<PAGE> 1
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As filed with the Securities and Exchange Commission on January __, 1996
Registration No. 33-65173
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
TRANSCISCO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2989345
(State of Incorporation) (I.R.S. Employer Identification No.)
601 CALIFORNIA STREET, SUITE 1301
SAN FRANCISCO, CALIFORNIA 94108
(415) 477-9700
(Address and telephone number of principal executive offices)
------------------
STEVEN L. PEASE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
TRANSCISCO INDUSTRIES, INC.
601 CALIFORNIA STREET, SUITE 1301
SAN FRANCISCO, CALIFORNIA 94108
(415) 477-9700
(Name, address and telephone number of agent for service)
------------------
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Title of Each Proposed Maximum Proposed Amount of
Class of Securities Amount to be Offering Price Maximum Aggregate Registration
to be Registered Registered per Security (1) Offering Price (1) Fee
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<S> <C> <C> <C> <C>
Common Stock, par 1,000,000 $2.88 $2,880,000 $993.10
value $.01 per
share
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 of the Securities Act of 1933 based on the closing
price of the Registrant's Common Stock as reported on the American
Stock Exchange on December 7, 1995
------------------
The registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Exhibit Index at page ___ of sequentially numbered pages.
<PAGE> 2
Subject to Completion, Dated _______________, 1996
PROSPECTUS
1,000,000 SHARES
TRANSCISCO INDUSTRIES, INC.
------------------------------------------------------
Common Stock
($0.01 par value per share)
--------------------------------------------
This Prospectus relates to the public offering, which is not
being underwritten, of 1,000,000 shares ("Shares") of the common stock ("Common
Stock") of Transcisco Industries, Inc. ("Transcisco"). The Shares may be offered
from time to time by any or all of the Selling Stockholders named herein (the
"Selling Stockholders"). The Selling Stockholders will offer and sell shares of
Common Stock, as described herein under the heading "Plan of Distribution." None
of the proceeds from the sale of the Shares by the Selling Stockholders will be
received by the Company. All expenses of registration incurred in connection
with this offering are being borne by the Company, but all selling and other
expenses incurred by Selling Stockholders will be borne by such Selling
Stockholders.
The Common Stock of the Company is traded in the American
Stock Exchange. On December 7, 1995, the closing price of the Company's Common
Stock was $2.88 per share. (AMEX Symbol: TNI)
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
Each Selling Stockholder and any broker executing selling
orders of behalf of the Selling Stockholders may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). Commissions received by any such broker may be deemed to be
underwriting commissions under the Securities Act.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES ND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------------------------------------------
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. 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.
-------------------------------
The date of this Prospectus is ____________, 1996
<PAGE> 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents and information heretofore filed with the
Securities and Exchange Commission are hereby incorporated by reference into
this Prospectus:
(1) The Company's Annual report on Form 10-K for the year ended March
31, 1995, filed pursuant to Section 13 of the Securities Exchange Act of 1934
("Exchange Act"), and the Form 10-KA filed on October 6, 1995.
(2) The Company's Quarterly Reports on Form 10-Q for the fiscal quarter
ended June 30, 1995, and September 30, 1995, and Form 8-K dated October 5, 1995,
each filed pursuant to Section 13 of the Exchange Act.
(3) The description of the Company's Common Stock to be offered hereby
contained in the Company's Registration Statement on Form 8-A, dated August 11,
1993, filed pursuant to Section 12(b) of the Exchange Act including any
amendment or report filed for the purpose of updating such description.
(4) All other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of this
Prospectus and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in the
Prospectus and to be part hereof from the date of filing such documents.
Any statement contained in any 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 which 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 modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge a copy of all documents
incorporated by reference to all those who request it. Requests for such
documents should be addressed to Gregory Saunders, Vice President and Controller
of the Company at 601 California Street, Suite 1301, San Francisco, CA 94108.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING DESCRIBED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY SELLING STOCKHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN
<PAGE> 4
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE
OF THE SHARES BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH
PERSON TO MAKE SUCH AN OFFER, SOLICITATION OR SALE. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.
The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments and exhibits thereto, referred to
as the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"). This prospectus does not contain all of the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission.
ADDITIONAL INFORMATION
The Company is subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended, and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such Reports, proxy statements and other
information can be inspected and copied at the Public Reference Room of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and copies of such material can be obtained from the Public
Reference Branch of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Company's Common Stock is listed on the American
Stock Exchange, and copies of such reports, proxy statements and other
information may be inspected at the American Stock Exchange. Information, as of
particular dates, concerning directors and officers of the Company, their
remuneration, options granted to them, the principal holders of securities of
the Company, and any material interest of such persons in transactions with the
Company has been or will be disclosed in the proxy statements or be distributed
to stockholders of the Company and filed with the Commission.
This Prospectus contains information concerning the Company and sales
of its Common Stock by the Selling Stockholders but does not contain all the
information set forth in the Registration Statement. The Registration Statement,
including various exhibits and schedules, may be inspected at the Commission's
office in Washington D.C.
RISK FACTORS
The Common Stock offered hereby involves a high degree of risk. In
addition to the other information included or
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incorporated by reference in this Prospectus, the following factors should be
considered carefully in the evaluation of the Company and its business before
purchasing any shares of the Common Stock offered hereby:
Restrictive Covenants. On August 1, 1995, the Company entered into a
refinancing transaction whereby it purchased approximately $15 million face
value of its own debt for approximately $9 million. The Company financed the
purchase through Transamerica Business Credit Corporation ("Transamerica"),
which provided a $10 million senior debt facility. As part of the senior debt
facility, the Company and each of its subsidiaries executed a security agreement
with Transamerica which contains certain financial covenants including (i) a
covenant that the Company's Tangible Net Worth (as defined therein) increase by
approximately 44% before September, 2000, (ii) a covenant requiring the Company
to reduce its ratio of indebtedness to Tangible Net Worth, (iii) that the
Company maintain certain specified average payable days, average receivable
days, and average inventory days, each measure of which is within a reasonable
range of the Company's historical averages, and (iv) that the Company increase
its fixed charge ratio after June, 1996. The breach of any of the foregoing
covenants would represent an event of default under the Loan and Security
Agreement, which could result in the acceleration of all amounts due thereunder,
the foreclosure by the lender on the collateral securing the agreement, and
certain other consequences which could have a material adverse effect on the
Company and its operations.
Put Right for Warrants. If for ten of the twelve months immediately
preceding July 31, 2000, the Company's Common Stock does not have a daily
average trading volume of at least 8,000 shares and any Warrants remain
outstanding under the Note and Warrant Purchase Agreement between the Company,
Furman Selz SBIC, L.P., and James Dowling, then the Company has the obligation
to purchase all the Warrants outstanding thereunder upon demand made by the
holder of the Warrant for the fair market value thereof. There can be no
assurance that the Company would be able to finance any such repurchase, and any
demand for repurchase of the Warrants could have a material adverse effect on
the Company's operations.
Sensitivity to Economic Conditions. The Company's revenues from its
railcar maintenance and repair operations, which constitute most of the
Company's revenues, are sensitive to economic activity in two major ways. First,
during a severe economic downturn, customers may decide to delay certain
maintenance programs, adversely affecting the Company. Second, when economic
activity is very strong and a shortage of railcars develops, customers may delay
preventive maintenance programs until railcar demand lightens up. The timing and
amount of the
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Company's railcar maintenance revenues are subject to a number of factors which
make estimation of operating results prior to the end of a quarter uncertain.
Fluctuations in revenue realization could adversely affect the market price of
the Company's Common Stock.
Fluctuations in Quarterly Results. The Company has experienced a
seasonal pattern of maintenance revenue, with the Fall and Winter quarters'
revenues declining relative to the Spring and Summer quarters' revenues. The
Company believes that this pattern is primarily a reflection of customer's
shipping cycles and adverse weather conditions inherent to these time periods.
In addition, the timing of closing of large contracts increases the risk of
quarter-to-quarter fluctuations in net income and the uncertainty of estimating
quarterly operating results. Such quarterly fluctuations could have an adverse
effect on the trading price of the Common Stock.
Dependence on Key Personnel. The Company's operations are highly
dependent upon the individual efforts of a few key management employees and
consultants, who have a long history in the railcar maintenance and leasing
industries, as well as in the management of its SFAT Russian Joint Venture. The
loss of the services of these key employees would adversely affect the ability
of the Company to manage its business, and could materially adversely affect its
operations.
Effect of Coal Consumption and Pricing. Due to the location of the
Company's repair facilities, the Company is dependent upon the current demand
for low-sulfur coal. Should coal prices increase or alternative fuels become
less expensive on a sustainable basis, the resulting shift from low-sulfur coal
to alternative sources would reduce rail traffic which would result in fewer
repairs and reduce the demand for full-service leases, which could adversely
affect the Company's profitability.
Remarketing of Leased Railcars. The success of the Company's leasing
operation is highly dependent upon the ability to re-lease railcars as current
leases expire. The re-leasing process is highly competitive and is subject to
the forces of supply and demand at the time current leases expire. Should the
demand for the railcars decline (with a resulting decrease in price), the
Company's earnings could fall short of expectations.
Fixed Fee Contracts. The Company enters into short and long-term fixed
fee contracts with certain coal car fleet customers. An unplanned increase in
maintenance costs (including the cost of labor or materials), or frequency of
repairs could create a situation where fixed fee income is below actual costs to
maintain and repair the fleet. This situation would result in higher costs and a
corresponding reduction in profitability. The Company believes that fixed fee
income is currently sufficient to
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meet future cost commitments, but a period of inflation in labor or materials
would adversely affect the Company's business and results of operations.
Risk of Conducting Business in Russia. The Company's subsidiary,
Transcisco Trading Company ("TTC"), owns 23.5% of Sovfinamtrans ("SFAT"), a
leading privately owned Russian petroleum and petrochemical rail transportation
company. SFAT has been profitable in every year since its founding in 1989.
However, like many other companies doing business in developing economies,
businesses in Russia face certain political and economic risks. Although SFAT is
a Russian business managed by Russians and has not been materially affected by
recent changes in Russia, a change in the political structure or climate in
Russia may have an adverse impact on SFAT's operations and, as a result, the
financial health of the Company. The Company also has conducted -- and may
conduct in the future -- business in certain third world countries with
unpredictable political and business environments. To the extent that the
political or economic situation in such foreign countries is unstable, the
Company's operating results could be adversely affected.
Patent/License Risk. The Company has a proprietary world-wide license
of a patented railcar heating system ("Uni-Temp"). The Company licenses the
technology from its inventor. The term of the license agreement expires after
all seven Uni-Temp patents have expired, which will occur by 2008. Although the
Company has had disputes regarding the Uni-Temp licensing agreement in the past,
there is currently no notice of default from the inventor. If there is a default
or dispute regarding the agreement, resulting in a loss of license rights, it
could adversely affect the Company's business and results of operations,
including its business with SFAT.
Technological Risk. The Uni-Temp system faces competition from other
domestic and international technologies. Any new development relating to tank
car heating systems could adversely impact the Company's revenues and profit
margins.
Environmental Risk. Under various federal, state and local laws,
ordinances and regulations, an owner or operator of real estate is potentially
liable for the costs of removal or remediation of certain hazardous or toxic
substances released on, above, under or in such property. Such laws may impose
such liability without regard to whether the owner knew of, or was responsible
for, the presence of such hazardous or toxic substances. At the Company's Miles
City, Montana repair shop
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site (the "Site"), there are two environmental issues pending. First, there are
five underground storage tanks ("USTs") located at the Site which, must be
removed. Although the Company believes that CMC Heartland Partners ("CMC"), the
successor to the prior owner of the Site, the Chicago, Milwaukee, St. Paul and
Pacific Railroad Company, is liable under the law of Montana for all liabilities
associated with the tanks and their contents, the Company has agreed with the
State of Montana to fund up to $50,000 of the cost of removal of the tanks. The
Company's cost of such removal is not expected to exceed $50,000. The Company
has a claim for indemnification from CMC for its costs associated with this
removal, although there can be no assurance that such claim would be successful.
Additionally, the groundwater at the Site has been contaminated by
diesel fuel arising out of activities of the Chicago, Milwaukee, St. Paul and
Pacific Railroad Company. Pursuant to a consent decree between CMC and the State
of Montana dated January 31, 1984 (the "Consent Decree"), CMC is conducting a
petroleum groundwater remediation project at the Site. Under the terms of the
Consent Decree, CMC is obligated to recover a substantial portion of the diesel
fuel from the groundwater. The Company believes that it is unlikely that the
state would require it to perform additional cleanup of the Site following the
conclusion of CMC's groundwater remediation project, because the diesel spill
was caused by CMC's predecessors. There can be no assurance, however, that the
State would not require the Company to conduct or fund such additional cleanup.
If the Company were required to recover the remaining diesel fuel or to fund all
or a part of such cleanup, it may be entitled to seek indemnification for all or
a portion of its costs associated therewith from CMC. There can be no assurance,
however, that such a claim would be successful.
Relationship with Suppliers. The Company maintains favorable business
relations with leading domestic producers of railcars and international
financing sources. These relationships have been essential in providing
competitive full service lease packages to prospective lessees. Any
deterioration in these relationships could adversely affect the Company's
business.
Interest Rate Risk. A major portion of the Company's debt is tied to
the prime or reference rate. To the extent that interest rates rise above
current levels, interest expense would increase and adversely affect the
profitability of the Company. Higher interest rates could also affect the
Company's ability to expand its portfolio of equipment under management.
Competition. The Company, through its railcar maintenance operation,
operates in an industry dominated by railroads and large, full service leasing
companies. The industry is
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competitive and includes many large firms with modern and efficient facilities,
as well as small, low-overhead companies which compete with low pricing
practices. The Company has been able to compete due to its quality of work,
value of repair services and the strategic location of plant facilities. Should
rail traffic patterns change, the Company could be placed at a competitive
disadvantage, resulting in loss of customers.
Unresolved Claims and Loss Contingencies. On or about September 15,
1995, Great American Insurance Company ("Great American") filed an action (the
"Action") in the Superior Court of the State of California in and for the County
of Marin against Mark Hungerford, a former Chairman, Director, and Chief
Executive Officer of the Company. The action purports to set forth three causes
of action for declaratory relief, and prays for judgment in the amount of
$2,675,000 (plus interest as provided by law) against Mr. Hungerford. According
to the complaint, the Action purports to arise out of a certain payment made by
Great American on behalf of Mr. Hungerford in connection with the partial
settlement of certain litigation, captioned Daniels v. PLM International, Inc.,
et al., to which Mr. Hungerford, and others including the Company, previously
were parties. The Daniels litigation has been settled, and the state and federal
complaints have been dismissed with prejudice. The complaint in the Action seeks
a declaration that two endorsements each barred coverage under a Directors' and
Officers' Policy issued by Great American to the directors and officers of the
Company. The complaint in the Action also seeks a declaration that no coverage
is afforded under that policy for the director and officer defendants in the
Daniels litigation in their capacities as directors or officers of PLM
International, Inc. Prior to the commencement of the Action in the Marin County
Superior Court, the United States District Court for the Northern District of
California ruled, on a summary judgment motion in a declaratory relief action,
that neither of the endorsements relied upon by Great American precluded
coverage under the particular Directors' and Officers' policy issued by Great
American. The Court of Appeals for the Ninth Circuit reversed and remanded that
decision, directing that it be dismissed on grounds which did not address the
coverage issues under the two endorsements. Great American thereafter filed the
Action in Marin County Superior Court. The Company has agreed to indemnify,
defend and hold harmless Mr. Hungerford from any claims, complaints,
liabilities, causes of action, costs and expenses arising out of any action by
Great American or any settlement thereof, so long as the Company approves any
such settlement. In connection with its indemnification obligation, the Company
has retained counsel to represent Mr. Hungerford in the action.
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Effect of Certain Charter and By-law Provisions. The Company's Amended
and Restated Certificate of Incorporation and Amended and Restated By-Laws
include certain provisions that could discourage potential takeover attempts. In
addition, the Company's Board of Directors has approved a shareholder rights
plan (the "Plan") which may be triggered if an individual acquires 5% or more
ownership of the Company's common stock (the "Ownership Limit"). The Plan is
designed to protect the Company's large net operating loss ("NOL"), the tax
benefit of which may be seriously eroded if, on a cumulative basis, more than
50% of the Company's stock (generally represented by 5% or more shareholders) is
bought and/or sold within any three year period. If triggered, the Plan would
effectively dilute the ownership of any person acquiring stock whose purchase
would bring the investor over the Ownership Limit. The Plan and the Company's
Bylaws could delay, deter or prevent transactions which may be beneficial to the
holders of the Company's Common Stock.
Loss of Limitation of Net Operating Loss Carryforward. As of September
30, 1995 the Company had an estimated NOL for federal income tax purposes of
approximately $23 million, based upon the Company's amended tax return being
filed for the 1993 tax year. The utilization of this net operating loss
carryforward to reduce future tax obligations is subject to loss or limitation
under Section 382 of the Internal Revenue Code if there is a change in ownership
(as defined in the Code) with respect to more than 50% of the Company's stock.
If the NOL carryforward were lost or limited, the resulting tax obligations
would adversely affect the Company's profitability, and could impair the
Company's ability to meet its debt service obligations and the Company could be
forced into another reorganization or into liquidation by its creditors.
Limitation on Use of NOL Against Alternative Minimum Taxable Income.
The Company's NOL may not fully offset the Company's tax liabilities since only
90% of the NOL may be used to offset Alternative Minimum Tax ("AMT"). As a
result, despite its NOL, the Company will experience a tax liability equal to
(at least) 10% of its AMT income, times an AMT tax rate of 20%.
Labor Risk. The Company's employees are currently non-union. A
successful unionization effort could result in (i) the loss of certain cost
advantages which allow the Company to compete in a highly price-competitive
environment and (ii) adversely affect revenues and profitability of the Company.
This would result in higher operating costs which would result in reduced
margins and profitability. The Company is unaware of any such activity at this
time.
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THE COMPANY
Transcisco Industries, Inc. was incorporated in California in 1972 and
reincorporated in Delaware in 1985. The Company's principal executive offices
are located at 601 California Street, Suite 1301, San Francisco, California
94108 and its telephone number at that address is (415) 477-9700. The Common
Stock of the Company is traded on the American Stock Exchange and is quoted
under the symbol TNI.
SELLING STOCKHOLDERS
The following table sets forth as of December 6, 1995 (i) the name of
each Selling Stockholder, (ii) the number of shares of Common Stock beneficially
owned prior to the offering, (iii) the number of shares of Common Stock being
offered and (iv) assuming that all shares offered for sale are sold, the number
of shares beneficially owned after the offering:
<TABLE>
<CAPTION>
Shares Beneficially Shares Shares Beneficially
Owned Prior Being Owned
To Offering (1) Offered After Offering (2)
------------------- ------- ------------------
Name of Stockholder (3) Number Percent Number Percent
- ----------------------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Furman Selz SBIC, L.P.(4) 966,667 15% 966,667 0 0.00%
James Dowling 33,333 1% 33,333 0 0.00%
--------- --- --------- --- ----
1,000,000 16% 1,000,000 0 0.00%
</TABLE>
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days upon the exercise of options or warrants.
Unless otherwise noted, the Company believes that all persons named in the table
have sole voting and investment power with respect to all shares of Common Stock
beneficially owned by them, subject to community property laws where applicable.
(2) Assumes sale of all the shares registered hereby.
(3) All of the shares owned by the Selling Shareholders which are registered
hereby will have been acquired as a result of the exercise of warrants issued to
the Selling Shareholders.
(4) Brian P. Friedman, an affiliate of Furman Selz SBIC, L.P., is a director of
the Company. He was elected by the directors of the Company on August 15, 1995.
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Stockholders that they
intend to make private sales directly or through a broker or brokers, who may
act as agent or as principal. The
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Selling Stockholders may also sell all or a portion of the shares offered hereby
from time to time on the American Stock Exchange and those sales will be made at
prices prevailing at the time of such sales. In connection with any sales, the
Selling Stockholders and any brokers participating in such sales may be deemed
to be underwriters within the meaning of the Securities Act. The Company will
receive no part of the proceeds of sales made hereunder.
The Company has advised the Selling Stockholders that anti-manipulative
Rules 10b-2, 10b-6 and 10b-7 under the Securities Exchange Act of 1934, as
amended, may apply to their sales in the market, has furnished each Selling
Stockholder with a copy of these Rules and has informed them of the need for
delivery of copies of this Prospectus. Any commissions paid or any discounts or
concessions allowed to any such broker-dealers, and any profits received on the
resale of such shares, may be deemed to be underwriting discounts and
commissions under the Securities Act if any such broker-dealers purchases shares
as principals.
Upon notification by a Selling Stockholder to the Company that any
material arrangement has been entered into with a broker-dealer for the sale of
shares through a cross or block trade, a supplemental prospectus will be filed
under rule 424(c) under the Securities Act setting forth the name of the
participating broker-dealer(s), the number of shares involved, the price at
which such shares were sold by the Selling Stockholder, the commissions paid or
discounts or concessions allowed by the Selling Stockholder to such
broker-dealer(s), and where applicable, that such broker-dealer(s) did not
conduct any investigation to verify the information set out in this Prospectus.
Any securities covered by this Prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under that Rule rather
than pursuant to this Prospectus.
There can be no assurance that any of the Selling Stockholders will
sell any or all of the shares of Common Stock offered by them hereunder.
The Selling Stockholders have agreed with the Company that during such
time as such Selling Stockholders may be engaged in the attempt to sell shares
registered hereunder, such persons will:
(i) not engage in any stabilization activity in connection with any of the
Company' securities;
(ii) cause to be furnished to each person to whom shares included herein may
be offered, and to each broker-dealer, if any, through whom shares are offered,
such copies of the
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Prospectus, as supplemented or amended, as may be required by such person; and
(iii) not bid for or purchase any of the Company's securities or any rights
to acquire the Company's securities, or attempt to induce any person to purchase
any of the Company's securities or rights to acquire the Company's securities
other than as permitted under the Exchange Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Greene, Radovsky, Maloney & Share, San Francisco,
California.
EXPERTS
The consolidated financial statements of Transcisco Industries, Inc.
appearing in Transcisco Industries, Inc.'s Annual Report (Form 10-KA) for the
year ended March 31, 1995 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report 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.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item Number
Item 14. Other Expenses of Issuance and Distribution*
The following table sets forth all expenses in connection with
the sale of common stock being registered. All amounts are
estimates except for the Registration Fee.
<TABLE>
<S> <C>
Registration Fee-Securities and Exchange
Commission $ 993.10
Legal Fees and Expenses $ 3,000.00
Miscellaneous $ 3,000.00
Total $ 6,993.10
</TABLE>
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* Represents expenses relating to the distribution by Selling
Stockholders pursuant to the Prospectus prepared in accordance
with the requirements of Form S-3. These expenses will be
borne by the Company on behalf of the Selling Stockholders.
Item 15. Indemnification of Directors and Officers
The Company has adopted provisions in its Certificate of Incorporation
that limit the liability of its directors and enable the Company to broaden the
indemnification provided to its directors and officers. As permitted by the
Delaware General Corporation Law, directors will not be liable for monetary
damages arising from a breach of their fiduciary duty as directors in certain
circumstances. Such limitation does not affect liability for any breach of a
director's duty to the Company or its shareholders for (i) breaches of the
director's duty of loyalty, (ii) acts or omissions not in good faith or
involving intentional misconduct or knowing violations of law (iii) the payment
of unlawful dividends or unlawful stock repurchases or redemption's or (iv)
transactions in which the director received an improper personal benefit. Such
limitation of liability does not affect the availability of equitable remedies
such as injunctive relief of rescission.
II - 1
<PAGE> 15
The Company's Bylaws provide that the Company shall indemnify its
directors and officers to the maximum extent permitted by Delaware law,
including circumstances in which indemnification is otherwise discretionary
under Delaware law. The Company has also entered into indemnification agreements
with its officers and directors containing provisions which are in some respects
broader than the specific indemnification provisions contained in the Delaware
General Corporation Law. The Indemnification Agreements may require the Company,
among other things, to indemnify such officers and directors against certain
liabilities that may arise by reason of their status or service as directors or
officers if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the Company and, with respect to
any criminal proceeding, had no reasonable cause to believe their conduct was
unlawful, to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified, and to obtain directors' and
officers' insurance if available on reasonable terms.
The Company understands that the staff of the Securities and Exchange
Commission is of the opinion that statutory, charter and contractual provisions
as are described above have no effect on claims arising under the federal
securities laws. The Company is not aware of any material threatened or ongoing
litigation or proceeding which may result in a claim for such indemnification,
except that the insurance carrier which provided the Company's directors and
officers liability insurance is contesting in state court (and previously in
Federal Court) a lower court decision finding the carrier liable for amounts
paid in settlement of the previously reported Daniels litigationin connection
with Mr. Hungerford. If the insurance carrier is successful in its action, Mr.
Hungerford may seek reimbursement for the amount of approximately $2,675,000.
See "Risk Factors -- Unresolved Claims and Loss Contingencies".
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
Number
------
<S> <C>
2 Joint Plan of Reorganization, as
amended, incorporated by reference to
Exhibit 2.0 to Form 10Q filed under the
Securities Exchange Act of 1934, as
amended, filed with the Securities and
Exchange Commission on November 12,
1993.
4.1 Amended and Restated Certificate of
Incorporation incorporated by reference
to Exhibit 3.1 to Form 8A filed under
</TABLE>
II - 2
<PAGE> 16
<TABLE>
<CAPTION>
Exhibit
Number
------
<S> <C>
the Securities Exchange Act of 1934,
as amended, filed with the
Securities and Exchange Commission
on August 12, 1993.
4.2 Amended and Restated Bylaws Incorporated
by reference to Exhibit 3.2 to Form 8A
filed under the Securities Exchange Act
of 1934, as amended, filed with the
Securities and Exchange Commission on
August 12, 1993.
5 Opinion of Greene, Radovsky, Maloney &
Share
23.1 Consent of Ernst & Young LLP,
Independent Accountants.
23.2 Consent of Greene, Radovsky, Maloney &
Share (included in opinion of counsel
filed as Exhibit 5 hereto).
99.1 Letter Agreement by and between
Transcisco Industries, Inc. and Mark C.
Hungerford dated July 1, 1995
</TABLE>
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement and to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) 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 Exchange Act (and, where applicable,
each filing of any employee benefit plan's annual report pursuant to Section
15(d) of the
II - 3
<PAGE> 17
Exchange Act) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities as 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 Act
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 and will be governed by the final
adjudication of such issue.
For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
II - 4
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto, duly
authorized, in the City of San Francisco, State of California, as of December
20, 1995.
TRANSCISCO INDUSTRIES, INC.
By:
----------------------------------------------
Steven L. Pease, President and
Chief Executive Officer
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
President and Chief Executive
- ------------------------------ Officer (Principal Executive
Steven L. Pease Officer) and Director
Vice President and Controller
- ------------------------------ (Principal Financial and
Gregory Saunders Accounting Officer)
Chairman of the Board
- ------------------------------ of Directors
Eugene M. Armstrong
Director
- ------------------------------
Ottokarl Finsterwalder
Director
- ------------------------------
George A. Tedesco
Director
- ------------------------------
William E. Greenwood
Director
- ------------------------------
Brian P. Friedman
</TABLE>
II - 5
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Numbered Page
- ----------- -------------
<S> <C> <C>
2 Joint Plan of Reorganization *
4.1 Amended and Restated *
Certificate of Incorporation
4.2 Amended and Restated Bylaws *
5 Opinion of Greene, Radovsky _____
Maloney & Share
23.1 Consent of Ernst & Young LLP, _____
Independent Accountants
23.2 Consent of Greene, Radovsky,
Maloney & Share (included at
Exhibit 5)
99.1 Letter Agreement by and between _____
Transcisco Industries, Inc. and
Mark C. Hungerford dated July 1,
1995
</TABLE>
- ----------------------
* Exhibit incorporated by reference.
II - 6
<PAGE> 1
EXHIBIT 5
December 20, 1995
Board of Directors
Transcisco Industries, Inc.
601 California Street, Suite 1301
San Francisco, CA 94108
Re: Registration Statement on Form S-3
Gentlemen:
You have requested our opinion with respect to certain matters
described below relating to 1,000,000 shares of the common stock (the "Common
Shares") of Transcisco Industries, Inc. ("Transcisco") to be issued pursuant to
the exercise of warrants issued under the Note and Warrant Purchase Agreement
dated August 1, 1995 (the "Warrants"), pursuant to the Registration Statement on
Form S-3 (the "Registration Statement") of Transcisco pursuant to the Securities
Act of 1933, as amended (the "Securities Act").
In connection with our opinion, we have reviewed and relied
upon the Registration Statement, the Articles of Incorporation and the Bylaws of
Transcisco, each as amended; copies of resolutions of the board of directors of
Transcisco authorizing the issuance of the Common Shares and the filing of, and
the transactions described in, the Registration Statement; and such other
records, documents, instruments and certificates of public officials and of
Transcisco as we have deemed necessary for the purpose of rendering the opinions
herein set forth. In making such examination, we have assumed the genuineness of
all signatures and the authenticity of all items submitted to us as originals
and the conformity with originals of all items submitted to us as copies.
Based upon and subject to the foregoing, and subject to the
qualifications set forth herein, we are of the opinion that the Common Shares to
be issued on exercise of the Warrants and pursuant to the Registration Statement
are duly authorized and when issued, will be fully paid and nonassessable,
provided the full purchase price for each of the Common Shares is paid to and
received by Transcisco.
<PAGE> 2
Transcisco Industries, Inc.
December __, 1995
Page 2
We hereby consent to the use of this opinion for filing with
the Registration Statement as Exhibit 5 thereto.
Very truly yours,
/s/ Greene, Radovsky, Maloney & Share
GREENE, RADOVSKY, MALONEY & SHARE
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Transcisco
Industries, Inc. for the registration of 1,000,000 shares of its common stock
and to the incorporation by reference therein of our report dated May 3, 1995,
with respect to the consolidated financial statements of Transcisco Industries,
Inc. included in its Annual Report (Form 10-K) for the year ended March 31, 1995
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Walnut Creek, California
December 15, 1995
<PAGE> 1
EXHIBIT 99.1
TRANSCISCO INDUSTRIES, INC.
601 CALIFORNIA STREET, SUITE 1301
SAN FRANCISCO, CA 94108
July 1, 1995
Mr. Mark C. Hungerford
44 Montgomery Street, Suite 4200
San Francisco, CA 94104
Dear Mark:
Pursuant to our meeting on June 27, 1995, and our conversation
on June 28, 1995, this letter agreement sets forth our understanding of the
manner in which we will resolve the following matters:
(1) your status as a Class F creditor under the provisions of
the Joint Plan of Reorganization approved by the United States Bankruptcy Court
for the Northern District of California, which involves two claims, the first of
which relates to deferred compensation (the "Deferred Compensation Claim"); and
the second claim relates to the unliquidated amount (the "Unliquidated Claim")
relating to the controversy with the Great American Insurance Company ("Great
American");
(2) the number of shares of the outstanding stock of
Transcisco Industries, Inc. (the "Company") owned by you and certain other
persons;
(3) the status of the Form S-3 Registration Statement
presently on file with the Securities and Exchange Commission relating to the
shares owned by, among others, you and Ozora Corporation;
<PAGE> 2
Mr. Mark C. Hungerford
July 1, 1995
Page 5
(4) the sale of a portion of your shares of stock in the
Company to the Company or an assignee; and
(5) the loss of principal that you and Beth Burns suffered in
connection with an investment in GIC II by each of your accounts in the
Company's Section 401(k) plan.
Our agreement with respect to each of these matters follows:
1. Deferred Compensation Claim. On July 5, 1995, or, if you so
request, July 3, 1995, or such other date as we may agree (for convenience, I
refer to this date as the "Closing"), the Company will pay to you on account of
your Deferred Compensation Claim that percentage of the outstanding balance of
the Deferred Compensation Claim which bears the same relationship as the option
payment made to First Interstate Bank on June 15, 1995, bore to the then
outstanding principal balance of the amount owed by the Company to First
Interstate Bank on that date. As you know, we are in the process of attempting
to refinance and prepay the amount owed to the Class F Creditors, including
First Interstate Bank, on terms and conditions set forth in an option (the "FIB
Option") which First Interstate Bank granted to the Company, the terms and
conditions of which we discussed in our telephone conversation. If and when we
exercise the FIB Option, at the closing of the payment of the indebtedness to
First Interstate Bank, the Company will pay to you 100% of the remaining balance
owed by the Company on your Deferred Compensation Claim. As of June 30, 1995,
the principal balance and accrued interest thereon is $147,106.96 and $6,878.26,
respectively.
<PAGE> 3
Mr. Mark C. Hungerford
July 1, 1995
Page 6
2. Unliquidated Claim. With respect to your potential claim
against the Company relating to Great American; the following will apply:
(a) Effective as of the Closing, in consideration of the
indemnity set forth in paragraph (b), below, you will be considered to have
withdrawn your Proof of Claim filed in the Company's Bankruptcy Case No.
91-32674-TC in the amount of $54,000,000. This withdrawal will be without
prejudice to your Deferred Compensation Claim.
(b) The Company, effective as of the Closing, will
indemnify, defend and hold you harmless from and against any and all claims,
complaints, liabilities, causes of action, costs and expenses (including,
without limitation, reasonable attorneys' fees) which arise out of any action
Great American hereafter may file against you in connection with the Great
American matter or the payment of any amounts in settlement thereof, so long as
the Company, in its discretion, approves of any such settlement.
(c) As a condition precedent to your right to be
indemnified under paragraph (b) above, you must (i) use your best efforts to
assist the Company in its efforts to settle all matters with Great American,
(ii) give the Company notice in writing as soon as practicable of any claim made
against you by Great American for which you will be seeking indemnification and
(iii) provide the Company with such information and cooperation as it may
require. In the event of such notice provided to the Company, the Company will
assume the defense of any such proceeding with counsel to be selected by the
Company, but
<PAGE> 4
Mr. Mark C. Hungerford
July 1, 1995
Page 7
subject to your reasonable approval. Provided the Company assumes the defense,
the Company will not be liable to you for any fees or costs of your counsel with
respect to the same proceeding; you will have the right, however, to employ at
your expense your own counsel in such proceeding.
3. Ownership of Shares in the Company.
(a) Within 10 days after the Closing (the "Disclosure
Date"), you will provide the Company with an affidavit signed under penalty of
perjury setting forth, as of the Disclosure Date and as of each day from June
30, 1992, through the Disclosure Date, the number of shares of common stock in
the Company owned by you, Katie Hungerford, Ozora Corporation or the Southern
Cross Trust or any affiliate of any of the foregoing, with such ownership being
defined as both legal and beneficial. The affidavit will have attached to it the
certificate numbers and the record owner for all of such shares. Within 5 days
of the Disclosure Date, you will file a Form 4 and Schedule 13D as necessary to
accurately reflect your ownership of shares of stock in the Company.
(b) Effective as of the Closing, the Registration and
Market Standoff Agreement will remain in effect. The Company, however, only will
be obligated to continue to maintain the Form S-3 in effect until December 31,
1995. The December 31, 1995 date, however, will be extended for that number of
days during which you do not have the right to sell the shares as a result of
the standoff provisions of Section 2 of that Agreement. (For your reference, I
have attached a copy of the Registration and Market Standoff Agreement.) You
recognize, however, that you may be in possession of material inside information
with respect
<PAGE> 5
Mr. Mark C. Hungerford
July 1, 1995
Page 8
to the Company and, therefore, except for sales to "insiders" of the Company,
you may not be able to sell any such shares until such information is disclosed
by the Company in a filing made by the Company under the Securities Exchange Act
of 1934.
(c) You will have the right to extend the December 31,
1995, date referred to in paragraph (b), above, to April 30, 1996, so long as
you provide the Company with an irrevocable proxy to vote the shares owned by
you, Katie, Ozora Corporation and the Southern Cross Trust, and any affiliate of
any of the foregoing, at the next annual meeting of the Company and any special
meeting of the Company prior thereto. Such proxy must be in form and substance
satisfactory to the Company.
(d) As a condition to Close, the Company will provide you
with a purchaser for 50,000 shares of stock in the Company owned by you at a
purchase price of $1.85 per share with an initial payment of 20% of such amount
to be paid on July 3, 1995, with the balance to be paid on July 15, 1995. The
form of such purchase agreement is attached.
4. Section 401(k) Plan. On the Close, the Company will deliver
a check to you in the amount of $15,263.04 and a check payable to Beth Burns in
the amount of $1,703.86, which represents the principal balance in your accounts
under the Company's Section 401(k) plan which were invested in GIC II and, in
consideration therefor, you will be treated as irrevocably assigning to the
Company any rights you may have against GIC II or any other person who may have
any liability for the loss of such sums.
<PAGE> 6
Mr. Mark C. Hungerford
July 1, 1995
Page 9
5. Confidentiality. Mark, it is extremely important that the
terms of this Agreement remain confidential in all respects to facilitate our
negotiation of a settlement with Great American. Therefore, you agree that, with
respect to any of the terms hereof which relate to Great American, including the
obligation of the Company to indemnify you, you will not disclose to anyone such
provisions for any purpose whatsoever except to your counsel and tax accountant
to the extent necessary provided each such person is advised as to the
confidentiality of the matter and agrees not to so disclose such information.
Notwithstanding the foregoing, if you receive a request to disclose the
information set forth herein relating to Great American by a court of competent
jurisdiction or by a governmental agency, you will (1) promptly notify us of the
existence, terms and circumstances surrounding such request, (2) consult with us
on the advisability of taking steps to resist or narrow that request, if
disclosure is required, (3) furnish only such portion as you are advised by
counsel is legally required to be disclosed and (4) cooperate with us in our
effort to obtain an order or other reasonable assurance that confidential
treatment will be accorded to that portion of the information that is required
to be disclosed. If you breach the provisions of this paragraph 5, the Company
will not be obligated to indemnify you with respect to the Great American matter
and paragraph 2(b) will be void and of no force or effect.
6. Closing. The Closing shall occur at the offices of the
Company at 601 California Street, Suite 1301, San Francisco, California 941084,
or such other place as we may mutually agree. At the Closing, each of us will
deliver the documents and instruments required to be delivered pursuant to the
terms of this letter agreement.
<PAGE> 7
Mr. Mark C. Hungerford
July 1, 1995
Page 10
7. Attorneys' Fees. If either of us brings any legal action or
other proceeding for the enforcement of this letter agreement or as a result of
an alleged breach or misrepresentation in connection with any of the provisions
hereof, the prevailing party will be entitled to recover court costs and
reasonable attorneys' fees and other costs incurred in that action or proceeding
in addition to any other relief to which such party may be entitled.
Mark, this letter is intended to be an enforceable agreement
and, if the foregoing is acceptable, please execute and return to me the
enclosed copy of this letter. Assuming that you so execute the enclosure, we
each will be under an obligation to execute such documents and take such actions
as may be reasonably required to carry out the provisions of this Agreement.
Very truly yours,
/s/ Steven L. Pease
-------------------
Steven L. Pease
SLP:mnt
Enclosure
AGREED AND ACCEPTED THIS
FIRST DAY OF JULY, 1995
/s/ Mark C. Hungerford
- ----------------------
MARK C. HUNGERFORD
