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As filed with the Securities and Exchange Commission on September 1, 2000
Registration No. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ELTRAX SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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MINNESOTA 41-1484525
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
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WILLIAM P. O'REILLY
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
400 GALLERIA PARKWAY
SUITE 300
ATLANTA, GEORGIA 30339
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
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Copies of all correspondence to:
JOEL M. ALAM, ESQ.
JAFFE, RAITT, HEUER & WEISS, P.C.
ONE WOODWARD AVENUE
SUITE 2400
DETROIT, MICHIGAN 48226
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
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, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum Amount of
Title of Each Class of Securities Amount to be Registered Aggregate Offering Price (1) Registration Fee
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Common Stock, $0.01 par value 3,648,788 shares $16,534,482.82 $4,365.10
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(1) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457(c), based upon the average of the high and low prices of the
registrant's common stock on August 25, 2000 on the Nasdaq National Market
System.
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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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THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETED AND MAY CHANGE.
THE SELLING SHAREHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
WE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION
PROSPECTUS DATED SEPTEMBER 1, 2000
PROSPECTUS
3,648,788 SHARES
ELTRAX SYSTEMS, INC.
COMMON STOCK
This prospectus covers the sale of up to 3,648,788 shares of Eltrax
Systems, Inc. common stock by certain stockholders. We will not receive any
proceeds from the sale of the shares by the stockholders.
Our common stock is listed on the Nasdaq National Market System under the
symbol "ELTX." The last reported sale price of the common stock as reported
on the Nasdaq National Market System on August 30, 2000, was $4.8125 per
share.
The selling stockholders, directly or through agents, brokers or dealers
designated from time to time, may sell the shares of our common stock
offered hereby from time to time on terms to be determined at the time of
sale. See "Plan of Distribution."
We have agreed to bear all expenses of registration of our common stock
offered hereby under federal and state securities laws.
On June 12, 2000 we entered into an agreement to merge with Cereus
Technology Partners, Inc. ("Cereus"). We amended and restated this
agreement as of July 27, 2000. Under the agreement, Cereus would merge
with and into a wholly-owned subsidiary of ours. We have scheduled a
meeting of our stockholders for September 29, 2000 to consider and vote
upon the merger.
SEE "RISK FACTORS" ON PAGE 6 FOR CERTAIN FACTORS RELATING TO AN
INVESTMENT IN THE SHARES.
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These securities have not been approved or disapproved by the
Securities and Exchange Commission or any state securities
commission nor has the Securities and Exchange Commission
or any state securities commission passed upon the
accuracy or adequacy of this prospectus. Any
representation to the contrary is a
criminal offense.
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The date of this Prospectus is , 2000.
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NOTE REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS CONTAINED IN THIS DOCUMENT OR INCORPORATED HEREIN BY
REFERENCE THAT ARE NOT STATEMENTS OF HISTORICAL FACTS ARE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. THE WORDS "BELIEVE," "EXPECT," "ANTICIPATE," "INTEND," "WILL" AND
SIMILAR EXPRESSIONS ARE EXAMPLES OF WORDS THAT IDENTIFY FORWARD-LOOKING
STATEMENTS. FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, STATEMENTS
REGARDING OUR FUTURE FINANCIAL POSITION, BUSINESS STRATEGY AND EXPECTED COST
SAVINGS. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON OUR CURRENT BELIEFS, AS
WELL AS ASSUMPTIONS WE HAVE MADE BASED UPON INFORMATION CURRENTLY AVAILABLE TO
US.
EACH FORWARD-LOOKING STATEMENT REFLECTS OUR CURRENT VIEW OF FUTURE
EVENTS AND IS SUBJECT TO RISKS, UNCERTAINTIES AND OTHER FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM ANY RESULTS EXPRESSED OR IMPLIED BY OUR
FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THE RESULTS EXPRESSED OR IMPLIED BY ANY FORWARD-LOOKING
STATEMENTS INCLUDE:
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- OUR ABILITY TO SUCCESSFULLY PENETRATE THE - OUR ABILITY TO FUND CONTINUING OPERATING
NETWORK, APPLICATION AND ASP MARKETS; LOSSES AND CAPITAL REQUIREMENTS;
- THE CONSUMMATION OF THE MERGER WITH CEREUS; - OUR ABILITY TO DISPOSE OF OUR HOSPITALITY
SERVICES GROUP;
- OUR ABILITY TO SUCCESSFULLY ACCESS THE CAPITAL - TRENDS FOR THE CONTINUED GROWTH OF THE
MARKETS TO FUND THE GROWTH OF OUR BUSINESS; BUSINESS OF ELTRAX AND CEREUS;
- OUR ABILITY TO CONTINUE TO SUCCESSFULLY MARKET - OUR ABILITY TO ENHANCE REVENUE AND EARNINGS
EXISTING PRODUCTS AND SERVICES, WHICH MAY BE GROWTH;
ADVERSELY IMPACTED BY COMPETITION;
- OUR ABILITY TO SUCCESSFULLY DEVELOP AND MARKET - OUR ABILITY TO INTEGRATE OUR BUSINESS WITH
NEW PRODUCTS AND SERVICES; CEREUS' BUSINESS AND OTHER PRIOR AND
SUBSEQUENT MERGERS AND ACQUISITIONS;
- THE EFFECTS OF OUR ACCOUNTING POLICIES AND - OUR ABILITY TO EXPAND OUR MARKET FOR EXISTING
GENERAL CHANGES IN GENERALLY ACCEPTED ACCOUNTING PRODUCTS AND SERVICES; AND
PRACTICES;
- GENERAL ECONOMIC AND BUSINESS CONDITIONS; - OTHER FACTORS DISCLOSED IN THE SECTION
ENTITLED RISK FACTORS BELOW AND IN OUR OTHER
FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.
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ALL SUBSEQUENT FORWARD-LOOKING STATEMENTS RELATING TO THE MATTERS DESCRIBED IN
THIS DOCUMENT AND ATTRIBUTABLE TO US OR TO PERSONS ACTING ON OUR BEHALF ARE
EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY SUCH FACTORS. WE HAVE NO OBLIGATION TO
PUBLICLY UPDATE OR REVISE THESE FORWARD-LOOKING STATEMENTS TO REFLECT NEW
INFORMATION, FUTURE EVENTS, OR OTHERWISE, EXCEPT AS REQUIRED BY APPLICABLE
FEDERAL SECURITIES LAWS, AND WE CAUTION YOU NOT TO PLACE UNDUE RELIANCE ON THESE
FORWARD-LOOKING STATEMENTS.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Eltrax
Systems, Inc., a Minnesota corporation, filed with the Securities and Exchange
Commission utilizing a "shelf" registration process. Under this shelf process,
the selling stockholders may, from time to time, sell the common stock described
in this prospectus. We may prepare a prospectus supplement at any time to add,
update or change information contained in this prospectus. Except for those
instances in which a specific date is referenced, the information in this
prospectus is accurate as of September , 2000. You should read
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both this prospectus and any prospectus supplement together with additional
information described under the heading "Where You Can Find More Information".
We believe that we have included or incorporated by reference all
information material to investors in this prospectus, but certain details that
may be important for specific investment purposes have not been included. To see
more detail, you should read the exhibits filed with or incorporated by
reference into the registration statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information
with the Securities and Exchange Commission. You may read and copy any document
we file at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following regional offices of the SEC: 7
World Trade Center, Thirteenth Floor, New York, NY 10048 and 500 West Madison
Street, Suite 1400, Chicago, IL 60661. Please call the SEC at 1-800-SEC-0330 for
further information on the operation of the SEC's public reference rooms. Our
SEC filings are also available to the public over the Internet at the SEC's web
site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the following documents we filed with the SEC and our
future filings with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until all of the securities are sold:
1. Our Annual Report on Form 10-K for the year ended December 31,
1999, filed with the SEC on March 27, 2000.
2. Amendment number 1 to our Annual Report on Form 10-K for the year
ended December 31, 1999, filed with the SEC on April 28, 2000.
3. The description of our common stock contained in our Registration
Statement on Form 8-A (file no. 0-22190).
4. Our Current Report on Form 8-K, containing restated audited
financial statements, filed with the SEC on August 28, 2000.
5. Our Current Report on Form 8-K, containing a copy of the joint
proxy statement/prospectus dated August 30, 2000 sent to
stockholders in connection with the merger with Cereus.
6. Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000, filed with the SEC on May 15, 2000.
7. Our Quarterly Report on Form 10-Q for the quarter ended June 30,
2000, filed with the SEC on August 14, 2000.
You may request a copy of these filings at no cost, by writing or calling us at
the following address:
Eltrax Systems, Inc.
400 Galleria Parkway
Suite 300
Atlanta, Georgia 30339
Attn: Corporate Secretary
You should rely only on the information incorporated by reference or provided in
this prospectus and any supplement. We have not authorized anyone else to
provide you with different information.
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THE COMPANY
Eltrax Systems, Inc., a Minnesota corporation, is a global provider of
outsourced information technology ("IT") solutions. We operate through two
separate business units: the technology services group and the hospitality
services group. The technology services group provides technology solutions,
customer care services and acts as an application service provider ("ASP"). The
hospitality services group provides enterprise information solutions for the
global hospitality industry.
As of July 19, 2000, our board of directors determined to dispose of
our hospitality services group. As a result of this decision, commencing with
the second quarter, we began reporting the historical operations of the
hospitality services group as a discontinued operation.
On June 12, 2000 we entered into an agreement to merge with Cereus. We
amended and restated this agreement as of July 27, 2000. Under the agreement,
Cereus would merge with and into a wholly-owned subsidiary of ours. We have
scheduled a meeting of our stockholders for September 29, 2000 to consider and
vote upon the merger.
Our headquarters are located at 400 Galleria Parkway, Suite 300,
Atlanta, GA 30339 and our telephone number is (770) 612-3500. We maintain a
worldwide web address at www.eltrax.com.
TECHNOLOGY SERVICES GROUP
The technology services group is a provider of outsourced Internet- and
network-based applications and services to over 3,000 clients. Our clients are
typically small- and medium-sized enterprises with revenue of $50 million to $1
billion where outsourced IT solutions provide a cost-effective alternative to
developing and maintaining internal technology infrastructures. The technology
services group is comprised of three divisions:
- TECHNOLOGY SOLUTIONS. We provide comprehensive solutions, such as
strategic assessment, application and network design, custom
application development and integration, network management,
support and maintenance that enable our clients to more
effectively communicate and manage information.
- CUSTOMER CARE SOLUTIONS. We simplify the technical support
functions of our clients by providing 24x7 help desk support and
training and installation services for the solutions that we have
developed and implemented.
- APPLICATION SERVICE PROVIDER (ASP). We provide our clients with
application outsourcing and remote delivery of applications that
lower total technology-related costs and infrastructure
requirements. Our existing core competencies within the IT
outsourcing marketplace and large customer base have allowed us
to more rapidly introduce our ASP offerings.
OUR SOLUTION AND ITS BENEFITS
We have developed our product and service offerings based on our
propriety Plan, Build, Run(SM) methodology, which offers clients rapid delivery
of comprehensive solutions for the effective deployment of e-business or other
technology-related initiatives. Our solutions provide clients with the following
benefits:
- ABILITY TO FOCUS ON CORE COMPETENCIES. Our solutions allow small-
and medium-sized companies to focus on their core business
competencies by outsourcing all or a portion of their IT needs.
Many of our clients do not have the resources to maintain
internal personnel with the advanced skills required in today's
IT environment.
- ACCESS TO COMPREHENSIVE IT FUNCTIONS. We provide services across
the entire IT spectrum from consulting to implementation to
maintenance. We believe the option of a single-source for IT
outsourcing is especially appealing to our clients who often lack
the time and resources to coordinate a multi-party effort.
Additionally, we provide our clients access to specific,
high-level IT expertise which would normally be handled by an IT
generalist.
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- ENHANCED RELIABILITY FOR KEY BUSINESS APPLICATIONS. Many of our
clients choose to outsource their key business applications. Any
service interruption involving key applications such as e-mail,
hosting, customer care and network administration can be
operationally debilitating and costly. Our solutions offer a
guaranteed level of performance, which provides clients with the
reliability they require from their key business applications.
OUR MARKET OPPORTUNITY
We believe we are positioned to take advantage of a number of key
trends in today's IT marketplace, including the emergence of the ASP market,
continued growth of network services management and increased emphasis by
organizations on customer care. Dataquest estimates that the ASP market will
grow to $22.7 billion in 2003, representing a compound annual growth rate (CAGR)
of 90.7%. The U.S. network services market is estimated by the GartnerGroup to
grow to $70.6 billion by 2003. In addition, IDC estimates that the global market
for outsourcing of customer relationship management services, of which customer
care outsourcing is a subset, will grow at a CAGR of 18.6% from $24.8 billion in
1998 to $58.3 billion in 2003.
OUR STRATEGY
Based on these current trends, we intend to focus most of our product
development and marketing skills on promoting and growing the technology
services group, especially the ASP division. Our objective is to become the
leading provider of outsourced Internet- and network-based solutions to small-
and medium-sized businesses. Our strategy for achieving this objective is as
follows:
- EXPAND SERVICE OFFERINGS. As a total solution provider of
outsourced IT services for small- to medium-sized clients, we
intend to continue to expand our service offerings within all
segments of the technology services group to capture a larger
percentage of our clients' IT budgets.
- OFFER NEW ASP PRODUCTS. We intend to continue to align ourselves
with other types of application developers and also to continue
to develop proprietary applications where applicable.
- MARKET OUR ASP PRODUCTS TO OUR EXISTING CLIENT BASE. We intend to
continue to target our large, existing client base for additional
ASP revenue opportunities.
- EXPAND STRATEGIC ALLIANCES. We intend to expand strategic
relationships with various manufacturers of networking hardware,
software developers and vertical industry specialists in order to
broaden our client base.
- FOCUS ON VERTICAL MARKETS. We intend to focus on specific
vertical markets, including, but not limited to: (i)
communications; (ii) retail; (iii) education; (iv) manufacturing;
and (v) healthcare. These are vertical markets in which we have
significant prior experience deploying IT solutions.
HOSPITALITY SERVICES GROUP
The hospitality services group designs, manufactures, markets and
services enterprise information products and services for the global hospitality
industry. These products and services consist of application-specific software
and hardware systems, supplemented by training, installation, maintenance and
call center support services. The hospitality services group concentrates on
three major areas: restaurant solutions, lodging solutions and energy management
solutions. In addition to our software enterprise products and services and
hardware products, we offer a wide variety of support services and products for
our hotel and restaurant information systems. In addition, we offer training,
installation, call center support and maintenance contracts for all hospitality
products. We are currently in the process of disposing of the hospitality
services group.
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RISK FACTORS
You should carefully consider the following risk factors as well as other
information included in this document. If any of the following risks or
uncertainties actually occur, our business, financial condition and results of
operations could be materially adversely affected. In that event, the trading
price of our common stock could decline.
RISKS RELATED TO OUR BUSINESS
Our stockholders are subject to the following risks related to our
business.
WE MAY BE UNABLE TO MEET OUR FUTURE WORKING CAPITAL REQUIREMENTS.
At June 30, 2000, we had a negative working capital position (excess of
current liabilities over current assets) of $5.2 million. Our net cash position
(deficit), defined as the sum of cash, cash equivalents and short-term
investments less short term borrowings and long-term debt, was $(17.3 million)
at June 30, 2000, compared to $(9.9 million) at December 31, 1999.
Commencing in the second quarter, due to greater losses than
anticipated in the second quarter and the resultant shortage of available cash,
we have not made timely payments to all of our trade and other creditors. As of
June 30, 2000, we had payables which were more than 30 days past due in the
amount of approximately $4.9 million relating to continuing operations. We have
negotiated deferred payment terms with most of these creditors.
We expect to meet our short-term working capital needs with borrowings
under the bank and Cereus facilities, the proceeds from the sale of all or a
portion of the hospitality services group, and up to $3.0 million in proceeds
from the sale of convertible subordinated notes to two private investors. We
cannot meet our working capital needs without these capital sources. Our ability
to access that capital is contingent on events, most of which are outside our
control. For example, we have entered into a letter of intent with respect to
the sale of our lodging and international business and are in discussions for
the sale of one of our subsidiaries, Squirrel Systems, Inc. However, the
consummation of both of those transactions is contingent on the negotiation and
execution of a definitive agreement and the completion of due diligence and
other matters customary in transactions of that sort.
While we expect to be able to close both of these transactions, there
can be no assurance that either or both of the transactions will close. Also,
there can be no assurance that the additional $3.0 million of convertible
subordinated notes will be funded because the funding of $1.0 million of the
notes is contingent on the execution of a definitive agreement for the sale of
all or a portion of our hospitality services group for gross proceeds of at
least $8.0 million and the funding of $2.0 million of the notes is contingent on
the closing of the merger with Cereus.
Similarly, our access to an additional $5.0 million of funding from
Cereus is contingent upon our bank agreeing to certain modifications to the bank
credit facility. While we expect to obtain the required modifications, there can
be no assurance that we will be successful in obtaining those modifications. As
such, there can be no assurance that we will have access to the additional
Cereus funding.
Finally, our ability to access an bank facility is contingent on our
compliance with the financial and other covenants and terms of that facility. If
we are in violation of the bank facility, or do not have sufficient eligible
accounts receivable to support the level of borrowings we need, we will be
unable to draw on the facility.
If any of these contingencies are not satisfied or we are in violation
of the bank facility so that we do not have access to any one of these sources
of capital through the remainder of the 2000 fiscal year, then our ability to
continue to operate would be jeopardized. In this event, we would be forced to
seek working capital from other sources to fund delinquent accounts payable and
meet ongoing trade obligations. However, there can be no assurance that other
financing sources will be available to meet our needs at that time.
Even if we are is able to meet our short-term capital needs from the
capital sources described above, our ability to meet our long-term capital needs
will be subject to factors outside of our control.
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Specifically, unless the price of our common stock increases significantly so
that holders of our convertible debt are likely to convert such debt into common
stock, we will be required to restructure that debt or raise additional equity
capital to fund such debt repayment beginning in June 2001. The principal amount
of the convertible debt outstanding at August 10, 2000 was $9.0 million. If the
balance of the convertible subordinated notes and the additional debt from the
Cereus bridge facility is funded (and assuming our pending merger with Cereus is
not completed), the principal amount of convertible debt outstanding would be $
17.0 million. To the extent such debt is not converted in full, or we are not
able to restructure the terms of such debt or obtain the necessary funds to
repay it in full, we do not expect that we will be able to meet our long-term
obligations.
WE HAVE A HISTORY OF LOSSES AND MAY NOT BE PROFITABLE IN THE FUTURE.
We have a history of net losses, including a net loss of $31.6 million
for the six months ended June 30, 2000 and a net loss of $9.8 million for the
year ended December 31, 1999. Further, executing our new business strategy and
expanding our services will require significant additional capital and other
expenditures. Accordingly, we may continue to generate net losses in the future,
and we may never become profitable.
OUR FUTURE RESULTS OF OPERATIONS ARE UNCERTAIN BECAUSE WE ARE SIGNIFICANTLY
REFOCUSING OUR BUSINESS.
We believe that the technology services and ASP markets will grow
significantly over the next five years. As a result, we are refocusing our
business efforts to devote our energy and resources to promote and develop the
technology services group as a full service provider, particularly its ASP
offerings. As part of this process, we are pursuing the disposition of our
hospitality services group. As such, we have begun accounting for the
hospitality services group as a discontinued operation and our historical
results of operations, which are the result of our old business strategy, may
not give you an accurate indication of how we will perform in the future.
OUR SUCCESS DEPENDS ON THE ACCEPTANCE AND INCREASED USE OF BOTH INTERNET-BASED
BUSINESS SOFTWARE SOLUTIONS AND OUR NEW PRODUCTS AND SERVICES, AND WE CANNOT BE
SURE THAT THIS WILL HAPPEN.
Our new business model depends in large part on the adoption of
Internet-based business software solutions by our target market of middle market
commercial users. Our business could suffer dramatically if Internet-based
software solutions are not accepted or are not perceived to be effective. The
market for Internet services, private network management solutions and widely
distributed Internet-enabled packaged application software has only recently
begun to develop, and we believe many of our potential customers are not aware
of the benefit of the outsourced solutions we provide.
The growth of Internet-based business software solutions could also be limited
by:
- concerns over transaction security and user privacy;
- inadequate network infrastructure for the Internet; and
- inconsistent performance of the Internet.
We cannot be certain that commercial customers will accept and employ
Internet-based software solutions or that this market will grow at the rate we
expect. If this market does not grow or grows more slowly than our predictions
our financial condition and results of operations would be adversely affected.
Additionally, many of our products and services are based on new or
improved technologies that have not previously been available. We will have to
overcome the difficulties inherent in the introduction of new or improved
technologies to the market, including our ability to demonstrate to customers
the technical capabilities and the value of these new technologies, and there is
no assurance that we can do so successfully. Lack of market acceptance of our
products and services would adversely affect our business.
WE MAY NOT BE ABLE TO DELIVER OUR SERVICES IF THIRD PARTIES DO NOT PROVIDE US
WITH KEY COMPONENTS OF OUR INFRASTRUCTURE.
We depend on other companies such as software vendors and equipment
manufacturers to supply us with key components of the computer and
telecommunications equipment and the telecommunications
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services that we use to provide our application hosting services. A disruption
in our ability to provide hosting services could prevent us from maintaining the
required standards of service, which would cause us to incur contractual
penalties, and would harm our business. Additionally, if any of our significant
software vendors stop making their products available to us or choose to compete
against us, our business would be harmed. Moreover, our success depends upon the
continued popularity of the product offerings of these vendors and on our
ability to establish relationships with new vendors in the future. If we are
unable to obtain packaged applications from these or comparable vendors or if
our vendors choose to compete with us or the popularity of their products
declines, our ability to customize, implement or host packaged software
applications may be adversely affected.
IF WE ARE UNABLE TO EFFICIENTLY INTEGRATE AND OPERATE RECENT ACQUISITIONS, OUR
BUSINESS WOULD BE HARMED.
During the last few years, we have merged with or acquired numerous
companies. The rapid growth associated with these acquisitions and the
difficulties we have experienced in integrating these businesses has placed, and
will continue to place, a significant strain on our systems, controls and
managerial resources. Our management has expended, and expects to continue to
expend, significant time and effort in integrating the operations of the
businesses we acquired and in expanding our systems and controls to these
acquired businesses. If we do not accomplish these tasks, our results of
operations and financial condition may be materially and adversely affected.
OUR GROWTH COULD BE LIMITED IF WE ARE UNABLE TO ATTRACT AND RETAIN QUALIFIED
PERSONNEL.
We believe that our success depends largely on our ability to attract
and retain highly skilled and qualified technical, managerial and marketing
personnel. Competition for this personnel in the information technology services
industry is intense. The inability to hire or retain qualified personnel could
hinder our ability to implement our business strategy and harm our business.
THE MARKETS WE SERVE ARE HIGHLY COMPETITIVE AND MANY OF OUR COMPETITORS HAVE
MUCH GREATER RESOURCES.
Competition in the information technology services industry is intense
and is expected to increase. Many of our competitors have substantially greater
financial, technical and marketing resources, larger customer bases, longer
operating histories, greater name recognition and more established relationships
in the industry than we do. Additionally, there are relatively few barriers to
entry in our business that would prevent new competitors from entering our
industry. We may not be able to compete effectively and, if we do not, our
financial condition and results of operations may be materially and adversely
affected.
OUR SUCCESS DEPENDS ON OUR ABILITY TO KEEP UP WITH RAPID TECHNOLOGICAL
DEVELOPMENTS AND EVOLVING INDUSTRY STANDARDS.
The Internet is characterized by rapidly changing technology, evolving
industry standards, and frequent new service and product announcements,
introductions and enhancements. Our future success will depend on our ability to
adapt our services to rapidly changing technologies and evolving industry
standards, to continually improve the performance, features and reliability of
our services and to insure the continued compatibility of our services with
products, services and architectures offered by various vendors or any
prevailing standard. If we do not keep up with those changes, our business may
suffer.
INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS AGAINST US, EVEN WITHOUT MERIT, COULD
REQUIRE US TO ENTER INTO COSTLY LICENSES OR DEPRIVE US OF TECHNOLOGY WE REQUIRE.
Our industry is technology intensive. As the number of software
products in our target markets increases and the functionality of these products
further overlap, third parties may claim that the technology we develop or
license infringes their proprietary rights. Any infringement claims, even
without merit, could require us to enter into costly royalty or licensing
agreements to avoid service implementation delays. If successful, a claim of
product infringement could deprive us of the technology we require altogether.
Any of these outcomes could harm our business.
FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS.
8
<PAGE> 10
Our success depends in part upon the protection of our proprietary
application software and hardware products. We have taken steps that we believe
are adequate to establish, protect and enforce our intellectual property rights.
However, we cannot assure you that these efforts to safeguard and maintain our
proprietary rights will be successful.
Furthermore, the laws of many foreign countries in which we do business
do not protect intellectual property rights to the same extent or in the same
manner as do the laws of the United States. Although we have implemented and
will continue to implement protective measures in those countries, these efforts
may also not be successful. Additionally, even if our U.S. and international
efforts are successful, our competitors may independently develop non-infringing
technologies that are substantially similar or superior to our technologies.
WE DERIVE A SIGNIFICANT PORTION OF OUR REVENUE FROM INTERNATIONAL OPERATIONS.
Our international operations represented approximately 13.3% and 18.5%
of our total revenue for the six months ended June 30, 2000 and year ended
December 31, 1999, respectively. The largest portion of this international
revenue is generated in the Pacific Rim Region, which represented approximately
3.9% and 7.4% of our total revenue for the quarter ended June 30, 2000 and year
ended December 31, 1999, respectively. Ongoing business in international markets
subjects us to a wide variety of risks, including:
- unexpected changes in legal and regulatory requirements;
- new tariffs or other barriers to certain international markets;
- difficulties in staffing and managing foreign operations;
- regional economic factors including recessions, hyperinflation or other
adverse economic developments;
- longer payment cycles and greater difficulty in collecting accounts
receivable;
- the possibility of expropriation;
- limitations on the repatriation of investment income, capital stock and
other assets;
- unstable political environments;
- potentially adverse tax consequences; and
- gains and losses on foreign currency conversion.
LEGAL UNCERTAINTIES AND GOVERNMENT REGULATION COULD ADD ADDITIONAL COSTS TO
DOING BUSINESS ON THE INTERNET AND COULD LIMIT OUR CLIENTS' USE OF THE INTERNET.
The laws governing the Internet remain largely unsettled. It may take
years to determine whether and how existing laws, such as those governing
intellectual property, privacy, libel, taxation and the need to qualify to do
business in a particular state, apply to the Internet. This legal uncertainty
could slow the growth in Internet use and decrease the acceptance of the
Internet as a commercial medium, which could harm our business.
In response to this legal uncertainty and the growing use of the
Internet, laws and regulations directly applicable to communications or commerce
over the Internet are becoming more prevalent. The adoption or modification of
laws or regulations relating to the Internet and Internet-based businesses could
harm our business.
OUR STOCK PRICE HAS BEEN VOLATILE.
The stock market in general, and the market for technology and
Internet-related companies in particular, has recently experienced extreme
volatility that has often been unrelated to the operating performance of
particular companies. During the year ended December 31, 1999, the per share
sales price of our common stock on the Nasdaq National Market System has
fluctuated from a low of $3.125
9
<PAGE> 11
to a high of $9.50. We believe that the volatility of our stock price does not
necessarily relate to our performance and is broadly consistent with volatility
experienced in our industry. Prices for our common stock are determined in the
marketplace and may be influenced by many factors including factors that are
beyond our control, such as prevailing market conditions, changes in earnings
estimates by industry research analysts, and general economic, industry and
market conditions. In addition, in order to respond to competitive developments,
we may from time to time make pricing, service or marketing decisions that could
harm our business. Also, our operating results in one or more future quarters
may fall below the expectations of securities analysts and investors. In either
case, the trading price of our common stock would likely decline.
WE HAVE NOT PAID ANY DIVIDENDS IN THE PAST AND DO NOT EXPECT TO PAY ANY
DIVIDENDS IN THE FORESEEABLE FUTURE.
We have never paid dividends on our common stock and do not anticipate
paying cash dividends in the foreseeable future. We intend to retain any
earnings to finance the development of our business and, consequently, may never
pay cash dividends. Our bank line of credit prohibits the payment of dividends.
RISKS RELATED TO OUR BUSINESS AFTER THE MERGER
Assuming the merger with Cereus is consummated, our stockholders will
be subject to the following risks in addition to the ones set forth above.
CEREUS IS A DEVELOPMENT STAGE COMPANY AND HAS A LIMITED OPERATING HISTORY.
Cereus has only a limited operating history in its e-business and B2B
technology business, and its prospects must be evaluated with a view to the
risks encountered by a company in an early stage of development, particularly in
light of the uncertainties relating to the new and evolving markets in which
Cereus intends to operate and the acceptance of Cereus's business model. In
addition, Cereus's limited operating history in its e-business and B2B
technology business makes the prediction of its future operating results
difficult or impossible.
CEREUS HAS A HISTORY OF LOSSES AND THE COMBINED COMPANY MAY NOT BE PROFITABLE IN
THE FUTURE.
Cereus had a net loss of $18.6 million for the six months ended June
30, 2000 and a net loss of $7.2 million for the year ended December 31, 1999.
Further, executing the combined company's business strategy and expanding its
services will require significant additional capital and other expenditures.
Accordingly, we anticipate continuing to generate net losses in the future.
THE COMBINED COMPANY WILL DEPEND ON KEY PERSONNEL.
The combined company will be highly dependent on the services of
several key executive officers and technical employees, many of whom could be
difficult to replace and the loss of any of whom could have a material adverse
effect on its business, financial condition and results of operations. The
combined company will enter into executive employment agreements with each of
its Chief Executive Officer, Chief Operating Officer and Chief Financial
Officer. In addition, the combined company will need to hire additional skilled
personnel to support the continued growth of its business. The market for
skilled personnel, especially those with the technical abilities required by the
combined company, is currently very competitive, and the combined company must
compete with much larger companies with significantly greater resources to
attract and retain such personnel. In addition, the senior officers of the
combined company after the merger have worked together for less than one year.
There can be no assurance that they will function successfully as a management
team to implement the combined company's strategy.
WE MAY BE UNABLE TO SUCCESSFULLY INTEGRATE OUR OPERATIONS.
The merger involves the integration of two companies that have
previously operated independently. The difficulties of combining the companies'
operations include integrating personnel with diverse business backgrounds and
combining different corporate cultures. The process of integrating operations
could cause an interruption of, or loss of momentum in, the activities of one or
more of the combined company's businesses and the loss of key personnel. The
diversion of management's attention and any delays or difficulties encountered
in connection with the merger and the
10
<PAGE> 12
integration of the two companies' operations could have an adverse effect on the
business, results of operations or financial condition of the combined company.
WE WILL INCUR SIGNIFICANT MERGER-RELATED AND INTEGRATION-RELATED EXPENSES.
Merger-related transaction costs will be recorded as a component of the
consideration paid for Cereus. These merger-related transaction costs consist
principally of charges related to investment banking fees, professional
services, registration and other regulatory costs, and are expected to be
approximately $1,223,000. Additional fees and costs may be incurred in
connection with the sale of equity or assets necessary to satisfy a condition to
consummation of the merger. In addition, we expect to incur pre-tax charges to
operations to reflect costs associated with combining the operations of the two
companies. These charges will be determined and recorded after the merger.
Additional unanticipated expenses may be incurred in the integration of our
businesses. Although we expect that the elimination of duplicative expenses as
well as the realization of other efficiencies related to the integration of the
businesses may result in cost savings, we cannot assure you that these benefits
will be achieved in the near term or at all.
SELLING STOCKHOLDERS
The selling stockholders may use this prospectus for the resale of
shares of our common stock being registered hereunder, although no selling
stockholder is obligated to sell any such shares. Of the 3,648,788 shares of
common stock offered by this prospectus, 180,000 shares were issued to selling
stockholders in a private placement on June 30, 2000, up to 175,000 shares are
issuable to selling stockholders in exchange for services rendered to us,
377,116 shares are issuable upon exercise of certain warrants and up to
2,916,672 shares are issuable upon the conversion of certain convertible
debentures. The selling stockholders who hold warrants and convertible
debentures are not required to exercise the warrants for, or convert the
debentures into, shares of common stock. None of the selling stockholders is an
affiliate of Eltrax.
The following table sets forth certain information regarding the
selling stockholders and the shares of common stock beneficially owned by each
of them. All information contained in the table is as of August 28, 2000. We are
not able to estimate the amount of shares that will be held by the selling
stockholders after the completion of this offering because those selling
stockholders may offer all or some of the shares and because there currently are
no agreements, arrangements or understandings with respect to the sale of any of
their shares. The following table assumes that all of the shares being
registered will be sold.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
Shares Beneficially
Owned After
Shares of Common Completion of
Stock Beneficially Number of the Offering (2)(3)
Owned Prior to the Shares -------------------
Offering (1) Being Offered Number Percent
Selling Stockholder ------------ ------------- ------ -------
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PNC Bank, National Association 12,532(4) 12,532(4) 0 *
---------------------------------------------------------------------------------------------------------------
Mark Tesio 78,750(5) 78,750(5) 0 *
---------------------------------------------------------------------------------------------------------------
Scott F. Koch 38,500(6) 38,500(6) 0 *
---------------------------------------------------------------------------------------------------------------
H. David Coherd 38,500(7) 38,500(7) 0 *
---------------------------------------------------------------------------------------------------------------
Robert L. Rosenstein 19,250(8) 19,250(8) 0 *
---------------------------------------------------------------------------------------------------------------
Bay Harbor Investments, Inc. 1,640,628(9) 1,640,628(9) 0 *
---------------------------------------------------------------------------------------------------------------
Strong River Investments, Inc. 1,640,628(9) 1,640,628(9) 0 *
---------------------------------------------------------------------------------------------------------------
E.piphany, Inc. 180,000 180,000 0 *
---------------------------------------------------------------------------------------------------------------
TOTAL 3,648,788 3,648,788 0 *
---------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 13
* Less than 1% of the outstanding shares of common stock.
(1) The number set forth in this column is the number of shares of common
stock held by each such selling stockholder and/or the number of shares of
common stock that would be received upon an exercise of warrants or
debentures held by each such selling stockholder that are exercisable
within 60 days of the date of this prospectus.
(2) Assumes that all shares of common stock being offered and registered
hereunder are sold, although no selling stockholder is obligated to sell
any such shares.
(3) Based upon 26,093,109 shares of common stock outstanding as of August 21,
2000.
(4) Shares of common stock issuable upon exercise of warrants.
(5) Includes 22,500 shares issued on July 27, 2000, plus an additional 15,000
shares we are obligated to issue to such selling stockholder if certain
events outside of the selling stockholder's control occur and 41,250
shares we are obligated to issue, but which may not be issued, pursuant to
an adjustment formula.
(6) Includes 11,000 shares issued on July 27, 2000, plus an additional 7,335
shares we are obligated to issue to such selling stockholder if certain
events outside of the selling stockholder's control occur and 20,165
shares we are obligated to issue, but which may not be issued, pursuant to
an adjustment formula.
(7) Includes 11,000 shares issued on July 27, 2000, plus an additional 7,335
shares we are obligated to issue to such selling stockholder if certain
events outside of the selling stockholder's control occur and 20,165
shares we are obligated to issue, but which may not be issued, pursuant to
an adjustment formula.
(8) Includes 5,500 shares issued on July 27, 2000, plus an additional 3,667
shares we are obligated to issue to such selling stockholder if certain
events outside of the selling stockholder's control occur and 10,083
shares we are obligated to issue, but which may not be issued, pursuant to
an adjustment formula.
(9) Includes 182,292 shares of common stock issuable upon exercise of
warrants and 1,458,336 shares to be issued upon conversion of convertible
debentures.
This prospectus also covers any additional shares of common stock that become
issuable in connection with the shares being registered by reason of any stock
dividend, stock split, recapitalization or other similar transaction effected
without receipt of consideration which results in an increase in the number of
our outstanding shares of common stock.
USE OF PROCEEDS
We will not receive any of the proceeds of any sale by the selling
stockholders.
PLAN OF DISTRIBUTION
The selling stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or
12
<PAGE> 14
trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. The selling stockholders may
use any one or more of the following methods when selling shares:
- ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
- block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
- an exchange distribution in accordance with the rules of the applicable
exchange;
- privately negotiated transactions;
- short sales;
- broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, if available, rather than under this prospectus.
The selling stockholders may also engage in short sales against the
box, puts and calls and other transactions in our securities or derivatives of
our securities and may sell or deliver shares in connection with these trades.
The selling stockholders may pledge their shares to their brokers under the
margin provisions of customer agreements. If a selling stockholder defaults on a
margin loan, the broker may, from time to time, offer and sell the pledged
shares.
Broker-dealers engaged by the selling stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933 in connection with such sales. In such
event, any commissions received by such broker-dealers or agents 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.
The Company is required to pay all fees and expenses incident to the
registration of the shares, including fees and disbursements of counsel to
certain of the selling stockholders. The Company has agreed to indemnify the
selling stockholders against certain losses, claims, damages and liabilities
including liabilities under the Securities Act.
LEGAL MATTERS
The legality of the common stock offered hereby will be passed upon by
Jaffe, Raitt, Heuer & Weiss, Professional Corporation, Detroit, Michigan. As of
August 29, 2000, certain shareholders of Jaffe, Raitt, Heuer & Weiss, P.C.
beneficially owned approximately 94,050 shares of our common stock.
EXPERTS
The financial statements incorporated in this registration statement by
reference to our Current Report on Form 8-K filed with the Commission on August
28, 2000 have been incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in auditing and accounting. The audited consolidated
balance sheet of Sulcus Hospitality Technologies Corp. as of December 31, 1998
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the two years in the period ended December 31, 1998 (not
presented separately in our financial statements) have been incorporated in
reliance on the report of Crowe Chizek and Company, LLP, independent
accountants, given on the authority of that firm as experts in auditing and
accounting.
The financial statements of Cereus and subsidiaries at December 31,
1999, and for the year ended December 31, 1999, have been incorporated in this
registration statement by reference to our Current Report on Form 8-K filed with
the Commission on August 30, 2000 in reliance upon the report of
13
<PAGE> 15
KPMG, LLP, independent certified public accountants, incorporated herein by
reference and upon the authority of said firm as experts in accounting and
auditing.
The financial statements of Cereus and subsidiaries at December 31,
1998, and for the year ended December 31, 1998, have been incorporated in this
registration statement by reference to our Current Report on Form 8-K filed with
the Commission on August 30, 2000 in reliance upon the report of Moore Stephens
Frost, PLC, independent certified public accountants, incorporated herein by
reference and upon the authority of said firm as experts in accounting and
auditing.
14
<PAGE> 16
<TABLE>
<S> <C>
=========================================================== ========================================================
No dealer, salesperson or other individual has been
authorized to give any information or to make any
representations not contained or incorporated by 3,648,788 SHARES
reference in this prospectus in connection with any
offering to be made by the prospectus. If given or made,
such information or representations must not be relied
upon as having been authorized by Eltrax. This
prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the Securities, in any
jurisdiction where, or to any person to whom, it is
unlawful to make such offer or solicitation. Neither the
delivery of this prospectus nor any offer or sale made
hereunder shall, under any circumstance, create an
implication that there has been no change in the facts
set forth in this prospectus or in the affairs of Eltrax
since the date hereof.
ELTRAX SYSTEMS, INC.
</TABLE>
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
COMMON STOCK
Page
----- --------------
<S> <C>
ABOUT THIS
PROSPECTUS......................................2
WHERE YOU CAN FIND PROSPECTUS
MORE INFORMATION................................3
THE COMPANY........................................4 --------------
RISK FACTORS.......................................6
SELLING STOCKHOLDERS..............................11
USE OF PROCEEDS...................................12
PLAN OF DISTRIBUTION..............................12
LEGAL MATTERS.....................................13
EXPERTS...........................................13
, 2000
------------
=========================================================== ========================================================
</TABLE>
15
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be incurred in
connection with the issuance and distribution of the securities being
registered.
<TABLE>
<S> <C>
Registration Fee.............................................$ 4,365
Legal Fees and Expenses....................................... 4,000
Accounting Fees and Expenses.................................. 2,000
Miscellaneous................................................. 635
-------
Total........................................................$11,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article V of Eltrax's Amended and Restated Articles of Incorporation
limits the liability of its directors to the fullest extent permitted by the
Minnesota Business Corporation Act (the "MBCA"). Specifically, directors of
Eltrax will not be personally liable for monetary damages for breach of
fiduciary duty as directors, except liability for (i) any breach of the duty of
loyalty to Eltrax or its shareholders, (ii) acts or omissions not in good faith
or that involve intentional misconduct or a knowing violation of law, (iii)
dividends or other distributions of corporate assets that are in contravention
of certain statutory or contractual restrictions, (iv) violations of certain
Minnesota securities laws, or (v) any transaction from which the director
derives an improper personal benefit.
Article IV of Eltrax's Amended and Restated Articles of Incorporation
gives Eltrax the power and authority to provide indemnification to officers,
directors, employees and agents of Eltrax to the fullest extent permissible
under the MBCA. Section 302A.521 of the MBCA requires that Eltrax indemnify any
director, officer or employee made or threatened to be made a party to a
proceeding, by reason of the former or present official capacity of the person,
against judgments, penalties, fines, settlements and reasonable expenses
incurred in connection with the proceeding if certain statutory standards are
met. "Proceeding" means a threatened, pending or completed civil, criminal,
administrative, arbitration or investigative proceeding, including a derivative
action in the name of Eltrax. Reference is made to the detailed terms of Section
302A.531 of the MBCA for a complete statement of such indemnification rights.
Article VII of Eltrax's Restated Bylaws provides that Eltrax shall
indemnify such persons, for such expenses and liabilities, in such manner, under
such circumstances, and to such extent, as permitted by the MBCA, as now enacted
or hereafter amended, provided that a determination is made in each case, in the
manner required by such statute, that the person seeking indemnification is
eligible therefor.
Eltrax maintains directors' and officers' liability insurance,
including a reimbursement policy in favor of Eltrax.
ITEM 16. EXHIBITS
See Index to Exhibits.
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:
(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 this registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value securities offered would not exceed that which
was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table set forth in this registration
statement; and
II-1
<PAGE> 18
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
registration statement or any material change to such
information in this registration statement;
provided, however, that subparagraphs (i) and (ii) do not apply if 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 Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(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 herein, 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.
The undersigned registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
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 provisions 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 against the registrant 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-2
<PAGE> 19
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
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 Southfield, State of Michigan, on August 31, 2000.
ELTRAX SYSTEMS, INC.,
a Minnesota corporation
By: /s/ William P. O'Reilly
---------------------------------------------
William P. O'Reilly
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Eltrax Systems, Inc. hereby constitutes and appoints William P.
O'Reilly his attorney-in-fact and agent, with full power of substitution and
resubstitution for him in any and all capacities, to sign any or all amendments
or post-effective amendments to this Registration Statement, and to file the
same, with exhibits thereto and other documents in connection therewith or in
connection with the registration of the shares of Common Stock under the
Securities Act of 1933, with the Securities and Exchange Commission, granting
unto such attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary in connection with such
matters as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that such attorney-in-fact and agent or his
substitute or substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ William P. O'Reilly Chairman of the Board, President, August 31, 2000
------------------------------------------ Chief Executive Officer and ---
William P. O'Reilly Director
/s/ William Taylor Director August 31, 2000
------------------------------------------ ---
William Taylor
/s/ Patrick J. Dirk Director August 31, 2000
------------------------------------------ ---
Patrick J. Dirk
/s/ Stephen E. Raville Director August 31, 2000
------------------------------------------ ---
Stephen E. Raville
/s/ James C. Barnard Director August 31, 2000
------------------------------------------ ---
James C. Barnard
/s/ William A. Fielder III Chief Financial Officer, Secretary August 31, 2000
------------------------------------------ and Treasurer (principal ---
William A. Fielder III accounting and financial officer)
</TABLE>
II-3
<PAGE> 20
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Item Item Method of Filing
---- ---- ----------------
<S> <C> <C>
2.1 Agreement and Plan of Merger dated as of Incorporated by reference to Appendix A to the
June 12, 2000 among Eltrax, Solemn and proxy statement/prospectus issued in connection
Cereus with the Company's Registration Statement on
Form S-4 (File No. 333-43224).
2.2 Second Amended and Restated Agreement Incorporated by reference to Appendix A to the
and Plan of Merger dated as of June 27, proxy statement/prospectus issued in connection
2000 among Eltrax, Solemn and Cereus with the Company's Registration Statement on
Form S-4 (File No. 333-43224).
2.3 Agreement and Plan of Merger dated as of Incorporated by reference to Exhibit 2.1
May 14, 1996 among Eltrax, Rudata to Eltrax's Current Report on Form 8-K filed June
Acquisition Corporation, Nordata 3, 1996.
Acquisition Corporation, Rudata, Inc.,
Nordata, Inc. and Howard B. and Ruby Lee
Norton, as amended pursuant to that First
Amendment to Agreement and Plan of
Merger dated as of May 17, 1996 among
the same parties.
2.4 Agreement and Plan of Merger dated as of Incorporated by reference to Exhibit 2.1 to
October 31, 1996 among Eltrax, ANS Eltrax's Current Report on Form 8-K filed
Acquisition Corporation, Atlantic Network November 12, 1996.
Systems, Inc. and Walter C. Lovett,
Douglas L. Roberson and B.Taylor
Koonce.
2.5 Agreement and Plan of Merger dated as of Incorporated by reference to Exhibit 2.1 to
May 14, 1997 among Eltrax, EJG Techline Eltrax's Current Report on Form 8-K filed May
Acquiring Corporation, EJG Techline 14, 1997.
Incorporated and Edward J. and Kathleen
M. Gorlitz and Colin E. and Diane C.
Quinn.
2.6 Agreement and Plan of Merger dated as of Incorporated by reference to Exhibit 2.1 to
July 1, 1997 among Eltrax, Four Corners Eltrax'sCurrent Report on Form 8-K filed July
Acquiring Corporation, Four Corners 1, 1997.
Technology, Inc. and Robert A. Hughes,
Joel J. Blickenstaff and David Noall.
2.7 Agreement and Plan of Merger dated as of Incorporated by reference to Exhibit 2.1 to
August 15, 1997 among Eltrax, Hi-Tech Eltrax's Current Report on Form 8-K filed
Acquiring Corporation, Hi-Tech August 15, 1997.
Connections, Inc. and Edward C. Barrett,
Daniel M. Christy, David R. Hurlbrink,
David R. Spatz, Raymond H. Melcher and
Timothy E. Devlin.
2.8 Agreement and Plan of Merger dated as of Incorporated by reference to Exhibit 2.1 to
October 31, 1997 among Eltrax, Eltrax's Current Report on Form 8-K filed
DataComm Acquiring Corporation, October 3, 1997.
Midwest Acquiring Corporation, DataCom
Associates, Inc., Midwest Telecom
Associates, Inc. and John M. Good, and
Harold Madison.
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2.9 Agreement and Plan of Merger dated as of Incorporated by reference to Exhibit 2.1 to
August 31, 1998 among Eltrax, Encore Eltrax's Current Report on Form 8-K filed
Acquiring Corporation, Encore Systems, Inc., September 10, 1998.
Global Systems and Support, Inc.,
Five Star Systems, Inc., Penelope A.
Sellers, and Joseph T. Dyer.
2.10 Agreement and Plan of Merger dated as of Incorporated by reference to Exhibit 2.1 to
November 11, 1998 among Eltrax, Sulcus Eltrax's Registration Statement on Form S-4
Hospitality Technologies Corp. and Sulcus (File No.333-68699).
Acquiring Corporation.
4.1 Specimen form of Eltrax's common stock Incorporated by reference to Exhibit 4.1 to
certificate. Eltrax's Registration Statement on Form S-18
(File No.33-51456).
4.2 Warrant, dated as of October 31, 1996, to Incorporated by reference to Exhibit 10.4 to
purchase 106,250 shares of Eltrax common Eltrax's Current Report on Form 8-K filed
stock granted to Walter C. Lovett. November 12, 1996.
4.3 Warrant, dated as of October 31, 1996, to Incorporated by reference to Exhibit 10.5 to
purchase 106,250 shares of Eltrax common Current Report on Form 8-K filed
stock granted to Douglas L. Roberson. November 12, 1996.
4.4 Warrant dated as of September 23, 1997 to Incorporated by reference to Exhibit 4.5 to Eltrax's
purchase 240,000 shares of Eltrax common stock Annual Report on Form 10-KSB for the year ended
granted to Morgan Q. Payne. December 31, 1997.
4.5 Convertible Debenture dated July 27, 2000 Incorporated by reference to Exhibit 4.5 to the
executed by Eltrax in favor of Strong River Company's Registration Statement on Form S-4 (File
Investments, Inc. No. 333-43224).
4.6 Convertible Debenture dated July 27, 2000 Incorporated by reference to Exhibit 4.6 to the
executed by Eltrax in favor of Bay Harbor Company's Registration Statement on Form S-4 (File
Investments, Inc. No. 333-43224).
4.7 Registration Rights Agreement dated July 27, Incorporated by reference to Exhibit 4.7 to the
2000 among Eltrax, Strong River Investments, Company's Registration Statement on Form S-4 (File
Inc. and Bay Harbor Investments, Inc. No. 333-43224).
4.8 Registration Rights Agreement dated June 29, Incorporated by reference to Exhibit 4.8 to the
2000 between Eltrax and E.piphany, Inc. Company's Registration Statement on Form S-4 (File
No. 333-43224).
4.9 Amended and Restated Registration Rights Incorporated by reference to Exhibit 4.9 to the
Agreement dated June 23, 2000 between Eltrax Company's Registration Statement on Form S-4 (File
and Cereus. No. 333-43224).
4.10 Warrant dated as of July 27, 2000 to purchase Incorporated by reference to Exhibit 4.10 to the
104,168 shares of Eltrax common stock granted Company's Registration Statement on Form S-4 (File
to Strong River Investments, Inc. No. 333-43224).
4.11 Warrant dated as of July 27, 2000 to purchase Incorporated by reference to Exhibit 4.11 to the
104,168 shares of Eltrax common stock granted Company's Registration Statement on Form S-4 (File
to Bay Harbor Investments, Inc. No. 333-43224).
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4.12 Warrant dated as of July 27, 2000 to purchase Incorporated by reference to Exhibit 4.12 to the
26,041 shares of Eltrax common stock granted to Company's Registration Statement on Form S-4 (File
Strong River Investments, Inc. No. 333-43224).
4.13 Warrant dated as of July 27, 2000 to purchase Incorporated by reference to Exhibit 4.13 to the
26,041 shares of Eltrax common stock granted to Company's Registration Statement on Form S-4 (File
Bay Harbor Investments, Inc. No. 333-43224).
4.14 Warrant dated as of July 27, 2000 to purchase Incorporated by reference to Exhibit 4.14 to the
52,083 shares of Eltrax common stock granted to Company's Registration Statement on Form S-4 (File
Strong River Investments, Inc. No. 333-43224).
4.15 Warrant dated as of July 27, 2000 to purchase Incorporated by reference to Exhibit 4.15 to the
52,083 shares of Eltrax common stock granted to Company's Registration Statement on Form S-4 (File
Bay Harbor Investments, Inc. No. 333-43224).
5.1 Opinion of Jaffe, Raitt, Heuer & Weiss, Filed herewith.
Professional Corporation, regarding legality of
securities being registered.
23.1 Consent of PricewaterhouseCoopers LLP. Filed herewith.
23.2 Consent of Crowe, Chizek and Company LLP. Filed herewith.
23.3 Consent of KPMG, LLC Filed herewith.
23.4 Consent of Moore Stephens Frost, PLC Filed herewith.
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