<PAGE>
File No. 333-________
As filed with the Securities and Exchange Commission on June 9, 1997.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
JW CHARLES FINANCIAL SERVICES, INC.
(Exact name of issuer as specified in its charter)
FLORIDA 6211 58-1545984
(State or other jurisdiction (PRIMARY STANDARD INDUSTRIAL (I.R.S. Employer
of incorporation or CLASSIFICATION CODE NUMBER) Identification
organization) Number)
980 NORTH FEDERAL HIGHWAY, SUITE 210
BOCA RATON, FLORIDA 33432
(561) 338-2600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF ISSUER'S PRINCIPAL EXECUTIVE OFFICES)
JOEL E. MARKS
VICE CHAIRMAN AND CHIEF FINANCIAL OFFICER
JW CHARLES FINANCIAL SERVICES, INC.
1117 PERIMETER CENTER WEST, SUITE 500E, ATLANTA, GEORGIA 30338
(770) 399-8805
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
W. RANDY EADDY, ESQUIRE
KILPATRICK STOCKTON LLP
1100 PEACHTREE STREET, ATLANTA, GEORGIA 30309-4530
TELEPHONE: (404) 815-6500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
possible after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================
Title of each class of Proposed Maximum Proposed Maximum
securities Amount to be Offering Price Aggregate Offering Amount of
to be registered Registered per Share Price registration fee
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.001 per share 392,199 shares (1) Not Applicable $2,581,013 (2) $783 (2)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the maximum number of shares of the Common Stock of JW Charles
Financial Services, Inc. ("JWCFS") issuable upon the consummation of the
exchange offer for the outstanding shares (the "AGRO Shares") of The Americas
Growth Fund, Inc. ("AGRO") based upon .418 as the Exchange Ratio (as defined)
(assuming that the net assets per share of ARGO does not increase above $3.74)
and the number of AGRO Shares on May 13, 1997, according to AGRO's Quarterly
Report on Form 10-QSB for the period ended March 31, 1997, excluding the AGRO
Shares owned by JWCFS.
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) and (f) (1). Calculated on the basis of $2.75 per
share, the last reported sales price of the Common Stock of AGRO (constituting
the securities to be received by the Registrant in the transaction) reported on
The Nasdaq Stock Market prior to June 6, 1997.
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.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
DATED JUNE 9, 1997, SUBJECT TO COMPLETION
-----------------------------------------
PRELIMINARY PROSPECTUS
- ----------------------
Offer for all (but not less than 51%) of
the outstanding Shares of Common Stock of
The Americas Growth Fund, Inc.
on the basis of
.418 Share of Common Stock of
JW Charles Financial Services, Inc.
(subject to adjustment)
for each Share of Common Stock of
The Americas Growth Fund, Inc.
by
JW CHARLES FINANCIAL SERVICES, INC.
JW Charles Financial Services, Inc. ("JWCFS") hereby offers, upon the
terms and subject to the conditions set forth herein and in the related Letter
of Transmittal (collectively, the "Exchange Offer"), to exchange shares of
common stock, par value $.001 per share, of JWCFS ("JWCFS Shares") for all (but
not less than 51%) of the outstanding shares of common stock, par value $.01 per
share ("AGRO Shares"), of The Americas Growth Fund, Inc. ("AGRO"). Each AGRO
Share validly tendered on or prior to the Expiration Date (as defined below) and
not properly withdrawn will be entitled to receive that number of JWCFS Shares
equal to the Exchange Ratio. The term "Exchange Ratio" means the quotient
(rounded to the nearest 1/100,000) determined by dividing (a) $8.95 (the average
of the last reported sales prices of JWCFS Shares on the American Stock Exchange
for the ten trading days immediately preceding the initial filing of the
Registration Statement of which this Prospectus forms a part) into (b) the
----
greater of (i) $3.74 (the net asset value per share of AGRO as of March 31, 1997
- ----------
according to the AGRO Quarterly Report on Form 10-QSB for the period ended March
31, 1997 (the "AGRO Form 10-Q")) and (ii) the net asset value per share of AGRO
as of a date subsequent to March 31, 1997 as established to the satisfaction of
JWCFS. If the net asset value per share of AGRO does not increase (or any such
purported increase cannot be established to the satisfaction of JWCFS), the
Exchange Ratio would be .418. Because the Exchange Ratio will not change for
fluctuations in the market price of the JWCFS Shares, such fluctuations may
adversely affect the extent to which the JWCFS Shares to be received by
tendering AGRO shareholders represent a premium for the AGRO Shares on the date
the Exchange Offer is consummated. The Exchange Ratio will be finally determined
as of the third business day immediately preceding the Expiration Date, as
described below, and a press release will be issued announcing the final
Exchange Ratio prior to the opening of business on the second business day prior
to the Expiration Date (as it may be extended from time to time). For purposes
of determining whether or not the minimum of 51% of the AGRO Shares has been
obtained, JWCFS shall include the 326,550 AGRO Shares (approximately 25.8% of
the outstanding) already owned by JWCFS as of May 31, 1997.
The JWCFS Shares are traded on the American Stock Exchange ("AMEX")
and the AGRO Shares are traded on The NASDAQ Stock Market ("NASDAQ"). On June 6,
1997, the last full trading day before the initial filing of the Registration
Statement with respect to the Exchange Offer, the last reported sale price per
JWCFS Share on the AMEX was $8.38 and the last reported sale price per AGRO
Share on NASDAQ was $2.75.
- --------------------------------------------------------------------------------
THIS EXCHANGE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, ATLANTA
TIME, ON _____________, 1997, UNLESS THE EXCHANGE OFFER IS EXTENDED. SHARES
THAT ARE TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME
PRIOR TO THE EXPIRATION OF THE EXCHANGE OFFER.
- --------------------------------------------------------------------------------
THE SECURITIES TO WHICH THIS PROSPECTUS RELATES
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS OFFERING CIRCULAR/
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
_______________
The date of this Prospectus is June __, 1997
<PAGE>
(cover page continued)
Following the Exchange Offer, JWCFS may, but will have no obligation
to, seek to cause AGRO to take one or more of the following possible actions:
the removal or delisting of the AGRO Shares from NASDAQ; the termination of
AGRO's status as a business development company ("BDC") under the Investment
Company Act of 1940, as amended (the "1940 Act"); and the merger of AGRO with a
wholly owned subsidiary of JWCFS. If such a merger is effected, shareholders of
AGRO would receive JWCFS Shares on the same basis as in the Exchange Offer. Any
such merger is referred to herein as the "Consolidation Merger" and, together
with the Exchange Offer, the "Transaction". JWCFS' success in causing AGRO to
take any of the foregoing actions, to the extent such actions cannot be
satisfied without the action of the AGRO Board of Directors (the "AGRO Board"),
will depend, among other things, on the determination of the incumbent AGRO
Board to cooperate with JWCFS and, in the absence of such cooperation, JWCFS'
ability to elect individuals to serve as directors of AGRO who support such
actions. Given the classification of the AGRO Board into three classes, the
prohibition under AGRO's Bylaws against removing directors other than for cause,
and the reservation of the authority to increase the number of directors solely
to the AGRO Board, it is possible that JWCFS' election of its nominees to a
majority of the seats on the AGRO Board, in the absence of the cooperation of
the incumbent AGRO Board in this regard, could be delayed. See "THE EXCHANGE
OFFER -- Control of the AGRO Board".
Questions and requests for assistance or additional copies of this
Prospectus and the Letter of Transmittal may be directed to the Information
Agent, whose address and telephone numbers are set forth on the back cover of
this Prospectus.
THIS PROSPECTUS AND THE EXCHANGE OFFER MADE HEREBY DO NOT CONSTITUTE A
SOLICITATION OF ANY PROXIES OR CONSENTS. ANY SUCH SOLICITATIONS, IF MADE, WILL
BE MADE ONLY PURSUANT TO SEPARATE PROXY OR CONSENT SOLICITATION MATERIALS
COMPLYING WITH THE REQUIREMENTS OF SECTION 14(A) OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED (THE "EXCHANGE ACT").
2
<PAGE>
IMPORTANT
Any AGRO shareholder desiring to tender shares should either (1) complete
and sign the Letter of Transmittal (or facsimile thereof) in accordance with its
instructions and either (a) deliver the Letter of Transmittal and the
certificate(s) for such shares, and all other required documents, to the
Exchange Agent, or deliver such shares pursuant to the procedures for book-entry
transfer set forth herein, or (b) otherwise comply with the guaranteed delivery
procedures set forth below, or (2) request such shareholder's broker, dealer,
commercial bank, trust company, or other nominee to effect the transaction for
such shareholder. An AGRO shareholder having shares registered in the name of a
broker, dealer, commercial bank, trust company, or other nominee must contact
such person if such shareholder desires to tender such shares.
Any AGRO shareholder who desires to tender shares and cannot deliver such
shares and all other required documents to the Exchange Agent by the expiration
of the Exchange Offer must tender such shares pursuant to the guaranteed
delivery procedure set forth under "THE EXCHANGE OFFER -- Procedure for
Tendering AGRO Shares".
In accordance with various state securities laws applicable to the Exchange
Offer that require the Exchange Offer to be made to the public by a licensed
broker or dealer, the Exchange Offer hereby is made to AGRO shareholders
residing in each such state by JWCharles/CSG on behalf of JWCFS. The use of
"JWCharles/CSG" herein is a stylized reference to JWCharles Securities, Inc.,
JWCharles Clearing Corp., and/or Corporate Securities Group, Inc., each of which
is a registered broker-dealer and wholly-owned subsidiary of JWCFS, in their
respective individual capacities and not as a joint entity. The principal
office for each of these companies is the same as for JWCFS: 980 North Federal
Highway, Suite 310, Boca Raton, Florida 33432.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE THAT ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (OTHER THAN EXHIBITS TO SUCH
DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO
THE INFORMATION INCORPORATED HEREIN) ARE AVAILABLE WITHOUT CHARGE, UPON ORAL OR
WRITTEN REQUEST BY ANY PERSON RECEIVING THIS PROSPECTUS, FROM JOEL E. MARKS,
SECRETARY, JW CHARLES FINANCIAL SERVICES, INC., 980 NORTH FEDERAL HIGHWAY, SUITE
310, BOCA RATON, FLORIDA 33432, (561) 338-2600. IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE NOT LATER THAN FIVE (5)
BUSINESS DAYS BEFORE THE EXPIRATION OF THE EXCHANGE OFFER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THOSE CONTAINED
OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY JWCFS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION TO ANY
PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. THE
OFFER IS NOT BEING MADE TO, NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF,
HOLDERS OF AGRO SHARES IN ANY JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE
THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. HOWEVER,
JWCFS MAY, IN ITS SOLE DISCRETION, TAKE SUCH ACTION AS IT MAY DEEM NECESSARY TO
MAKE THE OFFER IN ANY SUCH JURISDICTION AND EXTEND THE OFFER TO HOLDERS OF
SHARES IN SUCH JURISDICTION. NEITHER THE DELIVERY OR THIS OFFER IN ANY SUCH
JURISDICTION. NEITHER THE DELIVERY OR THIS PROSPECTUS NOR ANY EXCHANGE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF JWCFS OR AGRO SINCE THE DATE AS OF WHICH
INFORMATION IS FURNISHED OR THE DATE HEREOF.
3
<PAGE>
TABLE OF CONTENTS
-----------------
AVAILABLE INFORMATION.................................................6
Incorporation of Documents by Reference..........................6
AGRO Information.................................................7
SUMMARY...............................................................8
JWCFS............................................................8
AGRO.............................................................8
Background; Purpose of the Exchange Offer........................9
The Exchange Offer..............................................11
Selected Historical Financial Data..............................14
Summary Pro Forma Financial Data -- Unaudited...................15
Comparison of Certain Unaudited Per Share Data..................19
MARKETS FOR THE JWCFS AND AGRO SHARES................................20
Comparative Market Prices.......................................20
Condition of the Market for the AGRO Shares.....................21
THE EXCHANGE OFFER...................................................23
Background......................................................23
Purpose of the Exchange Offer; the Consolidation Merger.........24
Determination of the Exchange Ratio.............................25
Terms of the Exchange Offer.....................................26
Procedure for Tendering AGRO Shares.............................27
Exchange of AGRO Shares.........................................28
Withdrawal Rights...............................................29
Extension of Tender Period; Termination; Amendment..............30
Certain Conditions of the Exchange Offer........................31
Control of the AGRO Board.......................................32
Certain Federal Income Tax Consequences.........................33
Effects of the Exchange Offer and the Consolidation Merger......34
Fees and Expenses...............................................35
Source of Funds.................................................36
Regulatory Approvals............................................36
Miscellaneous...................................................37
INFORMATION ABOUT AGRO...............................................37
INFORMATION ABOUT JWCFS..............................................37
CERTAIN RELATIONSHIPS AND TRANSACTIONS...............................37
DESCRIPTION OF CAPITAL STOCK OF JWCFS................................38
JWCFS Shares....................................................38
Preferred Stock.................................................38
Limitations on Liability of Officers and Directors..............38
Miscellaneous...................................................39
4
<PAGE>
DESCRIPTION OF CAPITAL STOCK OF AGRO.................................39
AGRO Shares.....................................................39
Preferred Stock.................................................39
Dividends.......................................................39
Certain Anti-Takeover Provisions................................39
COMPARISON OF RIGHTS OF HOLDERS OF JWCFS SHARES AND HOLDERS
OF AGRO SHARES..................................................41
LEGAL MATTERS........................................................44
EXPERTS..............................................................44
PRO FORMA FINANCIAL INFORMATION -- UNAUDITED.........................45
ANNEX I -- Excerpts from AGRO's Annual Report on Form 10-KSB40 for
the Fiscal Year Ended December 31, 1996........................A-1
5
<PAGE>
AVAILABLE INFORMATION
JWCFS has filed a Registration Statement on Form S-4, Commission File No. 333-
__________ (the "Registration Statement"), with the Securities and Exchange
Commission (the "Commission") covering the JWCFS Shares to be issued in
connection with the Exchange Offer and the Consolidation Merger if there is one,
and, not later than the date of commencement of the Exchange Offer, will file a
Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") with the
Commission in connection with the Exchange Offer. As permitted by the rules
and regulations of the Commission, this Prospectus omits certain information
contained in the Registration Statement and the Schedule 14D-1. For such
information, reference is made to the Registration Statement, the Schedule 14D-
1, and the exhibits thereto.
Pursuant to Rules 14d-9 and 14e-2 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), AGRO will be required to file with the
Commission within ten business days after the commencement of the Exchange Offer
a statement on Schedule 14D-9 furnishing certain information with respect to its
position concerning the Exchange Offer. Such Schedule and any amendments
thereto should be available for inspection and copying as set forth below
(except that such Schedule and any amendments thereto will not be available at
the regional offices of the Commission).
Each of JWCFS and AGRO is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports and other information
with the Commission. The Registration Statement, as well as reports, proxy
statements, and other information filed by JWCFS or AGRO with the Commission
pursuant to the information requirements of the Exchange Act or the 1940 Act, as
applicable, may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: New York Regional
Office, 7 World Trade Center, 13th Floor, New York, New York 10048; and Chicago
Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60606.
Copies of such material also can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. JWCFS Shares and AGRO Shares are listed or quoted for trading
on the AMEX and NASDAQ, respectively, and such reports, proxy statements, and
other information concerning JWCFS and AGRO may be inspected at the offices of
the AMEX and NASDAQ, respectively, 86 Trinity Place, New York, New York 10006
and 1735 K Street, N.W., Washington, D.C. 20006. The Commission maintains an
Internet web site that contains reports, proxy and information statements, and
other information regarding issuers such as JWCFS and AGRO that file
electronically with the Commission. The address of that site is
http://www.sec.gov.
On ____________, 1997, pursuant to Rule 409 promulgated under the Securities
Act of 1933, as amended (the "Securities Act"), and Rule 12b-21 promulgated
under the Exchange Act, JWCFS requested that AGRO and its independent public
accountants provide to JWCFS certain information required for complete
disclosure concerning the business, operations, financial condition, and
management of AGRO. JWCFS will provide, in a subsequently prepared amendment or
supplement hereto, any and all information that it receives from AGRO prior to
the expiration of the Exchange Offer and that JWCFS deems to be material,
reliable, and appropriate.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission pursuant to the
Exchange Act are hereby incorporated by reference in this Prospectus:
(a) Annual Report on Form 10-K of JWCFS for the fiscal year ended December 31,
1996;
(b) Quarterly Report on Form 10-Q of JWCFS for the quarter ended March 31,
1997; and
(c) Proxy Statement dated April 30, 1997, for the Annual Meeting of
Shareholders of JWCFS to be held on June 10, 1997.
6
<PAGE>
All documents filed by JWCFS pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date hereof and before the date on which the
Transaction is completed shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing thereof. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein, or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
AGRO INFORMATION
While JWCFS has included information concerning AGRO (including the excerpts
from AGRO's Annual Report on Form 10-KSB40 for the year ended December 31, 1996
included elsewhere herein as Annex I) insofar as it is known or reasonably
available to JWCFS, AGRO is not affiliated with JWCFS, and to date AGRO has not
been asked to permit access by JWCFS, to AGRO's books and records. Therefore,
information concerning AGRO that has not been made public is not available to
JWCFS. Although JWCFS has no knowledge that would indicate that statements
relating to AGRO contained in this Prospectus in reliance upon publicly
available information are inaccurate or incomplete, AGRO was not involved in the
preparation of such information and statements and, for the foregoing reasons,
is not in a position to verify any such information or statements.
7
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the detailed information
appearing elsewhere in this Prospectus. Capitalized terms used and not
otherwise defined in this Summary have the meanings ascribed to them elsewhere
in this Prospectus.
As used herein the term "JWCFS" refers to JWCharles Financial Services, Inc.,
and "AGRO" refers to The Americas Growth Fund, Inc. and, unless the context
otherwise requires, their respective subsidiaries.
JWCFS
JWCFS is a diversified financial services holding company whose subsidiaries
engage primarily in securities brokerage, investment banking, and clearing and
execution of securities transactions. The foundation of JWCFS' business lies in
providing traditional securities brokerage services to retail, corporate, and
institutional clients. Today, these services are provided through the Company's
three principal operating, subsidiaries: JWCharles Securities, Inc. ("JWCS"),
Corporate Securities Group, Inc. ("CSG"), and JWCharles Clearing Corp. ("JWCC").
All three subsidiaries provide quality investment products and services,
including stocks, municipal and corporate bonds, unit investment trusts,
certificates of deposit, domestic and international mutual funds, initial and
secondary public offerings, life and long-term care insurance, fixed and
variable annuities, equity research, corporate finance, money market funds,
individual and corporate retirement plans, and cash management accounts.
JWCharles Securities, Inc. is a New York Stock Exchange, Inc. member firm with
branch offices in South Florida, Georgia, and New York. JWCS' branches
typically are owned and managed by the Company. JWCS' brokers are "full-
service" oriented and receive compensation packages competitive with most
regional and national wire-house brokerage firms. Corporate Securities Group,
Inc. is a general securities broker dealer, which offers its products and
services to a variety of clients through a national network of independently
owned offices. CSG offices offer a full array of investment products and
services, and can vary in size from one investment professional to many.
JWCharles Clearing Corp. is a New York Stock Exchange, Inc. member firm that
provides clearing services on a fully disclosed basis for a variety of
correspondents who are engaged in the securities brokerage business but who lack
the back office or other support capabilities to process and clear securities
transactions for their clients. Correspondents include broker dealers, banks,
and other financial institutions. JWCharles Securities, Inc. and Corporate
Securities Group, Inc. clear trades through JWCC as well as through an outside
clearing arrangement with Bear Stearns Securities Corp.
JWCFS has been a public company since 1984, and its common stock is traded on
The American Stock Exchange under the symbol "JWC". JWCFS is a Florida
corporation with its principal executive offices at 980 North Federal Highway,
Suite 210, Boca Raton, Florida 33432, (561) 338-2600.
From time to time, the term "JWCharles/CSG" is used herein as a stylized
reference to refer, as appropriate, to any or all of JWCharles Securities, Inc.,
JWCharles Clearing Corp., and Corporate Securities Group, Inc., in their
respective individual capacities and not as a joint entity. The principal
office for each of these companies is the same as for JWCFS.
AGRO
The following information concerning AGRO, except as otherwise indicated, is
derived from AGRO's Annual Report on Form 10-KSB40 for the year ended December
31, 1996 and the AGRO Form 10-QSB for the quarter ended March 31, 1997.
8
<PAGE>
AGRO was organized in 1994 as a non-diversified, closed-end investment
management company that elected to be regulated as a special type of investment
company known as a business development company (a "BDC") under the Investment
Company Act of 1940, as amended (the "1940 Act"). AGRO's investment objective
has been to achieve long-term capital appreciation of assets by investing in
equity and debt securities of emerging and established companies ("portfolio
companies"). As stated at the time of AGRO's August 1994 initial public
offering of AGRO Shares, AGRO's plans were to invest primarily in United States-
based portfolio companies that are "strategically linked" to the Caribbean and
Latin America. Since the completion of its initial public offering, from which
it derived approximately $5.15 million of net proceeds, AGRO has made
investments in a total of six portfolio companies, utilizing an aggregate of
$1,285,100 to do so. As of March 31, 1997, AGRO had investments (for a total of
$727,000) in three portfolio companies reflected on its financial statements as
having realizable value, and had approximately $4,000,000 in cash or cash
equivalents and other liquid assets that were not invested in portfolio
companies.
AGRO is a Maryland corporation with its principal executive offices located at
701 Brickell Avenue, Suite 2000, Miami, Florida 33131, (800) 329-8214.
BACKGROUND; PURPOSE OF THE EXCHANGE OFFER
JWCFS acquired its current ownership of AGRO Shares as a result of JW
Charles/CSG's participation as the principal market maker for the AGRO Shares
and the absence of higher competing bids from other purchasers in the normal
course of trading on NASDAQ. As a market maker, JW Charles/CSG purchases such
offered shares for its own account and holds them unless and until interested
purchasers make offers to buy at acceptable prices. To date, there has been no
significant, regularly recurring demand from third parties with respect to AGRO
Shares, and JWCFS is reluctant to permit JW Charles/CSG to continue its market-
making activity in the absence of such demand.
In September 1996, JWCFS' management began to review with the JWCFS Board of
Directors (the "JWCFS Board") (i) the trading profile for AGRO Shares and
JWCharles/CSG's increased ownership of AGRO Shares as a result; (ii) the
negative spread between AGRO's net asset value ("NAV") per share and the trading
prices of AGRO Shares; and (iii) the low level of investment in portfolio
companies by AGRO. Management began to consider whether JWCFS should explore a
different role with respect to AGRO in order to improve AGRO's prospects for
enhancing value for all its shareholders, many of whom were also clients or
customers of JWCharles/CSG who had purchased AGRO Shares in the August 1994
initial public offering that had been underwritten for AGRO by JWCharles/CSG.
Among other things, management reviewed with the JWCFS Board the potential
benefits and costs of an approach that would result in a substantial increase by
JWCFS in its ownership of AGRO Shares. The JWCFS Board authorized management to
continue the review process and designated JWCFS' Chairman and Vice Chairman to
function as an informal special committee (the "JWCFS Special Committee") to
keep the Board informed with respect to the situation.
After a series of discussions and analysis over several months, in March 1997
the JWCFS Special Committee determined to recommend that JWCFS proceed with a
transaction that has become this Exchange Offer. At a meeting on March 25, 1997,
the full JWCFS Board unanimously accepted the recommendation, and on June 6,
1997, the JWCFS Board approved the terms and conditions of the Exchange Offer as
set forth herein. See "THE EXCHANGE OFFER -- Background".
From time to time during 1996, JWCFS' Chairman and Vice Chairman had informal
discussions with AGRO's President concerning AGRO's operations and prospects,
including any plans by AGRO to increase its level of portfolio investments and
otherwise to enhance shareholder value. Such discussions continued in 1997 until
March 1997, when the JWCFS Special Committee decided to recommend to the JWCFS
Board that JWCFS undertake a transaction that has become this Exchange Offer.
None of the discussions with AGRO's President included any proposal or plan of
JWCFS for submission to the AGRO Board.
9
<PAGE>
Following the JWCFS Board's decision on March 25, 1997 to undertake the
Exchange Offer, JWCFS did not have further discussions with AGRO concerning that
proposal or any other possible action by JWCFS prior to the initial filing of
the Registration Statement. JWCFS did continue to contact AGRO to request more
convenient access to certain information concerning AGRO's public disclosures
and AGRO's stock trading and beneficial stock ownership positions. JWCFS had
determined that it did not wish to involve the AGRO Board in any formal or
informal consideration of JWCFS' proposal, but instead it desired, if it were to
undertake a transaction, to pursue the matter directly with AGRO's shareholders,
to the extent permitted by applicable laws and regulations, including the
Williams Act provisions of the Exchange Act.
In connection with filing the Registration Statement, JWCFS has offered to be
available to the AGRO Board for such discussions about the Exchange Offer as the
AGRO Board may wish to have. JWCFS had not undertaken, and does not propose to
undertake, to obtain an approval or recommendation by the AGRO Board of the
Exchange Offer. JWCFS hopes that the AGRO Board will rely on its option under
Rule 14d-9 of the Exchange Act to take a position that does not recommend or
oppose the Exchange Offer, but rather leaves the decision of whether to tender
their AGRO Shares in the Exchange Offer to each AGRO shareholder and such
shareholder's personal financial or other advisors.
The purpose of the Exchange Offer is to obtain control of AGRO. Following the
consummation of the Exchange Offer, in the absence of the cooperation of the
incumbent AGRO Board in causing AGRO to take the actions that may be sought by
JWCFS, JWCFS may seek to have elected to the AGRO Board that number of its
nominees (who may be officers or directors or otherwise affiliated with JWCFS)
that, following such election, will constitute at least a majority of the AGRO
Board (the "JWCFS Nominees"). In this regard, JWCFS may seek to, among other
things, secure an increase in the number of members of the AGRO Board or the
resignations of such number of incumbent AGRO directors, as is necessary in
either event, to enable the JWCFS Nominees to be elected to the AGRO Board as
described above.
There is currently no understanding or arrangement between JWCFS and AGRO as
to the election of any JWCFS Nominees to the AGRO Board. There is no assurance
that JWCFS will be successful in its effort to elect the JWCFS Nominees to the
AGRO Board as described above. The AGRO Board is classified into three classes
and AGRO's Bylaws prohibit the removal of AGRO directors other than for cause,
which removal requires the affirmative vote of the holders of 75% of the AGRO
Shares. In addition, only the AGRO Board may increase the number of AGRO
directors. As a result, in the absence of cooperation by the incumbent AGRO
Board, if JWCFS is unsuccessful in its efforts to elect the JWCFS Nominees to
the AGRO Board as described above, and if it is unable to remove the incumbent
AGRO directors for cause, the actions described herein could be effected only
after JWCFS is able to elect at least a majority of directors of AGRO's at
annual or special meetings of the AGRO shareholders.
10
<PAGE>
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE
OFFER JWCFS is offering to exchange JWCFS Shares for AGRO
Shares on the basis of .418 JWCFS Share for each
AGRO Share exchanged pursuant to the Exchange Offer.
To be eligible to receive JWCFS Shares pursuant to
the Exchange Offer, a holder of AGRO Shares must
validly tender for exchange and not withdraw AGRO
Shares on or before the expiration date. See "THE
EXCHANGE OFFER--Terms of the Exchange Offer".
EXPIRATION DATE 12:00 midnight, Atlanta time, on ____________, 1997,
unless extended, in which case the term "Expiration
Date" shall mean the last date and time to which the
Exchange Offer is extended. See "The EXCHANGE
OFFER--Extension of Tender Period; Termination;
Amendment".
CONDITIONS OF THE EXCHANGE
OFFER The Exchange Offer is subject to certain conditions,
including the condition that JWCFS receives valid
tenders for a sufficient number of AGRO shares to
equal, when added to AGRO shares already owned by
JWCFS, 51% of the outstanding AGRO Shares. As of May
31, 1997, JWCFS owned 326,550 AGRO Shares, or
approximately 25.8% of the shares outstanding. All
of the conditions to the Exchange Offer may be
waived in whole or in part in the sole discretion of
JWCFS. See "THE EXCHANGE OFFER--Certain Conditions
of the Exchange Offer".
AMENDMENT AND TERMINATION The Exchange Offer may be amended or terminated by
JWCFS at any time. See "THE EXCHANGE OFFER --Certain
Conditions of the Exchange Offer; -- Extension of
Tender Period; Termination; Amendment".
PROCEDURE FOR TENDERING Holders of AGRO Shares desiring to accept the
Exchange Offer must complete and sign the Letter of
Transmittal in accordance with instructions
contained therein, and forward or hand deliver it,
together with any other required documents, to the
Exchange Agent, either with the certificates for the
AGRO Shares to be tendered or delivery of such
shares pursuant to the procedures for book-entry
transfer, or in compliance with the specified
procedures for guaranteed delivery of AGRO Shares.
See "THE EXCHANGE OFFER -- Procedure for Tendering
AGRO Shares".
WITHDRAWAL RIGHTS Subject to the conditions set forth herein, tenders
of AGRO Shares may be withdrawn at any time on or
before the Expiration Date, and, unless theretofore
accepted for exchange, after ________________, 1997.
See "THE EXCHANGE OFFER -- Withdrawal Rights".
NO FRACTIONAL SHARES No fractional JWCFS Shares will be distributed.
Holders of AGRO Shares who would otherwise be
entitled to receive a fractional JWCFS Share will be
paid cash in lieu of such fraction. See "THE
EXCHANGE OFFER -- Terms of the Exchange Offer".
11
<PAGE>
DELIVERY OF JWCFS SHARES JWCFS will deliver JWCFS Shares and cash in lieu of
fractional shares as soon as possible after
acceptance of AGRO Shares for Exchange. See "THE
EXCHANGE OFFER -- Exchange of AGRO Shares".
EXCHANGE AGENT American Stock Transfer & Trust Company
INFORMATION AGENT American Stock Transfer & Trust Company
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES OF THE
EXCHANGE OFFER If the Consolidation Merger is effected, the
Exchange Offer and the Consolidation Merger together
will constitute a tax-free exchange; and no income,
gain, or loss will be recognized by AGRO
Shareholders upon the receipt of JWCFS Shares in
exchange for their AGRO Shares. For a discussion of
certain federal income tax consequences to holders
of AGRO Shares who receive cash in lieu of
fractional shares in the Exchange Offer, see "THE
EXCHANGE OFFER -- Certain Federal Income Tax
Consequences".
EFFECTS OF THE EXCHANGE
OFFER The maximum number of JWCFS Shares that might be
issued pursuant to the transaction in exchange for
all AGRO Shares, assuming an Exchange Ratio of
.418, would represent approximately 11.82% of the
JWCFS Shares outstanding as of June 6, 1997, and if
JWCFS acquires all such AGRO Shares pursuant to the
Exchange Offer and/or the Consolidation Merger,
former shareholders of AGRO (other than JWCFS) will
own approximately 10.57% of the outstanding JWCFS
Shares. In connection with the Consolidation Merger,
AGRO shareholders who choose to dissent from the
transaction will have the right to demand payment of
the fair value of their AGRO Shares as provided
under Maryland law. See "THE EXCHANGE OFFER --
Effects of the Exchange Offer and the Consolidation
Merger -- Dissenters' Rights."
The AGRO Shares are traded on NASDAQ. Depending on
the number of AGRO Shares acquired pursuant to the
Exchange Offer, or other developments as a result of
the Exchange Offer, the AGRO Shares may no longer be
eligible for designation to be traded on NASDAQ;
and, whether or not they remain so eligible, JWCFS
may seek to cause AGRO to remove the AGRO Shares
from trading on NASDAQ. See "THE EXCHANGE OFFER --
Effects of the Exchange Offer and the Consolidation
Merger".
THE CONSOLIDATION MERGER
If, following the Exchange Offer, JWCFS owns 90% or more of the
outstanding AGRO Shares, JWCFS may seek to cause the merger of AGRO with a
wholly-owned subsidiary of JWCFS without further action by the AGRO or JWCFS
shareholders (a so-called "short-form" merger) under applicable Maryland and
Florida law. JWCFS currently intends that, if such short-form or other merger
is effected, any then remaining shareholders of AGRO would receive JWCFS Shares
on the same basis as in the Exchange Offer. As of the date hereof, based on
available public information, JWCFS believes there are 1,265,100 AGRO Shares
outstanding. Based on JWCFS' present ownership of 326,550 AGRO Shares, an
aggregate of 812,040 AGRO Shares must be validly tendered and not withdrawn on
or before the Expiration Date for JWCFS to own 1,138,590 AGRO Shares,
constituting the 90% of the outstanding AGRO Shares that JWCFS must own to
effect a short-form merger as described above.
12
<PAGE>
Although JWCFS may seek to have AGRO effectuate the Consolidation
Merger if JWCFS obtains the requisite ownership of AGRO Shares, its plans are
subject to reconsideration and revision in light of market and other conditions
prevailing after the Exchange Offer and other factors. Accordingly, no
assurances can be given with respect to (i) whether the Consolidation Merger
will be undertaken or consummated, or (ii) any of the terms or conditions of the
Consolidation Merger. See "THE EXCHANGE OFFER -- Purpose of the Exchange Offer;
the Consolidation Merger".
DETERMINATION OF THE EXCHANGE RATIO
The JWCFS Board has determined the Exchange Ratio being offered for
the AGRO Shares. This determination was based on numerous factors, including:
the net asset value ("NAV") of AGRO; the condition of the public market for the
AGRO Shares on NASDAQ; premiums offered in comparable transactions; the fact
that tendering holders of AGRO Shares, as new holders of JWCFS Shares, would
continue to participate in the business of AGRO (if it were to be continued) as
a part of the business of JWCFS; the perception of JWCFS' management regarding
AGRO's business prospects; the perceived benefits to JWCFS of obtaining a
substantially increased ownership of AGRO; and available information concerning
the level of premium that likely would be attractive to the holders of AGRO
Shares not held by JWCFS. See "THE EXCHANGE OFFER -- Determination of the
Exchange Ratio".
THE JWCFS BOARD IS NOT MAKING A RECOMMENDATION TO THE HOLDERS OF AGRO
SHARES AS TO WHETHER OR NOT TO ACCEPT THE EXCHANGE OFFER. EACH AGRO SHAREHOLDER
SHOULD MAKE HIS OR HER OWN DETERMINATION BASED ON HIS OR HER OWN INVESTMENT
OBJECTIVES, CIRCUMSTANCES, AND ALTERNATIVES, FOLLOWING CAREFUL CONSIDERATION OF
THE INFORMATION CONTAINED IN THIS PROSPECTUS.
MARKET PRICES
JWCFS Shares are traded on the AMEX and AGRO Shares are traded on
NASDAQ. On , 1997, the last full trading day for which sales were made or
quotations were available at the time of printing of this Prospectus, the last
reported sales prices were $ per JWCFS Share and $ per AGRO Share, and
the final bids (the prices that dealers stood ready to pay to investors seeking
to sell their shares) were $ and $ , respectively.
For information relating to market prices of JWCFS Shares and AGRO
Shares during the current fiscal year and the past two fiscal years, see
"MARKETS FOR THE JWCFS AND AGRO SHARES". SHAREHOLDERS ARE URGED TO OBTAIN
CURRENT QUOTATIONS FOR JWCFS SHARES AND AGRO SHARES.
ACCOUNTING TREATMENT
The Exchange Offer and the Consolidation Merger, if the latter is
consummated, will be accounted for by JWCFS using the purchase method of
accounting under generally accepted accounting principles. In accordance with
the purchase method of accounting, the consolidated financial statements of
JWCFS will reflect the effects of the Exchange Offer and the Consolidation
Merger only from and after the closing date for each. The minority interest
amount reflected in JWCFS' consolidated financial statements applicable to AGRO
will be reduced by the percentage of minority owned shares acquired, and JWCFS'
share of AGRO's net income (losses) will be increased to the extent of the
minority interest acquired.
REGULATORY APPROVALS
JWCFS is not aware of any federal or state regulatory agencies whose
approval is required for the transactions contemplated hereby to be effected.
13
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
The following tables present summary historical financial information
for JWCFS and AGRO, which is derived from the separate historical financial
statements of JWCFS and AGRO. The historical financial information as of
December 31, 1996, 1995, 1994, 1993, and 1992 (in the case of AGRO, December 31,
1996, 1995, and 1994 only), and for the respective years then ended, has been
derived from audited financial statements of JWCFS and AGRO, respectively. The
financial statements of JWCFS as of December 31, 1996 and 1995, and for each of
the years in the three-year period ended December 31, 1996, are incorporated by
reference elsewhere in this Prospectus and such financial statements for AGRO
are included elsewhere in Annex -- hereto. Historical financial information as
of March 31, 1997, and for the three-month periods then ended, is derived in
part from unaudited financial statements incorporated by reference (or included
in Annex I) elsewhere in this Prospectus. In each case, the following summary
financial information should be read along with such financial statements and
related notes.
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31 DECEMBER 31
--------------------- ---------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
JWCFS-HISTORICAL DATA:
Results of Operations for Period:
Revenues $ 22,132 $ 21,011 $ 91,020 $ 80,041 $60,471 $50,066 $39,723
Income Before Income Taxes and
Cumulative Effect of Change in
Accounting Principle 1,585 1,406 8,232 6,287 5,243 4,944 3,228
Net Income 1,012 862 6,025 3,810 3,300 3,772 3,135
Net Income Per Common Share 0.29 0.14 1.27 .63 .56 .62 .47
Average Common Shares Outstanding 3,505 6,079 4,745 6,025 5,908 5,941 6,159
Financial Condition at end of Period:
Total Assets 122,561 121,157 127,331 115,214 82,218 77,564 50,030
Total Liabilities 106,177 103,724 111,959 98,643 69,459 67,454 42,897
Stockholders' Equity Per Share 4.94 1.73 4.76 1.63 2.18 1.73 1.07
THREE MONTHS ENDED YEAR ENDED
MARCH 31 DECEMBER 31
--------------------- ---------------------------
1997 1996 1996 1995 1994
--------------------- ---------------------------
AGRO - HISTORICAL DATA:
Results of Operations for Period:
Revenues $ 35 $ 59 $ 194 $ 327 $ 72
Expenses 170 113 516 296 71
Net Income (loss) (134) (42) (315) 25 1
Net Income (loss) Per Common Share
(.11) (0.03) (0.25) 0.02 NIL
Average Common Shares Outstanding
1,265 1,265 1,265 1,265 723
Financial Condition at end of Period:
Total Assets 4,778 5,162 4,939 5,213 5,175
Total Liabilities 47 24 74 33 20
Net Asset Value Per Share 3.74 4.06 3.85 4.09 4.07
</TABLE>
14
<PAGE>
SUMMARY PRO FORMA FINANCIAL DATA -- UNAUDITED
The following tables set forth for the periods and the dates indicated
selected unaudited pro forma financial information of JWCFS. The unaudited pro
forma financial information is based on the historical results of operations and
financial condition of JWCFS and AGRO. This information should be read in
conjunction with the Pro Forma Condensed Financial Statements that are included
elsewhere herein and the historical financial statements of JWCFS incorporated
by reference in this Prospectus. The pro forma data give effect to the Exchange
Offer and to the Consolidation Merger, in the latter case resulting in AGRO
being a wholly owned subsidiary of JWCFS, and in each case accounted for as a
purchase and based upon a conversion of an outstanding AGRO Share into .418
JWCFS Share.
The unaudited pro forma financial information presented is for informational
purposes only and is not necessarily indicative of results of operations or
financial position that would have been reported had the Exchange Offer or the
Consolidation Merger, as the case may be, been completed at the beginning of the
respective periods or as of the dates for which such unaudited pro forma
information is presented. Neither is such information indicative of future
results of operations or financial position.
THREE MONTHS ENDED MARCH 31, 1997
---------------------------------
<TABLE>
<CAPTION>
AS ADJUSTED FOR
AS ADJUSTED EXCHANGE OFFER
JWCFS FOR EXCHANGE AND CONSOLIDATION
STATEMENT OF OPERATIONS DATA: AS REPORTED OFFER ONLY(1) MERGER (2)
----------- ------------- -----------------
<S> <C> <C> <C>
Revenues:
Commissions $11,538,000 $11,538,000 $11,538,000
Market making and principal trans. 4,646,000 4,610,500 4,610,500
Interest 2,334,000 2,383,500 2,383,500
Clearing Fees 1,808,000 1,808,000 1,808,000
Other 1,806,000 1,827,200 1,827,200
------------------------------------------------
22,132,000 22,167,200 22,167,200
------------------------------------------------
Expenses:
Commission and clearing costs 11,558,000 11,558,000 11,558,000
Employee compensation and benefits 4,155,000 4,179,800 4,179,800
Selling, general and administrative 3,849,000 3,993,700 3,849,000
Interest 985,000 985,000 985,000
------------------------------------------------
20,547,000 20,716,500 20,571,800
------------------------------------------------
Income before income taxes and
minority interest 1,585,000 1,450,700 1,595,400
Provision for income taxes 573,000 573,000 576,952
------------------------------------------------
Income before minority interest 1,012,000 877,700 1,018,448
Minority interest -- (65,807) --
------------------------------------------------
Net income $ 1,012,000 $ 943,507 $ 1,018,448
================================================
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net income per common share $0.29 $0.26 $0.26
================================================
Weighted average shares outstanding 3,505,000 3,638,157 3,897,199
================================================
- -------------------------
</TABLE>
(1) Assumes the Exchange Offer results in JWCFS' ownership of an aggregate of
645,201 AGRO Shares (or 51% of the outstanding), which is the minimum
required for JWCFS to accept tendered shares and consummate the Exchange
Offer.
(2) Assumes ownership by JWCFS of 100% of the AGRO Shares.
16
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
---------------------------------------------
AS ADJUSTED FOR
AS ADJUSTED EXCHANGE OFFER
JWCFS FOR EXCHANGE AND CONSOLIDATION
STATEMENT OF OPERATIONS DATA: AS REPORTED OFFER ONLY(1) MERGER (2)
----------- ------------- -----------------
<S> <C> <C> <C>
Revenues:
Commissions $42,945,000 $42,945,000 $42,945,000
Market making and principal trans. 24,315,000 24,262,100 24,262,100
Interest 9,625,000 9,871,500 9,871,500
Clearing Fees 11,463,000 11,463,000 11,463,000
Other 2,672,000 2,672,000 2,672,000
------------------------------------------------
91,020,000 91,213,600 91,213,600
------------------------------------------------
Expenses:
Commission and clearing costs 47,229,000 47,229,000 47,229,000
Employee compensation and benefits 14,911,000 15,007,100 15,007,100
Selling, general and administrative 16,760,000 17,179,800 16,760,000
Interest 3,888,000 3,888,000 3,888,000
------------------------------------------------
82,788,000 83,303,900 82,884,100
------------------------------------------------
Income before income taxes and
minority interest 8,232,000 7,909,700 8,329,500
Provision for income taxes 2,207,000 2,199,400 2,239,750
------------------------------------------------
Income before minority interest 6,025,000 5,710,300 6,089,750
Minority interest -- (154,203) --
------------------------------------------------
Net income $ 6,025,000 $ 5,864,503 $ 6,089,750
================================================
Net income per common share $1.27 $1.20 $1.19
================================================
Weighted average shares outstanding 4,744,882 4,878,039 5,137,081
================================================
</TABLE>
_________________________
(1) Assumes the Exchange Offer results in JWCFS' ownership of an aggregate of
645,201 AGRO Shares (or 51% of the outstanding), which is the minimum
required for JWCFS to accept tendered shares and consummate the Exchange
Offer.
(2) Assumes ownership by JWCFS of 100% of the AGRO Shares.
17
<PAGE>
<TABLE>
<CAPTION>
MARCH 31, 1997
-----------------------------------------------
AS ADJUSTED FOR
AS ADJUSTED EXCHANGE OFFER AND
JWCFS FOR EXCHANGE CONSOLIDATION
BALANCE SHEET DATA: AS REPORTED OFFER ONLY(1) MERGER (2)
------------ ------------- -------------------
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents $ 9,471,000 $ 9,233,344 $ 9,120,013
Commissions and other receivables 2,733,000 2,765,200 2,765,200
Receivables from customers 95,458,000 95,458,000 95,458,000
Receivables from brokers and dealers 2,493,000 2,493,000 2,493,000
Securities owned, at market value 6,398,000 10,121,970 10,183,724
Furniture, equipment and leasehold
improvements, net 1,442,000 1,442,000 1,442,000
Deferred tax interest 1,735,000 1,741,000 1,741,000
Other, net 2,831,000 2,836,900 2,836,900
--------------------------------------------------
$122,561,000 $126,091,414 $126,039,837
==================================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Short-term borrowings from banks $ 31,870,000 $ 31,870,000 $ 31,870,000
Accounts payable, accrued liabilities
and other liabilities 8,764,000 8,811,100 8,811,100
Payable to customers 25,809,000 25,809,000 25,809,000
Payable to brokers and dealers 29,767,000 29,767,000 29,767,000
Securities sold, not yet purchased, at
market value 1,018,000 1,018,000 1,018,000
Notes payable to affiliate 8,375,000 8,375,000 8,375,000
Income taxes payable 574,000 574,000 574,000
Minority interest - 2,318,190 -
---------------------------------------------------
106,177,000 108,542,290 106,224,100
---------------------------------------------------
Commitments and contingencies - - -
---------------------------------------------------
Stockholders' equity
Preferred stock - - -
Common stock 3,000 3,134 3,392
Additional paid-in capital 821,000 1,985,990 4,252,345
Retained earnings 15,560,000 15,560,000 15,560,000
---------------------------------------------------
$122,561,000 $126,091,414 $126,039,837
===================================================
</TABLE>
_________________________
(1) Assumes the Exchange Offer results in JWCFS' ownership of an aggregate of
645,201 AGRO Shares (or 51% of the outstanding), which is the minimum
required for JWCFS to accept tendered shares and consummate the Exchange
Offer.
(2) Assumes ownership by JWCFS of 100% of the AGRO Shares.
18
<PAGE>
COMPARISON OF CERTAIN UNAUDITED PER SHARE DATA
The following tables show comparative historical per share data for JWCFS and
AGRO, combined pro forma per share data for JWCFS and equivalent pro forma per
share data for AGRO. The pro forma data give effect to the Exchange Offer only
(with an assumption that it results in JWCFS' ownership of only 51% of the
outstanding AGRO Shares) and to the Consolidation Merger, in the latter case
resulting in AGRO being a wholly owned subsidiary of JWCFS, and in each case
based upon the conversion of an AGRO Share into .418 JWCFS Share. The
information presented should be read in conjunction with the historical
financial statements and notes thereto, and the pro forma condensed financial
information, including the notes thereto, which are incorporated by reference or
included elsewhere in this Prospectus. These pro forma data are presented for
comparative purposes only and are not necessarily indicative of the combined
financial position or results of operations in the future or of what the
combined financial position or results of operations would have been had the
Exchange Offer or the Consolidation Merger, as the case may be, been consummated
during the periods or as of the date for which the pro forma data are presented.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1997
---------------------------------------
PRO FORMA
--------------------------
EXCHANGE CONSOLIDATION
HISTORICAL OFFER ONLY MERGER
----------- ----------- -------------
<S> <C> <C> <C>
JWCFS
Book value per share $4.94 $5.08(2) $5.34(2)
Net income per share 0.29 0.26(2) 0.26(2)
AGRO
Net assets per share 3.74 2.12(1) 2.23(1)
Net income (loss) per share (0.11) 0.11(1) 0.11(1)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
---------------------------------------
PRO FORMA
--------------------------
EXCHANGE CONSOLIDATION
HISTORICAL OFFER ONLY MERGER
----------- ----------- -------------
<S> <C> <C> <C>
JWCFS
Book value per share $4.76 $4.92(2) $5.19(2)
Net income per share 1.27 1.20(2) 1.19(2)
AGRO
Net assets per share 3.74 2.05(1) 2.17(1)
Net income (loss) per share (0.25) 0.50(1) 0.50(1)
</TABLE>
- ---------------
(1) Amounts are calculated by multiplying JWCFS's pro forma combined amounts by
the Exchange Ratio of .418.
(2) Amounts are calculated by dividing pro forma stockholders' equity or net
income by the sum of total outstanding shares of JWCFS common stock plus new
shares to be issued in the Exchange Offer or the Consolidation Merger, as
the case may be.
19
<PAGE>
MARKETS FOR THE JWCFS AND AGRO SHARES
COMPARATIVE MARKET PRICES
JWCFS Shares are traded on the AMEX (symbol: JWC), and AGRO Shares are
traded on NASDAQ (symbol: AGRO). (Prior to May 8, 1997, JWCFS Shares were
traded on NASDAQ under the symbol "KORP".) The following tables set forth the
high and low sales prices per JWCFS Share and AGRO Share for each period
indicated. They also set forth the high bid and low asked prices quoted by
dealers for the JWCFS Shares and the AGRO Shares. The high bid at any given
time is the highest price that a dealer is at that time offering to pay to an
investor who wishes to sell his or her shares, and the low asked at any given
time is the lowest price at which a dealer is at that time offering to sell
shares to an investor who wishes to buy them. For shares with wide bid-asked
spreads, the high bid and low asked prices provide additional information
concerning market prices; because sales prices are reported for transactions
between a dealer and an investor, the reported sales price will be relatively
high if the reported transaction is a sale by a dealer, and relatively low if it
is a purchase by a dealer. However, the bid-asked prices provide no assurance
that the specified prices are available for transactions involving more than one
round lot (100 shares).
Neither JWCFS nor AGRO has paid a cash dividend with respect to its shares.
The fiscal year for each company ends on December 31 of each year. On June 6,
1997, the last full trading day before the initial filing of the Registration
Statement with respect to the Exchange Offer, the last reported sale price per
JWCFS Share was $8.38, and such price per AGRO Share was $2.75.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT QUOTATIONS FOR JWCFS SHARES AND AGRO
SHARES.
<TABLE>
<CAPTION>
JWCFS SHARES(1) SALES PRICE
--------------
HIGH LOW HIGH BID LOW ASKED
------ ----- ---------- -----------
<S> <C> <C> <C> <C>
FISCAL YEAR
1995
First Quarter $ 3.42 $2.42 $ 3.08 $2.67
Second Quarter 2.75 2.17 2.58 2.42
Third Quarter 2.75 2.17 2.42 2.42
Fourth Quarter 3.17 2.42 2.83 2.67
1996
First Quarter $ 3.33 $2.75 $ 3.17 $2.92
Second Quarter 5.08 3.08 4.67 3.33
Third Quarter 5.00 3.17 4.50 3.67
Fourth Quarter 7.67 3.83 7.17 4.33
1997
First Quarter $12.50 $7.17 $12.25 $8.00
Second Quarter (through
June 6, 1997) $10.13 $6.00 NA NA
Date: June 6, 1997 $ 8.63 $8.38 NA NA
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
AGRO SHARES(1) SALES PRICE
--------------
HIGH LOW HIGH BID LOW ASKED
------ ----- ---------- -----------
<S> <C> <C> <C> <C>
FISCAL YEAR
1995
First Quarter $4.50 $2.00 $4.13 $2.50
Second Quarter 2.63 2.00 2.25 2.50
Third Quarter 2.63 2.00 2.00 2.50
Fourth Quarter 3.00 2.00 2.75 2.63
1996
First Quarter $3.00 $2.50 $2.63 $3.00
Second Quarter 2.75 2.25 2.56 2.75
Third Quarter 3.00 2.00 2.63 2.50
Fourth Quarter 2.88 2.50 2.88 2.75
1997
First Quarter $3.00 $2.69 $2.88 $2.81
Second Quarter (through
June 6, 1997) $2.88 $2.69 $2.88 $2.81
Date: June 6, 1997 $2.75 $2.75 $2.75 $2.94
</TABLE>
________________________
(1) Sources: The Nasdaq Stock Market, Inc. and The American Stock Exchange,
Inc., as applicable.
CONDITION OF THE MARKET FOR THE AGRO SHARES
Of the 938,550 outstanding AGRO Shares not owned by JWCFS as of May 31,
1997, an aggregate of approximately 36,750 are believed to be held by one
institutional investor; an aggregate of approximately 200,000 are believed to be
held by a group of investors whom JWCFS believes have acted (or may be acting)
in concert with respect to their ownership of AGRO Shares or otherwise
concerning AGRO; and the remaining approximately 701,800 shares are believed to
be held by approximately 940 other beneficial owners. The market for the
publicly held AGRO Shares is characterized by sporadic, low-volume trading, as
indicated in the following table. The following trading data are based on
volumes as reported by market makers, and thus a reported transaction may
represent only one side of the buy-sell cycle, with subsequent offsetting
transactions also being reported as separate trading volume. Accordingly, the
number of shares actually bought and sold by investors may be significantly less
than reflected by such volumes below.
<TABLE>
<CAPTION>
Aggregate Reported Average Daily
Period Trading Volume(1) Reported Trading Volume(1)
- ------ --------------------- --------------------------
<S> <C> <C>
1996:
- -----
January 106,951 4,861
February 76,935 3,847
March 90,255 4,298
April 113,445 5,402
May 169,860 7,721
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Aggregate Reported Average Daily
Period Trading Volume(1) Reported Trading Volume(1)
- ------ --------------------- --------------------------
<S> <C> <C>
June 120,435 6,022
July 84,476 3,840
August 133,614 6,073
September 62,300 3,115
October 101,750 4,424
November 100,000 5,000
December 289,825 13,801
1997:
- -----
January 135,885 6,177
February 30,500 1,605
March 43,050 2,153
April 50,100 2,277
May 23,700 1,129
</TABLE>
____________________________________
(1) Source: The Nasdaq Stock Market, Inc.
JW Charles/CSG has been the principal market maker for AGRO Shares since
1994. As of June 6, 1997, there were six other market makers for AGRO Shares;
however, these market makers (along with all others since January 1, 1996)
collectively accounted for less than 30% of the aggregate volume of all
reported trades in AGRO Shares from January 1, 1996 through April 30, 1997, with
JWCharles/CSG accounting for the entire remainder of over 70%. JWCFS may cause
JW Charles/CSG, which has ceased all market making activity for AGRO Shares in
connection with the filing of the Registration Statement with respect to this
Exchange Offer, not to resume such activity following the termination of the
Exchange Offer. That action alone could significantly and adversely affect the
AGRO Shares quotation and trading on NASDAQ, whether or not JWCFS otherwise
decides to seek to terminate such trading.
22
<PAGE>
THE EXCHANGE OFFER
BACKGROUND
JWCharles/CSG has been the principal market maker for the trading of AGRO
Shares on NASDAQ since it served as underwriter for AGRO's initial public
offering (the "IPO") in August 1994. Many purchasers of AGRO Shares in the IPO,
and many current holders of such shares, are clients or customers of JWCFS'
financial services business, and JWCFS has been concerned about the quality of
their respective investment experiences as purchasers of AGRO Shares. As a
result, JWCFS has caused JWCharles/CSG to continue its market making activity
with respect to AGRO Shares even though the low level of activity by other
market makers, and the sporadic and limited demand for AGRO Shares by
purchasers, has led to JWCFS' ownership of an increasing amount of AGRO Shares.
That is because, to assure the maintenance of a trading market for AGRO Shares
in such an environment, JWCharles/CSG has had to purchase and hold AGRO Shares
due to the unavailability of a sufficient number of interested purchasers making
acceptable offers to buy AGRO Shares. As a result of these factors, JWCFS'
ownership of AGRO Shares began to increase steadily during 1996, and in
December 1996 rose to 13%, which exceeded the parameters management seeks
to maintain with respect to securities for which JWCharles/CSG serves as a
market maker.
In response to that trend, JWCFS' management began to discuss the situation
with the JWCFS Board, including that the trading prices for AGRO Shares were
substantially below AGRO's net asset value ("NAV") per share, and to review
possible strategies for AGRO to enhance value for its shareholders. The JWCFS
Board authorized management to continue its review and analysis, and it
designated JWCFS' Chairman and Chief Executive Officer, Marshall T. Leeds, and
Vice Chairman and Chief Financial Officer, Joel E. Marks, to function as an
informal special committee of the Board (the "JWCFS Special Committee") to keep
the Board informed with respect to the situation.
During this period, AGRO entered into negotiations with respect to a
proposed merger with Advanced Electronic Support Products, Inc. ("AESP"). AGRO
initially considered engaging JWCFS to serve as its financial advisor for
certain of those negotiations, but did not do so. In November 1996, AGRO and
AESP mutually agreed to terminate their negotiations upon encountering
regulatory and other difficulties to its consummation. Those developments
caused JWCFS' management concern about the continuation of JWCFS' unusual
position with respect to the ownership of AGRO Shares. In early 1997, the JWCFS
Special Committee began to explore the feasibility and desirability of
affirmatively seeking to increase JWCFS' ownership of AGRO Shares in order to be
able to exercise some influence over the management of AGRO's business.
In November 1996, following the aborted transaction with AESP, certain
holders of AGRO Shares filed a lawsuit against AGRO, JWCFS, and other parties
complaining, among other things, that the transaction should have been
consummated (and would have been but for certain terms thereof that were alleged
to inappropriately benefit certain affiliates of AGRO). The lawsuit is still
ongoing and is being vigorously contested by JWCFS and the other defendants.
The plaintiffs (and persons whom JWCFS believes may be acting in concert with
them) are believed to own over 15% of the outstanding AGRO Shares. The plans
and intentions of these persons with respect to AGRO can not be ascertained
fully, and JWCFS has had to consider whether possible actions they might take
could adversely affect AGRO.
JWCFS believes that AGRO has not been successful in implementing its plan
of business, which is evidenced in significant part by the fact that, as of
March 31, 1997, AGRO reported that it had approximately $4 million of the $5.1
million of net proceeds from its IPO uninvested in portfolio companies. AGRO
has made investments in only six portfolio companies since the IPO in August
1994. In addition, AGRO's reported NAV as of March 31, 1997, was $3.74 per
share, of which $3.17 per share was in cash or other liquid assets. Yet, AGRO
Shares are trading below their NAV, and have done so consistently since March
1995.
In March 1997, after JWCFS' ownership of AGRO Shares had increased to
20.7%, the JWCFS Special Committee concluded and reported to the JWCFS Board
that JWCFS could not continue with the status quo, and that JWCFS should file a
Schedule 13D to report its ownership of AGRO Shares, rather than continue to
report on Schedule 13G as is customary when securities are owned solely
incidental to market making transactions. On
23
<PAGE>
March 25, 1997, the JWCFS Special Committee obtained approval from the JWCFS
Board to explore a specific transaction, and the committee began detailed
analysis of the possible structure and terms for an exchange tender offer. On
June 6, 1997, the JWCFS Special Committee recommended this Exchange Offer to the
JWCFS Board, and the JWCFS Board approved the terms and conditions,
the filing of the Registration Statement, and the taking of all related steps
necessary to permit the Exchange Offer to be made.
From time to time during 1996, JWFCS' Chairman and Vice Chairman had
informal discussions with AGRO's President concerning AGRO's operations and
prospects, including any plans by AGRO to increase its level of portfolio
investments and otherwise to enhance shareholder value. Such discussions
continued in 1997 until March 1997, when the JWCFS Special Committee decided to
recommend to the JWCFS Board that JWCFS undertake a transaction that has become
this Exchange Offer. None of the discussions with AGRO's President included any
proposal or plan of JWCFS for submission to the AGRO Board.
Following the JWCFS Board's decision on March 25, 1997 to undertake the
Exchange Offer, JWCFS did not have further discussions with AGRO concerning that
proposal or any other possible action by JWCFS prior to the initial filing of
the Registration Statement. JWCFS did continue to contact AGRO to request more
convenient access to certain information concerning AGRO's public disclosures
and AGRO's stock trading and beneficial stock ownership positions. JWCFS had
determined that it did not wish to involve the AGRO Board in any formal or
informal consideration of JWCFS' proposal, but instead it desired, if it were to
undertake a transaction, to pursue the matter directly with AGRO's shareholders,
to the extent permitted by applicable laws and regulations, including the
Williams Act provisions of the Exchange Act.
In connection with filing the Registration Statement, JWCFS has offered to
be available to the AGRO Board for such discussions about the Exchange Offer as
the AGRO Board may wish to have. JWCFS had not undertaken, and does not propose
to undertake, to obtain an approval or recommendation by the AGRO Board of the
Exchange Offer. JWCFS hopes that the AGRO Board will rely on its option under
Rule 14d-9 of the Exchange Act to take a position that does not recommend or
oppose the Exchange Offer, but rather leaves the decision of whether to tender
their AGRO Shares in the Exchange Offer to each AGRO shareholder and such
shareholder's personal financial or other advisors.
PURPOSE OF THE EXCHANGE OFFER; THE CONSOLIDATION MERGER
As the largest shareholder of AGRO, JWCFS desires to realize for itself and
all other AGRO shareholders the net asset value of their holdings in AGRO. JWCFS
believes that AGRO's prospects for future success as an independently operated
business development company ("BDC") may not be good and that it might be able
to enhance its value for shareholders by terminating its status as a BDC. Such a
termination, however, requires the approval of AGRO shareholders who own at
least a majority of the outstanding AGRO Shares, and may require the approval of
AGRO shareholders who own 75% of the outstanding AGRO Shares, depending upon the
definitive interpretation of certain ambiguous provisions in AGRO's governing
documents and the implications of certain public statements previously made by
AGRO.
The Exchange Offer is being made for the purpose of acquiring at least 51%
of the outstanding AGRO Shares and thereby to secure the ability to control
certain governance matters for AGRO, including to elect, in time, all the
members of its Board of Directors. Upon completion of the Exchange Offer, if
JWCFS holds the requisite number of AGRO Shares, and assuming the cooperation of
the incumbent JWCFS Board or the election of the JWCFS Nominees to a majority of
the AGRO Board (of which there is no assurance), JWCFS could cause the
termination of AGRO's election to be treated as a BDC under the 1940 Act; and,
if JWCFS holds at least 90% of such shares, JWCFS could cause the Consolidation
Merger of AGRO with a subsidiary of JWCFS without seeking a vote of AGRO's
shareholders (a so-called "short-form" merger), in which event the remaining
AGRO shareholders (other than JWCFS) would receive the same number of JWCFS
Shares for each AGRO Share as paid in this Exchange Offer. JWCFS will consider
all such alternatives, and possibly others that may become available to it, at
the appropriate time.
If following the Exchange Offer, JWCFS' ownership of AGRO Shares is less
than 100%, the principal factors in JWCFS' determination of whether to seek to
consummate the Consolidation Merger will include the following:
24
<PAGE>
. If such ownership is less than the 90% required for a short-form merger,
JWCFS will assess the administrative and regulatory complexities and expense of
pursuing a merger that requires the vote of AGRO shareholders.
. If AGRO were wholly owned by JWCFS, decisions regarding AGRO's operations
could be made without possible limitations arising out of the existence of a
minority shareholder interest. If JWCFS does not own all of the AGRO Shares,
AGRO would be required by law to be managed by the AGRO Board in the best
interests of all AGRO shareholders, rather than just JWCFS and its shareholders.
Moreover, as the majority shareholder, JWCFS might have certain legal duties to
the minority shareholders of AGRO that could restrict JWCFS' flexibility in
dealing with its assets and its operations in the manner JWCFS' management
believes to be in the best interest of JWCFS' shareholders, which would then
include the former AGRO shareholders who tendered their shares in this Exchange
Offer.
. As a 100% owned subsidiary, AGRO would no longer incur separate accounting,
possible SEC reporting, shareholder reporting, annual meeting, and independent
board expenses. JWCFS estimates that elimination of these expenses would result
in savings of approximately $100,000 per year.
. AGRO's status as a separate company could result in disproportionate
attention, by analysts and other members of the investment community, to AGRO's
role within the JWCFS organization, and could detract from JWCFS' ability to
communicate the role and capabilities of its various subsidiaries in the context
of JWCFS' overall business strategies.
. Conversion of the residual AGRO minority shareholder interest into
additional outstanding JWCFS shares would increase JWCFS' market capitalization
and public float, which could enhance the overall trading market for JWCFS
Shares.
The exact timing and details of any merger or other action concerning AGRO
necessarily will depend upon a variety of factors, including the number of AGRO
Shares acquired by JWCFS in the Exchange Offer. It should be noted that, as a
result of information hereafter obtained by JWCFS, changes in general economic
or market conditions or in the business of AGRO, or other factors, such action
might not be effected. JWCFS expressly reserves the right not to effect a
subsequent merger or take any other of the possible actions.
Except for the Transaction and except as otherwise described in this
Prospectus, JWCFS does not have any present plans or proposals that relate to or
would result in an extraordinary corporate transaction, such as a merger,
reorganization, liquidation, relocation of any operations of JWCFS, or the sale
or transfer of a material amount of assets involving JWCFS or any of its
subsidiaries, or any changes in JWCFS' capitalization or any other change in
JWCFS' corporate structure or business or the composition of its management.
However, JWCFS may, in the future, propose or develop additional or new plans or
proposals, or may propose the acquisition or disposition of assets or other
changes in JWCFS' business, corporate structure, capitalization, management, or
dividend policy.
DETERMINATION OF THE EXCHANGE RATIO
The JWCFS Board determined the Exchange Ratio based on the reported NAV of
AGRO at March 31, 1997 (without any discount thereto in respect of the
illiquidity of any AGRO portfolio investment, and subject to upward adjustment
if there is a demonstrated increase in AGRO's NAV before the third business day
preceding the Expiration Date) and the average of the last reported sales prices
of JWCFS Shares on the AMEX for the ten (10) trading days immediately preceding
the initial filing of the Registration Statement with respect to this Exchange
Offer. The Exchange Ratio represents (i) a premium of 33% based on the relative
last reported sales prices of JWCFS Shares and AGRO Shares on June 6, 1997, the
last such trading date, (ii) a premium of 35.7% based on the relative average
closing sales prices during the ten (10) trading days preceding such date, and
(iii) a premium of ____% based on the relative final closing sales prices on
____________, 1997, the last trading date immediately preceding the formal
commencement of this Exchange Offer.
25
<PAGE>
Based on relative closing bid quotations reported, such premiums are
29.2%, 33.3%, and ____%, respectively. Bid prices are the prices at which
dealers stand ready to purchase at least one round lot from investors seeking to
sell their shares, and JWCFS believes that, for shares (such as those of AGRO)
with wide bid-asked spreads, the bids provide a more accurate measure of
sales prices obtainable by individual investors seeking to sell a small number
of shares.
The JWCFS Board concluded that the Exchange Ratio and resulting premium
were reasonable and appropriate in light of numerous factors, including: AGRO's
NAV; the condition of the public market for the AGRO Shares on NASDAQ; the fact
that tendering holders of AGRO Shares, as new holders of JWCFS Shares, would
continue to participate in the business of AGRO; the perception of JWCFS'
management regarding AGRO's business prospects; the perceived benefits to JWCFS
of obtaining a substantially increased ownership of AGRO; and expectations
concerning the level of premium that likely would be attractive to the holders
of AGRO Shares not held by JWCFS. However, because the Exchange Ratio will not
change for possible fluctuations in the market price of the JWCFS Shares
following public awareness of the Exchange Offer, such fluctuations may
adversely affect the amount of any such premium on the date the Exchange offer
is consummated. The JWCFS Board, in connection with authorizing the Exchange
Offer, authorized JWCFS, to the extent permissible under applicable rules and
regulations of the Commission, to engage in open market repurchases of JWCFS
Shares if it believes that any such market price fluctuations make such
repurchases in the best interests of JWCFS' shareholders as a whole.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions of the Exchange Offer, JWCFS
hereby offers to exchange JWCFS Shares for all (but at least a minimum of 51%)
of the outstanding AGRO Shares, at a rate of .418 JWCFS Share for each AGRO
Share, provided that such AGRO Shares are validly tendered by the Expiration
Date and not withdrawn as provided in "THE EXCHANGE OFFER - Withdrawal Rights".
The term "Expiration Date" means 12:00 midnight, Atlanta time, on ___________,
1997, unless JWCFS extends the period of time for which the Exchange offer is
open, in which event the term "Expiration Date" means the latest time and date
at which the Exchange Offer as so extended by JWCFS expires.
Upon the terms and subject to the conditions of the Exchange Offer, JWCFS
will exchange all AGRO Shares for JWCFS Shares. Tendering shareholders will not
be obligated to pay any charges or expenses of the Exchange Agent or any
brokerage commissions. Except as set forth in the Letter of Transmittal, any
transfer taxes on the exchanged AGRO Shares pursuant to the Exchange Offer will
be paid by or on behalf of JWCFS unless such payment would jeopardize the tax-
free nature of the Transaction for federal income tax purposes. Currently,
JWCFS is not aware of any transfer taxes, the payment of which by JWCFS would
have such a result.
No fractional JWCFS Shares will be distributed. Holders of AGRO Shares who
would otherwise be entitled to receive a fractional JWCFS Share will be paid
cash in lieu of such fraction based on the last reported sales price of JWCFS
Shares on the Expiration Date.
JWCFS may choose not to accept any tender by a holder of less than all the
AGRO Shares owned by such holders; provided, however, that for purposes of this
-----------------
term, a nominee or street-name holder will not be considered the owner of AGRO
Shares, but rather the respective beneficial owners of such AGRO Shares shall be
deemed the owners.
The Exchange Offer is subject to certain conditions set forth in "THE
EXCHANGE OFFER - Certain Conditions of the Exchange Offer", including the
condition that JWCFS receives valid tenders (that are not subsequently
withdrawn) for a sufficient number of AGRO Shares to equal, when added to AGRO
Shares already owned by JWCFS, at least 51% of the outstanding AGRO Shares. As
of May 31, 1997, JWCFS owned 326,550 AGRO Shares, or approximately 25.8% of the
shares outstanding. If any condition is not satisfied, JWCFS may (i) terminate
the Exchange Offer and return all tendered AGRO Shares to tendering
shareholders, (ii) extend the Exchange Offer and, subject to withdrawal rights
as set forth in "THE EXCHANGE OFFER -- Withdrawal Rights", retain all such AGRO
Shares until the expiration of the Exchange Offer as so extended, (iii) waive
such condition and, subject to any requirement to extend the period during which
the Exchange Offer is open, exchange all AGRO Shares validly tendered for
exchange by the Expiration Date and not withdrawn, or (iv) delay acceptance for
26
<PAGE>
exchange of, or exchange for, any AGRO Shares until satisfaction or waiver of
such condition to the Exchange Offer, even though the Exchange Offer has
expired. JWCFS' right to delay acceptance for exchange of, or exchange for,
AGRO Shares tendered for exchange pursuant to the Exchange Offer is subject to
applicable law, including, to the extent applicable, Rule 14e-1(c) promulgated
under the Exchange Act, which requires that JWCFS pay the consideration offered
or return the AGRO Shares deposited by or on behalf of the AGRO shareholders
promptly after the termination or withdrawal of the Exchange Offer. For a
description of JWCFS' right to extend the period during which the Exchange Offer
is open and to amend, delay, or terminate the Exchange Offer, see "THE EXCHANGE
OFFER -- Extension of Tender Period; Termination; Amendment".
Requests will be made to AGRO for use of an AGRO shareholders list and
security position listings for purposes of communicating with AGRO shareholders
and disseminating the Exchange Offer to holders of the AGRO Shares. This
Prospectus and the related Letter of Transmittal will be mailed to record
holders of AGRO Shares and will be furnished to brokers, banks, and similar
persons whose names, or the names of whose nominees, appear on the AGRO
shareholders list or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of AGRO Shares by JWCFS following receipt of such list or
listings from AGRO.
PROCEDURE FOR TENDERING AGRO SHARES
To tender AGRO Shares pursuant to the Exchange Offer, either: (a) a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantee or an Agent's Message
(as defined below) in connection with a book-entry transfer, and any other
documents required by the Letter of Transmittal, must be received by the
Exchange Agent at one of its addresses set forth on the back cover of this
Prospectus and either (i) certificates for the AGRO Shares tendered must be
received by the Exchange Agent at one of such addresses, or (ii) such AGRO
Shares must be delivered pursuant to the procedures for book-entry transfer
described below (and a confirmation of such delivery received by the Exchange
Agent, such confirmation being referred to as a "Book-Entry Confirmation"), in
each case by the Expiration Date; or (b) the guaranteed delivery procedure
described below must be complied with. The term "Agent's Message" means a
message transmitted by a Book-Entry Transfer Facility (as defined below) to, and
received by, the Exchange Agent, that forms a part of a Book-Entry Confirmation
and states that such Book-Entry Transfer Confirmation has received an express
acknowledgment from the participant in such Book-Entry Transfer Facility
tendering the AGRO Shares that such participant has received and agreed to be
bound by the terms of the Letter of Transmittal and that JWCFS may enforce such
agreement against such participant.
The Exchange Agent will establish accounts with respect to the AGRO Shares
at The Depositary Trust Company and Philadelphia Depository Trust Company (each
a "Book-Entry Transfer Facility") for purposes of the Exchange Offer within two
business days after the date of this Prospectus, and any financial institution
that is a participant in the system of any Book-Entry Transfer Facility may make
book-entry delivery of AGRO Shares by causing such Book-Entry Transfer Facility
to transfer such AGRO Shares into the Exchange Agent's account in accordance
with the procedures of such Book-Entry Transfer Facility. However, although
delivery of AGRO Shares may be effected through book-entry transfer, the Letter
of Transmittal (or facsimile thereof) with any required signature guarantees, or
an Agent Message in connection with a book-entry transfer, and any other
required documents must, in any case, be received by the Exchange Agent at one
of its addresses set forth on the back cover of this Prospectus by the
Expiration Date, or the guaranteed delivery procedure described below must be
complied with. Delivery of the Letter of Transmittal and any other required
documents to a Book-Entry Transfer Facility does not constitute delivery to the
Exchange Agent.
Except as otherwise provided below, all signatures on a Letter of
Transmittal must be guaranteed by a firm that is a member of a registered
national securities exchange or the National Association of Securities Dealers,
Inc. (the "NASD"), or by a commercial bank or trust company having an office or
correspondent in the United States (an "Eligible Institution"). Signatures on a
Letter of Transmittal need not be guaranteed if (a) the Letter of Transmittal is
signed by the registered holder of the AGRO Shares tendered therewith and such
holder has not completed the box entitled "Special Exchange Instructions" on the
Letter of Transmittal, or (b) such AGRO Shares are tendered for the account of
an Eligible Institution.
27
<PAGE>
If a shareholder desires to tender AGRO Shares pursuant to the Exchange
Offer and cannot deliver such AGRO Shares and all other required documents to
the Exchange Agent by the Expiration Date, or such shareholder cannot complete
the procedure for book-entry transfer on a timely basis, such AGRO Shares may
nevertheless be tendered if all of the following conditions for guaranteed
delivery are met:
(a) such tender is made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by JWCFS is received by the
Exchange Agent (as provided below) by the Expiration Date; and
(c) the certificates for such AGRO Shares (or a confirmation of a
book-entry transfer of such AGRO Shares into the Exchange Agent's account
at one of the Book Entry Transfer Facilities), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof)
and any other documents required by the Letter of Transmittal, are received
by the Exchange Agent within five AMEX trading days after the date of
execution of the Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF AGRO SHARES AND ALL OTHER REQUIRED DOCUMENTS IS
AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF CERTIFICATES FOR AGRO
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED AND SUFFICIENT TIME TO ENSURE TIMELY RECEIPT SHOULD BE
ALLOWED. To avoid backup federal income tax withholding with respect to JWCFS
Shares received by a shareholder pursuant to the Exchange Offer, the shareholder
must provide the Exchange Agent with his correct taxpayer identification number
or certify that he is not subject to backup federal income tax withholding by
completing the Substitute Form W-9 included in the Letter of Transmittal.
The tender of AGRO Shares pursuant to any one of the procedures described
above will constitute an agreement between the tendering shareholder and JWCFS
upon the terms and subject to the conditions of the Exchange Offer.
All questions as to the form of documents and the validity, eligibility
(including time of receipt), and acceptance for exchange of any tender of AGRO
Shares will be determined by JWCFS, in its sole discretion, which determination
will be final and binding. JWCFS reserves the absolute right to reject any or
all tenders of AGRO Shares determined by it not to be in proper form, and to
refuse any acceptance for exchange of AGRO Shares that may, in the opinion of
JWCFS' counsel, be unlawful. JWCFS also reserves the absolute right to waive
any defect or irregularity in any tender of AGRO Shares. None of JWCFS, the
Exchange Agent, the Information Agent, or any other person will be under any
duty to give notification of any defect or irregularity in tenders, or incur any
liability for failure to give any such notification.
EXCHANGE OF AGRO SHARES
Upon the terms and subject to the conditions of the Exchange Offer, JWCFS
will accept for exchange, and will transfer JWCFS Shares in exchange for, AGRO
Shares validly tendered and not withdrawn by the Expiration Date as promptly as
practicable after the later of (i) the Expiration Date and (ii) the satisfaction
or waiver of the conditions set forth in "THE EXCHANGE OFFER -- Certain
Conditions of the Exchange Offer". In addition, JWCFS reserves the right, in
its sole discretion subject to Rule 14e-1(c) promulgated under the Exchange Act,
to delay the acceptance for exchange, or delay exchange, of any AGRO Shares in
order to comply with any applicable law. For a description of JWCFS' right to
terminate the Exchange Offer and not accept for exchange of, or exchange for,
any AGRO Shares, or to delay acceptance for exchange of, or exchange for, any
AGRO Shares, see "THE EXCHANGE OFFER -- Extension of Tender Period; Termination;
Amendment".
For purposes of the Exchange Offer, JWCFS shall be deemed to have accepted
for exchange and exchanged AGRO Shares tendered for exchange when, as, and if
JWCFS gives oral or written notice to the Exchange Agent of its acceptance of
the tenders of such AGRO Shares for exchange. Exchange of AGRO Shares accepted
for exchange pursuant to the Exchange Offer will be made by deposit of tendered
AGRO Shares with the Exchange Agent, which will act as agent for the tendering
shareholders for the purpose of receiving JWCFS Shares
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from JWCFS and transmitting such JWCFS Shares to tendering shareholders. In all
cases, the exchange of JWCFS Shares for shares of AGRO Shares accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of certificates for such AGRO Shares (or of a confirmation
of a book-entry transfer of such AGRO Shares into the Exchange Agent's account
at one of the Book-Entry Transfer Facilities), a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), and any other required
documents. For a description of the procedure for tendering AGRO Shares pursuant
to the Exchange Offer, see "THE EXCHANGE OFFER -- Procedures for Tendering AGRO
Shares". Accordingly, exchanges of JWCFS Shares for AGRO Shares may be made to
tendering shareholders at different times if delivery of the AGRO Shares and
other required documents occur at different times. Under no circumstances will
interest be paid by JWCFS pursuant to the Exchange Offer, regardless of any
delay in making such exchange.
If certain events occur, JWCFS may not be obligated to exchange JWCFS
Shares for AGRO Shares pursuant to the Exchange Offer. See "THE EXCHANGE OFFER
- -- Certain Conditions of the Exchange Offer". JWCFS will exchange the same
number of JWCFS Shares for each AGRO Share accepted for exchange pursuant to the
Exchange Offer.
If any tendered AGRO Shares are not exchanged pursuant to the Exchange
Offer for any reason, or if certificates are submitted for more AGRO Shares than
are tendered, certificates for such unexchanged or untendered AGRO Shares will
be returned (or, in the case of AGRO Shares tendered by book-entry transfer,
such AGRO Shares will be credited to an account maintained at one of the Book-
Entry Transfer Facilities), without expense to the tendering shareholder, as
promptly as practicable following the expiration or termination of the Exchange
Offer.
WITHDRAWAL RIGHTS
Tenders of AGRO Shares made pursuant to the Exchange Offer are irrevocable,
except that AGRO Shares tendered pursuant to the Exchange Offer may be withdrawn
at any time before the Expiration Date and, unless theretofore accepted for
exchange and exchanged pursuant to the Exchange Offer, may also be withdrawn at
any time after ________ 1997. If JWCFS extends the period during which the
Exchange Offer is open, is delayed in its acceptance of AGRO Shares for
exchange, or is unable to accept AGRO Shares for exchange pursuant to the
Exchange Offer for any reason, then, without prejudice to JWCFS' rights under
the Exchange Offer, the Exchange Agent may, on behalf of JWCFS, retain all AGRO
Shares tendered, and such AGRO Shares may not be withdrawn except as otherwise
provided in this section.
To be effective, a written, telegraphic, telex, or facsimile transmission
notice of withdrawal must be timely received by the Exchange Agent at one of its
addresses set forth on the back cover of this Prospectus, and must specify the
name of the shareholder who tendered the AGRO Shares to be withdrawn and the
number of AGRO Shares to be withdrawn, and the name of the registered holder if
different from that of the person who tendered such AGRO Shares. The signature
on the notice of withdrawal must be guaranteed by an Eligible Institution
(unless such AGRO Shares have been tendered for the account of any Eligible
Institution). If AGRO Shares have been tendered pursuant to the procedures for
book-entry tender as set forth under " -- Procedure for Tendering AGRO Shares",
any notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be created with the withdrawn AGRO Shares and
must otherwise comply with such Book-Entry Transfer Facilities Procedures. If
certificates have been delivered or otherwise identified to the Exchange Agent,
the name of the registered holder and the serial numbers shown on the particular
certificates evidencing the AGRO Shares to be withdrawn must also be furnished
to the Exchange Agent as aforesaid prior to the physical release of such
certificates. Withdrawals may not be rescinded, and AGRO Shares withdrawn will
thereafter be deemed not validly tendered for purposes of the Exchange Offer.
However, withdrawn AGRO Shares may be retendered by again following one of the
procedures described in "THE EXCHANGE OFFER -- Procedure for Tendering AGRO
Shares" before the Expiration Date.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by JWCFS, in its sole discretion,
which determination will be final and binding. None of JWCFS, the Exchange
Agent, the Information Agent, or any other person will be under any duty to give
notification of any defect or irregularity in any notice of withdrawal, or incur
any liability for failure to give any such notification.
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EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT
JWCFS reserves the right (but will not be obligated), at any time or from
time to time, in its sole discretion and regardless of whether or not any of the
conditions specified in "THE EXCHANGE OFFER -- Certain Conditions of the
Exchange Offer" have been satisfied, to (i) extend the period during which the
Exchange Offer is open by giving oral or written notice of such extension to the
Exchange Agent and by making public announcement of such extension, or (ii)
amend the Exchange Offer in any respect by making a public announcement of such
amendment. There can be no assurance that JWCFS will exercise its right to
extend or amend the Exchange Offer.
If JWCFS materially changes the terms of the Exchange Offer (other than a
change in price or percentage of securities sought) or the information
concerning the Exchange Offer, or waives a material condition of the Exchange
Offer, JWCFS will extend the Exchange Offer, if required by applicable law, for
a period sufficient to allow shareholders to consider the amended terms of the
Exchange Offer. Certain rules promulgated under the Exchange Act provide that
the minimum period during which an offer must remain open following material
changes in the terms of the offer or information concerning the offer (other
than a change in price or a change in percentage of securities sought) will
depend on the facts and circumstances, including the relative materiality of
such terms or information. The Commission has stated that, as a general rule,
it is of the view that an offer should remain open for a minimum of five
business days from the date that notice of such a material change is first
published, sent, or given, and that, if material changes are made with respect
to information that approaches the significance of price and share levels, a
minimum of ten business days may be required to allow adequate dissemination and
investor response. If (i) JWCFS increases or decreases the consideration
offered for AGRO Shares pursuant to the Exchange Offer, or JWCFS decreases the
number of AGRO Shares eligible for exchange, and (ii) the Exchange Offer is
scheduled to expire at any time earlier than the expiration of a period ending
on the tenth business day from and including the date that notice of such
increase or decrease is first published, sent, or given, then the Exchange Offer
----
will be extended until the expiration of such period of ten business days. The
term "business day" means any day other than a Saturday, Sunday, or federal
holiday and consists of the time period from 12:01 a.m. through 12:00 midnight,
Atlanta time.
JWCFS also reserves the right, in its sole discretion, if any condition
specified in "THE EXCHANGE OFFER - Certain Conditions of the Exchange Offer" has
not been satisfied and so long as AGRO Shares have not theretofore been accepted
for exchange, to delay (except as otherwise required by applicable law)
acceptance for exchange of, or exchange for, any AGRO Shares, or to terminate
the Exchange Offer and not accept for exchange of, or exchange for, any AGRO
Shares.
If JWCFS extends the period of time during which the Exchange Offer is
open, is delayed in accepting for exchange, or exchanging for, any AGRO Shares,
or is unable to accept for exchange of, or exchange for, any AGRO Shares
pursuant to the Exchange Offer for any reason, then, without prejudice to JWCFS'
----
rights under the Exchange Offer, the Exchange Agent may, on behalf of JWCFS,
retain all AGRO Shares tendered, and such AGRO Shares may not be withdrawn
except as otherwise provided in "THE EXCHANGE OFFER - Withdrawal Rights". The
reservation by JWCFS of the right to delay acceptance for exchange of, or
exchange for, any AGRO Shares is subject to the requirements of Rule 14e-1(c)
under the Exchange Act, which requires that JWCFS pay the consideration offered
or return the AGRO Shares deposited by or on behalf of shareholders promptly
after the termination or withdrawal of the Exchange Offer.
Any extension, termination, or amendment of the Exchange Offer will be
followed as promptly as practicable by a public announcement thereof. Without
limiting the manner in which JWCFS may choose to make any public announcement,
JWCFS will have no obligation (except as otherwise required by applicable law)
to publish, advertise, or otherwise communicate any such public announcement
other than by making a release to the Dow Jones News Service, subject to JWCFS'
obligations under Rule 14d-4(c) under the Exchange Act (relating to JWCFS'
obligation to disseminate public announcements concerning material changes in
the Prospectus), if such rule is applicable. If the Exchange Offer is extended,
Commission regulations require a public announcement of such extension no later
than 9:00 a.m., Atlanta time, on the next business day after the previously
scheduled Expiration Date.
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CERTAIN CONDITIONS OF THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer and without
prejudice to JWCFS' other rights under the Exchange Offer, JWCFS shall not be
required to accept for exchange of, or exchange for, any AGRO Shares, and may
terminate the Exchange Offer as provided in "THE EXCHANGE OFFER - Extension of
Tender Period; Termination; Amendment", if before the time of an exchange of any
AGRO Shares, whether or not any shares have theretofore been accepted for
exchange or exchanged pursuant to the Exchange Offer, and at any time after the
date of this Prospectus, any of the following conditions exists:
(a) there shall be threatened, instituted, or pending any action
or proceeding by any government or governmental authority or agency,
domestic or foreign, or by any other person, domestic or foreign, before
any court or governmental authority or agency, domestic or foreign, (i)
challenging or seeking to make illegal, to delay, or otherwise directly or
indirectly to restrain or prohibit (A) the making of the Exchange Offer or
any other material element of the Transaction or (B) the acceptance for
exchange of, or exchange for, some of or all of the AGRO Shares by JWCFS,
(ii) seeking to obtain material damages directly or indirectly relating to
the transactions contemplated by the Exchange Offer (including the other
elements of the Transaction), (iii) seeking any material diminution in the
benefits expected to be derived by JWCFS or any of its affiliates as a
result of the transactions contemplated by the Exchange Offer (or any other
elements of the Transaction), or (iv) that otherwise, in the sole judgment
of JWCFS, has or may have material adverse significance with respect to
either the value of JWCFS or any of its subsidiaries or affiliates or the
value of the AGRO Shares to JWCFS;
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order, or decree proposed, enacted, enforced,
promulgated, issued, or deemed applicable to the Exchange Offer or any
transaction contemplated by the Exchange Offer (including the other
elements of the Transaction) by any court, government, or governmental
authority or agency, domestic or foreign, that might, in the sole judgment
of JWCFS, directly or indirectly, result in any of the consequences
referred to in clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the counter market, (ii) the declaration
of a banking moratorium or any suspension of payments in respect of banks
in the United States, (iii) any material adverse change (or development or
threatened development involving a prospective material adverse change) in
United States or any other currency exchange rates, or a suspension of or a
limitation on the markets therefor, (iv) the commencement of a war, armed
hostilities, or other international or national calamity directly or
indirectly involving the United States, (v) any limitation (whether or not
mandatory) by any governmental authority or agency on, or any other event
that, in the sole judgment of JWCFS, might adversely affect, the extension
of credit by banks or other financial institutions, or (vi) in the case of
any of the foregoing existing at the time of the commencement of the
Exchange Offer, a material acceleration or worsening thereof;
(d) any material adverse change (i) shall have occurred or been
threatened (or any development shall have occurred or been threatened
involving a prospective material adverse change) in the business, financial
condition, results of operations, or prospects of AGRO, or (ii) shall have
occurred in the net asset value of AGRO or in the United States securities,
financial, or commodities markets, or JWCFS shall have become aware of any
facts that, in the sole judgment of JWCFS, have or may have material
adverse significance with respect to the value of AGRO Shares to JWCFS;
(e) a tender or exchange offer for some or all of the AGRO Shares
shall have been publicly proposed to be made or shall have been made by
another person, or it shall have been publicly disclosed or JWCFS shall
have otherwise learned that (i) any person or "group" (as defined in
Section 13(d)(3) of the Exchange Act) other than JWCFS and its affiliates
shall have acquired or proposed to acquire beneficial ownership of more
than 5% of any class or series of capital stock of AGRO (including AGRO
Shares), through the acquisition of stock, the formation of a group, or
otherwise, or shall have been granted any option, right, or warrant,
conditional or otherwise, to acquire beneficial ownership of more than 5%
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of any class or series of capital stock of AGRO (including AGRO Shares)
other than acquisitions for bona fide arbitrage purposes only and other
than as disclosed in a Schedule 13D or 13-G on file with the Commission on
June 4, 1997, (ii) any such person or group that, before June 4, 1997, had
filed such a Schedule with the Commission shall have acquired or proposed
to acquire beneficial ownership of additional shares of any class or series
of capital stock of AGRO (including AGRO Shares), through the acquisition
of stock, the formation of a group, or otherwise, constituting 1% or more
of any such class or series, or shall have been granted any option, right,
or warrant, conditional or otherwise, to acquire beneficial ownership of
additional shares of any class or series of capital stock of AGRO
(including AGRO Shares) constituting 1% or more of any such class or
series, (iii) any person or group (other than JWCFS and its affiliates)
shall have made a proposal with respect to a tender or exchange offer or a
merger, consolidation, or other business combination with or involving
AGRO, or (iv) any person shall have filed a Notification and Report Form
under the Hart-Scott-Rodino Act or made a public announcement or non-public
approach reflecting an intent to acquire AGRO or any assets or securities
of AGRO; or
(f) the JWCFS Shares to be issued to the AGRO shareholders in the
Exchange Offer shall not have been authorized for listing on the AMEX,
subject to official notice of issuance,
which, in the sole judgment of JWCFS, in any such case and regardless of the
circumstances (including any action or omission by JWCFS) giving rise to any
such condition, makes it inadvisable to proceed with such acceptance for
exchange of, or exchange for, any AGRO Shares.
The foregoing conditions are for the sole benefit of JWCFS and may be
asserted by JWCFS in its sole discretion regardless of the circumstances
(including any action or omission by JWCFS) giving rise to any such condition or
may (except in the case of the condition specified in clause (i) of the
preceding subparagraph (e)) be waived by JWCFS in its sole discretion in whole
at any time and in part from time to time. The failure by JWCFS at any time to
exercise its rights under any of the foregoing conditions shall not be deemed a
waiver of any such right. The waiver of any such right with respect to
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts and circumstances, and each such right shall be deemed an
ongoing right that may be asserted at any time and from time to time. Any
determination by JWCFS concerning the events described in this section will be
final and binding upon all parties.
In addition, JWCFS will not accept for exchange any AGRO Shares tendered,
and no JWCFS Shares will be transferred in exchange for any such AGRO Shares, at
any time at which there is in effect a stop order issued by the Commission with
respect to the Registration Statement under which the JWCFS Shares are to be
transferred.
CONTROL OF THE AGRO BOARD
Following the consummation of the Exchange Offer, and in the absence of the
cooperation of the incumbent AGRO Board in causing AGRO to take certain actions
that may be sought by JWCFS, JWCFS may, at the next or subsequent annual or
special meetings of AGRO shareholders, nominate individuals to serve as
directors of AGRO who (subject to fiduciary duties) support the Consolidation
Merger or other actions that may be considered by JWCFS for AGRO.
The AGRO Bylaws provide for the classification of the AGRO Board into three
classes, each with a term of three years and with only one class of directors
standing for election in any year. Under the AGRO Articles of Incorporation and
AGRO Bylaws, the AGRO Board can increase the number of directors at any time up
to a maximum of 12. In addition, a director may resign at any time. Under the
AGRO Bylaws, when a vacancy occurs in the AGRO Board (other than a vacancy
resulting from the removal of a director by the shareholders for cause), a
majority of the remaining directors, even if less than a quorum, may fill the
vacancy until the successor or successors are elected at a meeting of AGRO
shareholders. Directors may be removed from office only for "cause" by a vote of
at least 75% of the AGRO Shares and, in the event of any such removal, resulting
vacancies may be filled by the shareholders. The AGRO Bylaws do not provide for
cumulative voting on the election of directors.
Under the AGRO Bylaws, holders of 25% of the outstanding AGRO Shares may
call a special meeting of shareholders. If, following the consummation of the
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Exchange Offer, JWCFS owns at least 75% of the AGRO Shares, and if it could
establish "cause" for the removal of the AGRO directors, it could convene a
special meeting of AGRO shareholders to remove the incumbent AGRO directors and
elect their successors.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes certain federal income tax consequences
of the Exchange Offer and the Consolidation Merger to holders of AGRO Shares,
but does not purport to be a complete analysis of all of the potential tax
effects of the Transaction. The discussion is based upon the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury regulations, Internal Revenue
Service ("IRS") rulings, and judicial decisions now in effect, all of which are
subject to change at any time by legislative, judicial, or administrative
action, and any such change may be applied retroactively. No information is
provided herein with respect to foreign, state, or local tax laws or estate and
gift tax considerations. This information is directed to AGRO shareholders who
hold their AGRO Shares as "capital assets" within the meaning of Section 1221
of the Code. JWCFS does not intend to request a ruling from the IRS with
respect to the Exchange Offer or the Consolidation Merger. The following
discussion of certain federal income tax consequences relevant to the Exchange
Offer and the Consolidation Merger constitutes the opinion of Kilpatrick
Stockton LLP, tax counsel to JWCFS ("Tax Counsel"), subject to the
qualifications stated herein. Such opinion, however, has no binding effect on
the IRS or the courts.
In the opinion of Tax Counsel, if both the Exchange Offer and the
Consolidation Merger are effected, the transaction will be treated as a single
integrated transaction. In that case, the Exchange Offer and the Consolidation
Merger will constitute a tax-free exchange under Section 368 of the Code. In
such event, (i) no income, gain, or loss will be recognized by AGRO shareholders
upon the receipt of JWCFS Shares in exchange for their AGRO Shares, (ii) no
income, gain, or loss will be recognized by JWCFS or AGRO pursuant to the
Exchange Offer or the Consolidation Merger, (iii) the tax basis of the JWCFS
Shares received by AGRO shareholders will be equal to their basis in AGRO Shares
immediately before consummation of the Exchange Offer or Consolidation Merger,
(iv) the holding period of the JWCFS Shares received by each AGRO shareholder
will include the period for which such shareholder has held the AGRO Shares
surrendered in exchange therefor, and (v) the payment of cash in lieu of
fractional share interests in JWCFS will be treated for federal income tax
purposes as if the fractional shares were issued as part of the Exchange Offer
or the Consolidation Merger, as applicable, and then were redeemed by JWCFS.
The cash payments will be treated as having been received as distributions in
full payment in exchange for the shares redeemed as provided in Section 302(a)
of the Code.
If the Consolidation Merger is not effected, the Exchange Offer will not
qualify as a tax-free reorganization. As a result, (i) AGRO shareholders will
recognize gain or loss upon the receipt of JWCFS Shares in exchange for their
AGRO Shares, (ii) the tax basis of the JWCFS Shares received will be equal to
the fair market value of those shares, and (iii) the holding period for the
JWCFS Shares received will begin on the date of consummation of the Exchange
Offer. Any gain or loss recognized by an AGRO shareholder will be a capital
gain or loss if the AGRO shareholder held the AGRO Shares as a capital asset.
The maximum federal income tax rate applicable to an individual's capital
gains with respect to assets held for greater than one year is currently 28%.
Only $3,000 of an individual's capital losses are currently deductible in any
one year against ordinary income. A corporation's capital gains are taxable
currently at the same rate as the corporation's ordinary income, and a
corporation's capital losses are deductible only to the extent of its capital
gains. Congress currently is considering several proposals regarding the
taxation of capital gains, which if enacted into law, could affect the tax rate
applicable to capital gains. No assurance can be given that any of the
proposals will be enacted, or whether a proposal that is enacted will apply to
capital gain or loss recognized, if any, upon consummation of the Exchange
Offer.
Certain AGRO shareholders may be subject to backup withholding at a rate of
20% on payments of cash in lieu of fractional share interests in JWCFS. In
order to avoid such backup withholding, each AGRO shareholder must provide the
Exchange Agent with such AGRO shareholder's correct taxpayer identification
number and certify that such shareholder is not subject to such backup
withholding by completing the Substitute Form W-9 included in the Letter of
Transmittal.
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EFFECTS OF THE EXCHANGE OFFER AND THE CONSOLIDATION MERGER
Market for AGRO Shares; NASDAQ Trading. The exchange of AGRO Shares
pursuant to the Exchange Offer will reduce the number of AGRO Shares that might
otherwise trade publicly and is likely to reduce the number of holders of AGRO
Shares, which could adversely affect the liquidity and market value of the
remaining AGRO Shares held by shareholders other than JWCFS. JWCFS cannot
predict whether the reduction in the number of AGRO Shares that might otherwise
trade publicly would have an adverse or beneficial effect on the market price or
marketability of the AGRO Shares. However, JW Charles/CSG has been the
principal market maker for AGRO Shares on NASDAQ since its trading commenced in
August, 1994, and JWCFS may cause JW Charles/CSG permanently to cease all market
making activity for AGRO Shares. That alone would likely affect trading in a
significantly adverse manner.
According to NASDAQ's published guidelines, in order for the AGRO Shares to
continue to be traded on the NASDAQ, AGRO must meet the following criteria: at
least two registered and active market makers; at least $2 million of total
assets, and $1 million of capital and surplus; either a $1.00 minimum bid price
per share or a $1 million market value of public float and $2 million in capital
and surplus; at least 100,000 publicly held shares, with a market value of at
least $200,000; and at least 300 holders of AGRO Shares.
On November 6, 1996, the Board of Directors of The Nasdaq Stock Market,
Inc. approved and submitted for comments proposed changes that would make the
guidelines for continued eligibility for NASDAQ more stringent than the above
current guidelines. As proposed, these new guidelines would require: at least
two registered and active market makers; either $2 million of net tangible
assets (i.e., total assets less total liabilities and goodwill), or net income
of $500,000 in two of the last three years, or a market capitalization of at
least $35,000,000; a $1.00 minimum bid price per share; a $1 million market
value of public float; at least 500,000 publicly held shares, with a market
value of at least $1,000,000; and at least 300 holders of AGRO Shares.
If, upon the completion of the Exchange Offer, the AGRO Shares no longer
meet the requirements for designation for trading on NASDAQ and such designation
is revoked, or if JWCharles/CSG does not resume its market making activities,
and such designation is revoked, the market for AGRO Shares could be adversely
affected. Even if the AGRO Shares remain eligible for designation for trading
on NASDAQ after the Exchange Offer (and if the Consolidation Merger is not
immediately consummated), the extent of the public market for AGRO Shares and
availability of price quotations would depend upon such factors as the number of
holders and the aggregate market value of the publicly held AGRO Shares at such
time; the interest in maintaining a market in the AGRO Shares on the part of
securities firms; the possible termination of registration of the AGRO Shares
under the Exchange Act; and other factors beyond the control of AGRO. If the
Consolidation Merger is consummated, the AGRO Shares would no longer meet the
requirements for designation for trading on NASDAQ, and there would no longer be
a public market for such shares.
Registration Under the Exchange Act. The AGRO Shares currently are
registered under the Exchange Act. Such registration may be terminated upon
application of AGRO to the Commission if there are less than 300 holders of
record. Termination of the registration of the AGRO Shares under the Exchange
Act would substantially reduce the information required to be furnished by AGRO
to holders of AGRO Shares and to the Commission, and would make certain of the
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy or
information statement in connection with shareholder action (and the related
requirement of an annual report to shareholders), and the requirements of Rule
13e-3 under the Exchange Act with respect to "going private" transactions no
longer applicable to the AGRO Shares. Furthermore, "affiliates" of AGRO would
no longer be able to sell such securities pursuant to Rule 144 promulgated under
the Securities Act of 1933, as amended (the "Securities Act"). Moreover, if
registration of the AGRO Shares under the Exchange Act were terminated, the AGRO
Shares would no longer be eligible for trading on NASDAQ. JWCFS may cause AGRO
to terminate registration of the AGRO Shares if the requirements for such
termination are met as a result of the Exchange Offer. If the Consolidation
Merger is consummated, registration of the AGRO Shares would automatically be
terminated.
Dissenters' Rights. Following the completion of the Exchange Offer, in
connection with any Consolidation Merger and in accordance with Title 3,
Subtitle 2 of the Maryland General Corporation Law ("MGCL"), an AGRO shareholder
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may, by following the procedures summarized below, demand that JWCFS pay the
shareholder the fair value of his or her AGRO Shares in cash. If in connection
with any Consolidation Merger, a vote of AGRO shareholders is required to be
taken (because such merger cannot be effected without such a vote under the
MGCL), an AGRO shareholder wishing to demand payment of the fair value of his
AGRO Shares must submit a written notice to the Secretary of AGRO at or prior to
such vote stating that such shareholder objects to the proposed merger. The
shareholder must then not vote his shares in favor of the merger. Merely voting
against any Consolidation Merger or not voting in favor of any Consolidation
Merger will not constitute notice of objection or dissent and will not entitle a
shareholder to payment in cash of the value of his shares.
If in connection with any Consolidation Merger, no vote of AGRO
shareholders is required to be taken (because JWC or its wholly owned subsidiary
owns 90% or more of the AGRO Shares and is proposing to merge AGRO into the
owner of such shares under the MGCL without such a vote), JWCFS will notify each
record holder of AGRO Shares of any proposed merger at least 30 days prior to
the filing of the Articles of Merger. An AGRO shareholder wishing to demand
payment of the fair value of any part or all of his or her shares of AGRO must
submit a written notice to the Secretary of AGRO within 30 days after notice of
any Consolidation Merger is given, stating that such shareholder objects to the
proposed Consolidation Merger.
Promptly following the effectiveness of any Consolidation Merger, JWCFS, as
the successor to AGRO, will notify in writing each AGRO shareholder who filed a
notice of objection to the Consolidation Merger of the date on which the
Articles of Merger were accepted for recording. Within 20 days of the date on
which the Articles were accepted for recording, an objecting shareholder must
make a written demand for payment of the fair value of his or her stock, stating
the number of class of shares for which payment is demanded. The notice of
objection should be sent to JWCFS, 980 North Federal Highway, Suite 310, Boca
Raton, Florida 33432, Attention: Corporate Secretary.
AGRO's notice of the date on which the Articles of Merger were accepted may
contain an offer of payment and certain financial disclosures. If an objecting
shareholder who has followed all of the procedural steps required to demand
payment of fair value has not received payment for his or her shares, he or she
may, or JWCFS may, within 50 days of the acceptance of the Articles of Merger,
petition the court of equity in the appropriate county for appraisal of the fair
value of his or her AGRO Shares as of the date of the Consolidation Merger,
without including any appreciation or depreciation resulting directly or
indirectly from the Consolidation Merger or its proposal. Any shareholder who
filed a notice of objection, but fails to file a written demand for payment of
the fair value in a timely manner, will be bound by the terms of the transaction
and will not be entitled to receive payment in cash as a holder of dissenting
shares. A shareholder has no right to receive any dividends or other
distributions on such shares (or the JWCFS Shares into which such dissenting
shares would be converted), after close of business on the date the
Consolidation Merger is approved, and has no other rights, including voting
rights, with respect to such shares, except the payment of fair value. The
rights of a shareholder who demands payment will be restored if the demand for
payment is withdrawn, a petition of appraisal is not filed within the time
required, a court determines that the shareholder is not entitled to relief, or
the Consolidation Merger is abandoned or rescinded.
If the court finds that the objecting shareholder is entitled to an
appraisal of his or her stock, the court shall appoint three disinterested
appraisers to determine the fair value of the stock. Within 60 days after
appointment (or such longer period as the court may direct), the appraisers
shall file with the court and mail to each dissenting shareholder their report
stating their conclusion as to the fair value of the stock. Within 15 days
after the filing of the report, any party may object to the report and request a
rehearing. The court, upon motion of any party, will enter an order either
confirming, modifying, or rejecting the report and, if confirmed or modified,
enter judgment directing the time within which payment must be made. If the
report is rejected, the court may determine the fair value or remit the
proceeding to the same or other appraisers. Any judgment entered pursuant to a
court proceeding will include interest from the date of the shareholders'
approval of the Consolidation Merger, unless the court finds that the
shareholder's refusal to accept a written offer to purchase the shares was
arbitrary, vexatious, or not in good faith.
In general, the expenses of the appraisal proceedings will be the
responsibility of JWCFS. However, all or any part of such expenses may be
assessed against any dissenting shareholder to whom an offer to pay for such
shareholder's shares was made by JWCFS, if the court finds the failure to accept
such offer was arbitrary, vexatious, or not in good faith.
FEES AND EXPENSES
SOLICITING DEALERS. JWCFS may choose to engage and to pay to any
"qualified broker or dealer" (as defined below), and any commercial bank or
trust company having an office, branch, or agency in the United States, each of
which is referred to herein as a "Soliciting Dealer", a solicitation fee of $.15
for each AGRO share solicited that is properly tendered and accepted for
exchange and exchanged pursuant to the Exchange Offer; provided, however, that
-------- -------
the maximum aggregate fee payable to all Soliciting Dealers with respect to any
single beneficial owner shall be $500, and provided further that no Soliciting
Dealer fees will be paid with respect to any AGRO Shares tendered for the
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account of anyone who became the beneficial owner of such shares after June 6,
1997. In the event of such engagement, the name and address of each such
Soliciting Dealer will be set forth in the Letter of Transmittal. If the names
of more than one Soliciting Dealer appear on Letters of Transmittal for any
beneficial owner, JWCFS will pay the applicable proportionate fee to each such
Soliciting Dealer in proportion to the number of shares solicited by each. No
fee will be paid for AGRO Shares purchased from a Soliciting Dealer tendering
for its own account. In connection with the payment of such fees, JWCFS reserves
the right to conduct such investigation as it deems necessary to determine
whether AGRO Shares tendered separately are owned by the same beneficial owner,
whether any beneficial owner became such after June 4, 1997, and whether shares
tendered by a Soliciting Dealer were tendered for such Soliciting Dealer's own
account. A "qualified broker or dealer" is a broker or dealer that is a member
of a registered national securities exchange in the United States or the NASD,
and any foreign broker or dealer not eligible for National Association of
Securities Dealers, Inc. ("NASD"), membership who agrees to conform to the
NASD's Rules of Fair Practice in making solicitations within the United States
to the same extent as though it were a member thereof. No Soliciting Dealer
shall be the agent of JWCFS, the Information Agent, or the Exchange Agent.
INFORMATION AND EXCHANGE AGENT. JWCFS has retained American Stock Transfer
& Trust Company to act as both the Information Agent and the Exchange Agent in
connection with the Exchange Offer. The Information Agent may contact holders
of AGRO Shares by mail, telephone, telex, telegraph and personal interviews, and
may request brokers, dealers, and other nominee shareholders to forward
materials relating to the Exchange Offer to beneficial owners. The Information
and Exchange Agent will receive reasonable and customary compensation for its
services, will be reimbursed for certain reasonable out-of-pocket expenses, and
will be indemnified against certain liabilities in connection therewith,
including certain liabilities under the federal securities laws. The
Information and Exchange Agent has not been retained to make solicitations or
recommendations in its role as such.
OTHERS. Brokers, dealers, commercial banks, and trust companies will, upon
request, be reimbursed by JWCFS for reasonable and necessary costs and expenses
incurred by them in forwarding materials to their customers.
It is estimated that the expenses incurred by JWCFS in connection with the
Exchange Offer and the Consolidation Merger will be approximately as set forth
below:
Exchange Offer and
Exchange Offer Only Consolidation Merger
------------------- --------------------
Soliciting Dealer fees $ 48,000 $141,000
Legal fees and expenses 90,000 100,000
Accounting fees and expenses 35,000 35,000
Information and Exchange Agent fees
and expenses 25,000 35,000
Filing fees 783 783
Printing and mailing expenses 50,000 50,000
Miscellaneous 9,217 10,217
-------- --------
$258,000 $372,000
======== ========
SOURCE OF FUNDS
The funds for fees and expenses related to the Transaction will be derived
from JWCFS' working capital.
REGULATORY APPROVALS
Based upon an examination of publicly available information filed by AGRO
with the Commission and other publicly available information with respect to
AGRO, JWCFS is not aware of any license or regulatory permit that appears to be
material to the business of AGRO and that is likely to be adversely affected by
JWCFS' acquisition of AGRO Shares pursuant to the Exchange Offer, or of any
approval or other action by any state, federal, or foreign government or
governmental agency that would be required before the acquisition of AGRO Shares
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pursuant to the Exchange Offer. JWCFS presently intends to take such actions
with respect to any approvals as will enable it to acquire AGRO Shares as
expeditiously as possible. In this regard, JWCFS expressly reserves the right
to challenge the validity and applicability of any state, foreign, or other
statutes or regulations purporting to require approval of the commencement or
consummation of the Exchange Offer or the Consolidation Merger.
There can be no assurance that any license, permit, approval, or other
action, if needed, would be obtained or, if so obtained, when, or that adverse
consequences might not result to AGRO or to its business in the event of adverse
regulatory action or inaction.
MISCELLANEOUS
JWCFS is not aware of any jurisdiction where the making of the Exchange
Offer or the acceptance thereof would not comply with applicable law. If JWCFS
becomes aware of any jurisdiction where the making of the Exchange Offer or
acceptance thereof would not comply with applicable law, JWCFS will make a good
faith effort to comply with such law. If, after such good faith effort, JWCFS
cannot comply, the Exchange Offer will not be made to, nor will tenders be
accepted from or on behalf of, holders of AGRO Shares in such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of JWCFS not contained in this Prospectus or in the
Letter of Transmittal and, if given or made, such information or representation
must not be relied upon as having been authorized.
INFORMATION ABOUT AGRO
Excerpts from AGRO's Annual Report on Form 10-KSB40 for the fiscal year
ended December 31, 1996 have been reproduced by JWCFS and included as Annex I
hereto for delivery with this Prospectus. The description of AGRO in such report
is thereby made a part hereof.
INFORMATION ABOUT JWCFS
The description of JWCFS and its business set forth in its Annual Report on
Form 10-K for the fiscal year ended December 31, 1996 and in subsequent reports
filed by JWCFS with the Commission pursuant to the Exchange Act is incorporated
herein by reference. See "INCORPORATION OF DOCUMENTS BY REFERENCE".
JWCFS is subject to the informational filing requirements of the Exchange
Act and, in accordance therewith, is obligated to file reports and other
information with the Commission relating to its business, financial statements
and other matters. Information as of particular dates concerning JWCFS'
directors and executive officers, their remuneration, options granted to them,
the principal holders of JWCFS' securities, and any material interests of such
persons in transactions with JWCFS is required to be disclosed in proxy
statements distributed to JWCFS' shareholders and filed with the Commission.
Such reports, proxy statements, and other information are available for
inspection and may be copied as described in "AVAILABLE INFORMATION".
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Except as described above and in "THE EXCHANGE OFFER -- Background; and --
Purpose of the Exchange Offer; the Consolidation Merger", (a) neither JWCFS nor,
to the best of JWCFS' knowledge, any of JWCFS' directors and executive officers
has any contract, arrangement, understanding, or relationship with any other
person with respect to any securities of AGRO, and (b) there have not been any
contracts, negotiations, or transactions between (i) JWCFS or any of JWCFS'
directors, officers, or affiliates, on the one hand, and (ii) AGRO or any of its
directors, officers, or affiliates, on the other hand, that are required to be
disclosed pursuant to the rules and regulations of the Commission. None of
JWCFS and its directors and executive officers has effected any transaction in
AGRO Shares during the 60 days preceding the commencement of the Exchange Offer,
except as described in the above-referenced sections of this Prospectus.
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DESCRIPTION OF CAPITAL STOCK OF JWCFS
The authorized capital stock of JWCFS consists of 9,056,000 shares of
common stock, $.001 par value per share (which are the JWCFS Shares), and
5,000,000 shares of preferred stock, $.001 par value per share, having such
rights and privileges as the JWCFS Board may from time to time determine. As of
the date of this Prospectus, there were 3,319,021 JWCFS Shares and no shares of
preferred stock issued and outstanding.
The following summary of JWCFS capital stock does not purport to be
complete and is qualified in its entirety by reference to the Restated Articles
of Incorporation, as amended, and Bylaws, as amended, of JWCFS that are included
as exhibits to the Registration Statement of which this Prospectus forms a part,
and the applicable provisions of the Florida Business Corporation Act.
JWCFS SHARES
Holders of JWCFS Shares are entitled to one vote per share on any issue
submitted to a vote of the shareholders and do not have cumulative voting rights
in the election of directors. Accordingly, the holders of a majority of the
outstanding JWCFS Shares voting n the election of directors can elect all of the
directors then standing for election, if they choose to do so. All JWCFS Shares
are entitled to share equally in such dividends as the JWCFS Board may, in its
discretion, declare out of sources legally available therefor. Upon
dissolution, liquidation, or winding up of the JWCFS, holders are entitled to
receive on a ratable basis, after payment or provision for payment of all debts
and liabilities of JWCFS and any preferential amount due with respect to
outstanding shares of Preferred Stock, all assets of JWCFS available for
distribution, in cash or in kind. Holders of JWCFS Shares do not have
preemptive or other subscription rights, conversion or redemption rights, or any
rights to share in any sinking fund. All currently outstanding JWCFS Share are,
and the shares offered hereby (when issued in exchange for AGRO Shares in the
manner contemplated by this Prospectus) will be, fully paid and nonassessable.
PREFERRED STOCK
Pursuant to the JWCFS' Restated Articles of Incorporation, the JWCFS Board
from time to time, may authorize the issuance of shares of preferred stock in
one or more series, may establish the number of shares to be included in any
such series, and may fix the designations, powers, preferences, and rights
(including voting rights) of the shares of each such series and any
qualifications, limitations, or restrictions thereon. No shareholder
authorization is required for the issuance of shares of Preferred Stock unless
imposed by then applicable law. Shares of preferred stock may be issued for any
general corporate purposes, including acquisitions. The JWCFS Board could issue
a series of preferred stock with rights more favorable with regard to dividends
and liquidation than the rights of holders of JWCFS Shares. Such a series of
preferred stock also could be used for the purposes of preventing a hostile
takeover of JWCFS that is considered to be desirable by the holders of JWCFS
Shares, could otherwise adversely affect the voting power of the holders of
JWCFS Shares, and could serve to perpetuate the directors' control of the JWCFS
under certain circumstances. No transaction is now contemplated that would
result in the issuance of any such shares of preferred stock.
LIMITATIONS ON LIABILITY OF OFFICERS AND DIRECTORS
JWCFS' Restated Articles of Incorporation provide for indemnification of
directors to the fullest extent permitted by Florida law and, to the extent
permitted by such law, eliminate, or limit the personal liability of directors
to JWCFS and its shareholders for monetary damages for certain breaches of
fiduciary duty and the duty of care. Such indemnification may be available for
liabilities arising in connection with the Exchange Offer. Insofar as
indemnification for liabilities under the Securities Act may be permitted to
directors, offers, or persons controlling JWCFS pursuant to the foregoing
provisions, JWCFS has been informed that, in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable. Pursuant to its Bylaws, JWCFS may indemnify its
officers, employees, agents, and other persons to the fullest extent permitted
by Florida law.
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MISCELLANEOUS
JWCFS Shares are traded on the AMEX. American Stock Transfer & Trust
Company is the registrar and transfer agent for JWCFS Shares. The issuance of
JWCFS Shares in connection with the Transaction will result in dilution of the
voting power and relative equity interests of the current holders of JWCFS
Shares.
DESCRIPTION OF CAPITAL STOCK OF AGRO
AGRO is authorized to issue 10,000,000 shares of Common Stock, par value
$.01 per share, and 2,000,000 shares of preferred stock, par value $.01 per
share. As of the date of this Prospectus, JWCFS believes there are 1,265,100
AGRO Shares and no shares of preferred stock outstanding.
The following summary of AGRO capital stock does not purport to be complete
and is qualified in its entirety by reference to the Articles of Incorporation
and Bylaws, each as amended, of AGRO and the applicable provisions of the
Maryland General Corporation Law (the "MGCL").
AGRO SHARES
The holders of AGRO Shares are entitled to one vote per share on all
matters submitted for action by the shareholders. There is no provision for
cumulative voting rights with respect to the election of directors.
Accordingly, the holders of more than 50% of the AGRO Shares can, if they choose
to do so, elect all of the directors. In such event, the holders of the
remaining shares will not be able to elect any directors. The holders of AGRO
Shares are entitled to receive dividends when, as and if declared by the AGRO
Board out of funds legally available therefor. In the event of the liquidation,
dissolution, or winding up of AGRO, the holders of AGRO Shares are entitled to
share ratably in all assets remaining available for distribution to them after
payment of liabilities and after provision has been made for each stock, if any,
having preference over the AGRO Shares. Holders of AGRO Shares, as such, have
no conversion, preemptive or other subscription rights, and there are no
redemption provisions applicable to the AGRO Shares.
PREFERRED STOCK
AGRO is authorized to issue preferred stock with such designations, rights,
and preferences as may be determined from time to time by the AGRO Board.
Accordingly, the AGRO Board is empowered, subject to the applicable provisions
of the 1940 Act, without shareholder approval, to issue preferred stock with
dividend, liquidation, conversion, voting, or other rights that could adversely
affect the voting power or other rights of the holders of AGRO Shares. In the
event of issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying, or preventing an
acquisition or a change in control of AGRO.
DIVIDENDS
AGRO has never paid any dividends on the AGRO Shares. AGRO has stated that
its primary investment objective is long-term capital appreciation, rather than
current income, and that it expects to retain net investment income, if any, for
working capital and investment needs and does not expect to declare or pay any
dividends. The timing and payment of other cash distributions, if any, is
entirely in the discretion of the AGRO Board of Directors. To JWCFS'
knowledge, AGRO has not adopted any policies with respect to in-kind
distributions.
CERTAIN ANTI-TAKEOVER PROVISIONS
AGRO's Articles of Incorporation and Bylaws, each as amended, contain
certain provisions (commonly referred to as "anti-takeover" provisions) that may
have the effect of limiting the ability of other entities or persons to acquire
control of AGRO, to cause it to engage in certain transactions or to modify its
structure.
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The AGRO Board is classified into three classes, each with a term of three
years, with only one class of directors standing for election in any year. Such
classification may prevent replacement of a majority of the directors for up to
a two-year period. Directors may be removed from office only for cause by vote
of at least 75% of the shares of capital stock entitled to vote are required to
authorize AGRO's conversion from a closed-end to an open-end investment company,
or to authorize any of the following transactions: (i) merger, consolidation,
or share exchange of AGRO with or into any other company; (ii) dissolution or
liquidation of AGRO; (iii) sale, lease, exchange, mortgage, pledge, transfer, or
their disposition of all or substantially all of the assets of AGRO other than
in the ordinary course of business; or (iv) sale, lease, or exchange with AGRO,
in exchange for securities of AGRO, any assets, including cash of any entity or
person (having an aggregate fair market value of more than $1,000,000).
Additionally, an amendment to AGRO's Articles of Incorporation that makes any
class of capital stock a "redeemable security" (as defined in Section 2(a)(32)
of the 1940 Act) requires (i) the approval, adoption, or authorization of 70% of
the total number of directors fixed in accordance with the Bylaws of AGRO,
including a majority of those directors who are not "interested persons" (as
defined in Section 2(a)(19) of the 1940 Act), (ii) the affirmative vote of at
least 75% of the aggregate number of votes of capital stock entitled to vote on
the matter and (iii) the affirmative vote of at least 75% of the aggregate
number of votes entitled to be cast thereon by the holders of any class of
preferred stock of AGRO, voting as a separate class. The affirmative vote of at
least 75% of the shares of capital stock entitled to vote on the matter will be
required to amend the Articles of Incorporation to change or remove any of the
foregoing provisions.
The percentage votes required under these provisions that are greater than
the minimum requirements under Maryland law or the 1940 Act will make more
difficult a change in AGRO's business or management and may have the effect of
depriving stockholders of any opportunity to sell shares at a premium over
prevailing market prices by discouraging a third party from seeking to obtain
control of AGRO in a tender offer or other acquisition.
The MGCL imposes conditions and restrictions on certain "business
combinations" (including among other transactions, a merger, consolidation,
share exchange, or, in certain circumstances, an asset transfer or issuance of
equity securities or the provision of financial assistance or tax advantage)
between a Maryland corporation and any person who beneficially owns at least 10%
of the corporation's stock (an "Interested Stockholder"). Unless approved in
advance by the board of directors, or otherwise exempted by the statue, such a
business combination is prohibited for a period of five years after the most
recent date on which the Interested Stockholder became an Interested
Stockholder. After such five-year period, a business combination with an
Interested Stockholder must be: (a) recommended by the corporation's board of
directors; and (b) approved by the affirmative vote of at least (i) 80% of the
corporation's outstanding shares entitled to vote and (ii) two-thirds of the
outstanding shares entitled to vote which are not held by the Interested
Stockholder with whom the business combination is to be effected, unless, among
other things, the corporation's common shareholders receive a "fair price" (as
defined in the statute) for their shares and the consideration is received in
cash or in the same form as previously paid by the Interested Shareholders for
his shares. These provisions of Maryland law do not apply, however, to a
business combination of an investment company registered under the 1940 Act. As
a result, as long as AGRO is registered under the 1940 Act, Maryland's business
combination statute will not apply to the Consolidation Merger.
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COMPARISON OF RIGHTS OF HOLDERS OF JWCFS SHARES
AND HOLDERS OF AGRO SHARES
Pursuant to the Exchange Offer, AGRO shareholders who elect to receive
JWCFS Shares in exchange for AGRO Shares will become shareholders of JWCFS. The
rights of AGRO shareholders are currently governed by Maryland law (including
the MGCL), the AGRO Articles of Incorporation, as amended (the "AGRO Articles"),
and the AGRO Bylaws. Following the consummation of the Exchange Offer, the
rights of AGRO shareholders who become holders of JWCFS Shares will be governed
by Florida law (including the Florida Business Corporation Act) (the "FBCA"),
the Restated Articles of Incorporation of JWCFS (the "JWCFS Articles"), and the
Bylaws of JWCFS, as amended (the "JWCFS Bylaws"). Such rights will differ in
certain respects. The following is a summary of certain similarities and the
material differences between the rights of holders of JWCFS Shares and AGRO
Shares.
The following summary does not purport to be a complete statement of the
rights of the AGRO shareholders under Maryland law, the AGRO Articles, and the
AGRO Bylaws as compared with the rights of JWCFS shareholders under Florida law,
the JWCFS Articles, and the JWCFS Bylaws, or a complete description of the
specific provisions referred to herein. This summary is qualified in its
entirety by reference to such governing laws and corporate instruments.
Annual Meeting. Under the MGCL, all corporations are required to hold an
annual meeting, except that, if the bylaws so provide, a corporation need not
hold an annual meeting in a year in which the election of directors is not
required by the 1940 Act. The AGRO Bylaws provide that the AGRO annual meeting
of shareholders is to be set by the AGRO Board in compliance with the MGCL and
the 1940 Act.
Under the FBCA, corporations are required to hold an annual meeting for the
election of directors and the transaction of any proper business, but the
failure to do so does not affect the validity of any corporate action. The
JWCFS Bylaws do not alter this provision.
Special Meetings of Shareholders. The MGCL provides that a special meeting
of the shareholders of a corporation may be called by the president, the board
of directors, or anyone else specified in the charter or bylaws of the
corporation, and that the secretary of a corporation must call a special meeting
on written request of the shareholders entitled to cast 25% of all votes
entitled to be cast at the meeting (unless a different percentage is specified
in the corporation's charter or bylaws). The AGRO Bylaws provide that a special
shareholder meeting may be called by the president or a majority of the Board of
Directors, and shall be called upon the written request of the holders of 25% of
the outstanding capital stock entitled to vote at such meeting.
The FBCA provides that a special meeting of the shareholders of a
corporation may be called by the board of directors, or anyone else specified in
the articles of incorporation or the bylaws of a corporation, and that the
secretary of a corporation must call a special meeting on written request by not
less than 10%, unless a greater percentage not to exceed 50% is required in its
articles, of the shareholders entitled to vote on any issue proposed to be
considered at the meeting. The JWCFS Bylaws specify that special shareholder
meetings may be called by the president or the board of directors or upon
written request by a majority of the stockholders entitled to vote at such
meeting.
Number of Directors. Under the MGCL, except under certain circumstances,
each corporation must have at least three directors at all times. The MGCL
further provides that, subject to the foregoing, a corporation shall have the
number of directors provided in its charter until changed by the bylaws, and
that the bylaws may change the number of directors and may authorize the board
of directors to change the number of directors within a range set by the charter
or bylaws. The AGRO Articles provide that the number of directors shall be one
until further action by the AGRO Board and that the board may increase or
decrease the number of directors fixed by the AGRO Articles or the AGRO Bylaws
up to 12 but not less than two. The AGRO Bylaws provide that the AGRO Board can
increase or decrease the number of directors of AGRO from time to time up to a
maximum of 12. Under the AGRO Articles and the AGRO Bylaws, no decrease in the
number of directors may cause the removal or shorten the term of any incumbent
director.
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Under the FBCA, a board of directors must consist of one or more
individuals, with the number specified in or fixed in accordance with the
articles of incorporation or the bylaws. The JWCFS Articles provide that the
number of directors shall initially be two, and that the number of directors may
be increased or diminished by the Bylaws, but shall never be less than one.
Classification of Board of Directors. Under the MGCL, directors may be
divided into classes and, if directors are divided into classes, the term of
office of each class shall be as provided in the bylaws subject to certain
limitations as provided in the MGCL. The AGRO Articles provide that the AGRO
Bylaws may divide the AGRO directors into classes subject to certain limitations
as provided therein. The AGRO Bylaws provide for the classification of the AGRO
directors into three classes, each with a term of three years with one class of
directors standing for election every year.
Under the FBCA, directors may be divided into classes if so provided in a
corporation's articles or bylaws. Neither the JWCFS Articles nor the JWCFS
Bylaws include such a provision.
Cumulative Voting. The MGCL allows but does not require cumulative voting
for the election of directors. Neither the AGRO Articles nor the AGRO Bylaws
provide for cumulative voting.
Similarly, the FBCA allows but does not require cumulative voting for the
election of directors, and neither the JWCFS Articles nor the JWCFS Bylaws
provide for cumulative voting.
Removal of Directors; Filling Vacancies. The MGCL provides that, unless
the charter provides otherwise, the shareholders of a corporation may remove a
director with or without cause by the affirmative vote of a majority of the
votes entitled to be cast in the election of directors. The AGRO Articles
provide that directors may be removed only for cause by the affirmative vote of
75% of such votes. Under the MGCL and the AGRO Bylaws, a vacancy on the AGRO
Board resulting from a removal of a director may be filled by the shareholders.
Under the MGCL and the AGRO Bylaws, except as otherwise provided, a vacancy
resulting from any cause except an increase in the number of directors is filled
by a majority of the remaining directors, and a vacancy resulting from an
increase in the number of directors is filed by a majority of the entire board
of directors. A director elected by the AGRO Board to fill a vacancy serves
until the next annual meeting of shareholders at which time the shareholders
elect directors to fill any vacancies occurring since the preceding annual
meeting.
The FBCA provides that, unless the articles of incorporation provide
otherwise, the shareholders of a corporation may remove a director with or
without cause by the affirmative vote of a majority of the votes cast at a
meeting for such purpose. The JWCFS Articles are silent on this issue, and the
JWCFS Bylaws mirror the provision in the FBCA. The FBCA provides that a vacancy
on a board of directors may be filled by the affirmative vote of a majority of
the remaining directors or the shareholders, unless the articles of
incorporation provide otherwise. The JWCFS Articles do not address this issue,
but the JWCFS Bylaws provide that a vacancy on the JWCFS Board may be filled by
the affirmative vote of a majority of the remaining directors.
Amendment of Articles. Under the MGCL, a charter may be amended by the
affirmative vote of two-thirds of all the votes entitled to be cast on the
matter, unless otherwise provided in the charter. Under the AGRO Articles, the
provisions thereof may be amended by a majority of such votes, except that
certain provisions thereof, including provisions requiring 75% of such votes for
certain corporate transactions (the conversion of AGRO to an "open-end company"
under the 1940 Act, a merger, consolidation or share exchange by AGRO, the sale
of all or substantially all of AGRO's assets, the dissolution or liquidation of
AGRO, or the issuance of securities of AGRO under certain circumstances) may be
amended only upon the approval of 75% of the outstanding capital stock entitled
to vote thereon unless any such transaction is approved by 70% of the entire
AGRO Board (in which event such transaction need be approved by a majority of
such votes).
Under the FBCA, the articles of incorporation of a corporation may be
amended by the affirmative vote of a majority of all the votes entitled to be
cast on the matter, unless a greater vote is required in such articles. The
JWCFS Articles do not alter this provision.
42
<PAGE>
Amendment of Bylaws. The MGCL provides that the power to adopt, alter, or
repeal bylaws is vested in the shareholders, except to the extent that a
corporation's articles of incorporation or bylaws vest such power in the board
of directors. The AGRO Bylaws confer such power on the AGRO Board. The AGRO
Articles provide that the AGRO Board shall have the exclusive authority to
adopt, alter or repeal the Bylaws, except as otherwise provided in the AGRO
Bylaws or the 1940 Act.
The FBCA provides that a corporation's board of directors may amend or
repeal its bylaws, except to the extent that a corporation's articles of
incorporation reserve such power in the shareholders. The JWCFS Articles
provide that the power to alter, amend, or repeal the JWCFS Bylaws is vested in
the board of directors, but that the Board may not alter, amend, or repeal any
bylaw adopted by JWCFS' shareholders if the shareholders so provide. The JWCFS
Bylaws provide that they may be amended by a majority vote of the shareholders
or the board of directors.
Certain Voting Rights for Mergers. Under the MGCL, any merger, share
exchange, consolidation, or sale of substantially all of the assets of a
corporation requires the approval of two-thirds of the outstanding shares
entitled to vote thereon (unless the articles of incorporation require a
different percentage). The AGRO Articles require that 75% of such shares must
approve such a transaction, unless 70% of the Board of Directors approves the
transaction, in which event a majority of such shares can approve such a
transaction.
Under the FBCA, any merger, share exchange, or sale of substantially all of
the assets of a corporation requires the approval of a majority of the
outstanding shares entitled to vote thereon (unless the articles of
incorporation, the FBCA, or the board of directors as a condition of its
submission of the proposal requires a greater vote or a vote by classes). The
JWCFS Articles do not alter this provision.
Limitation of Liability. The AGRO Articles provide that no director shall
be liable to the corporation except to the extent that such exemption from
liability is prohibited by law, including the 1940 Act. Maryland law permits
such a limitation generally, except to the extent there was an improper benefit
or profit received by the officer or director, or that a final adjudication or
judgment against the officer or director was based on a finding that the action
of such person was a result of active and deliberate dishonesty and that such
action was material to the result.
The FBCA limits the liability of directors to the corporation unless the
director breached or failed to perform his duties as a director and such breach
or failure constituted (i) a violation of the criminal law, (ii) a transaction
from which the director received an improper personal benefit, (iii) an unlawful
distribution, (iv) willful misconduct in a proceeding by or in the right of the
corporation or a shareholder, or (v) recklessness or bad faith in a proceeding
by or in the right of someone other than the corporation or a shareholder.
Neither the JWCFS Articles nor the JWCFS Bylaws address this issue.
Appraisal Rights. Under the MGCL, a shareholder may petition a court of
equity for appraisal to determine the fair value of the shareholder's stock
under certain circumstances by following the procedure set forth therein. For a
discussion of such rights, see "The Exchange Offer -- Effects of the Exchange
Offer and the Combination Merger -- Dissenters Rights."
Under the FBCA any shareholder of a corporation, with certain limitations,
has the right to dissent from, and obtain payment of the fair value of the
shareholder's shares in the event of, a merger, a share exchange, the sale or
exchange of substantially all of the assets, a control-share acquisition, or,
under certain circumstances, an amendment of the articles of incorporation.
However, unless otherwise provided by its articles of incorporation, such
dissenters' rights are not available to the shareholders of a corporation whose
shares are registered on a national securities exchange, designated as a
national market security, or held of record by greater than 2,000 shareholders.
The JWCFS Articles do not alter this provision.
Indemnification. Under the MGCL, a corporation can indemnify any director
made party to a proceeding by reason of his or her service as a director,
subject to certain limitations provided therein. The AGRO Articles provide that
AGRO's officers and directors are to be indemnified by AGRO to the fullest
extent permitted by the MGCL, including the advancement of expenses in defending
43
<PAGE>
a proceeding. The AGRO Bylaws specify that the advancement of expenses may only
be carried out if the party seeking indemnification provides security, if AGRO
is insured against losses arising from the advancement, or if either a
disinterested majority of a quorum of directors or independent legal counsel
issues a written opinion determining that there is reason to believe that the
party seeking indemnification will ultimately be entitled to it.
Under the FBCA, a corporation can indemnify any person made party to a
proceeding by reason of his service as a director, officer, employee, or agent
of the corporation subject to certain limitations provided therein. The JWCFS
Articles provide that JWCFS' officers and directors are to be indemnified by
JWCFS to the fullest extent permitted by the FBCA.
Business Combinations. Certain provisions of the MGCL limit "business
combinations" (including mergers, consolidations, share exchanges, and, in
certain circumstances, asset transfers and issuances of equity securities)
between a Maryland corporation and any person who beneficially owns 10% or more
of the corporation's stock. These provisions of Maryland law do not apply,
however, to business combinations involving an investment company registered
under the 1940 Act, such as AGRO.
Under the FBCA, certain "affiliated transactions" (including mergers,
consolidations, share exchanges, and, in certain circumstances, asset transfers,
loans, and issuance of equity securities) between a Florida corporation and any
person who beneficially owns 10% or more of the corporation's stock (an
"Interested Shareholder") must be approved by the affirmative vote of at least
two-thirds of the outstanding shares entitled to vote that are not held by the
Interested Shareholder with whom the affiliated transaction is to be effected,
unless, among other things, the transaction was approved by a majority of the
disinterested directors, or the corporation's common shareholders receive a
minimum price (as defined in the statute) for their shares and the consideration
is received in cash or in the same form as previously paid by the Interested
Shareholder for its shares. Neither the JWCFS Articles nor the JWCFS Bylaws
alter this provision.
LEGAL MATTERS
The validity of the securities offered hereby has been passed upon for
JWCFS by Kilpatrick Stockton LLP, Atlanta, Georgia.
EXPERTS
The financial statements of JWCFS as of December 31, 1995 and 1996, and for
each of the two years ended December 31, 1996, included in JWCFS' Annual Report
on Form 10-K for 1996, incorporated by reference herein and elsewhere in the
Registration Statement, have been incorporated by reference herein and elsewhere
in the Registration Statement in reliance upon the report of Price Waterhouse
LLP, independent auditors, which report is also incorporated by reference
herein, and upon the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of JWCFS included in the JWCFS Annual
Report (Form 10-K) for the year ended December 31, 1994, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
44
<PAGE>
PRO FORMA FINANCIAL INFORMATION -- UNAUDITED
JWCFS
PRO FORMA CONDENSED
BALANCE SHEET -- UNAUDITED
The following unaudited Pro Forma Condensed Balance Sheet for JWCFS has
been prepared based upon the historical financial condition of JWCFS and AGRO.
The pro forma financial data give effect to (i) the Exchange Offer, assuming
that 51% of the outstanding AGRO Shares held by shareholders, including shares
presently owned by JWCFS, are tendered and accepted by JWCFS in the Exchange
Offer, and (ii) the Consolidation Merger, resulting in AGRO being a 100% owned
subsidiary of JWCFS, in each case accounted for as a purchase and based upon the
conversion of each AGRO Share into .418 JWCFS Share. The pro forma financial
data assume that the Exchange Offer or the Consolidation Merger, as the case may
be, occurred effective March 31, 1997.
The unaudited Pro Forma Condensed Balance Sheet should be read in
conjunction with the accompanying pro forma notes and the separate historical
financial statements and related notes thereto of JWCFS and AGRO for the fiscal
year ended December 31, 1996, and for the quarter ended March 31, 1997, which
are incorporated by reference or included elsewhere herein.
The pro forma financial condition is not necessarily indicative of the
financial condition that would actually have resulted if the Exchange Offer or
Consolidation Merger had occurred at the date indicated or that may be attained
in the future.
45
<PAGE>
JWCFS PRO FORMA CONDENSED BALANCE SHEET - UNAUDITED
At March 31, 1997
<TABLE>
<CAPTION>
As Reported Adjustments Pro Forma
------------------------- ------------------------------- ------------------------------
Consolidation Consolidation
ASSETS JWCFS AGRO Exchange Offer Merger Exchange Offer Merger
- ------ ------------ ----------- -------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 9,471,000 $ 20,600 (258,256)(a) (371,587)(a) $ 9,233,344 $ 9,120,013
Commissions and other receivables 2,733,000 32,200 - - 2,765,200 2,765,200
Receivables from customers 95,458,000 - - - 95,458,000 95,458,000
Receivables from brokers and dealers 2,493,000 - - - 2,493,000 2,493,000
Securities owned, at market value 6,398,000 4,697,300 (973,330)(b) (911,576)(b) 10,121,970 10,183,724
Furniture, equipment and leasehold 1,442,000 16,100 (16,100)(c) (16,100)(c) 1,442,000 1,442,000
improvements, net
Deferred tax asset 1,735,000 6,000 - - 1,741,000 1,741,000
Other, net 2,831,000 5,900 - - 2,836,900 2,836,900
------------ ---------- ---------- ---------- ------------ ------------
$122,561,000 $4,778,100 (1,247,686) (1,299,263) $126,091,414 $126,039,837
=========================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
- -------------------------------------
Short-term borrowings from banks $ 31,870,000 - - - $ 31,870,000 $ 31,870,000
Accounts payable, accrued liabilities 8,764,000 47,100 - - 8,811,100 8,811,100
and other liabilities
Payable to customers 25,809,000 - - - 25,809,000 25,809,000
Payable to brokers and dealers 29,767,000 - - - 29,767,000 29,767,000
Securities sold, not yet purchased, at 1,018,000 - - - 1,018,000 1,018,000
market value
Notes payable to affiliate 8,375,000 - - - 8,375,000 8,375,000
Income taxes payable 574,000 - - - 574,000 574,000
Minority interest in AGRO - - 2,318,190 (d) - 2,318,190 -
-----------------------------------------------------------------------------------------
106,177,000 47,100 2,318,190 - 108,542,290 106,224,100
-----------------------------------------------------------------------------------------
Stockholders' equity:
Common stock 3,000 12,700 (12,566)(e) (12,308) 3,134 3,392
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
As Reported Adjustments Pro Forma
------------------------- ------------------------------- -----------------------------
Consolidation Consolidation
JWCFS AGRO Exchange Offer Merger Exchange Offer Merger
------------ ----------- -------------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Additional paid-in capital 821,000 5,141,300 (3,976,310)(e) (1,709,955)(e) 1,985,990 4,252,345
Retained earnings 15,560,000 (423,000) 423,000 (e) 423,000 (e) 15,560,000 15,560,000
------------ ---------- ---------- ---------- ------------ ------------
16,384,000 4,731,000 (3,565,876) (1,299,263) 17,549,124 19,815,737
------------------------------------------------------------------------------------------
$122,561,000 $4,778,100 (1,247,686) (1,299,263) $126,091,414 $126,039,837
==========================================================================================
</TABLE>
See accompanying notes to unaudited Pro Forma Condensed Balance Sheet.
47
<PAGE>
NOTES TO JWCFS PRO FORMA CONDENSED BALANCE SHEET -- UNAUDITED
(MARCH 31, 1997)
(a) Adjustment represents fees and expenses of the Exchange Offer and
Consolidation Merger-see page 36.
(b) $890,328 of the amount represents the elimination of JWCFS' investment in
securities owned comprised of 326,550 shares of AGRO. The remainder represents
an adjustment to AGRO long term investments resulting from net value of assets
acquired in excess of cost.
(c) Amount represents the elimination of AGRO furniture, equipment and leasehold
improvements resulting from net value of acquired assets in excess of cost.
(d) Adjustment represents minority interest in AGRO at 49% of the March 31, 1997
net asset value of AGRO.
(e) Adjustments represent the elimination of all AGRO stockholders' equity
acounts and the recordation of the newly issued shares of JWCFS.
48
<PAGE>
JWCFS
PRO FORMA CONDENSED STATEMENTS OF INCOME -- UNAUDITED
The following unaudited Pro Forma Condensed Statements of Income for
JWCFS have been prepared based upon the historical results of operations of both
JWCFS and AGRO for each of the periods presented. The Pro Forma Condensed
Statements of Income assume the Exchange Offer or the Consolidation Merger, as
the case may be, occurred effective January 1, 1997 for the Pro Forma Condensed
Statement of Income for the three months ended March 31, 1997, and January 1,
1996 for the Pro Forma Condensed Statement of Income for the year ended December
31, 1996. The pro forma data give effect to (i) the Exchange Offer assuming that
51% of the outstanding AGRO Shares held by shareholders, including shares
presently owned by JWCFS, are tendered and accepted by JWCFS in the Exchange
Offer, and (ii) the Consolidation Merger, resulting in AGRO becoming a 100%
owned subsidiary of JWCFS, in each case accounted for as a purchase and based
upon the conversion each of AGRO Shares into .418 JWCFS Share.
The unaudited Pro Forma Condensed Statements of Income should be read in
conjunction with the accompanying pro forma notes and the separate historical
financial statements and related notes thereto of JWCFS and AGRO for the fiscal
year ended December 31, 1996, and for the quarter ended March 31, 1997, which
are incorporated by reference or included elsewhere herein.
The pro forma results are not necessarily indicative of the results that
would actually have been attained if the Exchange Offer or the Consolidation
Merger had been consummated at the beginning of the periods indicated or that
may be attained in the future, nor are the pro forma results for the interim
period shown necessarily indicative of results to be expected for the entire
1997 fiscal year.
49
<PAGE>
JWCFS PRO FORMA CONDENSED STATEMENT OF INCOME - UNAUDITED
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
As Reported Adjustments Pro Forma
------------------------ ------------------------- ----------------------------
Exchange Consolidation Exchange Consolidation
JWCFS AGRO Offer Merger Offer Merger
------------ ---------- --------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Commissions $42,945,000 $ - $ - $ - $42,945,000 $42,945,000
Market making and principal transactions,
net 24,315,000 (52,900) - - 24,262,100 24,262,100
Interest 9,625,000 246,500 - - 9,871,500 9,871,500
Clearing Fees 11,463,000 - - - 11,463,000 11,463,000
Other 2,672,000 - - - 2,672,000 2,672,000
-----------------------------------------------------------------------------------
91,020,000 193,600 - - 91,213,600 91,213,600
-----------------------------------------------------------------------------------
Expenses:
Commission and clearing costs 47,229,000 - - - 47,229,000 47,229,000
Employee compensation and benefits 14,911,000 96,100 - - 15,007,100 15,007,100
Selling, general and administrative 16,760,000 419,800 - (419,800)(a) 17,179,800 16,760,000
Interest 3,888,000 - - - 3,888,000 3,888,000
-----------------------------------------------------------------------------------
82,788,000 515,900 - (419,800) 83,303,900 82,884,100
-----------------------------------------------------------------------------------
Income (loss) before income taxes
and minority interest 8,232,000 (322,300) - 419,800 7,909,700 8,329,500
Provision (benefit) for income taxes 2,207,000 (7,600) - 40,350 (c) 2,199,400 2,239,750
-----------------------------------------------------------------------------------
Income (loss) before minority interest 6,025,000 (314,700) - 379,450 5,710,300 6,089,750
Minority interest - - (154,203)(b) - (154,203) -
-----------------------------------------------------------------------------------
Net income (loss) $ 6,025,000 $(314,700) $ 154,203 $ 379,450 $ 5,864,503 $ 6,089,750
===================================================================================
Net income (loss) per common share $1.27 $ (0.25) $ - $ - $1.20 $1.19
===================================================================================
Weighted average shares outstanding 4,744,882 1,265,100 133,157 392,199 4,878,039 5,137,081
===================================================================================
</TABLE>
See accompanying notes to unaudited Pro Forma Condensed Statements of
Income.
50
<PAGE>
NOTES TO PRO FORMA CONDENSED STATEMENT OF INCOME-UNAUDITED
YEAR ENDED DECEMBER 31, 1996
(a) Adjustment represents the elimination of all expenses of AGRO, except
salaries, which consist of the following:
Consulting fees $ 52,900
Professional fees 254,900
Board of Directors fees 14,000
Rent 500
Other 97,500
--------
$419,800
========
(b) Adjustment represents minority interest in loss of AGRO.
(c) Adjustment represents tax on AGRO income after giving effect to
adjustment (a) above at an effective rate of 38%.
51
<PAGE>
JWCFS PRO FORMA CONDENSED STATEMENT OF INCOME - UNAUDITED
THREE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
As Reported Adjustments Pro Forma
------------------------- ------------------------- ----------------------------
Exchange Consolidation Exchange Consolidation
JWCFS AGRO Offer Merger Offer Merger
------------ ----------- --------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Commissions $11,538,000 $ - $ - $ - $11,538,000 $11,538,000
Market making and principal
transactions, net 4,646,000 (35,500) - - 4,610,500 4,610,500
Interest 2,334,000 49,500 - - 2,383,500 2,383,500
Clearing Fees 1,808,000 - - - 1,808,000 1,808,000
Other 1,806,000 21,200 - - 1,827,200 1,827,200
--------------------------------------------------------------------------------
22,132,000 35,200 - - 22,167,200 22,167,200
------------------------------------------------------------------------------------
Expenses:
Commission and clearing costs 11,558,000 - - - 11,558,000 11,558,000
Employee compensation and benefits 4,155,000 24,800 - - 4,179,800 4,179,800
Selling, general and administrative 3,849,000 144,700 - (144,700)(a) 3,993,700 3,849,000
Interest 985,000 - - - 985,000 985,000
------------------------------------------------------------------------------------
20,547,000 169,500 (65,807) (144,700) 20,716,500 20,571,800
------------------------------------------------------------------------------------
Income (loss) before income taxes
and minority interest 1,585,000 (134,300) 65,807 144,700 1,450,700 1,595,400
Provision (benefit) for income taxes 573,000 - - 3,952(c) 573,000 576,952
------------------------------------------------------------------------------------
Income (loss) before minority
interest 1,012,000 (134,300) - 140,748 877,700 1,018,448
Minority interest - - (65,807)(b) - (65,807) -
------------------------------------------------------------------------------------
Net income (loss) $ 1,012,000 $ (134,300) $ 65,807 $ 140,748 $ 943,507 $ 1,018,448
====================================================================================
Net income (loss) per common share $0.29 $(0.11) $ - $ - $ $0.26 $0.26
====================================================================================
Weighted average shares outstanding 3,505,000 1,265,100 133,157 392,199 3,638,157 3,897,199
====================================================================================
</TABLE>
See accompanying notes to unaudited Pro Forma Condensed Statements of Income.
52
<PAGE>
NOTES TO PRO FORMA CONDENSED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31, 1997--UNAUDITED
(a) Adjustment represents the elimination of all expenses of AGRO, except
salaries, which consist of the following:
Professional fees 122,700
Board of Directors fees 3,500
Other 18,500
--------
$144,700
========
(b) Adjustment represents minority interest in loss of AGRO.
(c) Adjustment represents tax on AGRO income after giving effect to adjustment
(a) above at an effective rate of 38%.
53
<PAGE>
ANNEX I
The following pages that comprise this Annex I are excerpts taken
verbatim from AGRO's Annual Report on Form 10-KSB40 for the fiscal year ended
December 31, 1996, as filed by AGRO with the Commission. They are included for
the convenience of AGRO shareholders, but such inclusion does not imply that
JWCFS has investigated the accuracy of such information or has confirmed the
same with AGRO. As discussed above under "AVAILABLE INFORMATION," AGRO is
subject to the informational requirements of the Exchange Act and files other
reports with the Commission that are publicly available to AGRO shareholders.
A-1
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
The Americas Growth Fund, Inc., (the "Company") is a non-diversified,
closed-end management investment company that has elected to be treated as a
business development company ("BDC") under the Investment Company Act of 1940
(the "1940 Act"). The Company's primary investment objective is to achieve
long-term capital appreciation of its assets, rather than current income, by
investing in equity and debt securities of and providing managerial assistance
to, emerging and established companies that management believes offer
significant potential opportunities for growth (individually, "portfolio
company", collectively, "portfolio companies"). The Company plans to continue to
invest primarily in United States-based portfolio companies
"strategically-linked" to the Caribbean and Latin America. The Company considers
companies to be strategically-linked to the Caribbean and Latin America if they
derive substantial revenue (at least 50%) from operations or transactions in the
Caribbean and Latin America or, if in the Company's view, they are positioned to
do so. The Company considers "Caribbean and Latin American" countries to be
Argentina, Aruba, the Bahamas, Barbados, Belize, Bolivia, Brazil, Chile,
Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala,
Haiti, Honduras, Jamaica, Mexico, Netherlands Antilles, Nicaragua, Panama,
Paraguay, Peru, the Commonwealth of Puerto Rico, Trinidad and Tobago, Uruguay
and Venezuela. The Company seeks to identify such companies that it believes
will benefit from economic and political developments in these regions. United
States law currently prohibits investment in Cuba. Consistent with current
United States law, and, as may be permitted by changes in United States law, the
Company plans to invest in United States-based companies strategically-linked to
Cuba.
The Company considers "emerging companies" to be those companies in the
early stages of development with little or no operating history, revenue or
profits, which the Company anticipates will increase revenue and become
profitable. The Company considers "established companies" to be those with an
existing revenue and profit base. To a lesser extent, certain of the emerging
and established companies in which the Company invests may be in "turnaround" or
other restructuring situations.
The Company's investment objective is intended to provide investors
with the opportunity to participate in investments which are generally not
available to the public and which typically require substantial financial
commitment. The Company believes, although there can be no assurance, that a
favorable risk/reward ratio currently is available to investors who provide
capital and, to a certain extent, managerial assistance, to companies requiring
immediate funding at a time when a public offering of securities is not
practicable or just prior to a public offering of securities. The Company
believes that such investments often produce a relatively high rate of return
over a short period of time due to the increased risk associated with these
investments and that there are a sufficient number of potential investment
opportunities available to the Company to enable it to achieve its investment
objective.
The Company has placed and intends to place its emphasis on private
investments in restricted securities for which the Company is granted
registration rights and/or rights to participate in the sale of securities of a
portfolio company by other stockholders. Such investments may be private
investments in capital stock of privately-held companies that the Company
A-2
<PAGE>
anticipates will engage in a public offering within one to three years after the
investment; private investments in capital stock of publicly-held companies; or
bridge loans which are convertible into common stock or preferred stock of the
issuer or issued together with equity participations such as common stock,
preferred stock or warrants to purchase such stock or a combination thereof, or
both, for privately-held companies which the Company anticipates will complete a
public offering, other financing or a merger or acquisition transaction (other
than a leveraged buy-out) within one to three years from the date of investment.
Although there can be no assurance, the Company believes that such investments
can result in significant capital appreciation upon liquidation of the
investment.
The Company intends to a lesser extent to invest in marketable
securities of companies whose securities are traded in the over-the-counter
market, which have a total market capitalization, at the time of investment by
the Company, of less than $100 million ("Small-Cap Companies"), and which the
Company's management believes have significant potential for price appreciation.
Investments in such Small-Cap Companies may be made in the form of common stock,
preferred stock and securities convertible into or exchangeable for common stock
or preferred stock of the Small-Cap Companies.
The Company has experienced difficulty in locating quality portfolio
companies meeting the Company's investment objectives. In the opinion of the
management of the Company, the lack of such investment opportunities is
attributable to two primary causes. First, investments in a single private
issuer limited to 15% of the Company's net assets (approximately $730,000)
involves, in the opinion of the Company's management, a high degree of risk due
to: (i) the fact that the relative small size of the investment may not resolve
the capital needs of such portfolio company; and (ii) small emerging portfolio
companies usually lack professional management, audited financial statements or
adequate management information systems. The second cause relates to the
worsening of the economic and political relationship between the United States
and Cuba since the Company's initial public offering in August 1994 as a result
of, among things, the November 1994 U.S. congressional election, the downing by
the Cuban military of two "Brothers to the Rescue" airplanes and Congressional
consideration in passage of the Helms-Burton Act (formerly known as the Cuban
Liberty and Democratic Solidarity Act). As a result, there continues to be few,
if any, U.S. portfolio companies having suitable growth opportunities with
respect to Cuba in which the Company may invest. The Company does not anticipate
an improvement in the situation in the foreseeable future.
Nevertheless, since the Company's proposed merger with Advanced
Electronic Support Products, Inc. ("AESP") was terminated in the fall of 1996,
the Company has reviewed several investment opportunities which present an
acceptable degree of risk to the Company. Moreover, the Company invested in two
companies since the termination of the AESP merger. See "Present Portfolio -
Venture Capital Investments." Although management of the Company is encouraged
by the quality of the investment opportunities which have been reviewed since
the termination of the AESP merger, there can be no assurance that the Company
will be able to negotiate and complete transactions with potential portfolio
companies which meet the Company's investment objectives.
The Company has no fixed policy concerning the types of businesses or
industry groups in which it may invest or as to the amount of funds that it will
invest in any one issuer; however, the Company currently intends to limit
A-3
<PAGE>
its investment in marketable securities of any single Small-Cap Company to 5% of
its net assets, at the time of investment, and to limit its investment in any
single private issuer to 15% of its net assets, at the time of investment. The
foregoing is not a fundamental policy of the Company and may be changed at any
time without stockholder approval.
The Company makes its investments primarily as a result of the
recommendations of investment bankers and other professionals known to members
of the Company's management through their business dealings and professional
relationships. Leonard J. Sokolow, the Company's President and Portfolio
Manager, has principal responsibility for selecting investments for the Company
and will analyze and act upon such recommendations. The Company has one
employee, who is an officer.
Following its initial investment in a particular portfolio company, the
Company has made and may in the future make additional debt and equity
investments in the same portfolio company ("Additional Investments") in order to
protect or enhance its initial investment. The Company may, together with other
investors, including management and its affiliates, make direct or Additional
Investments in a number of other situations, including attempts to salvage
insolvent or bankrupt companies, the acquisitions of divisions of companies, the
acquisition of privately-held companies, or the acquisition of companies in
order to spin-off portions of their operations or assets into independent
entities.
PRESENT PORTFOLIO - VENTURE CAPITAL INVESTMENTS
Set forth below is certain information concerning the Company's present
principal investments in portfolio companies, only one of which is currently a
publicly-held company. Information concerning the publicly-held company has been
derived from filings by the company with the Securities and Exchange Commission
(the "Commission"). The information below concerning the privately-held
companies has been obtained from those portfolio companies. The Company's
principal investment in portfolio companies constituted, as of December 31,
1996, 10% of the Company's total portfolio investments. Following the additional
investment in TAG in January 1997, as described below, the Company's principal
investment in portfolio companies constituted 15% of the Company's total
portfolio investments.
Although the Company has not independently verified for purposes of
this Form 10-KSB, the information set forth in the documents filed by the
portfolio companies with the Commission, or otherwise obtained information from
the portfolio companies, to the Company's knowledge, the information provided
below concerning such portfolio companies is accurate.
Reports, proxy statements and other information concerning the
publicly-held companies described below may be inspected at certain of the
Commission's offices or otherwise obtained from the Commission upon payment of
prescribed fees.
GLOBALINK, INC. ("GLOBALINK"). In December 1996, the Company invested
$500,000 in Globalink, a public company traded on the American Stock
Exchange, and received 14,953 shares of 8% convertible preferred stock
in Globalink. Each share of preferred stock is convertible into 10
shares of Globalink common stock. Globalink's common stock is traded on
the American
A-4
<PAGE>
Stock Exchange under the symbol "GNK." The Company also received a
Warrant to purchase 149,530 shares of common stock of Globalink at
$4.18 per share. Globalink has agreed to register the common stock
issuable upon conversion of the preferred stock and the common stock
underlying the warrants. Globalink designs, develops, markets and
supports translation software products and services. Globalink markets
bi-directional software for creating draft translations between English
and Spanish, French, German and Italian and it is just releasing
Portuguese translation products.
Globalink has incurred significant losses since its inception in 1988.
Its accumulated deficit as of September 30, 1996 was approximately $8.6
million. Globalink reported net losses for its fiscal year ended
December 31, 1995 of approximately $1.1 million. For the nine-month
period ended September 30, 1996, Globalink reported net income of
$22,731. There can be no assurance that Globalink will be profitable in
the future.
The market for software is characterized by rapid change and
improvement in computer hardware and software technology. Globalink's
success will depend in part upon its ability to enhance its current
products, to introduce new products which address technological and
market developments, and satisfy the increasingly sophisticated needs
of customers. There can be no assurance that Globalink will be
successful in developing and marketing, on a timely basis, fully
functional product enhancements or new products that respond to the
technological advances by others, or that its new products will be
accepted by customers.
Due to the nature of Globalink's business, sales to a few customers,
primarily software distributors, have accounted for a significant
percentage of Globalink's sales. During the nine months ended September
30, 1996, three customers accounted for 38% of total sales. No
assurance can be given that such customers will continue to purchase
products from Globalink. Accounts receivable at September 30, 1996
include approximately $6.5 million in amounts due from five customers.
Any failure or significant delay of any such customers to pay their
respective accounts to Globalink would have a material adverse affect
on Globalink and its financial condition.
For the nine months ended September 30, 1996, Globalink had sales
returns and allowances of approximately $3.1 million, or approximately
22.2% of product sales for the period. No assurance can be given that
Globalink will be able to reduce such percentage of returns and
allowances or, that such percentages will not increase for future
periods.
THE AMERICAS GROUP, INC. ("TAG"). In January 1997 the Company
invested $250,000 in TAG, an unaffiliated company, pursuant to a
private placement under Rule 504 of the Securities Act of 1933. In
exchange for such investment the Company received 125,000 shares of TAG
common stock. In addition, the Company also received 5,000 shares of
common stock in consideration of Leonard J. Sokolow, the Company's
Chairman, serving on TAG's Board of Advisors. TAG is a corporate
consulting, financial advisory and merchant banking firm focusing its
activities in South America, Central America and the Caribbean.
TAG was formed in January 1996 and began limited operations in March
1996. Because there are many potential entrants to the field, it is
extremely difficult to assess which companies are likely to offer
competitive services in the future. TAG expects competition to persist,
intensify and increase
A-5
<PAGE>
in the future. Many of TAG's current and potential competitors have
longer operating histories, greater name recognition and greater
financial, technical and marketing resources than TAG. Such competitors
may be able to undertake more extensive marketing campaigns, adopt more
aggressive pricing policies and make more attractive offers to
businesses. There can be no assurance that TAG will be able to compete
effectively with current or future competitors or that the competitive
pressures faced by TAG will not have a material adverse effect on TAG's
business, financial condition or operating results. Furthermore,
although the common stock of TAG acquired by the Company is freely
transferable, a public market for such securities has not developed.
Consequently, the Company may not be able to readily liquidate its
investment.
THE AMERICAS GROWTH PARTNERS, INC. ("AGP"). In 1995 the Company for
an initial investment of $22,608 acquired an 80% ownership interest in
AGP, a publishing and consulting company. The only book which AGP
published is titled "Business Opportunities in a Free Cuba," the rights
to which AGP acquired. This investment has been written off and AGP has
discontinued sales of such book.
GOLF RESERVATIONS OF AMERICA, INC. ("GOLF"). In January 1995 the
Company invested $150,000 in Golf and was issued a $150,000 note and
was granted warrants to purchase 60,000 shares of Golf common stock at
$2.60 per share. Golf, a private company, had a system to make advance
golf reservations through a centralized reservations network of
participating golf courses, hotels, resorts and other lodging
properties, and provided ancillary travel services, all of which were
accessible by calling a single, toll-free phone number, 1-800-TEE TIME.
The $150,000 note was repaid in March 1995. Also in March 1995, the
Company invested an additional $50,000 and was issued a $50,000 note
due the earlier of April 1, 1996 or the closing of a firm commitment
underwritten public offering and was granted additional warrants to
acquire 20,000 shares of common stock at $2.60 per share. The common
stock underlying the 80,000 warrants have certain registration rights.
Such $50,000 note is in default and the Company has been advised that
Golf has filed for Chapter 11 bankruptcy. This investment has been
written down to $0.
COMPETITION
The Company encounters competition in its efforts to locate attractive
opportunities for the investment of its capital from other entities and
individuals having similar investment objectives. The primary competition for
desirable investments comes from investment companies, investment partnerships
and wealthy individuals. Some of the competing entities and individuals have
investment managers or advisors with significantly greater experience, resources
and managerial capabilities than the Company and are therefore in a better
position than the Company to obtain access to attractive investments. To the
extent that the Company can compete for such investments it may only be able to
do so on less favorable terms that those obtained by larger more established
investors.
A-6
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY
The Company maintains its principal executive office in Miami, Florida,
for which it pays only for administrative services and no rent.
ITEM 3. LEGAL PROCEEDINGS
On November 26, 1996, a purported derivative stockholders' suit
alleging breach of fiduciary duty under the Investment Company Act of 1940 was
filed in the Circuit Court for the Fifteenth Judicial Circuit in Palm Beach
Country, Florida against, among others, the Company and its board of directors.
The suit was filed by Kevin King, Herbert Hill, a general partner of Double H
Investment Co. and Bargelt Investments, Bonnie Cool Hayes and Ronald Hayes, who
purportedly own an aggregate of approximately 10% of the Company's outstanding
shares of common stock. The plaintiffs seek certain equitable relief, including
enjoining the directors from acting in their capacities as directors of the
Company and from making any investments or expenditures, except for payment of
regular expenses and salaries, and an unspecified amount of damages in
connection with, among other things, the previously announced proposed merger
between the Company and Advanced Electronic Support Products, Inc. ("AESP"),
which proposed merger was terminated by mutual agreement of the Company and AESP
on November 8, 1996. The Company has removed such suit to the United States
District Court, Southern District of Florida, Miami Division. The defendants
believe that the suit is completely without merit and are vigorously contesting
the plaintiffs' claims. The Company and the other defendants have filed several
motions to dismiss this suit. Based upon information currently available, the
management of the Company does not believe that the ultimate resolution of
this litigation will have a material adverse impact on the financial position
or results of operations of the Company.
Pursuant to the Company's Articles of Incorporation, Bylaws and
applicable federal and state law, the board of directors has sought
indemnification regarding this suit and the Company has agreed to indemnify the
board of directors in connection therewith. As part of such indemnification, the
Company has agreed to advance legal fees and expenses incurred by the board of
directors in defending such suit. Each board member has affirmed in writing his
good faith belief that the standard of conduct necessary for indemnification by
the Company has been met and each board member has made a written undertaking to
repay any such advance if it should be ultimately determined that the standard
of conduct has not been met. The Company is not currently engaged in any other
pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matters to a vote of its stockholders
during the fourth quarter 1996.
A-7
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's Common Stock has been quoted on the NASDAQ Small Cap
Market since August 22, 1994 under the symbol "AGRO". The following table sets
forth, for the periods indicated, the range of high and low bid quotations as
reported by NASDAQ. Such quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and do not necessarily represent actual
transactions. There presently is a limited public market for the Common Stock.
<TABLE>
<CAPTION>
Price Per Share
High Low
----------------------
<S> <C> <C>
The period from inception (June 3, 1994)
through December 31, 1994:
Third Quarter (commencing August 22, 1994) $5 $4 7/8
Fourth Quarter 5 4 1/8
Fiscal year ended December 31, 1995:
First Quarter 4 1/2 2
Second Quarter 2 3/4 2
Third Quarter 2 5/8 2
Fourth Quarter 2 5/8 2
Fiscal year ended December 31, 1996
First Quarter 2 7/8 2 1/2
Second Quarter 2 3/4 2 7/16
Third Quarter 2 5/8 2 1/4
Fourth Quarter 2 7/8 2 1/2
Fiscal year ending December 31, 1997
First Quarter (through March 21, 1997) 3 2 11/16
</TABLE>
As of March 21, 1997, there were approximately 110 registered holders
of the Company's Common Stock with 1,265,100 shares of Common Stock outstanding.
In addition, the Company believes that there are more than 945 beneficial owners
of Common Stock whose shares are held in "street" name as of such date. On March
21, 1997, the closing bid and ask price of the Common Stock were $2 3/4 and $2
13/16, respectively.
The Company has never paid and does not currently intend to pay cash
dividends. In addition, the Company has never made, nor adopted any policies
with respect to, in-kind distributions, and has no present intention of adopting
any such policies or of making any such distributions. Furthermore, there may
also be substantial legal and contractual restrictions affecting the timing of
any such distributions by the Company or any such resales by stockholders of
distributed securities.
A-8
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996 ("FISCAL 1996") COMPARED TO THE YEAR ENDED
DECEMBER 31, 1995 ("FISCAL 1995")
As a result of operations, net assets decreased approximately $314,700
(approximately 6.5% of net assets) during Fiscal 1996 compared with an increase
in net assets of approximately $25,100 during the Fiscal 1995. The net decrease
in net assets resulting from operations for Fiscal 1996 primarily resulted from
a net investment loss of $266,100, a realized loss of $21,400 primarily
resulting from the write-off of the Company's note receivable from AGP and
unrealized depreciation on investments of $29,600 as a result of the decline in
market value of the Company's note receivable from Golf as of December 31, 1996.
These results compare with a net increase in net assets resulting from
operations in Fiscal 1995 which occurred primarily from realized gains on sales
of investments of $44,700 which was offset by unrealized depreciation on
investments of $13,300 as a result in the decline in the market value of the
Company's investment in AGP as of December 31, 1995.
The Company recognized investment income (which consisted of interest
income) of approximately $246,500 for Fiscal 1996 compared with investment
income (which consisted entirely of interest income) of approximately $288,100
for Fiscal 1995.
Expenses aggregated approximately $515,900 during Fiscal 1996 which
included salaries, consulting fees, legal fees, accounting fees, consulting
fees, rent and administrative expenses as compared with expenses of $296,000
during Fiscal 1995 for salaries, consulting fees, legal fees, accounting fees,
rent and administrative expenses. Professional fees increased $192,100 and
consulting fees increased $16,900. With respect to the increase in professional
fees, approximately $110,000 was as a result of the proposed merger transaction
which the Company terminated in November 1996 and approximately $65,000 was as a
result of the purported shareholders derivative suit filed in November 1996. See
"Legal Proceedings."
LIQUIDITY AND CAPITAL RESOURCES
At of December 31, 1996, the Company had cash and cash equivalents of
approximately $415,900 and U.S. Treasury Bills of approximately $3,973,100 as
compared to approximately $601,800 in cash and cash equivalents and
approximately $4,424,800 in Treasury Bills at December 31, 1995. The decrease in
capital resources for Fiscal 1996 of approximately $637,600 was primarily due to
an operating and investment loss of $266,100 as compared to the decrease in
capital resources of $30,000 in Fiscal 1995 primarily due to a loan of $22,600
to AGP and the purchase of $9,600 in fixed assets. Also, in the fourth quarter
of 1996, the Company invested $500,000 in Globalink. In January of 1997, the
Company invested $250,000 in TAG. As of December 31, 1996, the Company had
liabilities of approximately $73,800 compared with liabilities of $33,200 as of
December 31, 1995.
As of March 21, 1997, the Company has incurred expenses of
approximately $112,600 relating to the purported shareholders derivative suit.
See "Legal Proceedings." The Company expects to incur significant additional
costs in connection with the litigation and its agreement to advance legal fees
and expenses incurred by the Board of Directors in defending such suit.
A-9
<PAGE>
ITEM 7. FINANCIAL STATEMENTS
See the financial statements included herein.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has not had any changes in or disagreements with its independent
accountants.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The following is a list of the executive officers and directors of the
Company. All directors of the Company are serving a current term of office which
continues until the next annual meeting of stockholders, and all officers are
serving a current term of office which continues until the next annual meeting
of directors:
<TABLE>
<CAPTION>
YEAR OF
NAME AND AGE OF DIRECTOR ELECTION POSITION
------------------------ -------- --------
<S> <C> <C>
Leonard J. Sokolow* 1994 President and Chairman of the
40 Board, Portfolio Manager
Hon. J. Antonio Villamil* 1994 Vice-Chairman
49 International Strategy,
Secretary and Director
Sanford B. Cohen 1994 Director
40
Martin C. Engelmann 1994 Director
55
Neil R. Winter 1995 Director
43
</TABLE>
*Indicates "interested person" of the Company within the meaning of the 1940
Act.
LEONARD J. SOKOLOW has been Chairman of the Board, President, Chief
Financial Officer and Portfolio Manager of the Company since inception. Since
August 1993, Mr. Sokolow has been President and Chief Executive Officer of
Genesis Partners, Inc. a privately-held corporation which provides domestic and
international investment banking and financial advisory services. Since
September 1996, Mr. Sokolow has been President of Union Atlantic LC a privately-
held company which provides domestic and international merchant banking and
A-10
<PAGE>
financial advisory services. From May 1988 to July 1993, Mr. Sokolow was
employed by Windmere Corporation, a public corporation engaged in the
manufacture and distribution of personal care products and small household
appliances, most recently as its Executive Vice President-Operations,
Administration and Finance and General Counsel. Since September 1992, Mr.
Sokolow has been a director of The Box Worldwide, Inc. (formerly Video Jukebox
Network, Inc.), a public company in the entertainment industry. Since March
1990, Mr. Sokolow has served as a director of Catalina Lighting, Inc., a public
company engaged in the import and distribution of commercial and residential
electrical lighting. Since April of 1995 Mr. Sokolow has been a director of
Ezcony Interamerica, Inc. a distributor of electronic products and CD Rom
programing to Latin America. Mr. Sokolow received a B.A. degree with majors in
Economics and Accounting from The University of Florida in 1977, a J.D. degree
from The University of Florida School of Law in 1980 and an L.L.M. (Taxation)
degree from The New York University Graduate School of Law in 1982. Mr. Sokolow
is a Certified Public Accountant.
HON. J. ANTONIO VILLAMIL has been Vice Chairman - International
Strategy, Secretary and a director of the Company since inception. Since January
1993, Mr. Villamil has been President and Chief Executive Officer of the
Washington Economics Group, Inc., an economic, financial, and government
relations adviser. From April 1989 to January 1993, Mr. Villamil served as Chief
Economist of the United States Department of Commerce, and most recently as
Under Secretary for Economic Affairs. From January 1981 to April 1989, Mr.
Villamil was employed by Southeast Bank, N.A., most recently as Senior Vice
President and Chief Economist, Corporate Planning and Economics Department,
Office of the Chairman of the Board. From 1978 to 1981, Mr. Villamil was
employed by Crocker National Bank, most recently as its Vice President and
Economist, Economics Department. Mr. Villamil received a B.S. degree in
Economics in 1968 and a Master of Arts in Economics in 1971 from Louisiana State
University.
SANFORD B. COHEN has been a director of the Company since inception. In
1985, Mr. Cohen co-founded Prescott Valley Broadcasting Co., Inc., owner of
KIHX-FM and KQNA-AM radio stations in Prescott Valley, Arizona, and has been its
President since its inception. From 1982 to 1984, Mr. Cohen was Vice President
of National Phonecasting Co., a joint venture with Gannett Broadcasting Corp., a
private company engaged in telephone broadcasting of financial information. Mr.
Cohen received his B.A. degree in Economics in 1979 from Michigan State
University.
MARTIN C. ENGELMANN has been a director of the Company since inception.
In 1984, Mr. Engelmann co-founded Dale-Mar Associates, Inc., a management
consulting firm specializing in companies in the health care industry with
distribution in the Caribbean, and has been its President since its inception.
Since November 1988, Mr. Engelmann has been a director of Miller Industries,
Inc., a public company engaged in manufacturing and marketing of glass doors and
windows. Mr. Engelmann received a B.S. degree in Business Administration from
The University of Florida in 1963.
NEIL R. WINTER has been a director of the Company since February, 1995.
Since March 1997 Mr. Winter has been the Chief Financial Officer of Seregenti
Eyewear, Inc. From June 1985 through March 1997, Mr. Winter was a
A-11
<PAGE>
shareholder in the CPA firm of Winter, Scheifley & Associates, P.C. He received
a Bachelor of Science degree from Boston University in 1974 and is licensed as a
Certified Public Accountant in the states of Colorado and Florida. Mr. Winter is
also a member of the Colorado Society of Certified Public Accounts and the
American Institute of Certified Public Accountants.
The Board of Directors is classified into three classes, each with a
term of three years, with only one class of directors standing for election by
the stockholders in any year. Officers are elected to serve, subject to the
discretion of the Board of Directors, until their successors are appointed.
Messrs. Cohen and Engelmann serve as Class I directors, Messrs.
Villamil and Winter serve as Class II directors and Mr. Sokolow serves as a
Class III directors. The terms of the, Class II, Class III and Class I directors
will expire on the dates of the 1997, 1998 and 1999 annual stockholders meeting,
respectively, or until the next applicable stockholders meeting.
ITEM 10. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information for the period January 1, 1995
through December 31, 1996 of the respective compensation earned by the Chief
Executive Officer of the Company and the other executive officer who earned in
excess of $100,000 (of which there were none), (the "Named Executive") in all
capacities in which he served.
<TABLE>
<CAPTION>
Annual Compensation
-------------------
Name and Principal
Position Year Salary Bonus Plan
------------------ ---- ------ ----------
<S> <C> <C> <C>
Leonard J. Sokolow,
Chairman of the Board
President, Chief Executive
Officer & Portfolio Manager 1995 $91,500 $2,700
1996 $96,100 $ 0
</TABLE>
Mr. Sokolow is employed as the Company's Chairman of the Board,
President and Portfolio Manager, pursuant to an employment agreement (the
"Employment Agreement") with the Company, dated August 30, 1994. The term of the
Employment Agreement was for an initial three year term, which is automatically
extended one additional year on each anniversary of the Employment Agreement
beginning in August 30, 1996 unless the Board of Directors provides Mr. Sokolow
with one year prior notice that the term shall not be extended. The Employment
Agreement currently terminates on August 30, 1999, unless extended in accordance
with its terms. Under the Employment Agreement, Mr. Sokolow received a salary of
$96,100 in 1996, which amount increases annually by the percentage increase in
the consumer price index. The Employment Agreement provides for the
reimbursement of health insurance premiums, automobile expenses not to exceed
$500 per month and travel expenses related to the Company's business. Mr.
Sokolow's employment may be terminated by the Company with or without cause. If
the Employment Agreement is terminated for any reason other that cause (as
defined in the Employment Agreement), Mr. Sokolow
A-12
<PAGE>
will be entitled to receive up to 10% of the income attributable to investments
made by the Company during his employment with the Company.
The Company has implemented an employee profit sharing plan (the
"Plan") which provides for payment of a performance fee in an amount equal to
20% of net income after taxes in each fiscal year, computed from the end of the
last fiscal year in respect of which performance fees were paid ("Plan Income").
Such performance fee shall be payable regardless of the amount of net income.
Pursuant to the Employment Agreement, Mr. Sokolow will receive 10% of Plan
Income, if any; provided, however, that the amount so distributable to Mr.
Sokolow pursuant to such employment agreement in any given year shall not exceed
50% of all amounts eligible to be distributed under the Plan.
Directors, other than Mr. Sokolow, will receive an annual fee of $2,500
for serving on the Board of Directors plus $250 and out-of-pocket expenses for
each meeting attended.
Other than the Plan, the Company does not have any stock option,
annuity, retirement, pension, deferred or incentive compensation plan or
arrangement under which any executive officers or directors are entitled to
benefits, nor does the Company have any long-term incentive plan pursuant to
which performance units or other forms of compensation are paid.
In September 1995 the Company entered into a month to month consulting
agreement with the Washington Economics Group, Inc. ("WEG"), of which Hon. J.
Antonio Villamil, Vice Chairman - International Strategy and a director of the
Company, is President and Chief Executive Officer. Pursuant to the consulting
agreement, WEG was to receive a monthly retainer of $3,000 in exchange for
providing up to 20 hours of consulting services per month. As of December 31,
1996, the Company elected not to renew such consulting agreement. In its
capacity as a consultant, WEG consulted with the Portfolio Manager in analyzing
investments, assisting management in investor relations and, as requested,
preparing formal presentations to the Board of Directors on market developments
in Latin America and the Caribbean.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 12, 1997, the beneficial
ownership of the Common Stock of the Company of (i) each person who is known by
the Company to beneficially own more than 5% of the Common Stock of the Company,
(ii) each director (including the Named Executive) of the Company, and (iii) all
directors and executive officers of the Company as a group (based upon
information furnished by such persons). Under the rules of the Commission, a
person is deemed to be a beneficial owner of a security if he has or shares the
power to vote or direct the voting of such security or the power to dispose or
direct the disposition of such security. Accordingly, more than one person may
be deemed to be a beneficial owner of the same securities. A person is also
deemed to be a beneficial owner of any securities of which that person has the
right to acquire beneficial ownership within 60 days.
A-13
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
Name and Address Beneficially Percentage
of Beneficial Owner (1) Owned (2) of Class
- ----------------------- --------- --------
<S> <C> <C>
Leonard J. Sokolow 100 *
Hon. J. Antonio Villamil 0 *
Neil R. Winter 0 *
Sanford B. Cohen 0 *
Martin C. Engelmann 0 *
Kevin C.King(3) 88,600 7%
JW Charles Clearing Corp. (4) 262,000 21%
All directors and executive
officers as a group
(5 persons) 100 *
</TABLE>
- -------------------
* Less than 1%
(1) The business address for purposes hereof of all of the Company's directors
and executive officers is in care of the Company.
(2) Unless otherwise noted, the Company believes that all persons in the table
have sole voting and disposition power with respect to all shares of Common
Stock beneficially owned by them.
(3) The address of such person is 10200 Old Katy Road, Suite 300, Houston, Texas
77043.
(4) The address of such person is 980 N. Federal Highway, Suite 310, Boca Raton,
Florida 33432.
The information contained in the preceding table and the footnotes thereto is
derived in part from Statements on Schedule 13D filed with the Securities and
Exchange Commission. The Company expresses no opinion as to the completeness or
accuracy of the information contained in such documents or as to such reporting
persons' compliance with The Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In September 1995 the Company entered into a month to month consulting
agreement with the Washington Economics Group, Inc. ("WEG"), of which Hon. J.
Antonio Villamil, Vice Chairman - International Strategy and a director of the
Company, is President and Chief Executive Officer. Pursuant to the consulting
agreement, WEG received a monthly retainer of $3,000 in exchange for providing
up to 20 hours of consulting services per month. This agreement was terminated
as of December 31, 1996. In its capacity as a consultant, WEG consulted with the
Portfolio Manager in analyzing investments, assisted management in investor
relations and, as requested, prepared a formal presentations to the Board of
Directors on market developments and economic conditions in Latin America and
the Caribbean. See "Executive Compensation".
A-14
<PAGE>
FORM 10-KSB
THE AMERICAS GROWTH FUND, INC.
LIST OF FINANCIAL STATEMENTS
The following financial statements of The Americas Growth Fund, Inc. are
included in Item 7:
Report of Independent Certified Public Accountants
Balance Sheets - December 31, 1996 and 1995
Statements of Operations - Years ended December 31, 1996 and 1995
Statements of Changes in Net Assets - Years ended December 31, 1996 and 1995
Statements of Cash Flows - Years ended December 1996 and 1995
Notes to Financial Statements
A-F-1
<PAGE>
Report of Independent Certified Public Accountants
Board of Directors and Shareholders
The Americas Growth Fund, Inc.
We have audited the accompanying balance sheets of The Americas Growth Fund,
Inc. as of December 31, 1996 and 1995 and the related statements of operations,
changes in net assets and cash flows for each of the two years in the period
ended December 31, 1996. 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. Our
procedures included observation of securities held by the Company or
confirmation of other securities owned by correspondence with the custodian and
broker as of December 31, 1996 and 1995. 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 The Americas Growth Fund, Inc.
at December 31, 1996 and 1995, the results of its operations, the changes in its
net assets and its cash flows for each of the two years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
Jacksonville, Florida
March 7, 1997
[EDITOR'S NOTE: by JWCFS: This report and the financial statements to which it
--------
relates have been reproduced herein as publicly available information. Such
reproduction is not pursuant to the consent of such independent certified public
---
accountants or of AGRO, and such reproduction does not imply that either of them
---
has reviewed this reproduction for purposes of its inclusion herein. There has
---------
been no such review.]
- -------------------
A-F-2
<PAGE>
THE AMERICAS GROWTH FUND, INC.
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------- ------------
<S> <C> <C>
Assets:
Investments at market or fair value:
Investments in U.S. Treasury Bills $ 3,973,100 $ 4,424,800
Investment in preferred stock 480,000 --
Investment in warrant 20,000 --
Investments in notes receivable -- 150,700
----------- -----------
Total investments (amortized cost of $4,525,300 4,473,100 4,575,500
and $4,597,400 for 1996 and 1995, respectively)
Cash and cash equivalents 415,900 601,800
Prepaid expenses 1,200 8,000
Income tax refund receivable 21,000 --
Deferred tax asset 6,000 4,400
Furniture and equipment, net 16,600 16,700
Organizational costs, net 4,200 5,700
Deposits 1,100 1,100
----------- -----------
4,939,100 5,213,200
----------- -----------
Liabilities:
Accounts payable 67,500 15,000
Accrued directors fees 3,600 4,600
Accrued profit sharing liability -- 2,700
Income taxes payable -- 7,700
Deferred tax liability 2,700 3,200
----------- -----------
73,800 33,200
----------- -----------
$ 4,865,300 $ 5,180,000
=========== ===========
Net assets:
Preferred stock, $.01 par value, 2,000,000
shares authorized, no shares issued $ -- $ --
Common stock, $.01 par value, 10,000,000 shares
authorized, 1,265,100 shares issued and outstanding 12,700 12,700
Capital in excess of par 5,141,300 5,141,300
Undistributed operating income (loss) and investment
gains (losses):
Accumulated operating (losses) income (266,400) (300)
Realized gains on investments 23,300 44,700
Unrealized depreciation of investments (45,600) (18,400)
----------- -----------
(288,700) 26,000
----------- -----------
Net assets applicable to outstanding common shares
(equivalent to $3.85 and $4.09 per share for 1996
and 1995, respectively, based on outstanding
common shares of 1,265,100) $ 4,865,300 $ 5,180,000
=========== ===========
</TABLE>
Read the accompanying notes.
A-F-3
<PAGE>
THE AMERICAS GROWTH FUND, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Interest income $ 246,500 $ 288,100
----------- -----------
Expenses:
Consulting fees to affiliate 30,000 36,000
Consulting fees 22,900 --
Salaries 96,100 99,700
Professional fees 254,900 62,800
Board of Directors fees 14,000 13,400
Rent 500 16,400
Other 97,500 67,700
----------- -----------
515,900 296,000
----------- -----------
Investment loss before income tax benefit (269,400) (7,900)
Less income tax benefit (3,300) (1,600)
----------- -----------
Net investment loss (266,100) (6,300)
----------- -----------
Realized (loss) gain on investments (23,300) 55,800
Less income tax (benefit) expense applicable to
realized (loss) gain on investments (1,900) 11,100
----------- -----------
(21,400) 44,700
----------- -----------
Unrealized depreciation of investments (29,600) (16,600)
Less income tax benefit applicable
to unrealized depreciation of investments (2,400) (3,300)
----------- -----------
(27,200) (13,300)
----------- -----------
Net (decrease) increase in net assets
resulting from operations $ (314,700) $ 25,100
=========== ===========
Per-share amounts:
Net investment loss $ (0.21) $ (0.01)
Net realized (losses) gains on investments (0.02) 0.04
Net unrealized losses on investments (0.02) (0.01)
----------- -----------
$ (0.25) $ 0.02
=========== ===========
Weighted average number of shares used
in per-share computations 1,265,100 1,265,100
=========== ===========
</TABLE>
Read the accompanying notes.
A-F-4
<PAGE>
THE AMERICAS GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Net investment loss $ (266,100) $ (6,300)
Net realized (losses) gains on investments (21,400) 44,700
Net increase in unrealized depreciation
of investments (27,200) (13,300)
----------- -----------
Net (decrease) increase in net assets
resulting from operations (314,700) 25,100
Net assets at beginning of period 5,180,000 5,154,900
----------- -----------
Net assets at end of period
(includes undistributed net investment
loss of ($266,400) and ($300) at
December 31, 1996 and 1995, respectively) $ 4,865,300 $ 5,180,000
=========== ===========
</TABLE>
Read the accompanying notes.
A-F-5
<PAGE>
THE AMERICAS GROWTH FUND, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
------------ -------------
<S> <C> <C>
Cash flows from operating activities:
Sources of cash:
Interest $ 31,600 $ 34,300
------------ ------------
Uses of cash:
Payroll 96,100 105,900
Consulting fees to affiliates 30,000 36,000
Consulting fees 22,900 --
Operating expenses 307,700 153,900
Income taxes 23,700 --
------------ ------------
480,400 295,800
------------ ------------
Cash (used-in) operating activities (448,800) (261,500)
------------ ------------
Cash flows from investing activities:
Sources of cash:
Proceeds from sale of U.S. Treasury Bills 12,498,900 9,000,000
Proceeds from notes receivable 100,000 100,000
Proceeds from sale of common stock -- 242,800
------------ ------------
12,598,900 9,342,800
------------ ------------
Uses of cash:
Purchase of furniture and equipment 1,500 9,600
Purchase of U.S. Treasury Bills 11,834,500 9,239,500
Purchase of preferred stock 480,000 --
Purchase of warrant 20,000 --
Purchase of common stock -- 87,700
Purchase of notes receivable:
Related party -- 22,600
Other -- 250,000
------------ ------------
12,336,000 9,609,400
------------ ------------
Cash provided by (used-in) investing activities 262,900 (266,600)
------------ ------------
(Decrease) in cash and cash equivalents (185,900) (528,100)
Cash and cash equivalents at beginning of period 601,800 1,129,900
------------ ------------
Cash and cash equivalents at end of period $ 415,900 $ 601,800
============ ============
</TABLE>
Read the accompanying notes.
A-F-6
<PAGE>
THE AMERICAS GROWTH FUND, INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
--------- ----------
<S> <C> <C>
Reconciliation of net (decrease) increase in net assets resulting
from operations to cash used-in operating activities:
Net (decrease) increase in net assets
resulting from operations $(314,700) $ 25,100
--------- ---------
Adjustments to reconcile net (decrease)
increase in net assets resulting from
operations to cash (used-in) operating activities:
Accretion of discount on U.S.
Treasury Bills (215,700) (251,900)
Realized loss (gain) on investments 23,300 (55,800)
Amortization and depreciation 3,100 2,500
Unrealized depreciation of investments 29,600 16,600
Deferred income tax benefits (2,100) (1,400)
Changes in assets and liabilities:
Income tax refund (21,000) --
Prepaid expenses 6,800 (7,200)
Interest receivable 800 (700)
Accounts payable 52,500 7,700
Accrued payroll taxes -- (8,900)
Accrued profit sharing liability (2,700) 2,700
Accrued directors fees (1,000) 2,100
Income taxes payable (7,700) 7,700
--------- ---------
Total adjustments (134,100) (286,600)
--------- ---------
Cash (used-in) operating activities $(448,800) $(261,500)
</TABLE>
Read the accompanying notes.
A-F-7
<PAGE>
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
1. ORGANIZATION AND NATURE OF OPERATIONS:
The Americas Growth Fund, Inc. (the "Company") was incorporated under
the laws of the State of Maryland on June 3, 1994. The Company is a
non-diversified, closed-end management investment company and has filed
with the Securities and Exchange Commission ("SEC") a notification of
election to be treated as a "business development company" as that term
is defined in the Investment Company Act of 1940, as amended.
The Company's primary investment objective is to achieve long-term
capital appreciation of its assets, rather than current income, by
investing in equity and debt securities of and providing managerial
assistance to, emerging and established companies that management
believes offer significant potential opportunities for growth
(individually, "portfolio company", collectively, "portfolio
companies"). The Company plans to invest primarily in United States
based portfolio companies "strategically-linked" to the Caribbean and
Latin America. The Company considers companies to be
strategically-linked to the Caribbean and Latin America if they derive
substantial revenue (at least 50%) from operations or transactions in
the Caribbean and Latin America or, if in the Company's view, they are
positioned to do so. The Company considers "Caribbean and Latin
American" countries to be Argentina, Aruba, the Bahamas, Barbados,
Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican
Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Jamaica,
Mexico, Netherlands Antilles, Nicaragua, Panama, Paraguay, Peru, the
Commonwealth of Puerto Rico, Trinidad and Tobago, Uruguay and
Venezuela. During 1996 and 1995, due to difficulties in locating
quality portfolio companies meeting the Company's investment
objectives, the Company's assets were primarily invested in U.S.
Treasury bills. There can be no assurance that the Company will be able
to negotiate and complete transactions with potential portfolio
companies which meet the Company's investment objectives.
The Company considers "emerging companies" to be those companies in the
early stages of development with little or no operating history, and
minimal revenue or profits, which the Company anticipates will increase
revenue and become profitable. The Company considers "established
companies" to be those with an existing revenue and profit base. To a
lesser extent, certain of the emerging and established companies in
which the Company invests may be in "turnaround" or other restructuring
situations.
The Company has placed and intends to place its emphasis on private
investments in restricted securities for which the Company is granted
registration rights and/or rights to participate in the sale of
securities of a portfolio company by other stockholders.
Such investments may be private investments in capital stock of
privately-held companies that the Company anticipates will engage in a
public offering within one to three years after the investment; private
investments in capital stock of publicly-held companies; or bridge
loans which are convertible into common stock or preferred stock of the
issuer or issued together with equity participations such as common
stock, preferred stock or warrants to purchase such stock or a
combination thereof, or both, for privately-held companies which the
Company anticipates will complete a public offering, other financing or
a merger or acquisition transaction (other than a leveraged buy-out)
within one to three years from the date of investment.
A-F-8
<PAGE>
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996 AND 1995
2. SIGNIFICANT ACCOUNTING POLICIES:
SECURITIES VALUATION:
Investments in unrestricted securities that are traded in the
over-the-counter market are generally valued at the closing bid
price on the last day of the year. U.S. Treasury bills are valued at
market value. Restricted securities are valued at fair value as
determined by the Board of Directors. Because of the inherent
uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready
market for the securities existed, and the differences could be
material.
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 amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates.
CASH AND CASH EQUIVALENTS:
The Company considers all highly liquid investments purchased with
original maturities of three months or less to be cash equivalents.
FURNITURE AND EQUIPMENT:
Furniture and equipment are stated at cost less accumulated
depreciation. Depreciation is computed using the straight-line
method over the estimated useful lives of the related assets.
ORGANIZATIONAL COSTS:
Organizational costs are stated net of accumulated amortization of
$3,300 and $1,800 at December 31, 1996 and 1995, respectively, and
are being amortized using the straight-line method over five years.
INCOME TAXES:
The Company is not entitled to the special treatment available to
regulated investment companies and is taxed as a regular corporation
for federal and state income tax purposes. The aggregate cost of
securities at December 31, 1996 and 1995 for federal income tax
purposes and financial reporting purposes was the same. The
aggregate gross unrealized depreciation for all securities held at
December 31, 1996 and 1995 is $52,200 and $22,600, respectively.
PER SHARE AMOUNTS:
Per share amounts are computed by dividing the net investment (loss)
and net realized and unrealized gains (losses) on investments by the
weighted average number of shares outstanding throughout the year.
A-F-9
<PAGE>
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996 AND 1995
3. CONCENTRATION OF CREDIT RISK:
Financial instruments that potentially subject the Company to
concentration of credit risk consist principally of cash and cash
equivalents. During the year the Company had deposits with financial
institutions which were not covered by the Federal Deposit Insurance
Corporation. Management regularly monitors their balances and attempts
to keep this potential risk to a minimum by maintaining their accounts
with financial institutions they believe are of good quality.
4. INVESTMENTS:
INVESTMENTS INCLUDE THE FOLLOWING AT DECEMBER 31, 1996 AND 1995:
<TABLE>
<CAPTION>
VALUE VALUE
PRINCIPAL TYPE OF ISSUE AND DECEMBER 31, DECEMBER 31,
AMOUNT NAME OF ISSUER 1996 1995
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury bills (81.7%
and 85.4% of net assets at
December 31, 1996 and 1995,
respectively)
$ 471,030 U.S. Treasury bill,
$500,000 face value,
matures January 11, 1996 $ -- $ 499,300
$ 1,415,780 U.S. Treasury bill,
$1,500,000 face value,
matures February 8, 1996 -- 1,492,000
$ 1,949,545 U.S. Treasury bill,
$2,000,000 face value,
matures June 6, 1996 -- 1,955,600
$ 476,030 U.S. Treasury bill,
$500,000 face value,
matures November 14, 1996 -- 477,900
$ 1,976,055 U.S. Treasury bill,
$2,000,000 face value,
matures February 6, 1997 1,989,700 --
$ 494,065 U.S. Treasury bill,
$500,000 face value,
matures February 13, 1997 496,900 --
$ 1,482,807 U.S. Treasury bill
$1,500,000 face value,
matures March 6, 1997 1,486,500 --
----------- -----------
Total U.S. Treasury bills $ 3,973,100 $ 4,424,800
=========== ===========
</TABLE>
A-F-10
<PAGE>
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996 AND 1995
4. INVESTMENTS (CONTINUED):
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES SHARES VALUE VALUE
DECEMBER 31, DECEMBER 31, TYPE OF ISSUE AND DECEMBER 31, DECEMBER 31,
1996 1995 NAME OF ISSUER 1996 1995
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stocks (0.0% of net
assets at December 31, 1996
and 1995)
Majority owned (restricted):
- 80 Americas Growth
Partners, Inc. $ - $ -
=========== ===========
8% Convertible, redeemable preferred
stocks (9.9% and 0.0% of net assets
at December 31, 1996 and 1995,
respectively) (restricted)
14,953 - Globalink, Inc. $ 480,000 $ -
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
WARRANTS WARRANTS VALUE VALUE
DECEMBER 31, DECEMBER 31, TYPE OF ISSUE AND DECEMBER 31, DECEMBER 31,
1996 1995 NAME OF ISSUER 1996 1995
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stocks warrants
(0.4% and 0.0% of net
assets at December 31, 1996
and 1995, respectively)
Golf Reservations
of America, Inc.
2 2 Class A -- --
2 2 Class B -- --
========== ==========
Restricted:
1 -- Globalink, Inc. $ 20,000 $ --
========== ==========
</TABLE>
A-F-11
<PAGE>
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996 AND 1995
4. INVESTMENTS (CONTINUED):
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE VALUE
OF NOTES TYPE OF ISSUE AND DECEMBER 31, DECEMBER 31,
DECEMBER 31, 1996 NAME OF ISSUER 1996 1995
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Notes (2.9% net assets
at December 31, 1995)
$ 50,000 Golf Reservations of
America, Inc. $ - $ 50,000
$ - Approved Financial
Corporation (including
accrued interest of
$700 at December 31,
1995) - 100,700
------------ -----------
$ - $ 150,700
============ ===========
</TABLE>
In December 1996, the Company purchased in a private placement for an
aggregate consideration of $500,000, 14,953 shares of Globalink, Inc.
(Globalink), 8% convertible, redeemable preferred stock and a warrant
entitling the holder to purchase 149,530 shares of Globalink common
stock at $4.18 per share through December 20, 2001. Globalink has the
right to redeem the preferred stock at the original purchase price plus
accrued dividends upon the occurrence of certain events. Each share of
preferred stock is convertible into ten shares of Globalink common
stock at the original purchase price of the preferred stock, subject to
adjustment should certain events occur. On January 1, 2002, any
outstanding shares of the preferred stock will be automatically
converted into common stock at the lesser of the original purchase
price or the average bid price for the ten trading days ending five
business days prior to the automatic conversion date. Globalink has
agreed to register the common stock issuable upon conversion of the
preferred stock and upon the exercise of the warrants. As of December
31, 1996, the Board of Directors has valued the preferred stock and the
warrant at $480,000 and $20,000, respectively.
In November 1994, the Company purchased in a private placement for an
aggregate consideration of $100,000, 50,000 shares of Greg Manning
Auctions, Inc. ("Manning") restricted common stock and a warrant
entitling the holder to purchase 50,000 shares of Manning restricted
common stock at $2.25 per share through November 3, 1995. Subsequently,
the number of common shares obtainable upon exercise was increased to
56,500 and the exercise price was decreased to $1.55. The Company
received certain registration rights with respect to the common stock
and the common stock underlying the warrant. The Company exercised the
warrant and purchased the common stock on November 1, 1995. On November
16, 1995 the Company sold the common stock of Greg Manning Auctions,
Inc. for $141,200 which resulted in a realized gain of approximately
$53,500.
A-F-12
<PAGE>
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996 AND 1995
4. INVESTMENTS (CONTINUED):
The Company agreed to loan up to $200,000 to Golf Reservations of
America, Inc. ("Golf") pursuant to two 10% promissory notes in January
and March, 1995. As of December 31, 1996 and 1995, the outstanding
balance was $50,000. The note is in default as of December 31, 1996 and
the Board of Directors has valued the note at $0 as of that date. In
connection with the notes, the Company received warrants to purchase an
aggregate 110,906 shares of Golf's common stock at an exercise price of
$1.88 per share. As of December 31, 1996 and 1995, the Board of
Directors has valued the warrants at $0.
On July 6, 1995, the Company entered in to a joint venture agreement
with Approved Financial Corporation (Approved) to market commercial
loans to businesses that derive, or are in a position to derive, a
substantial portion of their revenue from the Caribbean or Latin
America. The loans were to be secured by qualified first or second
mortgages. On August 1, 1995, the Company provided Approved with a
$200,000 credit facility bearing interest at prime. On July 24, 1996,
the outstanding credit facility was repaid in full and the joint
venture was terminated.
During 1995, the Company advanced funds to Americas Growth Partners,
Inc. (AGP) aggregating $22,608 pursuant to a 10% promissory note. In
addition, the Company received 80 shares of AGP common stock,
representing an 80% interest, in connection with the promissory note.
AGP is a publishing and consulting business which began operations in
January 1995. The Board of Directors deemed the note receivable to be
uncollectible and the Company recognized a realized loss on the
outstanding balance during 1996. The Board of Directors has valued the
common stock at $0 as of December 31, 1996. AGP's operating results for
1996 and 1995 were not significant.
5. CASH AND CASH EQUIVALENTS:
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF COST AND COST AND
SHARES SHARES VALUE VALUE
DECEMBER 31, DECEMBER 31, TYPE OF ISSUE AND DECEMBER 31, DECEMBER 31,
1996 1995 NAME OF ISSUER 1996 1995
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
415,000 600,600 Money market fund,
Cortland Trust, Inc. $ 415,000 $ 600,600
-- -- Checking account
with bank 900 1,200
---------- -----------
Total cash and cash equivalents
(8.5% and 11.6% of net assets at
December 31, 1996 and 1995,
respectively) $ 415,900 $ 601,800
========== ==========
</TABLE>
A-F-13
<PAGE>
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996 AND 1995
6. FURNITURE AND EQUIPMENT:
Furniture and equipment are comprised of the following at December 31,
1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Furniture and fixtures $ 1,500 $ 1,500
Computer equipment 17,900 16,400
-------- --------
19,400 17,900
Less accumulated depreciation (2,800) (1,200)
-------- --------
$ 16,600 $ 16,700
======== ========
</TABLE>
7. INCOME TAXES:
Significant components of the provision for income taxes attributable
to continuing operations in 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Current:
Federal $ -- $ 5,800
State -- 1,900
-------- --------
-- 7,700
-------- --------
Deferred:
Federal (benefit) (46,500) (1,100)
State (benefit) (15,800) (400)
-------- --------
(62,300) (1,500)
Increase in valuation allowance 54,700 --
-------- --------
(7,600) (1,500)
-------- --------
Provision for income
taxes (benefit) $ (7,600) $ 6,200
======== ========
</TABLE>
A-F-14
<PAGE>
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996 AND 1995
7. INCOME TAXES (CONTINUED):
The provision for income taxes at the Company's effective tax rate
differed from the provision for income taxes at the statutory rate
(15%) as follows:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Computed tax expense (benefit)
at the expected statutory rate $(48,300) $ 4,700
State tax, net of federal effect (16,200) 1,200
Valuation allowance 54,700 --
Other 2,200 300
-------- --------
$ (7,600) $ 6,200
======== ========
</TABLE>
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes.
The significant components of deferred tax assets and liabilities on
the balance sheet at December 31, 1996 and 1995 are:
Deferred tax assets:
Unrealized depreciation of
investments $ 9,300 $ 4,300
Section 179 expense carryover -- 100
Net operating loss 51,400 --
------- -------
60,700 4,400
Valuation allowance 54,700 --
------- -------
6,000 4,400
Deferred tax liability:
Depreciation 2,700 3,200
------- -------
Net deferred tax asset $ 3,300 $ 1,200
======= =======
The Company generated net federal operating losses in the amount of
approximately $288,700 of which approximately $40,800 has been carried
back to prior years resulting in a net operating loss carryforward of
approximately $247,900 which will expire in the year 2011.
A-F-15
<PAGE>
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996 AND 1995
8. RELATED PARTY TRANSACTIONS:
The Company entered into one year renewable consulting agreements with
an entity of which a director of the Company was Chairman and
President. The agreement was terminated as of December, 1996. During
1996 and 1995, the Company paid $30,000 and $36,000, respectively,
related to the agreement.
The Company leased its office space pursuant to a noncancelable
operating lease which expired in September, 1995. Commencing in October
1995, the Company is provided with free office space by a law firm with
which the Chairman is "of counsel". Rent expense for the periods ended
December 31, 1996 and 1995 amounted to approximately $0 and $16,400,
respectively. In addition, the Company paid the law firm legal fees of
approximately $102,100 in 1996.
The Company entered into an employment agreement with the president of
the Company. The agreement is for three years expiring in July, 1997.
Compensation is $90,000 per year with cost of living increases each
year. The Company paid the president $96,100 and $91,500 pursuant to
this agreement during 1996 and 1995, respectively.
9. PROFIT SHARING PLAN:
The Company provides an employee profit sharing plan (the Plan) which
provides for a performance fee equal to twenty percent (20%) of net
income. As of December 31, 1996 and 1995, approximately $0 and $2,700
respectively, was accrued in connection with the Plan.
10. MERGER ACTIVITY:
On November 25, 1995, the Company entered into a non-binding letter of
intent to merge with Tallard Technologies B.V. (Tallard), a
privately-held company. The contemplated merger with Tallard was
terminated prior to June 30, 1996.
On June 15, 1996, the Company entered into an Agreement and Plan of
Merger with Advanced Electronic Support Products, Inc. (AESP), a
privately held company engaged in the manufacturing and international
distribution of computer connectivity and networking products. Prior to
December 31, 1996 the contemplated merger with Advanced Electronics
Support Products, Inc. was terminated. The Company incurred
approximately $136,700 of legal costs associated with the merger. These
costs have been charged to current operations.
A-F-16
<PAGE>
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996 AND 1995
11. CONTINGENCY:
On November 26, 1996, a derivative stockholders' suit alleging breach
of fiduciary duty under the Investment Company Act of 1940 was filed
against the Company and its board of directors. The plaintiffs seek a
permanent injunction pursuant to Section 36(a) of the Investment
Company Act of 1940 to enjoin the Company's board of directors from
making any investments or expenditures, except for payment of regular
expenses and salaries and from acting in their fiduciary capacities as
directors and officers of the Company. The plaintiffs also seek an
unspecified amount of damages. Based on information currently
available, the management of the Company does not believe that the
ultimate resolution of this litigation will have a material
adverse impact on the financial position or results of operations of
the Company.
12. SUBSEQUENT EVENTS:
In January, 1997, the Company invested $250,000 in The Americas Group,
Inc. (TAG), an unaffiliated company, pursuant to a private placement
under Rule 504 of Regulation D of the Securities Act of 1933. The
Company received 125,000 shares of TAG common stock. In addition, the
Company also received 5,000 shares of common stock in consideration of
the Company's chairman serving on TAG's board of advisors.
[EDITOR'S NOTE by JWCFS: This is the end of Annex I.]
----------------------
A-F-17
<PAGE>
Facsimile copies of the manually executed Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for AGRO Shares, and any other
required documents should be sent by each shareholder of AGRO or such
shareholder's broker-dealer, commercial bank, trust company, or other nominee to
the Exchange Agent as follows:
Exchange Agent:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By Mail: By Facsimile Transmission: By Hand or Overnight
Courier:
40 Wall Street (718) 921-8334 40 Wall Street
46th Floor 46th Floor
New York, New York 10005 New York, New York 10005
For Information call: (800) 937-5449 (toll free)
(212) 936-5100 (collect)
Any questions or requests for assistance or additional copies of the
Prospectus and the Letter of Transmittal may be directed to either the
Information Agent or JWCFS at their respective telephone numbers and locations
listed below. You also may contact your broker, dealer, commercial bank, trust
company, or other nominee for assistance concerning the Exchange Offer.
The Information Agent:
AMERICAN STOCK TRANSFER & TRUST COMPANY
40 Wall Street
46th Floor
New York, New York 10005
For Information call: (800) 937-5449 (toll free)
(212) 936-5100 (collect)
JWCFS:
Joel E. Marks
JW Charles Financial Services, Inc.
980 North Federal Highway
Suite 310
Boca Raton, Florida 33432
For information call: (561) 338-2600
[Back cover page]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Florida Business Corporation Act (the "FBCA") authorizes
corporations to limit or eliminate the personal liability of directors to
corporations and their shareholders for monetary damages for breaches of certain
of the directors' fiduciary duties. In general, the duty of care requires that
a director exercise his judgment in good faith on an informed basis, and in a
manner he reasonably believes to be in the best interests of the corporation.
Absent the limitations now authorized by the FBCA, directors are accountable to
corporations and their shareholders for monetary damages only for conduct
constituting gross negligence in the exercise of their duty of care. Although
the statute does not change the directors' duty of care, it enables corporations
to limit available relief to equitable remedies such as injunction or
rescission.
The Registrant's Restated Articles of Incorporation (the "Registrant's
Articles") provide for indemnification of directors to the fullest extent
permitted by Florida law and, to the extent permitted by such law, eliminate, or
limit the personal liability of directors to the Registrant and its shareholders
for monetary damages for certain breaches of fiduciary duty and the duty of
care. Specifically, a director of the Registrant will not be personally liable
to the Registrant or its shareholders for monetary damages for breach of such
fiduciary duty as a director, except for liability for (i) a violation of the
criminal law, (ii) a transaction from which the director received an improper
personal benefit, (iii) an unlawful distribution, (iv) willful misconduct in a
proceeding by or in the right of the corporation or a shareholder, or (v)
recklessness or bad faith in a proceeding by or in the right of someone other
than the corporation or a shareholder.
The inclusion of this provision in the Registrant's Articles may have
the effect of reducing the likelihood of derivative litigation against directors
and may discourage or deter shareholders or management from bringing a lawsuit
against directors for breach of their duty of care, even though such an action,
if successful, might otherwise have benefited the Registrant and its
shareholders.
The Registrant's directors and officers are insured against losses
arising from any claim against them as such for wrongful acts or omissions,
subject to certain limitations.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed as part of this Registration
Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
3(a) Restated Articles of Incorporation of JWCFS (incorporated by
reference to Exhibit 3 to JWCFS' Current Report on Form 8-K dated
November 1, 1990).
3(b) Articles of Amendment to Restated Articles of Incorporation of
JWCFS (incorporated by reference to Exibit 3(b) to JWCFS' Annual
Report on Form 10-K for the fiscal year ended December 31, 1993).
3(c) Articles of Amendment to Restated Articles of Incorporation of
JWCFS (incorporated by reference to Exibit 3(c) to JWCFS' Annual
Report on Form 10-K for the fiscal year ended December 31, 1994).
3(d) By-Laws (incorporated by reference to Exhibit D to Amendment No. 1
to JWCFS' Registration Statement of Form S-18 (File Number 2-897713-
A) filed with the Commission on May 2, 1984).
4(a) Article III - Capitalization of JWCFS' Articles of Incorporation
(See Exhibit Number 3(b) above).
5 Opinion of Kilpatrick Stockton LLP
8 Opinion of Kilpatrick Stockton LLP
23(a) Consent of Price Waterhouse LLP
23(b) Consent of Ernst & Young, LLP
23(c) Consent of Kilpatrick Stockton LLP (included in Exhibit 5)
24 Power of Attorney (see Page II-4)
99(a) Form of letter of Transmittal for AGRO shareholders
99(b) Form of letter to Securities Dealers, Commercial
Banks, Trust Companies and other Nominees.
99(c) Form of letter to clients of Securities Dealers, Commercial
Banks, Trust Companies and other Nominees
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
99(d) Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 and Instructions Thereto
99(e) Form of Notice of Guaranteed Delivery
99(f) Form of Summary Advertisement
</TABLE>
ITEM 22. UNDERTAKINGS.
The undersigned hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1993;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(d) If the registrant is a foreign private issuer, to file a post-
effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of Regulation S-X at the start of any delayed
offering or throughout a continuous offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
The undersigned Registrant hereby undertakes: that prior to any public
reoffering of the securities registered hereunder through use of a prospectus
which is a part of this Registration Statement, by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c), such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other Items of
the applicable form.
II-2
<PAGE>
The Registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (a)(iii) immediately preceding, or (ii) that purports to
meet the requirements of section 10(a)(3) of the Securities Act of 1933 and is
used in connection with an offering of securities subject to Rule 415, will be
filed as part of an amendment to the registration statement and will not be used
until such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of this Registration Statement through
the date of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Atlanta, State of Georgia, on June 9, 1997.
JW CHARLES FINANCIAL SERVICES, INC.
By: /s/ Marshall T. Leeds
-----------------------
Marshall T. Leeds
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Marshall T. Leeds and Joel E. Marks,
jointly and severally, his attorneys-in-fact, each with power of substitution
for him in any and all capacities, to sign any amendments to this Registration
Statement, and to file the same, with the exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities indicated on the ___ day of ____________________, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ------
<S> <C> <C>
/s/ Marshall T. Leeds President, Chief Executive Officer and June 9, 1997
- --------------------------- Chairman of the Board (Principal Executive
MARSHALL T. LEEDS Officer)
/s/ Joel E. Marks Vice Chairman, Chief Financial Officer and June 9, 1997
- --------------------------- Secretary (Principal Financial and
JOEL E. MARKS Accounting Officer)
/s/ Wm. Dennis Ferguson Executive Vice President and Director June 9, 1997
- ---------------------------
WM. DENNIS FERGUSON
/s/ Gregg S. Glaser Executive Vice President, Treasurer and June 9, 1997
- --------------------------- Director
GREGG S. GLASER
/s/ Stephen W. Cropper Director June 9, 1997
- ---------------------------
STEPHEN W. CROPPER
/s/ John R. Faiella Director June 9, 1997
- ---------------------------
JOHN R. FAIELLA
/s/ Joseph P. Robilotto Director June 9, 1997
- ---------------------------
JOSEPH P. ROBILOTTO
/s/ Michael B. Weinberg Director June 9, 1997
- ---------------------------
MICHAEL B. WEINBERG
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
3(a) Restated Articles of Incorporation of JWCFS (incorporated by
reference to Exhibit 3 to JWCFS' Current Report on Form 8-K dated
November 1, 1990).
3(b) Articles of Amendment to Restated Articles of Incorporation of
JWCFS (incorporated by reference to Exibit 3(b) to JWCFS' Annual
Report on Form 10-K for the fiscal year ended December 31, 1993).
3(c) Articles of Amendment to Restated Articles of Incorporation of
JWCFS (incorporated by reference to Exibit 3(c) to JWCFS' Annual
Report on Form 10-K for the fiscal year ended December 31, 1994).
3(d) By-Laws (incorporated by reference to Exhibit D to Amendment No. 1
to JWCFS' Registration Statement of Form S-18 (File Number 2-897713-
A) filed with the Commission on May 2, 1984).
4(a) Article III - Capitalization of JWCFS' Articles of Incorporation
(See Exhibit Number 3(b) above).
*5 Opinion of Kilpatrick Stockton LLP
*8 Opinion of Kilpatrick Stockton LLP
23(a) Consent of Price Waterhouse LLP
23(b) Consent of Ernst & Young, LLP
23(c) Consent of Kilpatrick Stockton LLP (included in
Exhibit 5)
24 Power of Attorney (see Page II-4)
*99(a) Form of letter of Transmittal for AGRO shareholders
*99(b) Form of letter to Securities Dealers, Commercial
Banks, Trust Companies and other Nominees.
*99(c) Form of letter to clients of Securities Dealers,
Commercial Banks, Trust Companies and other
Nominees
*99(d) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 and
Instructions Thereto
*99(e) Form of Notice of Guaranteed Delivery
*99(f) Form of Summary Advertisement
</TABLE>
- ---------------
*To be filed by amendment
II-6
