<PAGE>
As Filed with the Securities and Exchange Commission on July ____, 1997
Registration No. 33- ___________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
COUNTRY WIDE TRANSPORT SERVICES, INC.
(Exact name of Registrant as Specified in its Charter)
DELAWARE 95-4105996
(State or Other Jurisdiction) (I.R.S. Employer
of Incorporation or Organization) Identification No.)
119 Despatch Drive
East Rochester, New York 14445
(716) 381-5470
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Office)
Timothy Lepper, President
Country Wide Transport Services, Inc.
119 Despatch Drive
East Rochester, NY 14445
(716) 381-5470
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copies of all communications to:
Richard H. Holtzberg, Esquire
Holtzberg & Conway
349 W. Commercial St., Suite 3000
East Rochester, New York 14445
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
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, check the following box. /X/
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. / /
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. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE:
Title of Shares to be Amount to be Proposed Maximum Proposed Maximum Amount of
Registered Registered Offering Price Per Aggregate Offering Price Registration Fee
Share
--------------------- ------------ ------------------ ------------------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.10 3,288,000 $ 1.32 (1) $ 4,340,160 (1) $ 1,316
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457 of the Securities Act of 1933. Specifically, the
registration fee is calculated based on the average of the reported bid and
asked prices of the securities as of July 15, 1997.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said section 8(a), may
determine.
1
<PAGE>
SUBJECT TO COMPLETION DATED JULY 17, 1997
3,288,000 SHARES
COMMON STOCK
COUNTRY WIDE TRANSPORT SERVICES, INC.
The shares of Common Stock, par value $0.10 per share (the "Common Stock"),
of Country Wide Transport Services, Inc. (the "Company") offered by this
Prospectus (the "Shares") are offered for sale by holders of the Company's
Common Stock (the "Selling Shareholders"). See "Selling Shareholders." The
Company has agreed to pay all of the expenses of this offering but will not
receive any of the proceeds from the sale of the Selling Shareholders Shares
being offered hereby.
A COPY OF THE COMPANY'S LATEST FORM 10-K REPORT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS REQUIRED TO BE DELIVERED WITH THIS PROSPECTUS.
All brokerage commissions and other similar expenses incurred by the
Selling Shareholders will be borne by them. The aggregate proceeds to the
Selling Shareholders from the sale of the Shares will be the purchase price of
the Shares sold, less the aggregate agents' commissions and underwriters'
discounts, if any, and other expenses of issuance and distribution not borne by
the Company. See "Use of Proceeds" and "Plan of Distribution."
The Common Stock is quoted on the National Association of Securities
Dealers OTC Bulletin Board under the symbol "CWTV." The closing bid and asked
prices per share reported on the OTC Bulletin Board on July 15, 1997 were $1-1/8
and $1-1/2 respectively.
The Selling Shareholders and any broker-dealers, agents or underwriters
that participate with the Selling Shareholders in the distribution of the
Shares, may be deemed "Underwriters," as that term is defined in the Securities
Act of 1993, as amended (the "Securities Act"), and any commissions received by
them and any profit on the resale of the Shares purchased by them may be deemed
underwriting commissions or discounts under the Securities Act. The Shares to
be offered by the Selling Shareholders may be offered in one or more
transactions in the over-the-counter market or in negotiated transactions or a
combination of such methods of sale, at market prices prevailing at the time of
sale, at prices related to those prevailing market prices, or at negotiated
prices. The Shares to be offered by the Selling Shareholders may be sold either
(a) to a broker or dealer as principal for resale by such broker or dealer for
its account pursuant to this Prospectus (for example, in transactions with a
"market maker") or (b) in brokerage transactions, including transactions in
which the broker solicits purchasers.
-------------------------
No dealer, salesman or other person is authorized to give any information
or to make any representations other than those contained or incorporated by
reference in this Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company
or the Selling Shareholders, or any underwriter, dealer or agent. This
Prospectus and any supplement thereto shall not constitute an offer to sell, or
the solicitation of an offer to buy, any of the Shares offered hereby 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 sale made
hereunder shall, under any circumstances, create an implication that there has
been no change in the affairs of the Company since the date hereof or thereof,
or that the information contained herein is correct as of any time subsequent to
the date hereof.
-------------------------
THE SECURITIES OFFERED HEREBY 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.
-------------------------
The date of this Prospectus is_________, 1997
---------
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the consolidated financial statements, including notes thereto
(the "Consolidated Financial Statements"), which are incorporated by reference
into this Prospectus. Unless otherwise indicated, all share, per share, and
financial information set forth herein reflects the one-for-five reverse stock
split effective May 15, 1997. Investors should carefully consider the
information set forth under the heading "Risk Factors." As used herein, the
"Company" means Country Wide Transport Services, Inc. and its subsidiaries,
except where the context indicates otherwise, and a "fiscal year" means the
twelve month period ending on June 30th of the specified year.
THE COMPANY
Country Wide Transport Services, Inc. ("Country Wide" or "Company") with
its principal executive offices at 119 Despatch Drive, East Rochester, NY 14445,
telephone number (716) 381-5470.
THE OFFERING
Common Stock Offered by the Selling Shareholders. . . . . 3,288,000 shares
Common Stock to be Outstanding after the Offering . . . . 4,248,117 shares (1)
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . No proceeds to the
Company
NASD OTC Bulletin Board Market Symbol . . . . . . . . . . CWTV
(1) Does not include 850,000 shares issuable to Company officers at $0.15 per
share under outstanding options which expire on May 1, 2002.
3
<PAGE>
RISK FACTORS
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK, INCLUDING THE
RISKS DESCRIBED BELOW. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE
SPECIFIC FACTORS SET FORTH BELOW, AS WELL AS THE OTHER INFORMATION CONTAINED IN
OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS, BEFORE DECIDING WHETHER TO
INVEST IN THE SHARES OFFERED HEREBY.
THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE CONTAIN
CERTAIN "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), WHICH REPRESENT THE
COMPANY'S EXPECTATIONS OR BELIEFS, INCLUDING, BUT NOT LIMITED TO, STATEMENTS
CONCERNING INDUSTRY PERFORMANCE, THE COMPANY'S OPERATIONS, PERFORMANCE,
FINANCIAL CONDITION, GROWTH AND ACQUISITION STRATEGIES, MARGINS AND GROWTH IN
SALES OF THE COMPANY'S PRODUCTS. FOR THIS PURPOSE, ANY STATEMENTS CONTAINED IN
THIS PROSPECTUS THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY BE DEEMED TO BE
FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
WORDS SUCH AS "MAY," "WILL," "EXPECT," "BELIEVE," "ANTICIPATE," "INTEND,"
"COULD," "ESTIMATE" OR "CONTINUE" OR THE NEGATIVE OR OTHER VARIATIONS THEREOF OR
COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.
THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES,
CERTAIN OF WHICH ARE BEYOND THE COMPANY'S CONTROL, AND ACTUAL RESULTS MAY DIFFER
MATERIALLY DEPENDING ON A VARIETY OF IMPORTANT FACTORS, INCLUDING THOSE
DESCRIBED BELOW UNDER THIS "RISK FACTORS" SECTION AND ELSEWHERE IN THIS
PROSPECTUS AND THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE.
Investment in the Shares is highly speculative and subject to numerous and
substantial risks. Therefore, purchase of the Shares is suitable only for those
persons who can afford to lose their entire investment. There is a minimum
public market for the Shares. Prospective purchasers of Shares should carefully
consider the risk factors relating to the business of the Company including, but
not limited to, the risk factors discussed below, and should consult all the
other information provided in this Prospectus (including the information
incorporated by reference) before making any purchase of Shares.
SUBSTANTIAL LOSSES
During the fiscal years ended June 30, 1995, 1996 and 1997, the Company
sustained losses of $5,411,000, $1,470,000 and $__________ respectively. While
management believes the Company has made sufficient changes to allow it to
return to profitability, there can be no assurance that the Company will not
continue to incur losses.
MATERIAL DISPOSITIONS OF ASSETS
From September 1995 through January 1997 all but one of the Company's
subsidiaries made substantial dispositions of assets and those subsidiaries were
liquidated. While the remaining subsidiary, Vertex Transportation, Inc., has
been profitable during the fiscal years ended 1995, 1996 and 1997, there can be
no assurance that the remaining business of that subsidiary will continue to be
profitable or that some unforeseen liability of the liquidated subsidiaries will
not affect the Company's business, assets, or liabilities in the future.
MOTOR CARRIER INDUSTRY
The business of the Company's remaining subsidiary, Vertex Transportation,
Inc., includes negotiation of motor carrier transportation services on a
short-term basis and thus is substantially affected by the availability of such
transportation services, as well as by the overall pricing and other competitive
considerations of that industry as compared to those of alternative
transportation industries.
GOVERNMENT REGULATION
Motor Carrier's are subject to regulation by various federal and state
governmental agencies, including the United States Department of Transportation.
These regulatory agencies have broad powers, and the motor carrier industry is
subject to regulatory and legislative changes that can affect the economics of
the industry by requiring changes in the operating practices or influencing the
demand for, and the costs of providing, services to shippers.
4
<PAGE>
EFFECTS OF FUEL, INSURANCE AND INTEREST RATES
Fuel prices and insurance premiums are expenses over which the Company has
little or no control. If these costs are increased to the Company's
transportation providers, the increases will be passed on to the Company by
increased rates. These increased rates, if not offset, will reduce the
Company's profitability.
ABSENCE OF DIVIDENDS
The Company anticipates that all of its earnings in the foreseeable future,
if any, will be retained for the development and expansion of its business, and
accordingly, has no current plans to pay dividends. Payment of dividends is
within the discretion of the Company's Board of Directors and will depend, among
other factors, upon the Company's earnings, financial condition, and capital
requirements. The Company's subsidiary, which now conducts substantially all
the business operations of the Company, has line-of-credit agreements which
contain provisions limiting the ability of the subsidiary to pay dividends.
LIQUIDITY AND MARKET PRICE
The Company was de-listed from trading on The Nasdaq SmallCap Market on
August 13, 1996 due to its failure to maintain the necessary equity and other
criteria of The Nasdaq Stock Market. The OTC Bulletin Board on which the
Company's shares are now quoted must be viewed as having very little liquidity,
and any amount of purchasing or selling of Company shares on that market could
cause significant and abrupt price changes in the reported market prices for the
Shares.
COMPETITIVE INDUSTRY
The Company is participating in a highly competitive industry and rates
demanded by competitors directly control the rates for which the Company can
render its services. In the event competitors rates are reduced, any such
reduction will have the effect of reducing the rates of the Company and thereby
reducing the Company's opportunities to earn profits.
MAINTENANCE OF CAPITAL
In order for the Company to attract the necessary transportation providers,
it is necessary for the Company to maintain sufficient capital to ensure timely
and current payment of transportation fees to these providers. Any reduction of
capital below that which is necessary to properly attract these transportation
providers will have a substantial adverse effect on the profitability of the
Company.
GENERAL ECONOMIC RISK
The major risk encountered by a logistics services company is that it will
not generate sufficient income to meet its operating expenses and debt service.
Its net income is entirely dependent upon the continuation of the service to its
customers as well as the existence of available transportation providers. The
net income of the Company may be affected by many factors including: (a) bad
debts, insolvency and bankruptcy of customers; (b) adverse changes in general
economic conditions; (c) adverse changes in transportation laws; (d)
unanticipated increases in operating costs; (e) increases in transportation and
other taxes; and (f) increases in interest rates on funds borrowed by the
Company not offset by increased revenues.
DEPENDENCE ON SIGNIFICANT CUSTOMERS
The success of the Company depends heavily on the business it conducts with
a limited number of significant customers. For the Company's fiscal years
ending June 30, 1996 and 1997, approximately 25%, and 10% of its net sales were
derived from sales to its two largest customers. The Company has had
long-standing relationships with most of its significant customers; however, it
generally does not have long-term contracts with them and they may unilaterally
reduce or discontinue the purchase of the Company's products without penalty.
The Company's loss of (or the failure to retain a significant amount of business
with) any of its significant customers could have a material adverse effect on
the Company.
USE OF PROCEEDS
The Shares being offered are for the account of the Selling Shareholders.
Accordingly, the Company will receive none of the proceeds from the sale of the
Shares.
5
<PAGE>
PLAN OF DISTRIBUTION
The Shares offered hereby are being sold by the Selling Shareholders acting
as principal for their own accounts. The Company will receive none of the
proceeds from this offering.
The distribution of the Shares by the Selling Shareholders is not subject
to any underwriting agreement. The Company expects that the Selling
Shareholders will sell their shares covered by this Prospectus through customary
brokerage channels, either through broker-dealers acting as agents or brokers
for the Selling Shareholders, or through broker-dealers acting as principals,
who may then resell their Shares in the over-the-counter market, or at private
sales or otherwise. The Selling Shareholders may sell Shares in such
transactions at market prices prevailing at the time of sale, at prices related
to the prevailing market prices, or at negotiated prices. The Selling
Shareholders may effect such transactions by selling Shares through
broker-dealers, and such broker-dealers will receive compensation in the form of
underwriting discounts, concessions, or commissions from the Selling
Shareholders and/or the purchasers of the Shares for whom they may act as agent
(which compensation may be in excess of customary commissions). The Selling
Shareholders and any broker-dealers that participate with the Selling
Shareholders in the distribution of the Shares may be deemed to be underwriters
and any commissions received by such broker-dealers and any profit on resale of
Shares sold by them might be deemed to be underwriting discounts or commissions
under the Securities Act. All expenses of registration incurred in connection
with this offering are being borne by the Company, but all brokerage commissions
and other similar expenses incurred by the Selling Shareholders will be borne by
the Selling Shareholders.
At the time a particular offer of Shares is made, to the extent required, a
supplement to this Prospectus will be distributed which will identify and set
forth the aggregate amount of Shares being offered and the terms of the
offering, including the name or names of any underwriters, dealers or agents,
the purchase price paid by any underwriters for Shares purchased from the
Selling Shareholders, any discounts, commissions and other items constituting
compensation from the Selling Shareholders and any discounts, commissions or
concessions allowed or reallowed or paid to dealers, including the proposed
selling price to the public.
The Selling Shareholders are not restricted as to the price or prices at
which they may sell their Shares. Sales of Shares at less than market prices
may depress the market price of the Company's Common Stock. Moreover, 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.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may not simultaneously engage in market
making activities with respect to the Shares for a period of nine business days
prior to the commencement of such distribution. In addition and without
limiting the foregoing, the Selling Shareholders will be subject to the
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including without limitation rules 10b-2, 10b-6, and 10b-7, which
provisions may limit the timing of purchases and sales of the Shares by the
Selling Shareholders.
In order to comply with certain states' securities laws, if applicable, the
Shares may be sold in such jurisdictions only through registered or licensed
brokers or dealers. In certain states the Shares may not be sold unless the
Shares have been registered or qualified for sale in such state, or unless an
exemption from registration or qualification is available and is obtained.
The Company has agreed to indemnify the Selling Shareholders against
certain liabilities, including liabilities under the Securities Act.
6
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission ("Commission"). Such
reports, proxy statements and other information filed by the Company may be
inspected and copied (at prescribed rates) at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549 and the following regional offices of the Commission: 7 World Trade
Center, Suite 1300, New York, New York 10048 and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. In addition, such
reports, proxy statements and other information can be obtained from the
Commission's web site at http://www.sec.gov. Quotations relating to the Common
Stock appear on the NASD'S OTC Bulletin Board. Such reports, proxy statements
and other information concerning the Company can also be inspected at the
offices of the National Association of Securities Dealers, Inc., 1735 K Street,
N.W., Washington, D.C. 20006.
A COPY OF THE COMPANY'S LATEST FORM 10-K ANNUAL REPORT FILED WITH THE
COMMISSION IS REQUIRED TO BE DELIVERED WITH THIS PROSPECTUS.
The Company has filed with the Commission a Registration Statement on Form
S-2 (the "Registration Statement") under the Securities Act, with respect to the
shares of Common Stock offered hereby (the "Shares"). This Prospectus, which is
a part of the Registration Statement, does not contain all the information set
forth in, or annexed as exhibits to, that Registration Statement, certain
portions of which have been omitted pursuant to rules and regulations of the
Commission. For further information with respect to the Company and the Shares
offered hereby, reference is hereby made to that Registration Statement,
including the exhibits thereto. Copies of the Registration Statement, including
exhibits, may be obtained from the aforementioned public reference facilities of
the Commission upon payment of the prescribed fees, or may be examined without
charge at those facilities. Statements contained herein concerning any document
filed as an exhibit are not necessarily complete and, in each instance,
reference is made to the copy of the document filed as an exhibit to the
Registration Statement. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed or to be filed by the Company with the
Commission under the Exchange Act are incorporated by reference in and made a
part of this Prospectus:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1997 (A copy of the Company's latest Form 10-K is required to
be delivered with this Prospectus.)
(b) all documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of this offering (which shall be deemed to be
incorporated by reference herein and to be a part hereof from the date
of filing of such documents).
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed documents, which are also incorporated or
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. The Company hereby undertakes to provide, without
charge, to each person, including any beneficial owner, to whom a copy of this
Prospectus is delivered, on the written or oral request of each such person, a
copy of any or all the information incorporated herein by reference. Exhibits
to any of such documents, however, will not be provided unless the exhibits are
specifically incorporated by reference into such documents. The requests should
be addressed to the Company's principal executive offices: Attn: Secretary,
119 Despatch Drive, East Rochester, New York 14445, telephone number (716)
381-5470.
7
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth certain information concerning the
beneficial ownership of the Common Stock as of July ____, 1997 and as adjusted
to reflect the sale of 3,288,000 Shares of Common Stock by the Selling
Shareholders.
<TABLE>
<CAPTION>
Shares Beneficially
Shares Beneficially Owned Shares to be Offered for Owned at Completion
Prior to Offering (1) Sale by Selling Shareholders of Offering
--------------------- ---------------------------- -----------
Name of Beneficial Owner Number Percent Number Number Percent
------------------------ ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
Arabella 500,000
c/o Privatim Finance Ag.
ROI Partners 300,000
c/o ROI Partners
Microcap Partners 50,000
c/o ROI Partners
ROI + Lane L/P 60,000
c/o ROI Partners
Pleiades Investment Partners 50,000
c/o ROI Partners
NAVLLC 18,000
c/o ROI Partners
ROI Offshore Fund Ltd 100,000
c/o ROI Partners
Mark Boyer (2) 80,000
c/o ROI Partners
Louis Fenn 50,000
Barry Plost 150,000
Siam Partners II 100,000
Tahoe Partnership I 100,000
E&MRP Trust 200,000
Special Situations Fund III LP 800,000
Special Situations Cayman Fund LP 200,000
Special Situations Private Equity Fund LP 500,000
Timothy Lepper (3)(5) 15,000
Wayne N. Parry (4)(5) 15,000
</TABLE>
The number of Shares which may actually be sold by the Selling Shareholders
will be determined from time to time by the Selling Shareholders and will depend
upon a number of factors, including the price of the Company's Common Stock from
time to time. Because the Selling Shareholders may sell all or none of the
Shares that they hold and because the offering contemplated by this Prospectus
is not being underwritten, no estimate can be given as to the number of Shares
that will be held by the Selling Shareholders upon termination of the offering.
See "Plan of Distribution."
(1) For all shares listed, each person possesses both sole voting and
investment power.
8
<PAGE>
(2) Mark Boyer has been a Director of the Company since 1994. _________ Shares
attributed to Mark Boyer are owned by ROI Partners, ROI & Lane, L.P. or accounts
controlled by ROI Partners. Mr. Boyer is a general partner of ROI Partners and
as such, controls said shares.
(3) Timothy Lepper has been President, Chief Executive Officer and a Director
of the Company since 1995. Mr. Lepper was also previously President of the
Company's subsidiary, Vertex Transportation, Inc. from before its acquisition by
the Company in 1994.
(4) Wayne N. Parry has been a Director of the Company since 1994 and Secretary
of the Company since 1996. Mr. Parry also has succeeded Mr. Lepper as President
of the Company's subsidiary, Vertex Transportation, Inc.
(5) Includes 425,000 Shares issuable to Timothy Lepper and 425,000 Shares
issuable to Wayne N. Parry at $0.15 per Share under outstanding options which
expire on May 1, 2002.
*Represents less than 1% of the Company's outstanding Shares.
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED AND OUTSTANDING CAPITAL STOCK
The authorized capital stock of the Company presently consists of 6,000,000
shares of common stock, par value $0.10 per share (the "Common Stock") and
5,000,000 shares of preferred stock, par value $0.01 per share (the "Preferred
Stock"). The following description of the Common Stock and Preferred Stock is
qualified in its entirety by reference to the Company's Amended and Restated
Certificate of Incorporation and By-laws, which are filed as exhibits to the
Registration Statement of which this Prospectus is a part.
COMMON STOCK
As of the date of this Prospectus, there were 4,248,117 issued and
outstanding shares of Common Stock and outstanding options to purchase
850,000 shares of Common Stock. The options were issued to Timothy Lepper and
Wayne N. Parry, the Company's two senior officers and expire on May 1, 2002.
Each holder of Common Stock is entitled to one vote for each share held. The
holders of Common Stock, voting as a single class, are entitled to elect all
of the directors of the Company.
Holders of Common Stock are entitled to receive ratably such dividends as
may be declared by the Board of Directors out of funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, holders of Common Stock would be entitled to share ratably in the
Company's assets remaining after payment of liabilities and the satisfaction of
any liquidation preference granted to the holders of any outstanding shares of
Preferred Stock. Holders of Common Stock have no preemptive or other
subscription rights. The shares of Common Stock are not convertible into any
other security. The outstanding shares of Common Stock are, and the shares
being offered hereby will be, upon issuance and sale, fully paid and
nonassessable.
DELAWARE LAW
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law ("Delaware Law"), an anti-takeover law. In general, the
statute prohibits a publicly held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date that the person became an interested stockholder unless
(with certain exceptions) the business combination or the transaction in which
the person became an interested stockholder is approved in a prescribed manner.
Generally, a "business combination" includes a merger, asset or stock sale, or
other transaction resulting in a financial benefit to the stockholder.
Generally, an "interested stockholder" is a person who, together with affiliates
and associates, owns (or within three years prior, did own) 15% or more of a
corporation's outstanding voting stock. This provision may have the effect of
delaying, deferring or preventing a change in control of the Company without
further action by the stockholders.
CERTAIN PROVISIONS OF THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION AND BYLAWS
Set forth below is a description of such provisions of the Company's
Amended and Restated Certificate of Incorporation and Bylaws. Such description
is intended as a summary only and is qualified in its entirety by reference to
the Company's Amended and Restated Certificate of Incorporation and Bylaws,
which are included as exhibits to the Registration Statement of which this
Prospectus forms a part.
NUMBER OF DIRECTORS AND AMENDMENT. The Bylaws provide that there shall be
no less than three nor more than seven directors sitting on the Board of
Directors and that the number of directors shall be fixed by majority approval
of the Board of Directors or by a vote of a majority of the stockholders of the
Company. Currently, the number of directors is set at three. In addition, the
Bylaws provide that such provision establishing the number of directors may only
be amended by a vote of a majority of the stockholders of the Company or by
majority approval of the Board of Directors.
9
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SPECIAL STOCKHOLDER MEETINGS. The Bylaws provide that special meetings
of the stockholders, for any purpose or purposes, unless required by law,
shall be called by the President, or by the President or Secretary if
requested in writing by a majority of the entire Board of Directors or by
stockholders owning not less than 50% of the entire voting stock of the
Company then issued and outstanding. A special meeting may not be held
absent a call by the President or such a written request. The request shall
state the purpose or purposes of the proposed meeting. Such limitation on
the right of stockholders to call a special meeting could make it more
difficult for stockholders to initiate action that is opposed by the Board of
Directors. Such action on the part of stockholders could include the removal
of an incumbent director, the election of a stockholder nominee as a
director, or the implementation of a rule requiring stockholder ratification
of specific defensive strategies that have been adopted by the Board of
Directors with respect to unsolicited takeover bids. In addition, the
limited ability of the stockholders to call a special meeting of stockholders
may make it more difficult to change existing Board of Directors and
management.
PREFERRED STOCK. The Amended and Restated Certificate of Incorporation
authorizes the Company's Board to establish one or more series of Preferred
Stock and to determine, with respect to any series of Preferred Stock, the
rights, preferences, privileges and restrictions thereof. No shares of
Preferred Stock are issued or outstanding. The Company believes that the
ability to issue Preferred Stock will provide the Company with increased
flexibility in structuring possible future financings and acquisitions, and
in meeting other corporate needs that might arise. Having such authorized
shares available for issuance will allow the Company to issue shares of
Preferred Stock without the expense and delay of a special stockholders'
meeting. The authorized shares of Preferred Stock, as well as shares of the
Company's Common Stock, will be available for issuance without further action
by stockholders, unless such action is required by applicable law or the
rules of any stock exchange on which the Company's securities may be listed.
Although the Company's Board of Directors has no intention at the present
time of doing so, it could issue a series of Preferred Stock, the terms of
which, subject to certain limitations imposed by the securities laws, could
impede the completion of a merger, tender offer or other takeover attempt.
The Company's Board of Directors will make any determination to issue such
shares based on its judgments as to the best interests of the Company and its
stockholders at the time of issuance. The Company's Board of Directors, in
so acting, could issue Preferred Stock having terms which could discourage an
acquisition attempt or other transaction that some, or a majority, of the
stockholders might believe to be in their best interests or in which
stockholders might receive a premium for their stock over the then market
price of such stock.
LEGAL MATTERS
Certain legal matters with respect to the Common Stock offered hereby will
be passed upon for the Company by Holtzberg & Conway, East Rochester, New York.
EXPERTS
The consolidated financial statements and financial statement schedules
of the Company as of June 30, 1996 and 1997 incorporated herein by reference
from the Company's Annual Report on Form 10-K for the year ended June 30,
1997 have been included herein and incorporated by reference in reliance on
the report of Hein & Associates, LLP, independent accountants, given on the
authority of that firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company and the Selling Shareholders will pay all of the expenses
incurred in connection with the offering described in this registration
statement. Those expenses are estimated to be as follows:
To be Paid To be Paid
by the by the Selling
Company Shareholders
------- ------------
Securities and Exchanges Commission
registration fee . . . . . . . . . . . . . . . $ 1,316 $ --
Legal fees and expenses. . . . . . . . . . . . . 10,000 --
Printing expenses. . . . . . . . . . . . . . . . 10,000 --
Fees and expenses (including legal fees) for
qualification under state securities laws. . . 5,000 --
Accounting fees and expenses . . . . . . . . . . 3,000 --
Miscellaneous. . . . . . . . . . . . . . . . . . 2,000 --
-------- -----
Total. . . . . . . . . . . . . . . . . . . . 31,316
-------- -----
-------- -----
Except for the Securities and Exchange Commission filing fee, all expenses
are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation), by reason of the fact that such person is or was an officer or
director of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
enterprise. The indemnity may include expenses (including attorneys fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by the person in connection with such action, suit or proceeding, provided that
the officer or director acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests, and for
criminal proceedings, had no reasonable cause to believe his conduct was
unlawful. A Delaware corporation may indemnify officers and directors in an
action or suit by or in the right of the corporation under the same conditions
against expenses (including attorney's fees) actually and reasonably incurred by
the person in connection with the defense or settlement of such action or suit,
except that no indemnification is permitted without judicial approval if the
officer or director is adjudged to be liable to the corporation. When an
officer or director is successful on the merits or otherwise in the defense of
any action referred to above, the corporation must indemnify him against the
expenses which the officer or director actually and reasonably incurred.
Article III, Section 13 of the Company's By-Laws provides that the Company
shall indemnify its directors and officers against liabilities and expenses
which they may incur as directors and officers of the Company to the extent the
corporation is empowered to provide such indemnification in accordance with the
Delaware Law.
Section 145 of the Delaware Law also contains provisions authorizing a
corporation to obtain insurance on behalf of any director and officer against
liabilities, whether or not the corporation would have the power to indemnify
against such liabilities. The Company currently does not maintain insurance
coverage for the directors and officers of the Company.
The directors and officers of the Company are entitled to indemnification
by each Selling Shareholder against any cause of action, loss, claim, damage or
liability to the extent it arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in this
Registration Statement and the Prospectus contained herein, as the same shall be
amended or supplemented, made in reliance upon and in conformity with written
information furnished by the Selling Shareholders expressly for use in
connection with the Registration Statement.
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<PAGE>
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
5.1 Opinion of Holtzberg & Conway [to be filed by amendment]
23.1 Consent of Holtzberg & Conway (contained in Exhibit 5.1 hereto)
23.2 Consent of Hein & Associates LLP [to be filed by amendment]
24.1 Power of Attorney (Reference is made to page II-5 of this Registration
Statement)
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a) (3) of the
Securities Act 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 securities offered would not
exceed that which was registered) and any deviation from the low or high and 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.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act 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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer of controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
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(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of East Rochester, State of New York, on this 11 day
of July, 1997.
COUNTRY WIDE TRANSPORT SERVICES, INC.
By: /s/ Timothy Lepper
----------------------------
Timothy Lepper, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1993, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
NAME TITLE DATE
---- ----- ----
/s/ Timothy Lepper Chairman, President, Chief July 11, 1997
------------------- Executive Officer, Principal
Timothy Lepper Financial Officer, Principal
Accounting Officer and Director
/s/ Wayne N. Parry Director July 11, 1997
-------------------
Wayne N. Parry
/s/ Mark Boyer Director July 11, 1997
---------------
Mark Boyer
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<PAGE>
POWER OF ATTORNEY
KNOW BY ALL MEN BY THESE PRESENTS, that each person whose signature appears
below, hereby constitutes and appoints Timothy Lepper and Wayne N. Parry, or
either of them, 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 the Registration Statement, and to
file the same, with exhibits thereto, and other documents in connection
therewith, or in connection with the registration of the Common Stock under the
Exchange Act, with the Securities and Exchange Commission, granting unto each of
said attorneys-in-fact and agents 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 each of said attorneys-in-fact and
agents or his substitute or substitutes may do or cause to be done by virtue
hereof.
NAME DATE
---- ----
/s/ Timothy Lepper July 11, 1997
-------------------
Timothy Lepper
/s/ Wayne N. Parry July 11, 1997
-------------------
Wayne N. Parry
/s/ Mark Boyer July 11, 1997
---------------
Mark Boyer
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