<PAGE>
As filed with the Securities and Exchange Commission on November 6, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMNEX, INC.
(Exact name of registrant as specified in its charter)
New York 11-2790221
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
101 Park Avenue
New York, New York 10178
(212) 867-0166
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Peter M. Izzo, Jr.
President
AMNEX, Inc.
101 Park Avenue
New York, New York 10178
(212) 867-0166
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications and notices to:
Fred S. Skolnik, Esq.
Certilman Balin Adler & Hyman, LLP
90 Merrick Avenue
East Meadow, New York 11554
(516) 296-7000
(Cover continued on following page)
<PAGE>
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 of the Securities
Act of 1933, check the following box. [x]
CALCULATION OF REGISTRATION FEE
Proposed
Proposed maximum
Title of Amount maximum aggregate Amount of
shares to be to be offering price offering registration
registered registered(1) per share (2) price(2) fee
------------------------------------------------------------------------------
Common Shares,
par value $.001 1,513,790 shs. $2.91(3) $4,405,128.90 $1,334.89
per share,
registered for
the benefit of
Selling
Shareholders
- --------------------------------------------------------------------------------
TOTAL: $1,334.89
(1) This Registration Statement also covers such additional number of Common
Shares as may be issuable by reason of the operation of the antidilution
provisions of certain outstanding convertible Preferred Shares and
warrants.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457.
(3) Calculated in accordance with Rule 457(c). Represents the average of the
high and low sale prices of the Company's Common Shares, as reported by
NASDAQ, on October 30, 1996.
----------
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 this registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
----------
<PAGE>
Subject to Completion
Preliminary Prospectus Dated November 6, 1996
PROSPECTUS
----------
COMMON SHARES
----------
AMNEX, INC.
This Prospectus relates to 1,513,790 Common Shares (the
"Shares") of AMNEX, Inc. (the "Company") and covers (i) the resale by a certain
entity of up to 1,138,790 Common Shares issuable upon the conversion of Series G
Preferred Shares of the Company; (ii) the resale by certain entities of an
aggregate of 275,000 Common Shares issuable upon the exercise of certain
outstanding warrants; (iii) the resale by a certain executive officer and
director of the Company of 25,000 Common Shares issuable upon exercise of an
outstanding warrant (such shares, as well as an additional 25,000 Common Shares
covered by (iv) hereof, being subject to a one-year lock-up agreement as
described under "Selling Shareholders"); and (iv) the resale by certain persons,
including such executive officer and director, as well as another executive
officer of the Company, of an aggregate of 75,000 Common Shares. The various
persons and entities referred to in this paragraph are hereinafter referred to
individually as a "Selling Shareholder" and collectively as the "Selling
Shareholders". The Company will not receive any proceeds from the sale of the
Shares by the Selling Shareholders. See "Selling Shareholders."
This offering is not being underwritten. The Selling
Shareholders, directly through agents designated by them from time to time or
through broker-dealers or underwriters also to be designated, may sell the
Shares from time to time, in or through privately negotiated transactions, or in
one or more transactions, including block transactions, on the NASDAQ Small Cap
Market, or on any other market or stock exchange on which the Shares may be
listed in the future pursuant to and in accordance with the applicable rules of
such market or exchange or otherwise. The selling price of the Shares may be at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. To the extent required, the
specific Shares to be sold, the names of the Selling Shareholders, the
respective purchase prices and public offering prices, the
<PAGE>
names of any such agent, broker-dealer or underwriter and any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying Prospectus Supplement. See "Selling Shareholders" and "Plan of
Distribution".
The Company has agreed to indemnify certain of the Selling
Shareholders against certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"). See "Selling
Shareholders" and "Plan of Distribution".
The Selling Shareholders and any agents, broker-dealers, or
underwriters that participate with the Selling Shareholders in the distribution
of any of the Shares may be deemed to be "underwriters" within the meaning of
the Securities Act, and any commissions received by them, and any profit on the
resale of the Shares purchased by them, may be deemed to be underwriting
commissions or discounts under the Securities Act. See "Selling Shareholders"
and "Plan of Distribution".
A PURCHASE OF THESE SECURITIES INVOLVES A CERTAIN DEGREE OF RISK.
SEE "RISK FACTORS" (PAGE 4).
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------
The Company's Common Shares are traded in the NASDAQ Small Cap
Market under the symbol "AMXI". On , 1996, the closing price of the Company's
Common Shares, as reported on the NASDAQ Small Cap Market, was $ per share.
----------
, 1996
<PAGE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY TO ANYONE
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR
TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUM
STANCES, CREATE ANY IMPLICATION THAT ANY INFORMATION CONTAINED HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
----------
AVAILABLE INFORMATION
The Company files reports, proxy and information statements
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, statements and other information filed by the
Company with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the following Regional Offices of the
Commission: 7 World Trade Center, Suite 1300, New York, New York 10048; and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material can also be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Furthermore, the Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding the Company. The address of such Web site if
http://www.sec.gov.
----------
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company with
the Commission (File No. 0-17158) and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995, as amended (the "1995 Form 10-K").
(b) The Company's Quarterly Reports on Form 10-Q for the
periods ended March 31, 1996 and June 30, 1996 (the "Forms 10- Q").
(c) The Company's Current Report on Form 8-K for an event
dated October 4, 1995, as amended (the "October 1995 Form 8-K").
(d) The Company's Current Report on Form 8-K for an event
dated June 28, 1996, as amended (the "June 1996 Form 8- K").
(e) The description of the Company's Common Shares contained
in the Company's Registration Statement on Form 10, as amended.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this
Prospectus and prior to the termination of the offering of Common Shares offered
hereby shall be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from their respective dates of filing.
The Company will provide without charge to each person to whom
a copy of this Prospectus is delivered, upon the written or oral request of any
such person, a copy of any or all of the documents referred to above which have
been incorporated into this Prospectus by reference (other than exhibits to such
documents). Requests for such copies should be directed to Amy S. Gross,
Secretary, AMNEX, Inc., 101 Park Avenue, New York, New York 10178 (telephone
number: (212) 867-4639).
3
<PAGE>
Any statement contained in a document incorporated herein by
reference shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
THE COMPANY
The Company, through its wholly-owned subsidiaries, American
Network Exchange, Inc. ("AMNEX"), Capital Network System, Inc. ("Capital"),
Crescent Public Communications Inc. ("Crescent"), American Hotel Exchange, Inc.
and Hospital TeleServices, Inc., and its 80%-owned subsidiary, National Business
Exchange, Inc. ("NBE"), provides a variety of telecommunications and related
services for operator-assisted ("0+") and direct-dialed long distance ("1+")
telephone calls transmitted throughout the United States and to international
points.
In December 1995, the Company underwent an internal
reorganization designed to enable it to more efficiently focus on its different
lines of business. The new business units reflect the Company's plan to shift
its focus from its core operator services business to higher margin
telecommunications service transactions and integrated (hardware and
telecommunications) services. Such new focus includes additional emphasis upon
long distance services which are paid for by coins deposited in the pay
telephone ("1+ Coin"), "1+" direct dial services, travel card services, the
ownership and operation of private pay telephones (through the acquisition of
Crescent as described in the October 1995 Form 8-K incorporated herein by
reference), the provision of telecommunications products and management services
to the hospitality industry and the internal capability to bill and collect
calls (through the acquisition of a controlling interest in NBE, as discussed
under "Subsequent Events"). Further, the reorganization is intended to enable
the Company to exploit certain market niches created by the passage of
telecommunications reform legislation in early 1996. See Item 1(c) of the 1995
Form 10-K incorporated herein by reference.
Notwithstanding the shift in focus described above, the
Company intends to continue to seek consolidation opportunities for its core
business. Indeed, as described in the June 1996 Form 8-K
4
<PAGE>
incorporated herein by reference, in June 1996, the Company acquired Capital, a
company which provides telecommunications services for "0+" and "1+" telephone
calls primarily from international points to locations in the United States.
The Company is a New York corporation which was organized on
March 15, 1985. Its principal executive offices are located at 101 Park Avenue,
New York, New York 10178 (telephone number: (212) 867-0166).
RISK FACTORS
This offering entails certain risks. In analyzing such an
investment, the following factors, among others, should be read and considered
carefully in conjunction with the more detailed information set forth elsewhere
herein.
1. Competition. AMNEX experiences formidable competition from
AT&T, which dominates the long distance and operator service businesses, as well
as from MCI, U.S. Sprint, LDDS WORLDCOM and various other third tier carriers
providing "0+" services either as an adjunct to their "1+" business or as their
primary business. In 1995, after several intermediate steps, the FCC finally
declared AT&T to be a non-dominant carrier, thereby granting it a wide range of
pricing, tariff and operational flexibility. In addition to AT&T, many local
exchange carriers ("LECs"), including the Regional Bell Operating Companies
("RBOCs"), which have significantly greater resources than AMNEX, have entered
the operator services business on a retail and wholesale basis. The
Telecommunications Act of 1996 (the "1996 Act") allows the RBOCs to enter the
long distance marketplace over time and, subject to Federal Communications
Commission ("FCC") review, to participate in the selection of the interLATA and
intraLATA carrier at their own payphones. The RBOCs can be expected to
aggressively market their operator services in competition with AMNEX and other
providers. In addition, most major interexchange carriers ("IXCs"), including
MCI and U.S. Sprint, and certain major non-RBOC LECs have entered the operator
services business. Further, AMNEX is aware of numerous other companies engaged
in the operator services business, either directly or through other entities,
some of which have significantly greater resources than AMNEX. Finally, some
IXCs, notably MCI and AT&T, have introduced specialized operator service
products such as 1-800-COLLECT and 1- 800-CALL ATT which compete with a portion
of AMNEX's operator services offerings. AMNEX believes that these "dial around"
services have had an adverse impact on its revenues. See Item 1(c) of the 1995
Form 10-K incorporated herein by reference.
2. Government Regulation. The Communications Act of 1934, as
amended, requires that rates charged by long distance and operator service
companies, such as AMNEX, be just and reasonable and grants authority to the FCC
to entertain and investigate complaints regarding interstate and international
services. The FCC has on several occasions proposed adoption of a system of
billed party preference whereby all calls of the type currently handled by AMNEX
would be routed directly to the IXC of the billed party and not through operator
service companies. Although the matter is still pending before the FCC, given
the age of the proceedings, the record before it and the new mandate of the 1996
Act, it is not expected that the FCC will adopt billed party preference.
However, there can be no assurances in this regard and, if such proposal is
adopted, it would have a material adverse effect on AMNEX's operator service
business. The FCC is also considering proposals that it adopt a rate ceiling on
operator- assisted calls or require that rate information be made available
prior to call completion. Although AMNEX believes that the proposals would not
have an adverse impact on the overall profitability of its operator service
business, no assurances can be given that the FCC will not adopt rate cap levels
or notice requirements different from those proposed which would have such
adverse effect.
In addition, AMNEX is currently authorized to provide
intrastate interexchange telecommunications service on a resale basis in
numerous states and its activities are regulated by public utilities commissions
or commerce departments in such jurisdictions. In many such states, rate caps on
operator services are in effect and/or the transmission of certain types of
intrastate calls by carriers other than the local telephone companies is
prohibited or restricted. AMNEX is also aware that a few states have found the
provision of competitive operator services not to be in the public interest.
Further, from time to time, various states consider a variety of regulatory
measures which could affect the manner, terms and conditions under which AMNEX
could provide service in such states. No assurances can be given that any
regulations, if adopted, will not have an adverse
5
<PAGE>
effect on the profitability of AMNEX's services. See Item 1(c) of the 1995 Form
10-K incorporated herein by reference.
3. Recent Shift in Business Focus. As discussed under "The
Company", the Company plans to shift its focus from its core operator services
business to higher margin telecommunications service transactions and integrated
(hardware and telecommunications) services. Due to the lack of operating history
with respect to such new services, an evaluation of the long-term prospects of
such business lines is difficult to make. See Item 1(c) of the 1995 Form 10-K
incorporated herein by reference.
4. Material Dependence Upon Executive Officers. The Company
is currently a party to employment agreements with Peter M. Izzo, Jr., President
and Chief Executive Officer of the Company, Kenneth G. Baritz, Chairman of the
Board of the Company, Kevin D. Griffo, Chief Operating Officer of the Company,
John Kane, Executive Vice President of the Company, and Amy S. Gross, Vice
President-General Counsel of the Company. Such agreements provide for an
initial term ending June 25, 1997 (except for Mr. Izzo's which provides for an
initial term ending June 25, 1998). Due to the expertise of the Company's
executive officers in the telecommunications industry, the loss of their
services could have a material adverse effect on the business and operations of
the Company. In addition, although the agreements prohibit the executive
officers from interfering with, among other things, customer relationships of
the Company for a period of one year following the expiration of the term, none
of the agreements contain any non-competition provisions. See "Subsequent
Events" and Item 10 of the 1995 Form 10-K incorporated herein by reference.
5. No Dividends. The Company has never paid any dividends on
its Common Shares and does not anticipate paying any dividends in the
foreseeable future.
6. Priority of Preferred Shares; Potential Substantial
Dilution. Holders of the outstanding Series B, Series D, Series E and Series G
Preferred Shares of the Company are entitled to priority over holders of Common
Shares with regard to dividends and such shares, together with the Series F
Preferred Shares of the Company, are entitled to priority in the distribution of
assets upon any liquidation (such shares having an aggregate current liquidation
preference of approximately $10,900,000). In addition,
6
<PAGE>
since such outstanding Preferred Shares are convertible currently into an
aggregate of approximately 4,300,000 Common Shares (an effective average
conversion price of approximately $2.50 per share), there may be a resulting
substantial dilution in the equity interest of holders of Common Shares.
There is also currently outstanding $2,225,000 in principal
amount of indebtedness of the Company which is convertible into an aggregate of
approximately 2,900,000 Common Shares of the Company (an effective average
conversion price of approximately $.76 per share), exclusive of Common Shares
issuable upon the conversion of accrued and unpaid interest thereon. Any such
conversion would result in a substantial dilution in the equity interest of the
holders of the Common Shares.
Further, there are currently outstanding options and warrants
for the purchase of approximately 4,000,000 Common Shares of the Company (a
substantial portion of which have exercise prices below the current market value
of the Company's Common Shares). Holders of "in the money" options and warrants
are likely to exercise them when, in all likelihood, the Company could obtain
additional capital on terms more favorable than those provided by the options
and warrants. In addition, any such option and warrant exercises would result in
a dilution in the equity interest of the holders of the Common Shares. Moreover,
while such options and warrants are outstanding, they may adversely affect the
terms on which the Company could obtain equity financing.
SUBSEQUENT EVENTS
Since the filing of the 1995 Form 10-K, in addition to those
events discussed in the Forms 10-Q and the June 1996 Form 8-K incorporated
herein by reference, or otherwise discussed herein, the following events
occurred:
(i) Effective June 25, 1996, the Company entered into
employment agreements with Peter M. Izzo, Jr., President and Chief Executive
Officer of the Company, Kenneth G. Baritz, Chairman of the Board of the Company,
Kevin D. Griffo, Chief Operating Officer of the Company, John Kane, Executive
Vice President of the Company, and Amy S. Gross, Vice President - General
Counsel of the Company. Such agreements provide for, among other matters, the
following:(i) an initial term ending on June 25, 1997(except for Mr. Izzo's
whose
7
<PAGE>
agreement provides for an initial term ending June 25, 1998); (ii) minimum
annual compensation as follows: Mr. Izzo - $240,000; Mr. Baritz - $190,000; Mr.
Griffo - $150,000; Mr. Kane - $150,000; and Ms. Gross - $115,000; (iii) the
entitlement by such persons to a bonus as follows: Mr. Izzo - 3% of the
Company's consolidated pre-tax profits; Mr. Baritz - 1% of the Company's
consolidated pre-tax profits; and Messrs. Griffo and Kane and Ms. Gross -
participation in a bonus pool equal to an aggregate of 3% of the Company's
consolidated pre-tax profits; and (iv) the entitlement by such persons to a
severance payment equal to the greater of one year's minimum annual salary and
the employee's total compensation for the previous 12 months (except that, for
Mr. Izzo, the figures are two years and 24 months, respectively) in the event
the executive officer's employment is terminated without cause, he or she
resigns for good reason or his or her employment is terminated following a
change in control of the Company (as defined in the employment agreements).
(ii) Russell K. Burbank resigned as a director of
the Company in August 1996.
(iii) Pursuant to an Asset Purchase Agreement dated as of
August 31, 1996 by and between the Company and Teleplus, Inc. ("Teleplus"), the
Company acquired the rights and obligations of Teleplus pursuant to a Mexico
Sales Representative Agreement dated November 3, 1993 (the "Mexico Agreement")
between Teleplus and Capital. The aggregate consideration for the purchase of
the Mexico Agreement consisted of $1,500,000 in cash and 1,052,336 Common Shares
of the Company, issuable in two equal tranches in January 1997 and 1998,
respectively. No financial statements with regard to Teleplus are included
herein since a business was not acquired as a result of the transaction.
(iv) Pursuant to a Stock Purchase Agreement dated as of
September 30, 1996 by and among the Company, NBE and James E. Everingham and
Daryl A. Frame, as selling shareholders, the Company acquired 80% of the
outstanding stock of NBE in consideration for the issuance by the Company of
357,796 Common Shares to the selling shareholders. Under certain circumstances,
the Company has the option to acquire the remaining outstanding shares of NBE.
No financial statements with regard to NBE are included herein since NBE is not
a "significant subsidiary" for purposes of the Commission's rules and
regulations.
8
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the
Shares by the Selling Shareholders.
SELLING SHAREHOLDERS
The following table sets forth, as of September 30, 1996, to
the Company's knowledge, certain securities ownership information with respect
to the Selling Shareholders:
Common Shares to
Common Shares Number of Common be Beneficially
Beneficially Shares Offered Owned After
Name Owned for Sale Offering
---- ----- -------- --------
Percent
of
Number Outstanding
------ -----------
Kenneth G. Baritz 325,666(1)(2) 50,000(2) 275,666 1.1%
Brown Simpson, LLC 50,000(3) 50,000 -0- -
Ann Diamond 3,000 3,000 -0- -
Lawrence Diamond 7,000(4) 7,000 -0- -
Joseph Getz 12,000 10,000 2,000 *
John Kane 81,500(5) 5,000 76,500 *
Bruce Sandys 100,000 25,000 75,000 *
Southbrook
International
Investments, Ltd. 754,717(6) 1,363,790(6) -0- -
- ----------
* Less than 1%.
(1) Includes 91,666 Common Shares issuable pursuant to currently
exercisable options and warrants and 50,000 shares issued as a
restricted stock grant.
(2) Resale of shares is subject to the terms of a lockup agreement between
Mr. Baritz and the Company pursuant to which the shares may not be sold
publicly for a period of one year following the date of this Prospectus
(subject to certain exceptions).
9
<PAGE>
(3) Represents shares issuable pursuant to currently exercisable
warrants.
(4) Shares are held in a retirement trust.
(5) Includes 50,000 Common Shares issuable pursuant to currently
exercisable options and 25,000 shares issued as a restricted stock
grant.
(6) Southbrook International Investments, Ltd. ("Southbrook") is the owner
of 100,000 Series G Preferred Shares of the Company. Such shares are
convertible generally into such number of Common Shares as shall equal
$20 divided by the lesser of (i) $3.5125 or (ii) 80% of the average
closing bid price for the Company's Common Shares for the five trading
days immediately preceding the conversion date. Accordingly, the
number of Common Shares ultimately issuable to Southbrook upon
conversion of the Series G Preferred Shares is, in part, dependent upon
the market price of the Company's Common Shares at the time of
conversion and, therefore, cannot be determined at this time. Based
upon the average closing bid price for the Company's Common Shares for
the five trading days immediately preceding September 30, 1996 of
$3.3125, as of such date, the number of shares that would have been
issuable upon conversion of the Series G Preferred Shares was
approximately 754,717. Pursuant to an agreement between the Company
and Southbrook, the number of shares to be registered upon conversion
of the Series G Preferred Shares is to be two times the number of
shares issuable based upon a conversion price of $3.5125 per share.
Based upon such conversion price, an aggregate of 569,395 Common Shares
would be issuable upon such conversion. Accordingly, an aggregate of
1,138,790 shares are covered by the registration statement of which
this Prospectus forms a part. The remaining 225,000 shares beneficially
owned by Southbrook and offered for sale hereunder represent shares
issuable pursuant to currently exercisable warrants.
The securities set forth in the above table are included in
this Prospectus pursuant to registration commitments accorded to the Selling
Shareholders. The Company will not receive any proceeds from the sale of the
Shares by the Selling Shareholders.
10
<PAGE>
To the Company's knowledge, no Selling Shareholder has had any
position, office or other material relationship with the Company or any of its
affiliates during the past three years (other than as a holder of the Company's
securities), except that (i) Kenneth G. Baritz has served as a director of the
Company since October 1992 and as its Chairman of the Board since January 1994;
(ii) Lawrence Diamond has served as an employee of the Company or its
subsidiaries since July 1994 (Ann Diamond being the wife of Mr. Diamond); and
(iii) John Kane has served as AMNEX's Executive Vice President for Corporate
Development since June 1995 and as the Company's Executive Vice President since
February 1996.
PLAN OF DISTRIBUTION
The Common Shares set forth in the "Selling Shareholders"
table may be sold by the Selling Shareholders, or by pledgees, donees,
transferees or other successors in interest, either pursuant to the Registration
Statement of which this Prospectus forms a part or, if available, under Section
4(1) of the Securities Act or Rule 144 promulgated thereunder.
This offering is not being underwritten. The Selling
Shareholders, directly through agents designated from time to time, or through
broker-dealers or underwriters also to be designated (who may purchase as
principal and resell for their own account), may sell the Shares from time to
time, in or through privately negotiated transactions, or in one or more
transactions, including block transactions, on the NASDAQ Small Cap Market or on
any other market or stock exchange on which the Shares may be listed in the
future pursuant to and in accordance with the applicable rules of such market or
exchange or otherwise. The selling price of the Shares may be at market prices
prevailing at the time of sale, at prices relating to such prevailing market
prices or at negotiated prices. From time to time the Selling Shareholders may
engage in short sales against the box, puts and calls and other transactions in
securities of the Company or derivatives thereof, and may sell and deliver the
shares in connection therewith. Further, except as set forth herein, the Selling
Shareholders are not restricted as to the number of shares which may be sold at
any one time, and it is possible that a significant number of shares could be
sold at the same time, which may have a depressive effect on the market price of
the Company's Common Shares.
11
<PAGE>
The Selling Shareholders may also pledge shares as collateral
for margin accounts, and such shares could be resold pursuant to the terms of
such accounts.
To the extent required by applicable law, the specific Shares
to be sold, the names of the Selling Shareholders, the respective purchase
prices and public offering prices, the names of any such agent, broker-dealer or
underwriter, and any applicable commissions or discounts with respect to a
particular offer will be set forth in an accompanying Prospectus Supplement.
Resales or reoffers of the Shares by the Selling Shareholders must be
accompanied by a copy of this Prospectus.
The Selling Shareholders and any agents, broker-dealers or
underwriters that participate in the distribution of the Shares may be deemed to
be underwriters, and any profit on the sale of the Shares by them, and any
discounts, commissions or concessions received by them, may be deemed to be
underwriting commissions or discounts under the Securities Act.
LEGAL MATTERS
Matters relating to the legality of the securities being
offered hereby are being passed upon for the Company by Certilman Balin Adler &
Hyman, LLP, 90 Merrick Avenue, East Meadow, New York 11554. Members of the firm
of Certilman Balin Adler & Hyman, LLP are shareholders of the Company.
EXPERTS
The consolidated financial statements of AMNEX, Inc. appearing
in AMNEX, Inc.'s 1995 Annual Report (Form 10-K), as amended, 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.
The financial statements of Crescent appearing in AMNEX,
Inc.'s Form 8-K for an event dated October 4, 1995, as amended, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated
12
<PAGE>
herein by reference. Such 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.
The audited historical consolidated financial statements for
the years ended September 30, 1993, 1994 and 1995 of Capital Network System,
Inc., incorporated by reference in this Prospectus, which appear in the Exhibit
to Amendment No. 1 to AMNEX, Inc.'s Form 8-K for an event dated June 28, 1996,
as amended, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
ADDITIONAL INFORMATION
The Company has filed a registration statement on Form S-3
(together with all amendments thereto, the "Registration Statement") with the
Commission under the Securities Act with respect to the securities offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement. For further information with respect to the Company and
the securities offered hereby, reference is made to the Registration Statement
and to the exhibits filed therewith, copies of which may be obtained upon
payment of a fee prescribed by the Commission, or may be examined free of charge
at the public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Each statement made in
this Prospectus referring to a document filed as an exhibit to the Registration
Statement is qualified by reference to the exhibit for a complete statement of
its terms and conditions.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses (estimated except for the
Registration Fee) in connection with the offering described in the Registration
Statement:
Registration Fee................................... $1,334.89
Accountants' Fees and Expenses..................... *
Legal Fees and Expenses............................ *
Printing .......................................... *
Miscellaneous...................................... *
---------
Total............................................ $ *
=========
* To be filed by amendment.
Item 15. Indemnification of Directors and Officers.
Under the laws of the State of New York, the officers and directors of
the Registrant are entitled to indemnification by the Registrant, under certain
circumstances, pursuant to Sections 721-727 of the New York Business Corporation
Law which authorizes the Registrant, generally, to indemnify officers and
directors against both expenses and liabilities in connection with any
proceeding involving any such officer or director, other than in a proceeding by
or in the right of the Registrant to procure a judgment in its favor, if (i)
such officer or director acted in good faith and in a manner he reasonably
believed to be in the best interests of the Registrant; and (ii) with respect to
any criminal proceeding, such officer or director also had no reasonable cause
to believe his conduct was unlawful. In addition, such statute authorizes the
Registrant, generally, to indemnify officers and directors against amounts paid
in settlement and their expenses in connection with any proceeding by or in the
right of the Registrant to procure a judgment in its favor which involved the
officer or director, if such officer or director acted in good faith for a
purpose which he reasonably believed to be in the best interests of the
Registrant.
The Registrant is required to indemnify an officer or director, as set
forth above, if such officer or director has been successful on the merits or
otherwise in the defense of any matter
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<PAGE>
referred to herein. Otherwise, indemnification of an officer or director, unless
ordered by a court, may be made by the Registrant only as authorized in a
specific case upon a determination that indemnification is proper in the
circumstances because the officer or director met the applicable standard of
conduct or because indemnification is permitted pursuant to Section 721 of the
Business Corporation Law. Such determination shall be made generally (a) by the
Board of Directors of the Registrant, acting by a quorum consisting of directors
who were not parties to the proceeding; or (b) if a quorum is not obtainable or,
even if obtainable, a quorum of disinterested directors so directs (i) by the
Board of Directors upon the written opinion of independent legal counsel that
indemnification is proper under the circumstances, or (ii) by the shareholders.
Article X of the Registrant's By-Laws provides that the Registrant
shall, to the fullest extent permitted by law, indemnify all its officers and
directors.
The Registrant's Certificate of Incorporation contains the provisions
of Section 402(b) of the Business Corporation Law of the State of New York
relating to the elimination of directors' liability for damages for breach of
duty in such capacity.
Item 16. Exhibits.
Exhibit Number Description of Exhibit
2.1 Amended and Restated Asset Purchase Agreement,
dated as of October 4, 1995, among Crescent
Public Communications Inc. ("Crescent"),
Crescent Communications, Inc. ("CCI"), AMNEX,
Inc. and Friedli Corporate Finance AG
("Friedli AG").1
2.2 Letter agreement, dated as of October 4, 1995,
among the Company, Crescent, CCI and Friedli
AG pursuant to which, among other matters, the
Agreement was declared null and void.1
- --------
1 Denotes document filed as an exhibit to the Registrant's Current Report on
Form 8-K for an event dated October 4, 1995, as amended (File No. 0-17158),
and incorporated herein by reference.
II-2
<PAGE>
2.3 Letter agreement, dated as of October 4, 1995,
among the Company, Crescent, the stockholders
of CCI and Friedli AG, among others.1
2.4 Stock Purchase Agreement, dated as of April
26, 1996, among AMNEX, Inc., Robert A.
Rowland, Delajane Rowland, Donald D. Simmons,
C. Michael Moehle, Barbara Ann Cromwell, Ellen
E. Wood, Daniel N. Matheson, Capital Network
System, Inc., Capital Network International,
Inc., Capital Network Mexico, S.A. de C.V.,
and Point to Point Communications Company.2
2.5 First Amendment to Stock Purchase Agreement,
dated as of June 28, 1996, by and among the
foregoing parties as well as Sirrom Capital
Corporation and Spectrum Global
Telecommunications Pty Limited.2
4 Specimen of certificate evidencing Common
Shares of the Registrant3
5 Opinion of Certilman Balin Adler & Hyman, LLP
regarding the legality of the securities being
registered
23.1 Consent of Ernst & Young LLP (with respect to the Company)
23.2 Consent of Price Waterhouse LLP
23.3 Consent of Ernst & Young LLP (with respect to Crescent)
- --------
2 Denotes document filed as an exhibit to the Registrant's Current Report on
Form 8-K for an event dated June 28, 1996, as amended (File No. 0-17158),
and incorporated herein by reference.
3 Denotes document filed as an exhibit to the Registrant's Registration
Statement on Form S-3 (Registration No. 33-58084) and incorporated herein by
reference.
II-3
<PAGE>
23.4 Consent of Certilman Balin Adler & Hyman, LLP (included in
its opinion filed as Exhibit 5)
24 Powers of Attorney (included in signature page forming a
part hereof)
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(l) 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 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement; notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of the securities offered would
not exceed that which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (l)(i) and (l)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
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<PAGE>
(2) 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.
(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, as amended, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
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 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 provi sions described under Item 15
above, 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 Act and
will be governed by the final adjudication of such issue.
II-5
<PAGE>
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 New York, State of New York, on the 6th day of
November, 1996.
AMNEX, INC.
By:/s/Kenneth G. Baritz
-----------------------
Kenneth G. Baritz
Chairman of the Board
----------
POWER OF ATTORNEY
Know all men by these presents, that each person whose signature appears
below constitutes and appoints Peter M. Izzo, Jr. and Kenneth G. Baritz his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, and each of them, or his
or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<PAGE>
Signature Capacity Date
- --------- -------- ----
President, Chief
Executive Officer and
Director (Principal
/s/ Peter M. Izzo, Jr. Executive Officer) November 6, 1996
- ----------------------
Peter M. Izzo, Jr.
Chairman of the
Board (Principal
/s/ Kenneth G. Baritz Financial Officer) November 6, 1996
- ----------------------
Kenneth G. Baritz
Vice President - Finance,
Treasurer and Chief
Accounting Officer
(Principal Accounting
/s/ Richard L. Stoun Officer) November 6, 1996
- ----------------------
Richard L. Stoun
/s/ Michael V. Dettmers Director November 6, 1996
- -----------------------
Michael V. Dettmers
<PAGE>
Exhibit 5
November 4, 1996
AMNEX, Inc.
101 Park Avenue
New York, New York 10178
Re: Registration Statement on Form S-3
Gentlemen:
In our capacity as counsel to AMNEX, Inc., a New York
corporation (the "Company"), we have been asked to render this opinion in
connection with the Company's Registration Statement on Form S-3 (the
"Registration Statement") being filed contemporaneously by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
covering 1,513,790 Common Shares, $.001 par value, of the Company (the "Shares")
which are being registered for resale by certain selling shareholders as
follows: (i) up to 1,138,790 Common Shares issuable to Southbrook International
Investments, Ltd. ("Southbrook") upon the conversion of outstanding Series G
Preferred Shares of the Company; (ii) 275,000 Common Shares issuable to
Southbrook and Brown Simpson LLC upon the exercise of outstanding warrants;
(iii) 25,000 Common Shares issuable to Kenneth G. Baritz, Chairman of the Board
of the Company, upon the exercise of an outstanding warrant; and (iv) 75,000
Common Shares (the "Outstanding Shares") which were issued to certain persons
pursuant to subscription arrangements with the Company.
In connection with our opinion, we have examined the
Restated Certificate of Incorporation and By-Laws of the Company, each as
amended, the Registration Statement, and certain agreements entered into, and
instruments and warrants issued, by the Company
<PAGE>
AMNEX, Inc.
November 4, 1996
Page 2
in connection with the issuance of the Shares. We are also familiar with
proceedings of the Board of Directors of the Company, or otherwise have relied
upon representations made by officers of the Company, relating to the
authorization of the issuance of the Shares. We have also examined such other
instruments and documents as we deemed relevant under the circumstances.
For purposes of the opinions expressed below, we have
assumed (i) the authenticity of all documents submitted to us as originals, (ii)
the conformity to the originals of all documents submitted as certified,
photostatic or facsimile copies and the authenticity of the originals, (iii) the
legal capacity of natural persons, (iv) the due authorization, execution and
delivery of all documents by all parties and the validity and binding effect
thereof and (v) the conformity to the proceedings of the Board of Directors of
all minutes of such proceedings and all representations, oral and written, made
by officers of the Company with respect thereto. We have also assumed that the
corporate records furnished to us by the Company include all corporate
proceedings taken by the Company to date.
Based upon and subject to the foregoing, including the
assumptions made, we are of the opinion that the Outstanding Shares have been
duly and validly authorized and issued, and are fully paid and nonassessable
Common Shares, $.001 par value, of the Company, subject to the provisions of
Section 630 of the Business Corporation Law of the State of New York (the
"BCL"); and (ii) the remaining Shares will be, upon issuance in accordance with
the terms of the respective instruments, duly and validly authorized and issued,
fully paid and nonassessable Common Shares, $.001 par value, of the Company,
subject to the provisions of Section 630 of the BCL.
We hereby consent to the use of our opinion as herein set
forth as an exhibit to the Registration Statement and to the use of our name
under the caption "Legal Matters" in the Prospectus forming a part of the
Registration Statement.
This opinion is as of the date hereof, and we do not
undertake, and hereby disclaim, any obligation to advise you of any
changes in any of the matters set forth herein.
<PAGE>
AMNEX, Inc.
November 4, 1996
Page 3
We are rendering this opinion only as to the matters
expressly set forth herein, and no opinion should be inferred as to
any other matters.
This opinion is for your exclusive use only and is to be
utilized and relied upon only in connection with the matters expressly set forth
herein.
Your attention is directed to the fact that members of
this firm are shareholders of the Company.
Very truly yours,
CERTILMAN BALIN ADLER & HYMAN, LLP
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Amnex, Inc. for the
registration of 1,513,790 shares of its common stock and to the incorporation
by reference therein of our report dated March 14, 1996 with respect to the
consolidated financial statements and schedule of Amnex, Inc. included in its
Annual Report (Form 10-K) for the year ended December 31, 1995, as amended,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
November 4, 1996
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 of AMNEX, Inc. of our report dated June 28, 1996 relating
to the consolidated financial statements of Capital Network System, Inc., for
the years ended September 30, 1993, 1994 and 1995, which appear in the Exhibit
to Amendment No. 1 to Form 8-K for an event dated June 28, 1996. We also consent
to the reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE
Austin, TX
November 6, 1996
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the capition "Experts" in the
Registration Statement (Form S-3) and related prospectus of Amnex, Inc. for the
registration of 1,513,790 shares of its common stock and to the incorporation by
reference therein of our report dated November 20, 1995 with respect to the
financial statements of Crescent Communications, Inc. included in Amnex, Inc.'s
Form 8-K dated October 4, 1995, as amended, filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
New York, New York
November 4, 1996
