Stock
offered hereby................................ 1,809,160
Class A Common Stock to be outstanding
after the Offering............................ 52,415,041
Total Common Stock (including Class B) to
be outstanding after the Offering............. 56,560,041
Nasdaq SmallCap Market Symbol................. PBSIA
</TABLE>
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<PAGE>
PLAN OF DISTRIBUTION
THE OFFERING
This Prospectus relates to the issuance of 1,809,160 shares of Class A
Common Stock in connection with the merger of Southern with and into Sub on the
terms and conditions set forth in the Plan of Merger.
In addition to the shares issued hereunder, the Company may issue up to
8,939,959 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>
1,809,160 SHARES
PRECEPT BUSINESS SERVICES, INC.
CLASS A
COMMON STOCK
------------
PROSPECTUS
------------
September 11, 1998
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