NATIONS EXPRESS INC, SB-2, 2000-07-24

NATIONS EXPRESS INC
SB-2, 2000-07-24

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<PAGE>

Registration No. 333-

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM SB-2

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

----------------

Nations Express, Inc.
(Name of small business issuer in its charter)

<TABLE>
<S> <C> <C>
North Carolina 4731 56-2077063
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of
incorporation or Classification Code Number) Identification No.)
organization)
</TABLE>

1328B Crossbeam Road
Charlotte, North Carolina 28217
(704) 423-9911
(Address and telephone number
of principal executive offices and principal place of business)

----------------

Allen D. Watson
President and Chief Executive Officer
Nations Express, Inc.
1328 Crossbeam Road
Charlotte, North Carolina 28217
(704) 423-9911
(Name, address and telephone number of agent for service)

----------------

Copy to:

<TABLE>
<S> <C>
B.T. Atkinson, Esq. William M. Prifti, Esq.
Moore & Van Allen, PLLC 5 Market Square
100 North Tryon Street, Floor 47 Suite 109
Charlotte, North Carolina 28202-4003 Amesbury, Massachusetts 01913
(704) 331-1000 (978) 388-4942
</TABLE>

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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,
check the following box. [_]
<PAGE>

CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed
Proposed Maximum
Amount Maximum Aggregate Amount of
Title of each Class of to be Offering Price Offering Registration
Securities to be Registered Registered Per Share(1) Price(1) Fee
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value
(2)........................ 1,150,000 $11.90 $13,685,000 $3,425
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Redeemable Common Stock
Purchase Warrants (2)...... 1,150,000 $ 0.10 $ 115,000 $ 30
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Common Stock issuable upon
exercise of Warrants (2)... 1,150,000 $16.66 $19,159,000 $4,800
---------------------------------------------------------------------------------
Representatives' Warrant.... 100,000 $0.001 $ 100 $ 1
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Representatives' Redeemable
Warrant.................... 100,000 $ 0.20 $ 20,000 $ 5
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Common Stock issuable upon
exercise of
Representatives' Warrant... 100,000 $16.80 $ 1,680,000 $ 444
---------------------------------------------------------------------------------
Common Stock issuable upon
exercise of
Representatives' Redeemable
Warrant.................... 100,000 $16.80 $ 1,680,000 $ 444
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Totals.................... 3,850,000 $36,339,100 $9,149
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</TABLE>
(1) Estimated pursuant to Rule 457(a) solely for the purpose of computing the
registration fee.
(2) Includes shares or warrants represented by 150,000 Units, each consisting
of one share of Common Stock and one Warrant to purchase one share of
Common Stock, subject to an over-allotment option granted to the
Underwriters by the Registrant. See "Underwriting."

The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. The prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED JULY 21, 2000

PROSPECTUS

[Nations Express, Inc.]

Nations Express, Inc.

1,000,000 Units

Each consisting of One Share of Common Stock
and One Redeemable Common Stock Purchase Warrant

This is an initial public offering of units of Nations Express, Inc. at an
estimated price of between $10.00 and $12.00 per unit. Prior to this offering,
there has been no public market for the units, the underlying common stock or
the warrants.

We intend to apply for listing on the American Stock Exchange and request the
symbol " ."

See "Risk Factors" beginning on page 6 to read about certain factors you
should consider before buying units.

------------

<TABLE>
<CAPTION>
Per
Unit Total
---- -----
<S> <C> <C>
Public offering price................................................
Underwriting discount................................................
Proceeds, before expenses, to Nations Express........................
</TABLE>

We have granted the underwriter the right to purchase up to 150,000 units to
cover over-allotments.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

Schneider Securities, Inc.

The date of this prospectus is , 2000
<PAGE>

PROSPECTUS SUMMARY

This summary may not contain all of the information that may be important to
you. You should read the entire prospectus, including the financial statements
and related notes, before making an investment decision.

The Company

Nations Express is a multi-service, expedited transportation company that
arranges on-time and intact delivery of customers' goods. Expedited
transportation refers to the shipment of time sensitive cargo. We arrange
coast-to-coast expedited air and ground freight forwarding to a wide range of
industries such as the printing, automotive, chemical and pharmaceutical
industries.

While many of our competitors arrange either expedited ground freight or
expedited air freight, we arrange both. Our services also include:

.Domestic Air: Air transportation of freight utilizing
commercial and cargo airlines within the United
States and Canada.

.International Shipping: Air and ocean transport of freight utilizing
commercial and cargo lines outside of the United
States.

.Expedited Truck: Movement of expedited freight using independent
owner-operators who are under exclusive contract
with us or independent trucking firms.

.Truck Load Brokerage: Movement of non-expedited freight via independent
trucking firms and owner-operators.

.Trade Show Logistics: Transportation management of trade show exhibit
materials.

Although we are capable of handling packages and shipments of any size, we
focus on large shipments of equipment or materials weighing over 100 pounds per
shipment. As a result of the size of our average shipment, we do not generally
compete with overnight courier or expedited small package companies such as
Federal Express Corporation, United Parcel Service of America, Inc. or the U.S.
Postal Service. Our competitors include Eagle USA Airfreight, Inc., Emery
Worldwide and BAX Global, Inc.

Since our formation in 1998, we have developed our business and operations
by opening additional locations in new markets, expanding our fleet of
independent owner-operators and by expanding our services in our existing
markets. We currently have operations in 16 locations.

Approximately 135 independent owner-operators operate a trucking fleet under
exclusive contract with us. Our exclusive independent contractor relationship
with the owner-operators in our fleet has enabled us to minimize capital costs.
We do not own or operate any aircraft. We utilize commercial air carriers to
provide expedited air transport.

Our shipments are centrally managed through our computerized management
information system, Express Alert. Express Alert enables us to track and trace
shipments and to provide historical data on each shipment. Express Alert also
provides an internet link between our Express Centers, sales agents and our
corporate office and provides updated account information and sales order
entry.

2
<PAGE>

Our business strategy focuses on establishing new company-owned Express
Centers in primary markets and expanding our expedited ground fleet. We also
intend to:

. continue to expand our volume of international air and ocean shipments;

. continue to develop our core freight forwarding business through our
broad menu of value added services;

. expand our Canadian freight forwarding business;

. acquire other non-asset based freight forwarding companies;

. utilize our user friendly computer based technology to increase sales and
expand operations;

. continue to develop our truck load brokerage business;

. expand our trade show logistics shipment business; and

. continue to develop independent agencies in our secondary markets.

Our principal executive offices are located at 1328B Crossbeam Road,
Charlotte, North Carolina 28217. Our mailing address is P.O. Box 19247,
Charlotte, North Carolina 28219, and our telephone number is (704) 423-9911.

3
<PAGE>

The Offering

Securities................ 1,000,000 units, each consisting of one share of
common stock and one redeemable common stock
purchase warrant to purchase one share of common
stock. Each warrant is exercisable to purchase one
share of common stock at an exercise price equal to
140%
of the initial public offering price for a period
of 60 months, commencing 13 months from the
completion of the offering. The warrants are
subject to redemption by Nations Express beginning
13 months after completion of the offering at a
price of $0.20 per warrant, provided that the
average closing bid price of the common stock
equals or exceeds 160% of the initial public
offering price per share for 20 consecutive trading
days.

Shares to be outstanding
after the offering (1)....
3,979,566 shares of Common Stock, including the
units.

Proposed American Stock
Exchange trading symbol...
" "

Use of Proceeds........... We intend to use substantially all of the net
proceeds from the offering for working capital and
expenditures related to geographic expansion.
--------
(1) Does not include the shares of common stock and warrants underlying the
underwriters' over-allotment option for 150,000 units, the 200,000 shares
of common stock underlying the underwriters' compensatory warrant and
950,000 shares reserved for issuance upon exercise of options to purchase
common stock under our 1998 Incentive Stock Option Plan and our 1999 Stock
Option Plan.

----------------

Risk Factors

An investment in our common stock will involve certain risks that should be
considered before subscribing to this offering. See "Risk Factors" discussion
beginning on page 6.

----------------

4
<PAGE>

SUMMARY FINANCIAL DATA AND OTHER INFORMATION

The following table summarizes the financial data of our business. You
should read this information with the discussion in "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and our
financial statements and notes to those statements included elsewhere in this
prospectus.

<TABLE>
<CAPTION>
Period from
March 1, 1998
(inception) to Year Ended Nine Months Ended Nine Months Ended
June 30, 1998 June 30, 1999 March 31, 1999 March 31, 2000
-------------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Statements of Income
Data:
Revenue................. $533,522 $7,369,373 $4,307,285 $13,912,714
Purchased
transportation......... 234,149 5,028,050 2,928,954 9,731,663
-------- ---------- ---------- -----------
Gross profit............ 299,373 2,341,323 1,378,331 4,181,051
Operating expenses...... 235,882 2,150,422 1,277,640 3,754,656
-------- ---------- ---------- -----------
Income from operations.. 63,491 190,901 100,691 426,395
Interest expense, net... 3,608 20,928 5,210 5,771
Income tax expense...... 12,767 66,289 38,193 166,218
-------- ---------- ---------- -----------
Net income.............. $ 47,116 $ 103,684 $ 57,288 $ 254,406
======== ========== ========== ===========
Basic and diluted
earnings per common
share.................. $ .05 $ .04 $ .02 $ .08
Weighted average common
shares outstanding,
basic.................. 931,157 2,316,618 2,347,656 2,735,366
Weighted average common
shares outstanding,
diluted................ 931,157 2,316,618 2,347,656 3,153,610

Operating Data:
Company-owned Express
Center................. 2 2 2 5
Agent-owned Express
Center................. 1 9 6 12
Number of truck owner-
operators.............. 0 32 24 135
</TABLE>

The following table presents a summary of our balance sheet at March 31,
2000:

. on an actual basis;

. on an as adjusted basis to reflect the sale of 1,000,000 units in this
offering at an assumed initial public offering price of $11 per share
after deducting the estimated underwriting discount and offering
expenses.

<TABLE>
<CAPTION>
March 31, 2000
----------------------
Actual As Adjusted
---------- -----------
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents............................... $ 50,235 $ 9,050,235
Working capital......................................... 1,652,436 10,652,436
Total assets............................................ 3,670,801 12,670,801
Long-term lease obligations............................. 77,734 77,734
Shareholders' equity.................................... 1,952,286 10,952,286
</TABLE>

5
<PAGE>

RISK FACTORS

The purchase of the units involves a high degree of risk. Accordingly, each
prospective investor, before placing an order for any units, should carefully
read this prospectus in its entirety and should consider the following risks
and speculative features inherent in and affecting this offering and our
business, as well as general investment risks. An investment in the units
should be made only by persons who can afford an investment involving such
risks and is suitable only for persons able to sustain the loss of their entire
investment.

We have a limited operating history.

Nations Express was organized in March 1998 and has a limited operating
history. There can be no assurance that our revenue will continue to increase
or that we will consistently generate net income.

We face intense competition in our industry.

Although the industry is highly fragmented with a large number of
participants, we compete primarily with a relatively small number of domestic
firms with nationwide networks and the capability to provide the same services
offered by us. These firms include Eagle USA Airfreight, Inc., BAX Global,
Inc., and subsidiaries of Emery and Federal Express Corporation, each of whom
have significantly greater financial, technical, marketing and sales resources
than we do. We also encounter competition from regional and local freight
forwarders, cargo sales agents and brokers and surface freight forwarders.
Competitive pressures such as those described above could cause us to lose
market acceptance and customers and have a material adverse effect on our
results of operations. There is no assurance that we will be able to compete
effectively in the future.

We may need additional funds to expand our operations.

There is a risk that the cash proceeds of this offering may not be
sufficient to meet our working capital or financing requirements. If a shortage
arises, additional capital will be needed. There can be no assurance that
additional financing will be available when needed or on terms acceptable to
us.

We rely on our key personnel.

Our success depends to a large degree on the continued services of certain
key management personnel. The loss of any of these people could have a material
adverse effect on us. We maintain "key-man" insurance on the life of our chief
executive officer, Allen D. Watson. One of our key employees has an employment
contract with Nations Express at this time. In addition, we will need to
continue to attract and retain sales and marketing agents in order to expand
our business and competitive position in the marketplace. Competition for such
personnel in the freight delivery industry is intense and there is no assurance
that we will be able to recruit or retain key personnel.

Our success depends on our ability to effectively manage growth.

Our ability to effectively manage growth will require us to continue to
invest in operational, financial and management systems and resources and to
hire, retain, motivate and manage our employees and independent sales marketing
agents and owner operators. If we are unable to manage growth effectively, our
business and results of operations could be adversely affected.

Our existing officers and directors will control Nations Express after the
offering.

After the offering, our current officers and directors will beneficially
own, or have voting control over, approximately 38% of the outstanding common
stock (assuming all units are sold but excluding exercise of the

6
<PAGE>

over-allotment option). Accordingly, the current officers and directors will
have the ability to influence the election of our directors and to control
virtually all corporate actions. This concentration of ownership may also have
the effect of delaying or preventing a change in control of Nations Express.

We do not intend to pay dividends in the foreseeable future.

Although we have paid dividends to holders of our preferred stock, we have
not declared or paid, and do not intend to declare or pay, any cash dividends
or other dividends on our common stock in the foreseeable future. Earnings, if
any, will be used to finance our operations and growth.

The offering price of the units is not based on any formal valuation of our
assets or other objective criteria.

The price per unit in this offering will be the result of negotiations
between our management and the underwriters. It will be determined using
financial projections and multiples derived from a study of other companies
with operating businesses comparable to ours. It was not based on any formal
valuation of our assets, our earnings, book value or other objective criteria.

There has been no public market for the units or the underlying common stock or
warrants.

Prior to the offering, there has been no public market for the securities
being offered. We cannot assure you that the market price of the securities
after the offering will equal or exceed the initial public offering price or
that an active trading market will develop and be sustained. The market price
of the securities may fluctuate substantially based on our operating results,
variations between actual results and the results expected by analysts and
investors, changes in local or global economic factors or developments in the
expedited freight industry and others common to initial public offerings. In
addition, the stock market has from time to time experienced extreme price and
volume fluctuations, which could adversely affect the market price for the
securities regardless of our financial performance.

Our air freight services depend on the availability of cargo space from third
parties to serve our customers.

Our air freight services business depends on the availability of air cargo
space, including space on commercial aircraft and cargo airlines. Shortages of
available cargo space are most likely to occur around holidays and in heavy
transportation lanes. In addition, available cargo space could be reduced as a
result of decreases in the number of commercial airlines serving particular
locations. This might occur as a result of general economic conditions,
transportation strikes, regulatory changes and other factors beyond our
control. To date, a lack of air cargo space has not had a significant impact on
our ability to provide timely service to our customers. Our future operations,
however, could be adversely affected by shortages of suitable cargo space and
rate increases charged by commercial airlines for cargo space.

Personal injury and accident claims resulting from our expedited ground
services could materially impact our profitability.

We currently utilize the services of approximately 135 independent truck
owner-operators who are under exclusive contract with us. In addition, we
utilize the services of other drivers or transportation companies from time to
time. We may be held liable for their actions. We carry $10 million of
liability insurance on our owner-operators and their vehicles. Claims may,
however, exceed the amount of liability coverage carried at any one time. A
material increase in the frequency or severity of accidents, liability claims
or unfavorable resolutions of claims could materially affect us.

7
<PAGE>

We could incur additional expenses or taxes if the independent owner-operators
we use in connection with our expedited ground fleet are found to be
"employees" rather than independent contractors.

The Internal Revenue Service, and state authorities and other third parties
have successfully asserted that independent owner-operators in the
transportation industry, including the type we use in connection with our
ground fleet, are "employees" rather than "independent contractors" for
purposes of the Internal Revenue Code or other state or local tax laws or
regulations. Although we believe that the independent owner-operators we use
are not "employees," the IRS, and state authorities or others could challenge
this position. Federal and state tax or other applicable laws, or
interpretations of applicable laws, could change. If they do, we could incur
additional employee benefit-related expenses and could be liable for additional
taxes, penalties and interest for prior periods and additional taxes for future
periods.

Our failure to comply with government permit and licensing requirements could
result in substantial fines or revocation of our operating authorities.

Our operations are subject to various federal, state, local and foreign
regulations that in many instances require permits and licenses. Our failure to
comply with applicable regulations and maintain necessary permits and licenses
could result in substantial fines or revocation of our operating authority. At
the present time, we believe we are in compliance with all applicable
regulations and all required licenses and operating authorities are current.

Delays in the final determination of costs of shipment and collections and our
limited operating history make it difficult to accurately estimate the
collectibility of our receivables.

A final accounting of the costs associated with a shipment may not be
available until well after the shipment is delivered. Our invoices to customers
are distributed shortly after the shipment has been delivered and costs have
been calculated. We typically do not collect our accounts receivable until
approximately 55 days after billing. In addition, we are often required to
rebill our customers for shipments, which further exacerbates the delay between
booking accounts receivable and actual payment. Although we believe our reserve
for uncollectible accounts is adequate, these factors, when combined with our
limited operating history, make it difficult to accurately estimate the
collectibility of our receivables.

Our relationships with independent agents may be terminated with 30 to 90 days
notice.

Our agency agreement governing the relationship between Nations Express and
our agents may be terminated upon 30 to 90 days notice by either party. Our
business opportunities in a particular market could be adversely affected if
one of our agents terminated their agreement. Although we believe our
relationship with these agents is good, we cannot assure you that our agents
will continue to represent Nations Express.

Our independent agents, independent contractors and staff members are not bound
by non-competition agreements.

Our independent agents, independent contractors and employees, some of whom
are integral to our relationships with certain key customers or locations, may
terminate their relationship with Nations Express with little or no notice and
go to work for one of our competitors. These individuals have an understanding
of our business operations and proprietary approaches to the marketplace.
Although we believe our relationships with independent agents, independent
contractors and employees are good, we cannot assure you that certain key
independent agents, staff members or independent contractors may not go to work
for a competitor and exploit the knowledge and training they received while
working for Nations Express.

The seasonality of our business may adversely affect our profitability from
quarter to quarter.

Our operating results have been subject to seasonal trends when measured on
a quarterly basis. The first quarter of the calendar year has traditionally
been the weakest and the third and fourth quarters have

8
<PAGE>

traditionally been the strongest. This pattern is the result of, or is
influenced by, numerous factors that are beyond our control including climate,
holidays, consumer demand, economic conditions and other similar forces. In
addition, this historical quarterly trend has been influenced by the growth and
diversification of our service offerings. We cannot accurately forecast many of
these factors nor can we estimate accurately the relative influence of any
particular factor and, as a result, there can be no assurance that historical
patterns, if any, will continue in the future.

A significant portion of our revenues are derived from customers in
industries whose shipping patterns are tied closely to consumer demand and from
customers in industries whose shipping patterns are dependent upon just-in-time
production schedules. Therefore, the timing of our revenues are, to a large
degree, impacted by factors out of our control. Additionally, many customers
ship a significant portion of their goods at or near the end of a quarter, and
therefore, we may not learn of a shortfall in revenues until late in a quarter.

Government regulations and environmental compliance costs may adversely affect
our profitability.

We are subject to Federal, state and local laws and regulations regulating
the discharge of materials into the environment or for the protection of the
environment. Similar laws apply in many foreign jurisdictions in which we
operate. Although our current operations have not been significantly affected
by compliance with these environmental laws, governments are becoming
increasingly sensitive to environmental issues, and we cannot predict what
impact future environmental regulations may have on our business. We do not
anticipate making any material capital expenditures for environmental control
purposes in the foreseeable future.

Future sales by existing shareholders could depress the market price of our
common stock.

Once a trading market develops for our common stock, many of our
shareholders will have an opportunity to sell their common stock for the first
time. Sales of a substantial number of shares of common stock in the public
market, or the threat that substantial sales might occur, could cause the
market price of our common stock to decrease. These factors could also make it
difficult for us to raise capital by selling stock.

You will experience immediate and substantial dilution in the book value of
your investment.

The net tangible book value per share of the common stock immediately after
this offering of $2.75 per share will be substantially less than the initial
public offering price. Furthermore, in the event that we issue additional
shares of common stock in the future, including shares that may be issued upon
exercise of options, warrants and other rights, purchasers of common stock in
this offering will experience further dilution.

Provisions of our charter and bylaws and North Carolina laws may delay or
prevent transactions that would benefit our shareholders.

Our articles of incorporation and bylaws and North Carolina corporate law
contain provisions that may have the effect of delaying, deferring, preventing
or discouraging a change of control of Nations Express. These provisions
include, among others:

. Authorizing our board of directors to set the terms of our preferred
stock; and

. Restricting our ability to engage in transactions with certain
shareholders.

These provisions may deter persons from making unsolicited tender offers or
other unilateral takeover proposals. These provisions may motivate potential
acquirers to negotiate with our board of directors rather than pursuing non-
negotiated takeover attempts. It may therefore be more difficult for our
shareholders to benefit from transactions that are opposed by the incumbent
board of directors.

9
<PAGE>

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements under "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business," and elsewhere in this prospectus constitute forward-
looking statements. Words such as "expects," "anticipates," "approximates,"
"believes," "estimates," "intends," and "hopes" and variations of such words
and similar expressions are intended to identify such forward-looking
statements. We have based these statements on our current expectations and
projections about future events. These forward-looking statements are not
guarantees of future performance and are subject to risks and uncertainties
that could cause actual results to differ materially from those projected in
these statements. The forward-looking statements contained in this prospectus
include, among other issues, statements about the following:

. general economic conditions in our markets, including inflation,
recession, interest rates and other economic factors;

. damage to or other disruption of our facilities and equipment; and

. other factors that generally affect the business of transportation,
including expedited air and expedited ground freight.

We are not obligated to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this prospectus might not occur.

10
<PAGE>

USE OF PROCEEDS

The net proceeds from the sale of the units is expected to be approximately
$9,000,000 ($10,650,000 if the underwriters' over-allotment is fully
exercised).

We expect to use the net proceeds for working capital and other general
corporate purposes, including:

. geographic expansion;

. continue development of our truck and freight satellite tracking system;

. improve our accounting and information systems; and

. develop our business to business website.

We have not committed any specific portion of the net proceeds to any
particular purpose, and our management will have the ability to allocate the
proceeds at its discretion. A portion of the net proceeds may be used for the
acquisition of businesses that compliment are own. Currently, we do not have
any understandings, commitments or agreements with respect to acquisitions.
Pending application of proceeds to any specific purpose, we intend to invest
the net proceeds in short-term, highly liquid money market investments.

11
<PAGE>

CAPITALIZATION

The following table sets forth the actual capitalization of the Company as
of March 31, 2000 and the capitalization as of March 31, 2000 as adjusted to
reflect the sale of all Units being offered, but excluding exercise of the
over-allotment option.

<TABLE>
<CAPTION>
March 31, 2000
----------------------
Actual As Adjusted
---------- -----------
<S> <C> <C>
Lease obligations (including current portion)........... $ 110,063 $ 110,063
Shareholders' Equity:
Preferred stock; no par value: 1,000,000 shares
authorized; no shares outstanding.................... 0 0
Common stock, no par value: 25,000,000 shares
authorized; 2,979,566 shares issued and outstanding,
actual; 3,979,566 shares issued and outstanding, as
adjusted (1)......................................... 1,528,538 10,438,538
Warrants outstanding (1).............................. 50,390 140,390
Retained earnings..................................... 373,358 373,358
---------- -----------
Total shareholders' equity ........................... 1,952,286 10,952,286
---------- -----------
Total Capitalization ............................... $2,062,349 $11,062,349
========== ===========
</TABLE>
--------
(1) Does not give effect to an aggregate of up to 2,350,000 shares of common
stock issuable upon exercise of: (i) the warrants being offered hereby;
(ii) the Underwriter's over-allotment option, including the shares
underlying the warrants included in the Units such to the over-allotment
option; (iii) the Representative's Warrants; or (iv) the issuance of any of
the 950,000 shares reserved for issuance upon exercise of outstanding
options to purchase Nations Express common stock.

12
<PAGE>

DILUTION

The net tangible book value of our common stock as of March 31, 2000 was
approximately $1,952,286, or $.66 per share. Net tangible book value per share
represents the amount of our total tangible assets less total liabilities,
divided by the 2,979,566 shares of common stock outstanding as of March 31,
2000.

Net tangible book value dilution per share represents the difference between
the amount per share paid by new investors who purchase units in this offering
and the pro forma net tangible book value per share of common stock immediately
after completion of this offering. After giving effect to the sale of 1,000,000
units in this offering at an initial public offering price of $11.00 per unit,
after deduction of estimated underwriting discounts and commissions and
offering expenses, the pro forma net tangible book value of Nations Express at
March 31, 2000 would have been approximately $11 million or $2.75 per share.

This represents an immediate increase in net tangible book value of $2.09
per share to existing shareholders, and an immediate dilution in net tangible
book value of $8.25 per share to new investors in the offering, as illustrated
in the following table:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per Unit (1)............ $11.00
Net tangible book value per share at March 31, 2000......... $ 0.66
Increase per share attributable to new investors............ 10.34
Pro forma net tangible book value per share after the Offering
#(2)......................................................... 2.75
------
Net tangible book value dilution per share to new investors
#(3)......................................................... $ 8.25
======
</TABLE>
--------
(1) Before deduction of estimated underwriting discounts and commissions and
offering expenses to be paid by Nations Express. The initial public
offering price includes $0.10 for each warrant.
(2) Does not give effect to an aggregate of up to 2,350,000 shares of common
stock issuable upon exercise of: (i) the warrants being offered hereby;
(ii) the Underwriters' over-allotment option, including the shares
underlying the warrants included in the units subject to the over-allotment
option; (iii) the Representative's Warrants; or (iv) the issuance of any of
the 950,000 shares reserved for issuance upon the exercise of outstanding
options to purchase our common stock.
(3) Represents dilution of approximately 75% to purchasers of the units.

The following table summarizes as of March 31, 2000, on a pro forma basis to
reflect the same adjustments described above, the number of shares of common
stock purchased from Nations Express, the total consideration paid and the
average price per share paid by (i) the existing holders of common stock and
(ii) the new investors in the offering, assuming the sale of 1,000,000 Units
hereby at an initial public offering price of $11 per unit. The calculations
are based upon total consideration given by new and existing shareholders,
before any deduction of estimated underwriting discounts and commissions and
offering expenses.

<TABLE>
<CAPTION>
Shares
Outstanding Total Consideration Average
----------------- ------------------- Price
Number Percent Amount Percent Per Share
--------- ------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C>
Existing shareholders...... 2,979,566 74.9% $ 1,421,226 11.4% $ .48
New Investors.............. 1,000,000 25.1% $11,000,000 88.6% $11.00(1)(2)
--------- ----- ----------- ----- ------
Total(2)................. 3,979,566 100.0% $12,421,226 100.0%
========= ===== =========== ===== ======
</TABLE>
--------
(1) Assumes initial public offering price of $11.00 per unit.
(2) The foregoing table does not give effect to the items described in
footnotes (1) and (2) to the previous dilution table.

13
<PAGE>

SELECTED FINANCIAL DATA AND OTHER INFORMATION

The following table presents our selected financial data. The information
set forth below should be read together with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our historical
financial statements and notes to those statements included in the prospectus.
Our statements of income data set forth below for the period from inception
(March 1, 1998) to June 30, 1998 and for the year ended June 30, 1999 are
derived from our audited financial statements included elsewhere in this
prospectus which have been audited by Arthur Andersen LLP, independent public
accountants, whose report is also included in this prospectus.

The statements of income data for the nine months ended March 31, 1999 and
2000 and the balance sheet data as of March 31, 1999 and 2000 are derived from
unaudited financial statements included in this prospectus and, in the opinion
of management, include all normal and recurring adjustments that are necessary
for a fair presentation of our financial position and results of operations for
these periods. The historical financial information may not be indicative of
our future performance.

Operating Data:
Company-owned Express
Center................. 2 2 2 5
Agent-owned Express
Center................. 1 9 6 12
Number of Truck Owner-
Operators.............. 0 32 24 135
</TABLE>

<TABLE>
<CAPTION>
June 30, 1998 June 30, 1999 March 31, 1999 March 31, 2000
------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents............ $ 95,471 $ 284,800 $ 89,129 $ 50,235
Working capital......... 255,383 635,458 213,158 1,652,436
Total assets............ 533,455 2,190,405 1,471,173 3,670,801
Long-term lease
obligations............ 27,603 45,955 61,337 77,734
Shareholders' equity.... 288,229 849,696 355,516 1,952,286
</TABLE>

14
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's discussion and analysis of financial condition and results of
operations are presented to assist in understanding the financial condition and
results of operations of Nations Express for the nine months ended March 31,
2000 and March 31, 1999, the fiscal year ended June 30, 1999 and the period
from March 1, 1998 (inception) to June 30, 1998. This discussion and the
related financial data should be read in conjunction with the financial
statements and related notes included elsewhere in this Prospectus.

Overview

Historically, we have increased revenues through the expansion of
operations. Internal revenue growth has occurred through the addition of
company-owned Express Centers into new markets, expansion of our service
products and increases in direct sales staff. We plan to continue to expand our
internal sales growth by expanding our existing Operating Offices and
developing new Operating Offices in major domestic markets in the United
States. Although opening a new Operating Office would have a negative impact on
our earnings until revenues for the new Operating Office exceed operating
costs, start-up costs for new Operating Offices do not require significant
capital expenditures. Operating expenses are controlled by limiting payroll
expenses for new employees through sales commissions plans and bonuses based on
profitability of the new Operating Office. In addition, new Operating Offices
generally do not require commitments of more than one year for office and
warehouse space. We plan to open an Operating Office in one additional new
market by the end of fiscal year 2000 and six additional new markets by the end
of fiscal year 2001.

Sales growth has occurred through the addition of new Agencies in new
markets and the addition of independent sales agents. Agencies are typically
established transportation enterprises that sell our services in a specific
market or region and have both sales and customer service operations. Agencies
sell our services on an exclusive basis under an agency agreements with an
unspecified duration. We also engage independent sales agents who are typically
individuals that sell our services on an exclusive basis in a specific market
or region and utilize Operating Offices to service their customers. We intend
to continue to develop our operations by expanding existing Agencies in
secondary markets and by adding new Agencies in secondary markets throughout
the United States. During the twelve months ended June 30, 1999, we added ten
new Agencies. We intend to open one new Agency by the end of fiscal year 2000.

Results of Operations

Nine Months Ended March 31, 2000 versus Nine Months Ended March 31, 1999

During the nine months ended March 31, 2000, our revenues increased to
$13,912,714 from $4,307,285 for the nine months ended March 31, 1999. Operating
income increased to $426,395 for the nine months ended March 31, 2000 as
compared to operating income of $100,691 for the nine months ended March 31,
1999. During the nine months ending March 31, 2000, revenues grew at a rate of
223% over the same period in the prior year. Revenue increases during the
period were primarily the result of sales growth within our existing markets,
the addition of two new Agencies and the expansion of our product offerings to
include truck load brokerage freight using existing common carriers.

Gross profit for the nine months ended March 31, 2000 was $4,181,051
compared to $1,378,331 for the nine months ended March 31, 1999. Gross profit
as a percentage of sales decreased from 32% for the nine months ended March 31,
1999 to 30% for the nine months ended March 31, 2000. Gross profit as a
percentage of sales declined in the nine months ended March 31, 2000 due to
expansion costs and increased competition as we expanded our sales presence
beyond our primary markets in North Carolina and Los Angeles and from increased
sales volumes of lower margin freight services such as our truck load brokerage
services.

15
<PAGE>

Operating expenses for the nine months ended March 31, 2000 were $3,754,656
compared to $1,277,640 for the same period ended March 31, 1999. As a
percentage of revenues, operating expenses decreased from 29.7% for the nine
months ended March 31, 1999 to 27.0% for the nine months ended March 31, 2000.
Operating expense increases reflect increases in direct sales and marketing
personnel, service operations personnel, and administrative and accounting
personnel and related expenses in support of our revenue growth.

Federal and state income tax expense increased from $38,193 for the nine
months ended March 31, 1999 to $166,218 for the nine months ended March 31,
2000. Income tax as percentage of pre-tax income was 40% for the period ended
March 31, 1999 and 39.5% for the period ended March 31, 2000.

Net income increased from $57,288 for the nine months ended March 31, 1999
to $254,406 for the nine months ended March 31, 2000. Net income as a
percentage of sales increased to 1.8% for the period ended March 31, 2000 from
1.3% for the period ended March 31, 1999. Net income increased as a percentage
of revenues due to increases in revenues and a slight decline in operating
expenses as a percentage of sales.

During the nine months ended March 31, 2000, we opened seven new Agencies,
we converted two agencies to company owned agencies and one agency was closed.

Fiscal Year Ended June 30, 1999 versus the Period from March 1, 1998
(Inception) to June 30, 1998

During the fiscal year ending June 30, 1999, our revenues increased to
$7,369,373 from $533,522 for the four months ended June 30, 1998. Operating
income increased to $190,901 for the twelve months ended June 30, 1999,
compared to $63,491 for the four months ended June 30, 1998.

Gross profit increased from $299,373 for the period from inception to June
30, 1998 to $2,341,323 for the twelve months ended June 30, 1999. Gross profit
as a percentage of sales decreased from 56.1% for the four months ended June
30, 1998 to 31.8% for the twelve months ended June 30, 1999. Gross profits as a
percentage of sales declined in 1999 due to increased competition as we
expanded our sales presence beyond our markets in North Carolina and from
increased sales volumes of lower margin freight services. Our airfreight sales
margins vary according to the level of air freight services required by our
customers and is affected by the level of competition within specific markets
or region. Our ground freight margins vary according to the level of service
required by ground freight customers. Ground freight margins are affected by
the level of competition within a market or region.

Operating expenses increased from $235,882 for the period from inception to
June 30, 1998 to $2,150,422 for the twelve months ended June 30, 1999. As a
percentage of revenues, operating expenses decreased from 44.2% for the four
months ended June 30, 1998 to 29.2% for the twelve months ended June 30, 1999.
Components of operating expenses include sales and marketing, general and
administrative and depreciation. Sales expenses increased from $79,223 for the
four months ended June 30, 1998 to $773,799 for the twelve months ended June
30, 1999. Sales and marketing expense increases resulted from expenditures for
additional sales staff, commissions based on increases in sales volumes and
increases in expenses for advertising and marketing materials. Because of
increased sales volumes, sales and marketing expenses decreased as a percentage
of sales from 14.9% for the four months ended June 30, 1998 to 10.5% for the
twelve months ended June 30, 1999. General and administrative expenses
increased from $153,594 for the four months ended June 30, 1998 to $1,353,477
for the twelve months ended June 30, 1999. General and administrative expenses
as a percentage of sales decreased from 28.8% for the four months ended June
30, 1998 to 18.4% for the twelve months ended June 30, 1999. General and
administrative expense increases resulted from increases in service operations
personnel, administrative and accounting personnel in support of our revenue
growth.

Federal and state income tax expense increased from $12,767 for the four
months ended June 30, 1998 to $66,289 for the twelve months ended June 30,
1999. Income tax expense as a percentage of revenues decreased from 2.4% for
the four months ended June 30, 1998 to 0.9% for the twelve months ended June
30, 1999. As a percentage of pre-tax income, income tax expense increased from
21.3% for the four months ended June 30,

16
<PAGE>

1998 to 39% for the twelve months ended June 30, 1999. Increases in our income
tax expense as a percentage of pre-tax income is the result of increases in the
applicable income tax rates at higher levels of income.

Net income increased from $47,116 for the four months ended June 30, to 1998
to $103,684 for the twelve months ended June 30, 1999. Net income as a
percentage of sales decreased to 1.4% for the period ended June 30, 1999 from
8.8% for the period from inception to June 30, 1998. Net income as a percentage
of revenues decreased due to a decline in gross profit as a percentage of
revenues and as a result of increased sales and marketing expenditures,
increased expenditures for operations and increased expenditures for
administration and accounting.

During the period from March 1, 1998 (inception) to June 30, 1998, we opened
two company owned Express Centers. During the twelve months ended June 30,
1999, we opened eight new agency owned Express Centers.

Liquidity and Capital Resources

Our primary need for capital resources is to fund working capital
requirements. We have historically relied upon cash flow from operations and
borrowings under our credit facility to meet our capital needs. We believe our
cash flow from operations and the net proceeds of this offering will be
sufficient to meet our capital needs over the short term. We have a revolving
line of credit of $1.5 million with a commercial bank that is secured by our
accounts receivable and requires that the Company maintain certain financial
ratios. This credit facility was secured in November 1999, and expires on
November 30, 2000. Borrowings under this credit facility bear interest at the
bank's prime rate.

Beginning in November 1998, various shareholders loaned us cash in
increments of $25,000. In lieu of interest, we agreed to issue 10,000 shares of
common stock upon execution of each $25,000 note. In total, our liquidity was
increased $250,000 from the execution of shareholder notes.

On March 15, 1999, we offered an aggregate of 170,000 units in a private
placement. Each unit consisted of one share of no par common stock priced at $2
per share and one share of Series A Convertible Preferred stock priced at $2.50
per share. In May 1999, we sold 95,556 units. We received $392,238 in net
proceeds including amounts assigned to stock warrants, net of commissions paid
to the securities brokerage firm that acted as placement agent in the offering.

In July 1999, we sold 159,227 units consisting of one share of no par value
common stock priced at $2 per share and one share of Series A convertible
Preferred Stock priced at $2.50 per share. We received $621,233 in proceeds,
net of commissions paid to the securities brokerage firm that acted as
placement agent in the offering.

On March 31, 2000, we had working capital of $1,652,436 compared to $213,158
as of March 31, 1999. Borrowings under our credit facility were $215,822 on
March 31, 2000.

We made cash distributions to our preferred shareholders of $31,848 during
the nine month period ended March 31, 2000. All outstanding shares of preferred
stock were converted to common stock on January 15, 2000. There are no shares
of preferred stock currently outstanding. We have no plans to issue any shares
of preferred stock or to pay any dividends on our common stock in the
foreseeable future.

Effect of Recently Issued Accounting Pronouncements

In June 1998, June 1999 and June 2000, the FASB issued Statement of
Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and hedging Activities and SFAS No. 137, Accounting for Derivative
Instruments and Hedging Activities--Deferral of the Effective Date of FASB
Statement No. 133 and SFAS No. 138, Accounting for Certain Derivative
Instruments and Certain Hedging Activities--an amendment of SFAS No. 133. These
statements outline the accounting treatment for all derivative activity. We do
not use derivative instruments and these accounting statements will not have an
effect on us.

17
<PAGE>

BUSINESS

Nations Express is a multi-service, expedited transportation company that
arranges on-time and intact delivery of customers' goods. We arrange coast-to-
coast expedited air and ground freight forwarding to a wide range of industries
including customers in the printing, automotive, chemical and pharmaceutical
industries.

While many of our competitors arrange either expedited ground or expedited
air freight, we arrange both expedited ground and expedited air freight, as
well as trade show logistics, charter aircraft services, truck load brokerage
and deferred ground freight. During the last year, 60% of our shipments were
delivered by ground transportation and 40% were delivered through the air. The
services we provide include:

.Domestic Air: Air transportation of freight utilizing
commercial and cargo airlines within the United
States and Canada.

.International Shipping: Air and ocean transport of freight utilizing
commercial and cargo lines outside of the
United States.

.Expedited Truck: Movement of expedited freight using owner
operators who are under exclusive contract with
us or independent trucking firms.

.Truck Load Brokerage: Movement of non-expedited freight via
independent trucking firms and owner-operators.

.Trade Show logistics: Management and transportation of trade show
exhibit materials.

Although we are capable of handling packages and shipments of any size, we
focus primarily on large shipments of equipment or materials weighing over 100
pounds per shipment. As a result of the size of our average shipment, we do not
generally compete with overnight courier or expedited small package companies
such as Federal Express Corporation, United Parcel Service of America, Inc. or
the U.S. Postal Service. Our primary competitors include Eagle USA Airfreight,
Inc., Emery Worldwide and BAX Global, Inc.

Since our formation in 1998, we have developed our business and operations
by opening new locations in primary and secondary markets, expanding our fleet
of independent owner-operators and by expanding our services in our existing
markets. We currently have operations in 18 locations including Charlotte, Los
Angeles, Chicago, Boston and Atlanta. We expect to use a portion of the
proceeds of this offering to open approximately seven new locations. By the end
of fiscal 2001, we anticipate having a total of 23 locations.

Approximately 135 independent owner-operators operate a trucking fleet under
exclusive contract with us. We anticipate this number will increase to
approximately 200 by the end of 2001. Our exclusive independent contractor
relationship with the owner-operators in our fleet has enabled us to minimize
our capital costs. Each owner-operator is responsible for maintaining their
truck and paying their operating expenses. Owner-operators are generally
compensated based on the mileage traveled to deliver a given shipment.

We do not own or operate any aircraft. We utilize commercial air carriers to
provide expedited air transport. In situations where air transport is the
chosen mode of transportation, we pick-up a shipment at the customer's location
and deliver it directly to the commercial carrier. The commercial carrier flies
it to the selected destination airport. We then pick-up the shipment and
deliver it to the recipient's location. In the event of a rerouting or
cancellation of the commercial flight, we can deploy an independent owner-
operator in our expedited ground fleet to the actual flight destination or
engage an independent trucking firm to pick-up and deliver the shipment to the
recipient's location.

Our shipments are centrally managed from our headquarters in Charlotte,
North Carolina through our computerized management information system, Express
Alert. Express Alert is designed to maximize the

18
<PAGE>

efficiency of our services both in terms of timing and load factor. Our Alert
system enables us to track and trace shipments and to provide historical data
on each shipment. Our alert systems provide an internet link between our
Operating Offices, sales agents and our corporate office and provides updated
account information and sales order entry.

Our business strategy focuses on establishing new company owned Express
Centers in primary markets and expanding our expedited ground fleet. We also
intend to:

. expand our operations to include international air and ocean shipments;

. continue to develop our core freight forwarding business through our
broad menu of value added services;

. expand our Canadian freight forwarding business;

. acquire non-asset based freight forwarding companies;

. leverage our computer based technology to increase sales and expand
operations;

. continue to develop our truck load brokerage business;

. expand our trade show logistics shipment business;

. continue to develop independent agencies in our secondary markets.

Industry Overview

Large multinational companies, as well as businesses of all sizes,
increasingly are examining their supply chain, from sourcing through returns to
achieve competitive advantages and cost savings. As a result, the most
successful transportation providers will be those carriers that can provide
value-added services, speed and reliability of delivery of both goods and
information, global capabilities and competitive pricing. Consequently, the
long term trend favors logistics and airfreight companies.

We believe that the current global airfreight and expedited market is about
$72 billion worldwide. Airfreight growth is expected to be driven by several
factors, including (1) the expansion of global commerce because of the
reduction of regulatory barriers and the world-wide sourcing of raw materials
and product distribution, (2) "just-in-time" inventory trends aimed at reducing
inventory turnover time and warehousing facilities; and (3) fast growth of
high-value, short shelf- life technology and electronic products. The future
success of freight forwarding businesses will depend on the ability to
integrate technological applications with customers to provide complete global
solutions. The industry will continue to evolve from a price-based to a
service-based industry.

Freight forwarding is traditionally a non-asset based business. Providers
typically do not own aircraft or ocean vessels, although some may maintain
small truck fleets. The International air freight forwarders generally focus on
the heavyweight freight market that involve shipments greater than 70 pounds,
and generally do not directly compete with the integrated carriers of small
parcels such as UPS and Fed Ex.

In most cases, a freight forwarder acts as an indirect carrier for its
customers. The forwarder procures shipments from its customers, consolidates
them into a single lot based on common destination and tenders them to the
airline, air charter, ocean carrier or common carrier for transportation to a
distribution point. Consolidation of shipments is commonly carried out on a
door-to-door or airport-airport basis. When providing door-to-door services the
forwarder usually arranges for local and long-haul surface transportation in
addition to the air freight.

Freight forwarders usually offer customers fee-based services related to the
movement of goods which may include preparing all shipment-related
documentation, waybills, commercial invoices and packing lists.

19
<PAGE>

Business Strategy

Nations Express was organized in March 1998 and maintains its administrative
headquarters in Charlotte, North Carolina. We also operate 5 company owned
Express Centers, and 11 agency owned Express Centers. We intend to expand our
business principally through the establishment of Operating Offices in
strategic locations throughout the United States, Canada and Europe and the use
of independent sales and marketing agents in strategic locations throughout the
world. The Express Centers are owned and operated by Nations Express. Agencies
are owned and operated by independent business owners who enter into an Express
Center Agency Agreement with Nations Express. We plan to own and operate
Express Centers in approximately twenty primary markets and to use Agencies in
secondary markets. In addition, we enter into Commissioned Sales Contractor
Agreements with independent sales and marketing agents at certain locations.

The sales and marketing agents, working either from their home office or
from a business office, register a customer's shipments either through our
national Customer Service Centers in Charlotte, North Carolina or Los Angeles,
California, or through a designated regional Express Center. Each Express
Center manages all sales, marketing and operational functions within a
particular region in conjunction with our national marketing activities and
centralized accounting functions.

The Operating Offices are responsible for providing a number of services.
The primary function is to provides sales and customer service in a specified
market or airport city, such as local airfreight cartage and expedited "over
the road" service utilizing local carriers. The Operating Offices utilize our
billing and accounting software, which allows each Operating Office to transmit
customer billing and account information to our administrative offices for
billing to the customer. Customer invoicing and account collection for all
Operating Offices and all sales and marketing agents is handled through our
headquarters in Charlotte, North Carolina. Through this centralized system, we
calculate and pay all commissions owed to the Agencies, sales employees and the
independent sales and marketing agents. Agencies are paid a commission on the
gross profit generated by the Agency on a weekly basis. Independent sales and
marketing agents are paid a commission based on a rate that is customary in the
freight forwarding industry.

Through the establishment of these Operating Offices and the use of
independent sales and marketing agents in our secondary markets, we believe we
can expand our business without the costs typically associated with the
ownership and maintenance of company owned facilities.

Our Services and Strategy

Our business strategy focuses on establishing company owned Express Centers
in primary markets, expanding our Express Center Agencies in our secondary
markets and expanding our existing ground fleet of independent truck owner
operators. In addition, we intend to focus on the following key services.

Core freight forwarding services

In order to continue our rapid development of our core business of freight
forwarding services, we plan to consistently provide cost-effective and
reliable freight forwarding services. Our competitors tend to be single service
providers offering either expedited ground or expedited air freight forwarding
services. Nations Express, on the other hand, is a multi-service provider
offering expedited air and expedited ground services. Our combination of
services enables us to provide on-time services in any city in the United
States.

We have a diverse customer base. Our customers' industries include
automotive, computer and electronic equipment, pharmaceuticals, heavy
industrial and construction equipment, motion picture, printed materials,
aerospace products, textiles and apparel. In addition to these industries, we
provide transportation services to trucking lines, steamship lines, brokerage
firms and logistics companies. As a result of our diversity of customer base
and services, no single customer contributes more than 5% to our revenues.

20
<PAGE>

Market trends demonstrate that many expedited freight customers are
demanding more than basic transportation services. To accommodate these
customers, we offer a variety of services including:

. 24 hour, seven days per week customer service;

. Customs and international documentation;

. Shipment monitoring services;

. Proof of delivery documentation for every shipment; and

. Door-to-door services.

Logistics

Our industry expertise enables us to maximize the efficiency and performance
of our freight forwarding and other expedited transportation services for our
customers such as providing transportation advisory services to our customers
or staffing or managing a customer's shipping department or work in conjunction
with a customer's internal shipping staff.

Domestic expedited air and expedited ground freight business

We have focused our development to date on expedited air and expedited
ground freight services. In many situations, ground freight expediting offers
the most cost-effective and reliable method for transporting large, heavy
shipments in a short period of time. Through our fleet of independent owner
operator trucks, we are able to provide direct door-to-door expedited service
in any city in the United States and most of Canada.

We recognize, however, that occasions arise when expedited air freight will
be the most cost-effective, if not the only, way to provide on-time service. We
do not own, and do not intend to acquire, any aircraft. To provide air freight
services, we engage commercial airlines or air cargo carriers. He also have
developed a base of over 250 delivery services throughout the United States and
Canada in order to handle door-to-door services anywhere in the United States.
Our choice of carrier depends on the contents of the shipment, the basis of the
route, departure time, available cargo capacity and cost.

Due to the volume of shipments we arrange, we are able to negotiate
competitive pricing for air shipments. While our airfreight purchasing power is
based on volume, we do not have a contractual obligation to meet minimum volume
requirements. We are able to offer prices that are lower than the price our
customers could negotiate with commercial air and air cargo carriers. The
volume of shipments we handle also enables us to occasionally obtain additional
discounts from commercial air and air cargo carriers if, for example, we have
already reserved capacity on a particular flight we can negotiate an even
further discount by reserving additional capacity on that flight. As we
continue to grow, we may obtain additional volume discounts with commercial air
lines and air cargo carriers as a result of increased purchased capacity.

Canadian freight forwarding services

We plan to continue to expand our presence in the Canadian market. In order
to capitalize on the opportunities in Canada, we intend to establish Agencies
in key Canadian markets. We currently have a Canadian Customs Bond, which
allows our independent owner operator fleet to cross the U.S.-Canadian border
with minimal delay from customs officials. Avoiding potential delays when
crossing the border will facilitate our expedited service approach.

Strategic acquisitions

We intend to expedite our expansion through strategic acquisitions. We
recognize that, in some circumstances, the most-efficient way to expand our
operations will be by acquiring an existing company. Potential targets would
include existing participants in certain key markets or companies whose
services

21
<PAGE>

compliment our own. We believe expansion through acquisition will enable us to
increase our market share more rapidly and allow us to take advantage of
opportunities arising from economies of scale earlier than if we relied
exclusively on internal expansion.

Computer based technology

An important component of our business strategy is the development of
advanced information systems. We have invested substantial management and
financial resources in the development of a sophisticated proprietary
information system to provide accurate and timely information to management and
our customers. The ability to provide accurate, up to date information on the
status of shipments is, and will continue to be, essential to our continued
growth.

Our integrated information system, known as Express Alert, includes tracking
information, management information and interfaces with Platinum Accounting
software to provide integrated data links to the accounting modules. The system
was specifically designed for the freight forwarding industry. The individuals
involved in the system design were freight expediting career professionals with
extensive experience in the industry. The Express Alert system is operated from
our headquarters in Charlotte, North Carolina, and is accessible from personal
computers via an internet connection at our various Operating Offices.
Operating Office remote access requires user ID and password and is tightly
controlled through limited access to features, functions and data, and is
protected by firewall technology.

The Express Alert system provides a comprehensive source of information for
managing our tracking services our expedited freight orders from quote to point
of delivery completion and customer invoicing. Our information systems provide
daily company-wide financial information and sales information on a customer's
shipment activity, which enhances our ability to compete for more profitable
business. We believe our information system has been instrumental in increasing
the productivity of our personnel and the quality of our operations and
services. System efficiencies have resulted in expedited entry, processing,
retrieval and dissemination of information, both for our management and
customers. As we continue to invest in our Express Alert system, we will be
able to accommodate customer remote order access. Our accounting software is
licensed with Platinum Software Corporation through a standard software
licensing agreement.

Truck load brokerage business

Our truckload brokerage services locate and secure capacity when ground
transportation is the most efficient means of meeting a customer's delivery
requirements. Our brokerage operations enable us to service a large number of
customers simultaneously through third-party hauling companies. Independent
trucking companies can be engaged on an "as needed" basis. Our brokerage
operations may engage an entire truck or trailer to haul a shipment or it may
reserve capacity on a truck or trailer already engaged to travel the same route
on the same schedule. Reserving available capacity on a previously scheduled
shipment can result in reduced costs and higher profit margins for Nations
Express.

Trade show business

One of our key business segments involves the exhibit handling and transport
of equipment and materials used in trade shows. Expedited freight is often the
only alternative available to trade shows where an abbreviated time period
occurs between events. Our trade show services include the scheduling of trade
show events, facilities and consolidation of shipments to and from trade show
events. We anticipate that this segment of our operations will continue to
develop and become more profitable as we establish new locations in key
markets.

Marketing

Our principal customers are manufacturers and distributors of items which
typically demand expedited transportation services such as computer and
electronic equipment, pharmaceuticals, heavy industrial and

22
<PAGE>

construction equipment, motion pictures, printed materials, automobile parts,
aerospace products, textiles and apparel.

We market our services nationwide through a national sales organization
consisting of 5 company owned Express Centers and 11 Agent owned Express
Centers. We also utilize the services of independent sales and marketing
agents. We currently have Express Centers in Charlotte NC, Los Angeles CA,
Portland OR, Roanoke VA, Chicago IL, Dayton OH, Columbia SC, Tampa FL, Raleigh
NC, Atlanta GA, Greenville SC, Cleveland OH, Denver CO, Washington DC, Phoenix
AZ and Boston MA. We expect to continue our national expansion by increasing
the number of Operating Offices, recruiting sales and marketing agents and
expanding our expedited ground fleet of independent truck owner operators. Our
marketing efforts are directed primarily to distribution procurement and
marketing managers of multinational corporations with substantial requirements
for national and international transportation of cargo.

Through the expansion of our Operating Offices, we will be able to
facilitate a greater number of shipments, and thereby obtain lower rates from
airlines and third-party ground carriers. In addition, through selective
consolidation of freight shipments, we are able to reduce our costs of
transportation and take advantage of more competitive pricing.

Employees

As of June 28, 2000, we had 65 employees, 64 of which were employed on a
full-time basis. None of our employees are parties to any collective bargaining
agreement, and we consider our relationship with our employees to be good.

Legal Proceedings

From time to time, we may become involved in legal proceedings occurring in
the ordinary course of business. Subject to the uncertainties inherent in any
litigation, management believes that there are currently no pending or
threatened proceedings that are reasonably likely to result in a material
adverse change in our financial condition or operations.

Properties

Our executive offices are located at 1328B Crossbeam Road, Charlotte, North
Carolina 28217. We do not own any real property. The following is a list of our
facilities as of June 28, 2000.

<TABLE>
<CAPTION>
Company-
Leased or
Location Agency
-------- -------------
<S> <C>
Atlanta, GA Company Lease
Boston, MA Agency
Charlotte, NC Company Lease
Chicago, IL Company Lease
Cleveland, OH Company Lease
Columbia, SC Agency
Dayton, OH Agency
Denver, CO Agency
Greenville, SC Agency
Los Angeles, CA Company Lease
Phoenix AZ Agency
Portland, OR Agency
Raleigh, NC Company Lease
Roanoke, VA Agency
Tampa, FL Agency
Washington, DC Agency
</TABLE>

We believe our existing office facilities are in good condition and are
equipped for our purposes.

23
<PAGE>

MANAGEMENT

Directors and Officers

As of June 28, 2000, the positions of the directors and executive officers
of the Company and their ages are as follows:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Allen D. Watson........... 50 President, Chief Executive Officer, Director

Executive Vice President and Chief Financial
William R. Frazier........ 52 Officer

Daniel H. McPherson, III.. 37 Vice President, Director

Daniel Dukesherer......... 49 Vice President Western Region, Director

John P. Manry............. 65 Chairman of the Board of Directors

Thomas E. McChesney....... 54 Director

Jerry N. Carr............. 52 Director
</TABLE>

Allen D. Watson co-founded Nations Express and he has been its President,
Chief Executive Officer and a director since inception in 1998. Mr. Watson has
more than 20 years experience in the airfreight and expedited transportation
industry. Mr. Watson was co-founder, Chief Executive Officer and a director of
Express America, an expedited shipping company. He served as Chief Executive
Officer of Express America from January 1990 to March 1995, when the company
was sold to Landstar Freight Systems. Mr. Watson was also co-founder, Executive
Vice-President and later, President, of Jetway Express from January 1983 until
November 1989. Prior to Jetway, Mr. Watson held various management positions
with CF Airfreight Division, a division of Consolidated Freightways.

William R. Frazier joined Nations Express in September 1999 as our Executive
Vice President, Chief Financial Officer and serves as the Corporate Secretary.
Mr. Frazier earned his BBA in accounting from Texas A&M University at Commerce
and is a licensed CPA in the state of Texas. From 1995 to 1999, Mr. Frazier
served as the EVP, CFO and Corporate secretary for ISI Commercial
Refrigeration, Inc., a wholesale distributor of commercial refrigeration
equipment. From 1989 to 1995, Mr. Frazier served as the Vice President of
Finance, CFO and Corporate Secretary of FM Industries, Inc. a manufacturer of
heavy hydraulic cushioning devices for railcars. From 1983 to 1989, Mr. Frazier
served one year as the corporate controller and five years as Vice President of
Finance and CFO for Pinetree Computer Systems, Inc., a manufacturer of hand
held computers. From 1975 through 1983, Mr. Frazier held positions as
accountant and controller for companies in the electronic manufacturing
industry, plastic injection molding manufacturing and oil and gas engineering.
From 1970 to 1994, Mr. Frazier served as a warrant officer and helicopter pilot
in the U.S. Army and U.S. Army Reserves.

Daniel H. McPherson, III is a co-founder of Nations Express. Mr. McPherson
and has served as its Vice President of Operations and a director since
inception in 1998. He is responsible for day-to-day operations. Mr. McPherson
has been in the expedited and airfreight industry for 15 years. Mr. McPherson
was employed by Surf Air for 13 years, a company based in Atlanta, Georgia.
Surf Air is one of the leading family-owned air cargo shipping companies in the
United States. While at Surf-Air, he held various management positions.

Daniel Dukesherer joined Nations Express in June 1998 with the opening of
our Los Angeles Express Center. He has been a director since December 1998.
From 1995 to June 1998, Mr. Dukesherer was the President of California
Conventions, a trade show shipping division for Landstar Freight System. From
1992 to 1993, he served as the director of the trade show shipping division for
Express America. From 1988 to 1992. Mr. Dukesherer was the director of trade
shows for Airways Freight Systems. Prior to 1988, Mr. Dukesherer served in a
variety of management positions with Strategic Air Cargo, an air cargo shipping
company.

24
<PAGE>

John P. Manry is a co-founder of Nations Express. Mr. Manry has been an
independent businessman since 1988 with experience in corporate finance,
mergers, acquisitions and strategic planning. From 1983 to 1988, Mr. Manry was
the Chief Executive Officer of Pinetree Computers, Inc. He was employed by IBM
from 1960 to 1983, serving in a variety of sales management and corporate
management positions. Mr. Manry is a graduate of Marquette University.

Thomas E. McChesney became a director upon inception of the Company and
serves on our Compensation Committee. He is a registered representative with
Blackwell Donaldson & Co., a securities brokerage firm. Previously, Mr.
McChesney was an officer and director of Paulson Investment Co. and Paulson
Capital Corporation from March 1977 to June 1995. Mr. McChesney also serves on
the board of directors of Labor Ready, Inc. and USOL Holdings.

Jerry N. Carr became a director on September 15, 1998 and serves on our
Compensation Committee and our Audit Committee. Mr. Carr is the President and
Chief Executive Officer of Badger Sportswear, a nationally known supplier of
sports clothing for Adidas and Nike. From 1972 to 1985, Mr. Carr served as a
manufacturing Director with the Milliken Textile Group of Greenville, South
Carolina. Mr. Carr is a graduate of the University of Alabama.

All directors are elected pursuant to our Bylaws, which provide for a Board
of Directors of not more than seven directors. Each of our directors serve
until the next annual meeting of the shareholders or until a successor is
elected and qualified. Directors receive no compensation other than grants of
stock options for their services in that capacity and are entitled to
reimbursement for any expenses incurred in attending meetings. Executive
officers are appointed by the Board of Directors and serve at the pleasure of
the Board.

Committees of the Board

The Board of Directors has established an Audit Committee and a Compensation
Committee. The Audit Committee is currently comprised of John P. Manry and
Jerry N. Carr. The Audit Committee recommends the selection of our independent
auditors and consults with the auditors on our internal accounting controls.
The Compensation Committee currently comprised of John P. Manry, Thomas E.
McChesney and Jerry N. Carr. The Compensation Committee determines salaries,
bonuses and other compensation for our officers.

25
<PAGE>

BENEFICIAL OWNERS OF COMMON STOCK

The following table describes, as of June 28, 2000, with an adjustment to
reflect the issuance of the Units being offered, information on the ownership
of our common stock by (i) each person known by us to own more than five
percent (5%) of the outstanding common stock; (ii) each of the Company's
directors and executive officers; and (iii) all directors and executive
officers as a group.

<TABLE>
<CAPTION>
Shares Shares
Beneficially Beneficially
Owned Owned
Before the After the
Name Offering(a) Offering
---- -------------------- -----------------
Number Percent Number Percent
--------- ------- --------- -------
<S> <C> <C> <C> <C>
Allen D. Watson........................ 555,000 18.3% 555,000 13.8%
Daniel H. McPherson, III............... 222,500 7.4% 222,500 5.6%
Daniel Dukesherer...................... 210,000 7.0% 210,000 5.3%
John P. Manry.......................... 131,000 4.4% 131,000 3.3%
Thomas E. McChesney.................... 195,000(b) 6.5% 195,000 4.9%
Jerry N. Carr.......................... 190,000 6.3% 190,000 4.7%
William R. Frazier..................... 37,500 1.2% 37,500 .9%
William H. Carr........................ 165,000 5.5% 165,000 4.2%
Marquette University................... 200,000 6.7% 200,000 5.0%
All officers and directors as a group
(6 persons)........................... 1,541,000 51.7% 1,541,000 38.2%
</TABLE>
--------
(a) Shares beneficially owned do not include unvested stock options held as
follows:

<TABLE>
<S> <C>
Allen D. Watson...................................................... 65,000
Daniel H. McPherson, III............................................. 27,500
Daniel Dukesherer.................................................... 10,000
John P. Manry........................................................ 25,000
Thomas E. McChesney.................................................. 25,000
Jerry N. Carr........................................................ 25,000
William R. Frazier................................................... 162,500
</TABLE>

The above options were issued between July 1998 through January 2000, with
exercise prices ranging from $2.00 per share to $2.50 per share and expire
ten years after issuance.

(b) Includes 50,000 shares held by Elizabeth R. McChesney, wife of Thomas E.
McChesney, and 10,000 shares held in trust for Christina Rose, McChesney
Trust.

26
<PAGE>

MANAGEMENT COMPENSATION

Executive Compensation

The following table shows the compensation paid to our executive officers
since our formation in 1998.

Summary Compensation Table

<TABLE>
<CAPTION>
Other annual Total
Fiscal Salary Bonus Compensation Compensation
Name and Principal position Year ($) ($) ($) ($)
--------------------------- ------ ------- ------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Allen D. Watson,............... 2000 105,750 20,000 0 125,750
President and Chief Executive 1999 68,000 0 3,600 71,600
Officer 1998 2,500 0 0 25,000

Daniel McPherson,.............. 2000 80,750 10,000 3,600 94,350
Vice President of Operations 1999 69,000 0 3,600 72,600
and Director 1998 11,873 0 15,000 26,873

William R. Frazier,............ 2000 75,833 0 51,547(1) 127,380
Executive Vice President, 1999 0 0 0 0
Chief Financial Officer and 1998 0 0 0 0
Secretary
</TABLE>

--------

(1) Includes auto allowance, relocation expenses from Texas to North Carolina,
expenses related to the sale of Mr. Frazier's residence in Texas and
temporary living expenses for Mr. Frazier in North Carolina.

Director Compensation

Our directors do not receive a fee for attending Board meetings. Similarly,
members of committees of the Board do not receive a fee for attending
committee meetings. The directors are reimbursed for travel expenses incurred
in attending Board and committee meetings. No separate fees are paid to
employees for their services as directors. It is presently anticipated that
during fiscal 2001, the Board will adopt a compensation program for directors
who are not employees of the Company.

27
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On July 28, 1998, the Board of Directors approved a shareholder loan program
whereby the Company was authorized to borrow from its shareholders an amount
not to exceed $250,000. In January 1999, certain shareholders loaned us cash in
the aggregate amount of $250,000. We issued promissory notes to those who made
the loans which provided that, in lieu of interest on the principal balance of
each note, we would issue shares of common stock at the rate of 10,000 shares
for each $25,000 loaned. We issued 100,000 shares of our common stock in lieu
of interest on these promissory notes.

The following is a list of the shareholders who loaned us cash and the
number of shares issued to each shareholder under the Notes:

<TABLE>
<CAPTION>
Loan Shares
Name Amount Issued
---- ------- ------
<S> <C> <C>
John P. Manry................................................ $25,000 10,000
Thomas E. McChesney.......................................... $50,000 20,000
Jerry N. Carr................................................ $75,000 30,000
DW Squared Partnership....................................... $50,000 20,000
John Ferris.................................................. $25,000 10,000
Craig Weiser................................................. $25,000 10,000
</TABLE>

Thomas E. McChesney, one of our directors, is a registered representative
with Blackwell Donaldson & Company. Blackwell Donaldson & Company acted as
placement agent for our private offerings in 1999. Blackwell Donaldson &
Company received a commission of approximately $132,000 in cash and 25,478
warrants with an approximate value of $50,000 as a fee for acting as placement
agent in the offering. Each warrant entitles the holder to purchase two shares
of common stock for nominal consideration.

28
<PAGE>

DESCRIPTION OF CAPITAL STOCK

Following the closing of the sale of the units offered hereby, the
authorized capital stock of Nations Express will consist of 25,000,000 shares
of common stock, no par value, and 1,000,000 shares of preferred stock, no par
value.

Units

Each unit being offered in this offering consists of one share of common
stock and a warrant exercisable for one share of common stock. The common stock
and warrants that comprise the units will trade only as units until at least 30
days after the date of this prospectus or such later time as determined by the
underwriter.

Common Stock

We are authorized to issue 25,000,000 shares of common stock. Holders of
common stock are entitled to receive ratably dividends, if any, as they are
declared by the Board of Directors out of legally available funds, subject to
the preferences of any outstanding preferred stock. Holders of common stock are
not entitled to any preemptive rights. In the event of liquidation of the
Company, holders of common stock are entitled to share ratably in the net
assets remaining after payment in full of all of the Company's liabilities,
including satisfaction of the liquidation preferences of any preferred stock
that may be outstanding. The rights, privileges and preferences of holders of
common stock may become subject to those of any preferred stock that the
Company may issue in the future. Holders of common stock are entitled to one
vote for each share of common stock held of record on all matters submitted to
a vote of shareholders, including the election of directors. All outstanding
common stock is full paid and nonassessable. As of June 28, 2000, there were
2,979,566 shares of common stock issued and outstanding held by 76
shareholders.

Preferred Stock

We are authorized to issue 1,000,000 shares of preferred stock. As of June
28, 2000, there were no shares of preferred stock issued and outstanding. The
Articles of Incorporation, as amended, allow the Board of Directors, without
further shareholder approval to establish the preferences, limitations and
rights of the preferred stock.

Warrants

The following is a brief summary of certain provisions of the warrants. This
summary does not purport to be complete and is qualified in all respects by
reference to the actual text of the Unit and Warrant Agreement (the "Warrant
Agreement") between the Company and First Union National Bank (the "Transfer
and Warrant Agent"). A copy of the Warrant Agreement has been filed as an
exhibit to the Registration Statement of which this prospectus is a part.

Each warrant entitles the registered holder thereof to purchase, for a
period of 60 months commencing 13 months after the date of the Prospectus, one
share of common stock at a price equal to 140% of offering price. The warrant
exercise price is subject to adjustment under provisions referred to below. The
holder of any warrant may exercise a warrant by surrendering the certificate
representing the warrant to the Transfer and Warrant Agent, with the
subscription form on the reverse side of such certificate properly completed
and executed, together with payment of the exercise price. The warrants may be
exercised in whole or in part at the applicable exercise price until expiration
of the warrants. No fractional shares will be issued upon the exercise of the
warrants.

The exercise price of the warrants bears no relation to any objective
criteria of value and should in no event be regarded as an indication of any
future market price of the securities offered hereby.

29
<PAGE>

The exercise price and number of shares of common stock purchasable upon the
exercise of the warrants are subject to adjustment upon the occurrence of
certain events, including, without limitation, stock splits, stock dividends,
recapitalizations and reclassifications.

Beginning thirteen months after this offering, we may redeemed the warrants
for $0.20 per warrant if the closing bid price of the common stock as reported
on the Nasdaq SmallCap Market equals or is in excess of 160% of the original
offering price for a period of 20 consecutive trading days. In the event we
exercise the right to redeem the warrants, those warrants will be exercisable
until the close of business on the date of redemption. If any warrant called
for redemption is not exercised by such time, it will cease to be exercisable
and the holder will be entitled only to the redemption price.

Upon separation from the units, the warrants will be in registered form and
may be presented to the Transfer and Warrant Agent for transfer, exchange or
exercise at any time on or prior to their expiration at which time the warrants
become wholly void and of no value. If a market for the warrants develops,
holders may sell warrants instead of exercising them. There can be no
assurance, however, that a market for the warrants will develop or continue.

The warrants do not confer upon holders any voting, dividend or other rights
of our shareholders.

Nations Express and the Transfer and Warrant Agent may modify the warrants
as they deem necessary and desirable provided the modification does not
materially adversely affect the interests of the warrant holders. No other
modifications may be made to the warrants without the consent of the majority
of the warrant holders. Modifications of the number of securities purchasable
upon the exercise of any warrant, the exercise price and the expiration date
with respect to any warrant requires the consent of the holder of the warrant
unless the modification occurs in connection with a stock dividend,
recapitalization, reclassification or similar event.

No gain or loss will be recognized by a holder upon the exercise of a
warrant. The sale of a warrant by a holder or the redemption of a warrant by
Nations Express will result in the recognition of gain or loss in an amount
equal to the difference between the amount realized by the holder and the
warrant's adjusted basis in the hands of the holder. Provided that the holder
is not a dealer in the warrants and that the common stock would have been a
capital asset in the hands of the holder had the warrant been exercised, gain
or loss from the sale or redemption of warrant will be long-term or short-term
capital gain or loss to the holder. Loss on the expiration of the warrant,
equal to the warrant's adjusted basis in the hands of the holder, will be long-
term or short-term capital loss, depending on whether the warrant had been held
for more than one year.

The above discussion does not address all of the tax consideration that may be
relevant to a particular purchaser. Accordingly, all prospective purchasers are
advised to consult their own tax advisors regarding the federal, state, local,
and foreign tax consequences of the purchase of the units and the ownership and
disposition of the warrants and the common stock.

Representative's Warrant

At the closing of this offering, we will issue to Schneider Securities
warrants (the "Representative's Warrants") to purchase 100,000 units. The
Representative's Warrants will be exercisable for a four-year period commencing
one year from the date of this Prospectus. The exercise price of the
Representative's Warrants will be 140% of offering price. The Representative's
Warrants will not be transferable prior to their exercise date except to
officers of the Representative and members of the syndicate and officers and
partners thereof. The Representative's Warrants will contain provisions
providing adjustment in the event of any recapitalization, reclassification,
stock dividend, stock split or similar transactions. The Representative's
Warrants and the securities issuable upon exercise of the Representative's
Warrant may not be offered for sale except in compliance with the applicable
provisions of the Securities Act. We have agreed that, for a period of six
years from the date of this Prospectus, if we intend to file a registration
statement for the public sale of securities (other than a registration
statement on Form S-4, S-8 or a comparable registration statement), we will
notify all

30
<PAGE>

of the holders of the Representative's Warrants and securities issued upon
exercise thereof and if so requested, will include therein material to permit a
public offering of the securities underlying the Representative's Warrants
solely at our expense (excluding fees and expenses of the Holder's counsel and
any underwriting or selling commissions). See "Underwriting."

Registration Rights

We will grant registration rights to the holders of the Representative's
Warrants, which provides the holders with certain rights to register the shares
of common stock underlying the Representative Warrants. In addition, for a
period of five years from the date of this prospectus, upon written demand of
the holders of a majority of the Representative's Warrants, has been, on one
occasion, to promptly register the underlying securities solely at our expense
(excluding fees and expenses of the holder's counsel and any underwriting or
selling commissions). Additionally, for a period of five years from the date of
this prospectus, upon written demand of any holder, we have agreed, on one
occasion, to promptly register the underlying securities for purposes of a
public offering, solely at the expense of such holder.

Limitation of Liability

Our charter provides that no director will be personally liable to Nations
Express or to its shareholders for monetary damages for breach of fiduciary
duty as a director, except that the limitation shall not eliminate or limit
liability (i) for any breach of the director's duty of loyalty to Nations
Express or its shareholders, (ii) for acts of omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
North Carolina law, dealing with liability for unauthorized distributions and
loans to insiders, respectively, or (iv) for any transaction from which the
director derived an improper personal benefit.

Our charter and bylaws further provide for the indemnification of our
directors and officers to the fullest extent permitted by North Carolina law,
including circumstances in which indemnification is otherwise discretionary.

A principal effect of these provisions is to limit or eliminate the
potential liability of our directors for monetary damages arising from breaches
of their duty of care, unless the breach involves one of the four exceptions
described in (i) through (iv) above. These provisions may also shield directors
from liability under federal and state securities laws. Insofar as
indemnification for liabilities under the Securities Act of 1933, as amended
(the "Act") may be permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.

Transfer Agent and Warrant Agent

The Transfer Agent and Registrar for the units, the common stock and the
warrants is First Union National Bank, Charlotte, North Carolina.

31
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALES

Prior to this offering, there has been no public market for any of our
securities. Future sales of substantial amounts of units or common stock in the
public market could materially adversely affect the market price of such
securities. As described below, only a limited number of shares will be
available for sale shortly after this offering, due to certain contractual and
legal restrictions on resale. Nevertheless, sales of substantial amounts of the
units or common stock in the public market or the perception that such sales
could occur after such restrictions lapse could materially adversely affect the
market price of the units, common stock and warrants and our ability to raise
equity capital in the future.

Upon completion of this offering, we will have 3,979,566 shares of Common
Stock outstanding, assuming no exercise of the underwriters' over-allotment
option and no exercise of outstanding options. The units consisting of
1,000,000 shares of common stock and the warrants to purchase 1,000,000 shares
of common stock that are to be sold to the public in this offering will be
freely tradeable without restriction under the Securities Act, unless purchased
by affiliates of Nations Express as that term is defined in Rule 144 under the
Securities Act.

The remaining 2,979,566 shares of common stock outstanding upon completion
of this Offering will be restricted securities as that term is defined in Rule
144 under the Securities Act ("Restricted Shares"). Restricted Shares may be
sold in the public market only if registered or if they qualify for an
exemption from registration under Rule 144 or 701 promulgated under the
Securities Act, which are summarized below. Sales of the Restricted Shares in
the public market, or the availability of such shares for sale, could
materially adversely affect the market price of the common stock and warrants.
In general, under Rule 144 as currently in effect, beginning 90 days after the
date of this prospectus, a person (or persons whose shares are aggregated) who
has beneficially owned Restricted Shares for at least one year (including the
holding period of any owner other than an affiliate of the Company) would be
entitled to sell within any three-month period a number of shares that does not
exceed the greater of (i) one percent of the number of shares of common stock
then outstanding or (ii) the average weekly trading volume of the common stock
during the four calendar weeks preceding the filing of notice of such sale.
Sales under Rule 144 are also subject to certain manner of sale provisions and
notice requirements and to the availability of current public information about
Nations Express.

Under Rule 144(k), a person who is not deemed to have been an affiliate of
Nations Express at any time during the three months preceding a sale, and who
has beneficially owned the shares proposed to be sold for at least two years
(including the holding period of any owner other than an affiliate of Nations
Express), is entitled to sell such shares without complying with the manner of
sale, public information volume limitations or notice provisions of Rule 144.

Any employee, officer or director of or consultant to Nations Express who
purchased shares pursuant to a written compensatory plan or contract may be
entitled to rely on the resale provisions of Rule 701. Rule 701 permits
affiliates of Nations Express to sell their Rule 701 shares under Rule 701
without complying with the holding period requirements of Rule 144. Rule 701
further provides that non-affiliates may sell such shares in reliance on Rule
144 without having to comply with the public information, volume limitation or
notice requirements of Rule 144. In both cases, a holder of Rule 701 shares is
required to wait until 90 days after the date of this prospectus before selling
such shares.

Nations Express, its officers, directors and shareholders holding 5% or more
of the outstanding stock have agreed that for a period of 13 months from the
completion of this offering they will not sell or otherwise dispose of any
securities. All other shareholders also have agreed to a 13-month lock-up of
their shares and warrants except that such shareholders will be permitted to
register and sell to the public, on a pro rata basis, up to 300,000 shares of
common stock six months after the completion of this offering.

32
<PAGE>

UNDERWRITING

The underwriters named below have agreed, subject to the terms and
conditions of the firm commitment Underwriting Agreement between Nations
Express and the Underwriters to purchase from Nations Express the number of
units set forth opposite their names. The Representative of the Underwriters is
Schneider Securities, Inc.

The underwriting discount set forth on the cover page of this prospectus
will be allowed to the Underwriters at the time of delivery to the Underwriters
of the units so purchased.

<TABLE>
<CAPTION>
Number of
Names of Underwriters Units
--------------------- ---------
<S> <C>
Schneider Securities, Inc.......................................
---------
Total ........................................................ 1,000,000
=========
</TABLE>

The Underwriters have advised the Company that they propose to offer the
Units to the public at an offering price of between $10-12 per unit and that
the Underwriters may allow to certain dealers who are members of the National
Association of Securities Dealers, Inc, a concession not in excess of $ per
unit.

The following table summarizes the compensation to be paid to the
Underwriters by the Company.

<TABLE>
<CAPTION>
Total
-----------------------------
Per Without With
Share Over-allotment Over-allotment
----- -------------- --------------
<S> <C> <C> <C>
Underwriting Discounts paid by the
Company........................... $ $ $
</TABLE>

The Company has granted to the Underwriters an over-allotment option
exercisable during the 45-day period following the date of this prospectus to
purchase up to a maximum of 150,000 additional units at the public offering
price, less the underwriting discount set forth on the cover page of this
Prospectus. The Underwriters may exercise such option only to satisfy over-
allotments in the sale of the units.

The Company has agreed to pay to the Representative a non-accountable
expense allowance equal to 3% of the total proceeds of this Offering, or $
if the Underwriters exercise the over-allotment option in full, of which
$25,000 has already been paid. The Underwriters do not intend to offer or sell
Units to accounts over which they exercise discretionary authority.

At the closing of this offering, Nations Express will issue to the
Representative, for nominal consideration the Representative's Warrants to
purchase 100,000 units exercisable at 140% of the initial public offering price
for these Securities. See "Description of Securities--Representative's
Warrants."

For the period during which the Representative's Warrants are exercisable,
the holder(s) will have the opportunity to profit from a rise in the market
value of the Nation Express' common stock, with a resulting dilution in the
interests of the other shareholders of Nations Express. The holder(s) of the
Representative's Warrants can be expected to exercise them at a time which
Nations Express would, in all likelihood, be able to obtain any needed capital
from an offering of unissued common stock on terms more favorable to Nations
Express than those provided for in the Representative's Warrants. Such facts
may adversely affect the terms on which the Company can obtain additional
financing. To the extent that the Representative realizes any gain from the
resale of the Representative's Warrants or the securities issuable thereunder,
such gain may be deemed additional underwriting compensation under the
Securities Act of 1933, as amended.

Nations Express has agreed to enter into a three year non-exclusive
consulting agreement with the Representative, pursuant to which the
Representative will act as a financial consultant to Nations Express,
commencing on the closing date of this offering. The total consulting fee of
$108,000 will be payable, in full, on the closing date of this offering.

33
<PAGE>

Nations Express, its officers, directors and shareholders holding 5% or more
of the outstanding stock have agreed that for a period of 13 months from the
completion of this offering they will not sell or otherwise dispose of any
securities. All other shareholders have agreed to a 13-month lock-up of their
shares and warrants except that such shareholders will be permitted to register
and sell to the public, on a pro rata basis, up to 300,000 shares of common
stock six months after the completion of this offering.

The Underwriting Agreement provides for reciprocal indemnification between
Nations Express and the Underwriters against certain liabilities in connection
with the Registration Statement, including liabilities under the Securities
Act.

Nations Express has agreed with the Representative that for a period of 24
months from the closing date of this offering, the Representative may designate
an observer to the Board of Directors who will be entitled to attend and
receive notice of all meetings of the Board. The observer, who has not been
determined, will be reimbursed for out-of-pocket travel expenses incurred in
attending such meetings but will otherwise not be compensated by Nations
Express.

Upon the exercise of the Redeemable Warrants more than one year after the
offering and to the extent not inconsistent with the guidelines of the National
Association of Securities Dealers Regulation, Inc., and the rules and
regulations of the Securities and Exchange Commission, Nations Express has
agreed to pay the Representative a commission in connection with the exercise
of the Redeemable Warrants if (a) the market price of the underlying shares of
common stock is lower than the exercise price, (b) the Redeemable Warrants are
exercised in an unsolicited transaction, or (c) the Redeemable Warrants are
held in any discretionary accounts. In addition, unless granted an exemption by
the Commission from Regulation M promulgated under the Exchange Act, the
Representative will be prohibited from engaging in any market making activities
or solicited brokerage activities with regard to the Company's securities for a
period of one or five days before the solicitation of the exercise of any
Redeemable Warrant or before the exercise of any Redeemable Warrant based upon
a prior solicitation, until the later of the termination of such solicitation
activity or the termination by waiver or otherwise of any right the
Representative or any other soliciting broker-dealers may have to receive a fee
for the exercise of the Redeemable Warrants following such solicitation.

The Representative has advised Nations Express that, pursuant to Regulation
M under the Securities Act, some persons participating in this offering may
engage in transactions, including stabilizing bids, syndicate covering
transactions or the imposition of penalty bids, that may have the effect of
stabilizing or maintaining the market price of the common stock at a level
above that which might otherwise prevail in the open market. A "stabilizing
bid" is a bid for or the purchase of common stock on behalf of the underwriters
for the purpose of fixing or maintaining the price of the common stock. A
"syndicate covering transaction" is a bid for or the purchase of common stock
on behalf of the underwriters to reduce a short position incurred by the
underwriters in connection with this offer. A "penalty bid" is an arrangement
permitting the Representative to reclaim the selling concession otherwise
accruing to an underwriter or syndicate member in connection with this offering
if the common stock originally sold by such underwriter or syndicate member is
purchased by the Representative in a syndicate covering transaction and has
therefore not been effectively placed by such underwriter or syndicate member.
The Representative has advised Nations Express that such transactions may be
effected on the Nasdaq SmallCap Market or otherwise and, if commenced, may be
discontinued at any time.

34
<PAGE>

LEGAL MATTERS

The validity of the shares of units, including the common stock and
redeemable common stock purchase warrants, offered hereby has been passed upon
for Nations Express by Moore & Van Allen, PLLC, Charlotte, North Carolina.
Certain matters related to this offering will be passed upon for the
Underwriters by the law offices of William M. Prifti, Esq. Amesbury,
Massachusetts.

EXPERTS
The audited financial statements of Nations Express, Inc. included in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said report.

AVAILABLE INFORMATION

This prospectus constitutes a part of a Registration Statement on Form SB-2
(together with all exhibits thereto, the "Registration Statement") filed by
Nations Express with the Commission under the Securities Act. 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, and reference is hereby made to the Registration Statement
for further information with respect to Nations Express and the units. Any
statements contained herein concerning the provisions of any document are not
necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference.

35
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Audited Financial Statements
Report of Independent Public Accountants................................. F-2
Balance Sheets as of June 30, 1998 and 1999.............................. F-3
Statements of Income for the Four Months ended June 30, 1998, the Year
Ended June 30, 1999..................................................... F-4
Statements of Changes in Shareholders Equity for the Four Months Ended
June 30, 1998, the Year Ended June 30, 1999............................. F-5
Statements of Cash Flows for the Four Months Ended June 30, 1998, the
Year Ended June 30, 1999................................................ F-6
Notes to Financial Statements............................................ F-7
Unaudited Interim Financial Statements
Balance Sheet as of March 31, 2000 (unaudited)........................... F-12
Statements of Income for the Nine Months Ended March 31, 1999 and 2000
(unaudited)............................................................. F-12
Statements of Changes in Shareholders Equity the Nine Months Ended March
31, 2000 (unaudited).................................................... F-14
Statements of Cash Flows for the Nine Months Ended March 31, 1999 and
2000 (unaudited)........................................................ F-15
Notes to Unaudited Financial Statements.................................. F-16
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Nations Express, Inc.

We have audited the accompanying balance sheets of Nations Express, Inc. (a
North Carolina corporation) as of June 30, 1999 and 1998, and the related
statements of income, changes in shareholders' equity and cash flows for the
year ended June 30, 1999, and for the period from inception (March 1, 1998) to
June 30, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Nations Express, Inc. as of
June 30, 1999 and 1998, and the results of its operations and its cash flows
for the year ended June 30, 1999, and for the period from inception (March 1,
1998) to June 30, 1998, in conformity with generally accepted accounting
principles.

Arthur Andersen LLP

Charlotte, North Carolina,
November 24, 1999.

F-2
<PAGE>

NATIONS EXPRESS, INC.

BALANCE SHEETS--June 30, 1998 and 1999

<TABLE>
<CAPTION>
1998 1999
-------- ----------
<S> <C> <C>
ASSETS
------

Current assets:
Cash and cash equivalents.............................. $ 95,471 $ 284,800
Accounts receivable, net of allowance for uncollectible
accounts of $3,655 and $78,665 in 1998 and 1999....... 371,308 1,585,906
Deferred tax asset..................................... 822 30,377
Other current assets................................... 2,500 7,290
-------- ----------
470,101 1,908,373
-------- ----------
Property and equipment:
Furniture and fixtures................................. 13,322 26,164
Office equipment....................................... 43,097 52,535
Information systems equipment.......................... 0 187,615
Vehicles............................................... 0 25,699
Accumulated depreciation............................... (3,065) (27,981)
-------- ----------
53,354 264,032
-------- ----------
Other assets............................................. 10,000 18,000
-------- ----------
$533,455 $2,190,405
======== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current portion of long-term lease obligations......... $ 9,710 $ 29,330
Loans from shareholders................................ 0 250,000
Accounts payable....................................... 183,739 766,405
Accrued income taxes................................... 10,684 79,569
Accrued expenses....................................... 10,585 147,611
-------- ----------
214,718 1,272,915
Long-term lease obligations.............................. 27,603 45,955
Deferred taxes........................................... 2,905 14,734
Other long-term liabilities.............................. 0 7,105
-------- ----------
245,226 1,340,709
-------- ----------
Commitments and contingencies (Note 7)
Shareholders' equity:
Preferred stock-Series A, no par value; authorized
1,000,000 shares; 0 and 95,556 shares issued and
outstanding in 1998 and 1999, respectively............ 0 187,458
Common stock, no par value; authorized 25,000,000
shares; 2,270,000 and 2,465,556 shares issued and
outstanding in 1998 and 1999, respectively............ 241,113 461,048
Stock warrants......................................... 0 50,390
Retained earnings...................................... 47,116 150,800
-------- ----------
288,229 849,696
-------- ----------
$533,455 $2,190,405
======== ==========
</TABLE>

The accompanying notes to financial statements are an integral part of these
balance sheets.

F-3
<PAGE>

NATIONS EXPRESS, INC.

STATEMENTS OF INCOME
For the Four Months Ended June 30, 1998, and for the Year Ended June 30, 1999

<TABLE>
<CAPTION>
1998 1999
-------- ----------
<S> <C> <C>
Revenues.................................................. $533,522 $7,369,373
Purchased transportation.................................. 234,149 5,028,050
-------- ----------
Gross profit.......................................... 299,373 2,341,323
-------- ----------
Operating expenses:
Sales and marketing..................................... 79,223 773,799
General and administrative.............................. 153,594 1,353,477
Depreciation............................................ 3,065 23,146
-------- ----------
235,882 2,150,422
-------- ----------
Income from operations.................................... 63,491 190,901
Interest expense, net..................................... 3,608 20,928
-------- ----------
Income before income taxes................................ 59,883 169,973
Income tax expense........................................ 12,767 66,289
-------- ----------
Net income................................................ $ 47,116 $ 103,684
======== ==========
Basic and diluted earnings per common share............... $ 0.05 $ 0.04
Weighted average basic and diluted common shares
outstanding.............................................. 931,157 2,316,618
======== ==========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-4
<PAGE>

NATIONS EXPRESS, INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the Four Months Ended June 30, 1998, and for the Year Ended June 30, 1999

<TABLE>
<CAPTION>
Common Stock Preferred Stock Stock Warrants
------------------ --------------- -------------- Retained
Shares Amount Shares Amount Shares Amount Earnings Total
--------- -------- ------ -------- ------ ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, March 1, 1998
(inception)............ 0 $ 0 0 $ 0 0 $ 0 $ 0 $ 0
Shares issued for
capital contributions.. 2,270,000 227,000 0 0 0 0 0 227,000
Fair value of stock
options issued to
nonemployees........... 0 14,113 0 0 0 0 0 14,113
Net income.............. 0 0 0 0 0 0 47,116 47,116
--------- -------- ------ -------- ------ ------- -------- --------
Balance, June 30, 1998.. 2,270,000 241,113 0 0 0 0 47,116 288,229
Shares issued for
capital contributions.. 95,556 154,390 95,556 187,458 0 0 0 341,848
Shares issued in lieu of
interest payments...... 100,000 10,000 0 0 0 0 0 10,000
Fair value of stock
options issued to
nonemployees........... 0 55,545 0 0 0 0 0 55,545
Fair value of stock
warrants issued to
nonemployees........... 0 0 0 0 25,478 50,390 0 50,390
Net income.............. 0 0 0 0 0 0 103,684 103,684
--------- -------- ------ -------- ------ ------- -------- --------
Balance, June 30, 1999.. 2,465,556 $461,048 95,556 $187,458 25,478 $50,390 $150,800 $849,696
========= ======== ====== ======== ====== ======= ======== ========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-5
<PAGE>

NATIONS EXPRESS, INC.

STATEMENTS OF CASH FLOWS
For the Four Months Ended June 30, 1998, and for the Year Ended June 30, 1999

<TABLE>
<CAPTION>
1998 1999
--------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income........................................... $ 47,116 $ 103,684
Adjustments to reconcile net income to net cash used
in operating activities--
Depreciation....................................... 3,065 23,146
Provision for uncollectible accounts............... 3,655 97,529
Interest expense on notes to shareholders.......... 0 10,000
Compensation expense for stock options issued to
nonemployees...................................... 14,113 55,545
Deferred income taxes.............................. 2,083 (17,726)
Increase in accounts receivable.................... (374,963) (1,310,357)
Increase in accounts payable....................... 183,739 582,666
Increase in accrued liabilities.................... 10,585 137,026
Increase in accrued income taxes................... 10,684 68,885
Change in other operating assets and liabilities... (12,500) (5,685)
--------- -----------
Net cash used in operating activities............ (112,423) (255,287)
--------- -----------
Cash flows from investing activities--Capital
expenditures 0 (191,596)
--------- -----------
Cash flows from financing activities:
Proceeds from issuance of stock and stock warrants,
net................................................. 212,000 392,238
Repayments of capital lease obligations.............. (4,106) (6,026)
Proceeds (payments) of loans from shareholders....... 0 250,000
--------- -----------
Net cash provided by financing activities........ 207,894 636,212
--------- -----------
Net increase in cash and cash equivalents.............. 95,471 189,329
Cash and cash equivalents, beginning of period......... 0 95,471
--------- -----------
Cash and cash equivalents, end of period............... $ 95,471 $ 284,800
========= ===========
Supplemental cash-flow disclosures:
Cash paid for interest............................... $ 3,608 $ 12,704
Cash paid for income taxes........................... 0 15,130
========= ===========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-6
<PAGE>

NATIONS EXPRESS, INC.

NOTES TO FINANCIAL STATEMENTS
June 30, 1998 and 1999

1. The Company:

Organization

Nations Express, Inc. (the Company) is a North Carolina corporation that
commenced operations on March 1, 1998 and is in the business of arranging air
cargo, expedited truck, truck load and aircraft charter freight services on a
timely and cost-effective basis for commercial and industrial customers
throughout the United States and Canada.

Risks and Uncertainties

The Company's future results of operations may be affected by risks and
difficulties frequently encountered by early stage companies. Factors that
could affect the Company's future operating results include, but are not
limited to, a decrease in the demand for transportation services, the Company's
dependence on relationships with service providers, competition, availability
of cargo space from third parties to serve our customers, the Company's ability
to manage growth, and dependence on key personnel.

2. Summary of Significant Accounting Policies:

Revenue and Cost of Sales Recognition

Revenues from the transportation of freight are recognized on the day
freight departs the terminal of origin. Transportation costs and destination
delivery costs are recognized concurrently with freight revenues.

Cash

Cash and cash equivalents include cash on hand, demand deposits and short-
term investments with original maturities of three months or less.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reported period. Actual results could differ from these estimates.

Property and Equipment

The Company provides for depreciation using the straight-line method over
estimated useful lives of the related assets which range from 5 to 10 years.
Maintenance and repairs are charged to expense as incurred.

Income Taxes

The Company accounts for income taxes under SFAS No. 109, "Accounting for
Income Taxes." Deferred income taxes are recognized for the tax consequences of
"temporary differences" by applying enacted statutory rates to differences
between financial statement carrying amounts and tax basis of existing assets
and liabilities.

3. Loans From Shareholders:

Commencing in November 1998, loans were received from various shareholders
in increments of $25,000. In lieu of interest, the Company agreed to issue
10,000 shares of common stock upon execution of each, $25,000 note. In total,
interest expense related to these notes amounted to $10,000 and was recorded
during the 12 months ended June 30, 1999. The entire principal balance of the
notes is due and payable upon the earlier of one year from the date of the
notes or such time as the Company realizes proceeds of not less than $350,000
from the sale of its equity securities. These loans were satisfied in July 1999
(Note 9).

F-7
<PAGE>

NATIONS EXPRESS, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

4. Income Taxes:

The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
1998 1999
------- --------
<S> <C> <C>
Current.................................................... $10,684 $ 84,015
Deferred................................................... 2,083 (17,726)
------- --------
$12,767 $ 66,289
======= ========
</TABLE>

The tax effect of temporary differences that give rise to the Company's
deferred tax asset (liability) are as follows as of June 30, 1998 and 1999:

<TABLE>
<CAPTION>
1998 1999
------- --------
<S> <C> <C>
Depreciation............................................. $(2,905) $(14,734)
Allowance for uncollectible accounts..................... 822 30,377
------- --------
$(2,083) $ 15,643
======= ========
</TABLE>

The income tax provision was different from the amount computed using the
federal statutory income tax rate due to the effect of state taxes.

5. Shareholders' Equity:

On March 15, 1999, the Company issued a Private Offering Memorandum whereby
it offered an aggregate of 170,000 units. Each unit consisted of one share of
no par value common stock priced at $2 per share and one share of Series A
Convertible Preferred Stock priced at $2.50 per share. In May 1999, 95,556
units were sold. Proceeds received by the Company including amounts assigned to
stock warrants, net of commissions paid to the securities brokerage firm that
provided placement services, totaled $392,238.

Preferred Stock--Series A

The Series A Preferred Stock is convertible into shares of the Company's
common stock at the option of the shareholder at a price of $2.50 per share.
This conversion price increases to $3.00 per share six months after the close
of the private placement offering and increases to $3.50 per share 12 months
after the close of the private placement offering. The Company may require a
mandatory conversion of the Series A Preferred Stock immediately prior to the
close of a firm underwritten public offering of its common stock. Holders of
the Series A Preferred Stock are entitled to receive cumulative annual
dividends of $0.25 per share, payable quarterly, before any dividends may be
paid to the holders of the Company's common stock.

Stock Options

The Company's shareholders have approved two different stock option plans
which provide that qualified and nonqualified options may be granted to
employees, directors, and agents at exercise prices not less than market value
on the date of grant. The 1998 Incentive Stock Option Plan is a qualified plan
for employees and directors under which the options vest 25% one year from the
date of grant and then proportionately over a three-year period and are
exercisable for 10 years from the grant date. The 1999 Stock Option Plan is a
nonqualified plan primarily for agents under which the options vest 25% on the
date of grant and then proportionately over a three-year period and are
exercisable for five years from the grant date.

F-8
<PAGE>

NATIONS EXPRESS, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

A summary of outstanding options and the related weighted average exercise
price per share is shown in the following table:

<TABLE>
<CAPTION>
1998 1999
------------------------------ ------------------------------
Shares Shares
Under Shares Under Under Shares Under
Qualified Nonqualified Average Qualified Nonqualified Average
Plan Plan Price Plan Plan Price
--------- ------------ ------- --------- ------------ -------
<S> <C> <C> <C> <C> <C> <C>
Balance, beginning of
period................. 0 0 $ 0 140,000 40,000 $ 2
Granted during period... 140,000 40,000 2 270,000 80,000 2
------- ------ --- ------- ------- ---
Balance, end of period.. 140,000 40,000 $ 2 410,000 120,000 $ 2
======= ====== === ======= ======= ===
Exercisable at end of
period................. 0 10,000 $ 2 35,000 40,000 $ 2
======= ====== === ======= ======= ===
</TABLE>

The Company has adopted Statement of Financial Accounting Standards ("SFAS")
No. 123, "Accounting for Stock-Based Compensation." In accordance with the
provisions of SFAS No. 123, the Company has elected to apply APB Opinion 25 and
related Interpretations in accounting for stock options issued to employees.
Accordingly, the Company does not recognize compensation cost in connection
with its employee stock options. If the Company had elected to recognize
compensation cost for employee stock options based on the fair value at the
grant date as prescribed by SFAS No. 123, net income would have been reduced by
$2,875 and $53,280 in 1998 and 1999, respectively, and earnings per share
(basic and diluted) would have been $0.05 and $0.04 in 1998 and 1999,
respectively.

The fair value of options granted to employees in 1999 and 1998 is estimated
on the date of grant using the Black-Scholes option-pricing model based on the
following assumptions:

<TABLE>
<CAPTION>
1998 1999
---- ----
<S> <C> <C>
Dividend yield................................................... 0% 0%
Risk-free interest rate.......................................... 5.01% 5.01%
---- ----
Expected life in years........................................... 5 5
==== ====
</TABLE>

Compensation cost for stock options issued to nonemployees is recognized in
accordance with SFAS No. 123 and totaled $14,113 and $55,545 in 1998 and 1999,
respectively.

Stock Warrants

In May 1999, the underwriters of the Company's 1999 private placement
offering received 25,478 stock warrants as a component of the placement
commission. Each warrant represents the right to purchase two shares of the
Company's common stock at an exercise price of $2.70 per share and expires five
years from the date of issuance. The fair-value of these warrants was
calculated using the Black-Scholes option-pricing model.

6. Earnings Per Share:

The Company has adopted Statement of Financial Accounting Standards ("SFAS")
No. 128, "Earnings Per Share." This statement establishes standards for
computing and presenting earnings per share. It requires presentation of basic
and diluted earnings per share on the face of the income statement for all
entities with complex capital structures and requires reconciliation of the
computation of basic earnings per share to diluted earnings per share. Basic
earnings per share is computed by dividing income available to common
shareholders (the numerator) by the weighted average number of shares
outstanding for the period (the denominator). The

F-9
<PAGE>

NATIONS EXPRESS, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

computation of diluted earnings per share is similar to basic earnings per
share, except that the denominator is increased to include the number of
additional common shares that would have been outstanding if potentially
dilutive common securities had been converted into common stock.

The following shares of convertible securities were excluded from the
computation of diluted EPS because their inclusion would have had an
antidilutive effect:

<TABLE>
<CAPTION>
1998 1999
------- -------
<S> <C> <C>
Stock options................................................ 180,000 530,000
Stock warrants............................................... 0 25,478
Preferred stock-Series A..................................... 0 95,556
======= =======
</TABLE>

Additionally, the number of common shares and potential common shares at
June 30, 1999, would have been higher had the completion of the private
placement offering, (see Note 5) which resulted in the issuance of an
additional 159,227 common shares and 159,227 preferred shares, occurred before
year-end.

7. Commitments and Contingencies:

Property and equipment at June 30, 1998 and 1999, includes $41,419 and
$98,038, respectively, of capitalized furniture and fixtures, office equipment
and information systems equipment. Capital lease obligations for these items at
June 30, 1999, consist of the following:

<TABLE>
<S> <C>
Capitalized lease obligations for furniture and fixtures,
office equipment and information systems equipment, interest
from 6% to 24%, payable in installments ranging from $114 to
$566 monthly from May 2000 to March 2003........................ $75,285
Less--Current installments..................................... (29,330)
-------
Capital lease obligations, excluding current installments...... $45,955
=======
</TABLE>

The following is a schedule by year of future minimum lease payments under
capital leases at June 30, 1999:

<TABLE>
<CAPTION>
Principal Interest Total
--------- -------- -------
<S> <C> <C> <C>
2000.............................................. $29,330 $ 9,294 $38,624
2001.............................................. 30,836 2,687 33,523
2002.............................................. 11,622 809 12,431
2003.............................................. 3,497 154 3,651
------- ------- -------
$75,285 $12,944 $88,229
======= ======= =======
</TABLE>

The Company's operating leases involve principally office space and office
equipment. Rental expense relating to these leases was and $12,231 in 1998 and
$47,647 in 1999. Future minimum payment obligations for noncancelable operating
leases exceeding one year are as follows at June 30, 1999:

F-10
<PAGE>

NATIONS EXPRESS, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

The Company experiences routine litigation in the normal course of its
business. Management is of the opinion that none of this routine litigation
will have a material adverse impact on financial position, results of
operations or cash flows.

8. Related Party:

A director at the Company is a registered representative of the securities
brokerage firm used as the placement agent for the private placement offering.
As compensation for services performed, this brokerage firm received 25,478
stock warrants (see Note 5) and cash of $51,114 in May 1999, and $84,761 in
July 1999.

9. Subsequent Events:

In July, the Board of Directors agreed to offer an additional 84,783 units
under the Private Offering Memorandum (Note 5). Proceeds from the sale of
159,227 units received by the Company, net of commissions paid to the
securities brokerage firm that provided placement services, totaled $621,233.

During July 1999, all loans from shareholders (see Note 3) were satisfied.
Shareholder loans totaling $175,000 were repaid with a portion of the proceeds
from the private placement offering. Additional shareholder loans of $75,000
were satisfied with the issuance of 33,333 shares of common stock.

On November 5, 1999, the Company entered into a revolving loan agreement
with First Union National Bank (FUNB). Borrowings under this revolving loan
agreement are secured by the Company's accounts receivable and may not exceed
$750,000 until the Company meets additional requirements as defined in the loan
agreement, at which point the Company's borrowing limit will be increased to
$1,500,000. Interest is payable on a monthly basis at FUNB's prime rate. The
Company is subject to certain financial and nonfinancial covenants under the
revolving loan agreement.

F-11
<PAGE>

NATIONS EXPRESS, INC.

BALANCE SHEET--MARCH 31, 2000
(Unaudited)

<TABLE>
<CAPTION>
2000
----------
ASSETS

<S> <C>
Current assets:
Cash and cash equivalents........................................ $ 50,235
Accounts receivable, net of allowance for uncollectible accounts
of $120,453..................................................... 3,059,143
Deferred tax asset............................................... 30,377
Other current assets............................................. 114,423
----------
3,254,178
----------
Property and equipment:
Furniture and fixtures........................................... 52,276
Office equipment................................................. 65,962
Information systems equipment.................................... 241,093
Vehicles......................................................... 97,906
Accumulated depreciation......................................... (76,403)
----------
380,834
----------
Other assets....................................................... 35,789
----------
$3,670,801
==========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Current portion of long-term lease obligations................... $ 32,329
Accounts payable................................................. 1,071,880
Accrued income taxes............................................. 58,321
Accrued expenses................................................. 223,390
Note payable to Bank............................................. 215,822
----------
1,601,742
Long-term lease obligations........................................ 77,734
Deferred taxes..................................................... 14,734
Other long-term liabilities........................................ 24,305
----------
1,718,515
----------
Shareholders' equity:
Preferred stock-Series A, no par value; authorized 1,000,000
shares; 0 shares issued and outstanding......................... 0
Common stock, no par value, authorized 25,000,000 shares;
2,979,566 shares issued and outstanding......................... 1,528,538
Stock warrants................................................... 50,390
Retained earnings................................................ 373,358
----------
1,952,286
----------
$3,670,801
==========
</TABLE>

F-12
<PAGE>

NATIONS EXPRESS, INC.

STATEMENTS OF INCOME
For the Nine Months Ended March 31, 1999 and 2000
(Unaudited)

<TABLE>
<CAPTION>
1999 2000
---------- -----------
<S> <C> <C>
Revenues................................................ $4,307,285 $13,912,714
Purchased transportation................................ 2,928,954 9,731,663
---------- -----------
Gross profit.......................................... 1,378,331 4,181,051
---------- -----------
Operating expenses...................................... 1,277,640 3,754,656
Income from operations.................................. 100,691 426,395
Interest expense, net................................... 5,210 5,771
---------- -----------
Income before income taxes.............................. 95,481 420,624
Income tax expense...................................... 38,193 166,218
---------- -----------
Net income.............................................. $ 57,288 $ 254,406
========== ===========
Basic and diluted earnings per common share............. $ 0.02 $ 0.08
Weighted average common shares outstanding, basic....... 2,347,656 2,735,366
Weighted average common shares outstanding, diluted..... 2,347,656 3,153,610
========== ===========
</TABLE>

F-13
<PAGE>

NATIONS EXPRESS, INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the Nine Months Ended March 31, 2000
(Unaudited)

<TABLE>
<CAPTION>
Common Stock Preferred Stock Stock Warrants
-------------------- ------------------- -------------- Retained
Shares Amount Shares Amount Shares Amount Earnings Total
--------- ---------- -------- --------- ------ ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1999.. 2,465,556 $ 461,048 95,556 $ 187,458 25,478 $50,390 $150,800 $ 849,696
Shares issued for
capital contributions.. 225,894 422,249 159,227 345,129 0 0 0 767,378
Fair value of stock
options issued to
nonemployees........... 0 37,654 0 0 0 0 0 37,654
Shares issued for
conversion of
shareholder loan....... 33,333 75,000 0 0 0 0 0 75,000
Preferred shares
converted to common
stock.................. 254,783 532,587 (254,783) (532,587) 0 0 0 0
Dividends on preferred
stock.................. 0 0 0 0 0 (31,848) (31,848)
Net Income.............. 0 0 0 0 0 0 254,406 254,406
--------- ---------- -------- --------- ------ ------- -------- ----------
Balance, March 31, 2000
(unaudited)............ 2,979,566 $1,528,538 0 $ 0 25,478 $50,390 $373,358 $1,952,286
========= ========== ======== ========= ====== ======= ======== ==========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-14
<PAGE>

NATIONS EXPRESS, INC.

STATEMENTS OF CASH FLOWS
For the Nine Months Ended March 31, 1999 and 2000
(Unaudited)

<TABLE>
<CAPTION>
1999 2000
--------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income........................................... $ 57,288 $ 254,406
Adjustments to reconcile net income to net cash used
in operating activities--
Depreciation....................................... 16,480 48,422
Provision for uncollectible accounts............... 50,000 58,387
Interest expense on notes to shareholders.......... 5,000 0
Compensation expense for stock options issued to
nonemployees...................................... 40,000 29,404
Increase in accounts receivable.................... (844,767) (1,515,035)
Increase in accounts payable....................... 458,026 305,475
Increase in accrued liabilities.................... 55,744 75,778
Increase (decrease) in accrued income taxes........ 37,152 (39,888)
Increase in pre-paid expenses...................... 0 (94,353)
--------- -----------
Net cash used in operating activities............ (125,077) (877,404)
--------- -----------
Cash flows from investing activities--Capital
expenditures.......................................... (137,765) (104,083)
--------- -----------
Cash flows from financing activities:
Proceeds from issuance of stock and stock warrants,
net................................................. 10,000 771,233
Repayments of capital lease obligations.............. (3,500) (33,285)
Proceeds (payments) of loans from shareholders....... 250,000 (175,000)
Proceeds from bank revolving credit.................. 0 215,822
Dividends on preferred stock......................... 0 (31,848)
--------- -----------
Net cash provided by financing activities........ 256,500 746,922
--------- -----------
Net decrease in cash and cash equivalents.............. (6,342) (234,565)
Cash and cash equivalents, beginning of period......... 95,471 284,800
--------- -----------
Cash and cash equivalents, end of period............... $ 89,129 $ 50,235
========= ===========
Supplemental cash-flow disclosures:
Cash paid for interest............................... $ 12,557 $ 13,113
Cash paid for income taxes........................... 0 46,962
========= ===========
</TABLE>

F-15
<PAGE>

NATIONS EXPRESS, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 1999 and 2000

1. Basis of Presentation

Information presented as of March 31, 2000, and for the nine month periods
ended March 31, 2000 and March 31, 1999, is unaudited. In the opinion of
management, the unaudited financial statements have been prepared on the same
basis as the audited financial statements, and reflect all adjustments
necessary to present fairly the financial position as March 31, 2000, and the
results of operations, changes in shareholders' equity and cash flows for the
nine month periods ended March 31, 2000 and March 31, 1999. The results of
operations for these interim periods are not necessarily indicative of results
that may be expected for any other interim period or for the year as a whole.
These unaudited financial statements should be read in conjunction with the
audited financial statements and the notes thereto as of June 30, 1999 and June
30, 1998, and for the year ended June 30, 1999, and the four months ended June
30, 1998.

2. Events Occurring Subsequent to June 30, 1999

The financial statements as of and for nine month period ended March 31,
2000 reflect the following events that occurred subsequent to June 30, 1999:

-- Sale of 159,227 units, each consisting of one share of common stock and
one share of preferred stock, in connection with the private placement.
Cash received for the sale of these units, net of commissions paid to
the securities brokerage firm that provided placement services, totaled
$621,233.

-- Conversion of all outstanding preferred stock to common stock

-- Issuance of a total of 313,000 stock options to employees and non-
employees

-- Payment of preferred dividends of $31,848

Additionally, the borrowing limit under the revolving loan agreement with
First Union National Bank was increased to $1.5 million.

3. Effect of Recently Issued Accounting Pronouncements

F-16
<PAGE>

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

You should rely only on the information contained in the prospectus or
information we have referred you to. We have not authorized anyone to provide
you with information that is different. This prospectus may only be used where
it is legal to sell these securities. The information in this prospectus may
only be accurate as of the date of this prospectus.

-----------------

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PROSPECTUS SUMMARY....................................................... 2
SUMMARY FINANCIAL DATA AND OTHER INFORMATION............................. 5
RISK FACTORS............................................................. 6
USE OF PROCEEDS.......................................................... 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS........................................................... 16
BUSINESS................................................................. 21
MANAGEMENT............................................................... 29
BENEFICIAL OWNERS OF COMMON STOCK........................................ 32
MANAGEMENT COMPENSATION.................................................. 33
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................... 33
DESCRIPTION OF CAPITAL STOCK............................................. 34
LEGAL MATTERS............................................................ 41
EXPERTS.................................................................. 41
AVAILABLE INFORMATION.................................................... 42
</TABLE>

Until , 2000 (25 days after the effective date of the Registration
Statement) all dealers that effect transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to the obligation of dealers to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

$ *

[Nations express logo]

Nations Express, Inc.

1,000,000 Units

Each consisting of One Share of Common Stock and One Redeemable Common Stock
Purchase Warrant

-----------------

PROSPECTUS

-----------------

Schneider Securities, Inc.

* , 2000

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers.

Permissible Indemnification. The North Carolina Business Corporation Act
(the "NCBCA") allows a corporation, by charter, bylaw, contract or resolution,
to indemnify or agree to indemnify its officers, directors, employees and
agents and any person who is or was serving at the corporation's request as a
director, officer, employee or agent of another entity or enterprise or as a
trustee or administrator under an employee benefit plan, against liability and
expenses, including reasonable attorneys' fees, in any proceeding (including
without limitation a proceeding brought by or on behalf of the corporation
itself) arising out of their status as such or their activities in any of the
foregoing capacities as summarized herein. Any provision in a corporation's
charter or bylaws or in a contract or resolution may include provisions for
recovery from the corporation of reasonable costs, expenses and attorneys' fees
in connection with the enforcement of rights to indemnification granted therein
and may further include provisions establishing reasonable procedures for
determining and enforcing such rights.

The corporation may indemnify such person against liability expenses
incurred only where such person conducted himself or herself in good faith and
reasonably believed (i) in the case of conduct in his or her official corporate
capacity, that his or her conduct was in the corporation's best interests, and
(ii) in all other cases, that his or her conduct was at least not opposite to
the corporation's best interests; and, in the case of a criminal proceeding, he
or she had no reasonable cause to believe his or her conduct was unlawful;
provided, however, that a corporation may not indemnify such person either in
connection with a proceeding by or in the right of the corporation in which
such person was adjudged liable to the corporation, or in connection with any
other proceeding charging improper personal benefit to such person (whether or
not involving action in an official capacity) in which such person was adjudged
liable on the basis that personal benefit was improperly received.

Mandatory Indemnification. Unless limited by the corporation's charter, the
NCBCA requires a corporation to indemnify a director or officer of the
corporation who is wholly successful, on the merits or otherwise, in the
defense of any proceeding to which such person was a party because he or she is
or was a director or officer of the corporation against reasonable expenses
incurred in connection with the proceeding.

Advance for Expenses. Expenses incurred by a director, officer, employee or
agent of the corporation in defending a proceeding may be paid by the
corporation in advance of the final disposition of the proceeding as authorized
by the board of directors in the specific case, or as authorized by the charter
or bylaws or by any applicable resolution or contract, upon receipt of an
undertaking by or on behalf of such person to repay amounts advanced unless it
ultimately is determined that such person is entitled to be indemnified by the
corporation against such expenses.

Court-Ordered Indemnification. Unless otherwise provided in the
corporation's charter, a director or officer of the corporation who is a party
to a proceeding may apply for indemnification to the court conducting the
proceeding or to another court of competent jurisdiction. On receipt of an
application, the court, after giving any notice the court deems necessary, may
order indemnification if it determines either (i) that the director or officer
is entitled to mandatory indemnification as described above, in which case the
court also will order the corporation to pay the reasonable expenses incurred
to obtain the court-ordered indemnification, or (ii) that the director or
officer is fairly and reasonably entitled to indemnification in view of all the
relevant circumstances, whether or not such person met the requisite standard
of conduct or was adjudged liable to the corporation in connection with a
proceeding by or in the right of the corporation or on the basis that personal
benefit was improperly received in connection with any other proceeding so
charging (but if adjudged so liable, indemnification is limited to reasonable
expenses incurred).

Parties Entitled to Indemnification. The NCBCA defines "director" to include
ex-directors and the estate or personal representative of a director. Unless
its charter provides otherwise, a corporation may

II-1
<PAGE>

indemnify and advance expenses to an officer, employee or agent of the
corporation to the same extent as to a director and also may indemnify and
advance expenses to an officer, employee or agent who is not a director to the
extent, consistent with public policy, as may be provided in its charter or
bylaws, by general or specific action of its board of directors, or by
contract.

Indemnification by Registrant. Registrant's Bylaws provide for
indemnification of its directors and officers to the fullest extent permitted
by North Carolina law, and require its Board of Directors to take all actions
necessary and appropriate to authorize such indemnification.

Under North Carolina law, a corporation also may purchase insurance on
behalf of any person who is or was a director or officer against any liability
arising out of his status as such. Registrant currently maintains a directors'
and officers' liability insurance policy.

SEC Position on Indemnification. Insofar as indemnification for liabilities
under the Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the small business issuer pursuant to the
foregoing provisions, or otherwise, the small business issuer has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.

Item 25. Other Expenses of Issuance and Distribution.

The estimated expenses in connection with the issuance and distribution of
the securities covered by this Registration Statement, other than underwriting
discounts and commissions, are as follows:

<TABLE>
<S> <C>
Printing fees and expenses......................................... $100,000
Legal fees and expenses............................................ 150,000
Accounting fees and expenses....................................... 150,000
Blue Sky fees and expenses......................................... 20,000
NASD filing fee.................................................... 4,155
SEC filing fee..................................................... 9,161
Other.............................................................. 16,684
--------
Total............................................................ $450,000
========
</TABLE>

Item 26. Recent Sales of Unregistered Securities

In connection with the formation of the Company in March 1998, 2,270,000
shares of common stock were sold to 23 persons at a price of $0.10 per share.
This transaction was not registered under the Securities Act pursuant to the
exemption provided by Section 4(2) thereof for transactions not involving any
public offering. Each of the purchasers was a member of management, a director,
or a person affiliated therewith through a personal, family or business
relationship.

In July 1998, the Company issued 100,000 shares to six existing shareholders
in payment of $10,000 in interest that had accrued on loans to the Company.
This transaction was not registered under the Securities Act pursuant to the
exemption provided by Section 4(2) thereof for transactions not involving any
public offering.

In May 1999 and July 1999, the Company sold 254,783 units, each consisting
of one share of common stock and one share of convertible preferred stock, at a
price of $4.50 per unit in a private offering to 57 persons. The offering was
conducted pursuant to Rule 506 promulgated under Section 4(2) of the Securities
Act. As compensation for serving as placement agent in the offering, Blackwell
Donaldson & Company, a registered broker-dealer, received a sales commission in
the amount of approximately $132,000 and 25,478 warrants with an approximate
value of $50,000. Each warrant entitles the holder to purchase two shares of
common stock for nominal consideration. This transaction was not registered
under the Securities Act pursuant to the exemption provided by Section 4(2)
thereof for transactions not involving any public offering.

II-2
<PAGE>

In July 1999, a shareholder loan in the amount of $75,000 was satisfied with
the issuance of 33,333 shares of common stock.

In September 1999, the Company sold 33,333 and 33,334 shares of common
stock, respectively, to a director of the Company and his brother at a price of
$2.25 per share. This transaction was not registered under the Securities Act
pursuant to the exemption provided by Section 4(2) thereof for transactions not
involving any public offering.

Since its inception, the Company has issued options to purchase 792,000
shares of common stock (net of forfeitures) to employees, directors and agents
of the Company. These transactions were not registered under the Securities Act
pursuant to the exemptions provided by Rule 701 promulgated thereunder for
issuance of securities pursuant to compensatory benefit plans.

Item 27. Exhibits.

An index of exhibits appears at page II-6 of this Registration Statement and
is incorporated herein by reference.

Item 28. Undertakings.

(A) 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;

(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in "Calculation of
Registration Fee" table in the effective Registration Statement; and

(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.

2. that, for the purpose of determining any liability under the
Securities Act, 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 this offering.

(B) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
undersigned Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form SB-2 and has duly caused
this Registration Statement on Form SB-2 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Charlotte, State of
North Carolina, on July 21, 2000.

Nations Express, Inc.

/s/ Allen D. Watson
By: _________________________________
Allen D. Watson
President and Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form SB-2 has been signed by the following persons in
the capacity and on the dates indicated.

Each of the undersigned directors and officers of Registrant, by his
execution hereof, hereby constitutes and appoints ALLEN D. WATSON and WILLIAM
R. FRAZIER, and each of them, as his true and lawful attorneys-in-fact and
agents, for him or her, and in his or her name, place and stead, to execute and
sign any and all pre-effective and post-effective amendments to such
Registration Statement, and file the same, together with all exhibits and
schedules thereto and all other documents in connection therewith, with the
Commission and with such state securities authorities as may be appropriate,
granting unto said attorneys-in-fact, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully and to all intents ad
purposes as the undersigned might or could do in person, and hereby ratifying
and confirming all the acts of said attorneys-in-fact and agents, or any of
them, which they may lawfully do in the premises or cause to be done by virtue
hereof.

<TABLE>
<CAPTION>
Name Title Date
---- ----- ----

<S> <C> <C>
/s/ Allen D. Watson President, Chief Executive July 21, 2000
______________________________________ Officer and Director
Allen D. Watson (principal executive
officer)

/s/ William R. Frazier Executive Vice President, July 21, 2000
______________________________________ Chief Financial Officer
William R. Frazier (principal financial and
accounting officer) and
Corporate Secretary

/s/ John P. Manry Chairman of Board of July 21, 2000
______________________________________ Directors
John P. Manry

/s/ Daniel Dukesherer Director and Vice July 21, 2000
______________________________________ President Western Region
Daniel Dukesherer

/s/ Jerry N. Carr Director July 21, 2000
______________________________________
Jerry N. Carr
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
Name Title Date
---- ----- ----

<S> <C> <C>
/s/ Daniel H. McPherson, III Director and Vice July 21, 2000
______________________________________ President of Operations
Daniel H. McPherson, III
/s/ Thomas E. McChesney Director July 21, 2000
______________________________________
Thomas E. McChesney
</TABLE>

II-5
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
No. Description
------- ----------- ---
<C> <S> <C>
1.1 Form of Agreement among Underwriters

1.2 Form of Underwriting Agreement

1.3 Form of Selected Dealers Agreement

1.4 Form of Underwriters' Warrant Agreement

1.5 Form of Consulting Agreement

3.1 Articles of Incorporation of Nations Express, Inc.

3.2 Bylaws of Nations Express, Inc.

4.1 Form of Stock Certificate*

4.2 Form of Warrant Certificate*

5.1 Opinion of Moore & Van Allen, PLLC*

10.1 1998 Incentive Stock Option Plan

10.2 1999 Stock Option Plan

23.1 Consent of Arthur Andersen LLP

Powers of Attorney (included on signature page of
24.1 Registration Statement)

</TABLE>

--------
* To be filed by amendment.

II-6