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Registration No. 33-88796
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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POST-EFFECTIVE AMENDMENT TO FORM SB-2 ON
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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CEDAR GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2577796
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(State of Incorporation) (I.R.S. Employer Identification No.)
500 Rue Notre Dame
Lachine, Quebec CANADA H8S 2B2
(514) 634-3550
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)
The Corporation Trust Company
1209 Orange Street
11th and Market Streets
Wilmington, Delaware 19801
(215) 563-7750
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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copies to:
Joseph P. Galda, Esq. Mr. Michel L. Marengere
Clark, Ladner, Fortenbaugh & Young Chairman and Chief Executive Officer
One Commerce Square Cedar Group, Inc.
2005 Market Street 500 Rue Notre Dame
Philadelphia, PA 19103 Lachine, Quebec CANADA H8S 2B2
(215) 241-5043 (514) 634-3550
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practical after the effective date of this Registration Statement.
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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/
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CEDAR GROUP, INC.
2,425,579 shares of Common Stock
offered by certain Selling Security Holders
This Prospectus relates to the sale of 633,412 shares of common stock,
$.001 par value per share (the "Common Stock"), previously issued by Cedar
Group, Inc. (the "Company") in certain private placement transactions, all of
which are offered by the holders thereof identified as "Selling Security
Holders" in this Prospectus, the sale by Ladenburg, Thalmann & Company and/or
permitted assignees, of 200,000 shares of Common Stock which may be issued
pursuant to the exercise of certain outstanding warrants (the "Ladenburg
Warrants"), and the sale by United Dominion Industries Limited or its assignees
of 1,592,167 shares of Common Stock which have been or may be issued in the
future upon conversion of certain Class A Preferred Shares of the Company's
subsidiary, Dominion Bridge Inc. See "SELLING SECURITY HOLDERS."
The Company will not receive any proceeds from the sale of shares of
Common Stock by the Selling Security Holders. However, the Company will receive
proceeds from the exercise of the Ladenburg Warrants. Sales of shares of
Common Stock may be made in negotiated transactions, or otherwise, at market
prices prevailing at the time of sale or at negotiated prices. The Common Stock
may be sold by one or more of the following: (a) a block trade in which the
broker or dealer so engaged will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer for its account pursuant to
this Prospectus; and (c) ordinary brokerage transactions and transactions in
which the broker solicits purchases. All expenses of the registration of such
securities will be borne by the Company. The Selling Security Holders, and not
the Company, will pay or assume all applicable brokerage commissions or other
costs of sale as may be incurred in the sale of such securities. See "SELLING
SECURITY HOLDERS" and "PLAN OF DISTRIBUTION."
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THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS."
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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 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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<TABLE>
<CAPTION>
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Price to Underwriting Discounts and Proceeds to the Selling
Class of Security Public Commissions Security Holders
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<S> <C> <C> <C>
Shares of Common $5.875 --(2) $3,721,295.50(2)
Stock(1)
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</TABLE>
(1) Represents the anticipated sale by the Selling Security Holders at
$5.875, the closing price on February 9, 1996. There can be no
assurances, however, that the Selling Security Holders will be able to
sell their shares of Common Stock at this price, or that a liquid
market will exist for the Company's Common Stock. The Company will
realize no proceeds upon the sale of shares of Common Stock by the
Selling Security Holders.
(2) Does not give effect to ordinary brokerage commissions or other costs
of sale that will be borne solely by the Selling Security Holders.
The Common Stock is traded on the NASDAQ National Market System under
the symbol "CGMV." On February 9, 1996, the closing price on NASDAQ was $5.875.
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The date of this Prospectus is February __, 1996.
<PAGE> 4
ENFORCEMENT OF CERTAIN CIVIL LIABILITIES
AND AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
All of the Company's directors, officers and certain experts named
herein are residents of Canada. Consequently, it may be difficult for United
States investors to effect service within the United States upon the Company's
directors, officers or certain experts named herein, or to realize in the United
States upon judgments of courts of the United States predicated upon civil
liabilities under the United States Securities Act of 1933, as amended (the
"Securities Act"). A judgment of a court of the United States predicated solely
upon such civil liabilities would probably be enforceable in Canada by a
Canadian court if the United States court in which the judgment was obtained had
jurisdiction, as determined by the Canadian court, in the matter. There is
substantial doubt whether an original action could be brought successfully in
Canada against any of such persons or the Company predicated solely upon such
civil liabilities.
The Authorized Agent to receive service of process in the United States
is The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware
19801: Telephone (215) 563-7750.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Copies of these reports may be inspected and copied at the
Public Reference Facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, DC 20549, and at the Commission's regional offices at
7 World Trade Center, Suite 1300, New York, New York 10048 and at Northwest
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such materials can be obtained upon written request
addressed to the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, DC 20549, at prescribed rates. The Common Stock is listed on
NASDAQ and reports and other information concerning the Company may also be
inspected at the offices of the National Association of Securities Dealers,
Inc. at 1735 K Street, N.W., Washington, DC 20006.
In addition, the Company will provide without charge to each person to
whom this Prospectus is delivered, upon either the written or oral request of
such person, a copy of any or all of the documents incorporated herein by
reference other than exhibits to such documents. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE". Such requests should be directed to J. Arthur
Gelinas, Vice-President Corporate Services, Cedar Group, Inc., 500 Rue Notre
Dame, Lachine, Quebec, Canada H8S 2B2, (514) 634-3550.
The Company has filed with the Commission a registration statement
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-KSB/A for the fiscal year ended
September 30, 1995 filed on February 15, 1996 by the Company with the
Commission (File No. 1-10372) pursuant to the Exchange Act, the Company's
Quarterly Report on Form 10-Q for the quarterly period ended December 31, 1995
filed on February 8, 1996 and the Company's Current Report on Form 8-K filed on
January 29, 1996, are incorporated herein by reference.
All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Common Stock shall be deemed
to be incorporated by reference in this Prospectus.
Any statement contained herein or 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 document subsequently filed with the Commission which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner, to which a copy of this Prospectus is delivered, on the
written or oral request of such person to the Company, 500 Rue Notre Dame,
Lachine, Quebec CANADA H8S 2B2, telephone (514) 634-3550, Attention: J. Arthur
Gelinas, Vice President, Corporate Services, a copy of any or all of the
documents described above and incorporated herein by reference (not including
exhibits thereto unless such exhibits are specifically incorporated by reference
into the information that the Registration Statement incorporates).
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information and financial statements (including the notes thereto) appearing
elsewhere in or incorporated by reference into this Prospectus.
THE COMPANY
Cedar Group, Inc. (the "Company"), through its operating subsidiaries,
participates in two principal market segments: infrastructure engineering and
manufacturing services, and industrial specialty fasteners, respectively.
Dominion Bridge Inc. ("Dominion Bridge") and Steen Contractors Ltd.
("Steen") are the Company's principal operating subsidiaries and are involved in
the engineering infrastructure segment, which accounted for approximately 97% of
the Company's consolidated revenue during the fiscal year ended September 30,
1995 ("Fiscal 1995"). Dominion Bridge was acquired from United Dominion
Industries Limited ("UDIL") in April 1994, though pursuant to the acquisition
agreement the transaction was effective from an accounting point of view from
March 9, 1994. Steen was acquired in July 1995 pursuant to a Share Purchase
Agreement whereby the Company acquired 75% of the outstanding common stock of
Steen with the remaining 25% to be purchased in two installments over the next
two years. The acquisition of Steen was given effect from an accounting point
of view from April 1, 1995.
The Company has three operating subsidiaries in the industrial fastener
segment located in the United States, namely, Unimetric Corporation
("Unimetric"), a 70% owned subsidiary involved in the manufacturing of specialty
fasteners for the industrial and aerospace markets, and Banyan Fastener Corp.
and M.S.W. International, Inc. (collectively, the "Fastener Importers"), both of
which are importers and distributors of standard industrial fasteners.
The Company has announced its intention to make an offer to acquire all
of the ordinary shares of McConnell Dowell Corporation Limited ("MDC"), a
publicly-traded infrastructure engineering company in Australia and New Zealand,
subject to approval by the Australian Treasurer under the Foreign Acquisitions
and Takeover Act of 1975. The Company currently owns 14.9% of the ordinary
shares of MDC and the tender offer for MDC is contingent upon the Company
acquiring an aggregate minimum of 40.1% of the ordinary shares of MDC which it
does not own. It is anticipated that the tender offer will remain open until
the end of March 1996. There can be no assurances that even if the Australian
Treasurer approves the tender offer that it will be completed successfully.
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The Company is incorporated in Delaware and its principal executive
offices are located at 500 Rue Notre Dame, Lachine, Quebec, CANADA H8S 2B2. The
Company's telephone number is (514) 634-3550.
THE OFFERING
Securities Being Offered: This Prospectus relates to the sale
of 633,412 shares of common stock,
$.001 par value per share (the
"Common Stock"), previously issued
by the Company in certain private
placement transactions, all of which
are offered by the holders thereof
identified as "Selling Security
Holders" in this Prospectus, 200,000
shares of Common Stock, which may be
issued pursuant to the exercise of
the Ladenburg Warrants, and the sale
by United Dominion Industries
Limited or its assignees of
1,592,167 shares of Common Stock
which have been or may be issued in
the future upon conversion of Class
A Preferred Shares of the Company's
subsidiary, Dominion Bridge Inc.
See "SELLING SECURITY HOLDERS."
The shares of Common Stock offered by
the Selling Security Holders may be
offered for sale from time to time
by the holders in regular brokerage
transactions, either directly or
through brokers or to dealers, in
private sales or negotiated
transactions, or otherwise, at
prices related to then prevailing
market prices. The Company will not
receive any proceeds from the sale
of shares of Common Stock by the
Selling Security Holders. All
expenses of the registration of such
securities are, however, being borne
by the Company. The Selling
Security Holders, and not the
Company, will pay or assume such
brokerage commissions as may be
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incurred in the sale of their
securities.
The Common Stock is traded on the
NASDAQ National Market System under
the symbol "CGMV." On February 9,
1996, the closing bid price on
NASDAQ was $5.875.
<TABLE>
<S> <C>
Total number of shares of
Common Stock outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15,497,582
Total number of shares
reserved for future issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,435,000
Total number of shares of
Common Stock being offered
by Selling Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,425,579
Total number of shares
outstanding and subject to
future issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17,932,582
</TABLE>
Use of Proceeds: The Company will not receive any of
the proceeds of the sale of any of
the shares of Common Stock by the
Selling Security Holders.
The net proceeds realized by the
Company upon the exercise of the
Ladenburg Warrants will be used to
offset the general working capital
requirements of the Company.
Inasmuch as the Company has received
no firm commitments for the exercise
of the Ladenburg Warrants, however,
there can be no assurances as to the
amount of the net proceeds to be
realized by the Company.
Risk Factors: The Common Stock offered hereby
involves a high degree of risk. See
"RISK FACTORS."
Trading Symbol: Common Stock-CGMV
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RISK FACTORS
An investment in the Common Stock involves a high degree of risk. Prior
to making an investment decision with respect to the Common Stock offered by
this Prospectus, prospective investors should carefully consider, along with the
other matters discussed in this Prospectus, the following risk factors:
1. NEED FOR ADDITIONAL FINANCING. As of the date of this
Prospectus, the Company is attempting to acquire control of MDC. As a result,
the Company is in the process of negotiating bank lines of credit necessary to
complete the MDC acquisition. In addition, the Company's wholly-owned
subsidiary, Cedar Group (TCI) Inc. LLC ("TCI") is undertaking a private offering
outside of the United States of up to an additional $15 milion of shares of
preferred stock convertible into Company Common Stock. SEE "RECENT
DEVELOPMENTS."
There can be no assurances that the Company will successfully secure
financing when necessary. The Company's failure to secure additional financing
when required could have an adverse effect on the Company's acquisition of MDC,
its financial condition and the continued viability of some of its operating
subsidiaries.
2. RISK OF PRODUCT AND CONSTRUCTION LIABILITY. The Company is
subject to a risk of claims for product and construction liability. If a
liability claim exceeding the Company's insurance coverage or its own available
resources were to be successfully asserted against the Company, it could have a
material adverse effect on the Company's financial condition. The Company has
liability insurance which it believes is customary for the industries in which
it participates. However, there is no assurance that such coverage will be
sufficient to fully insure against claims brought against the Company and its
subsidiaries, or that the Company will be able to maintain such insurance at
affordable rates or obtain additional insurance covering its business.
3. CONTRACTUAL LIABILITY FOR LATE PROJECTS AND COST OVERRUNS.
Many of the projects undertaken by the Company provide for penalties for
delays in completion. In addition, such projects are usually undertaken on a
fixed price basis. Accordingly, the Company's results of operations may be
adversely affected by delays in completion or cost overruns. Furthermore,
Dominion Bridge obtains contractual assistance from subcontractors on various
projects and is solely responsible for the costs of the subcontractors without
recourse to the owner of the project. Accordingly, the Company may suffer
financial losses if it cannot successfully claim such losses from the owner of
the project.
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4. SECURED LIENS -- EXISTENCE OF LIENS ON SIGNIFICANT PORTIONS OF
ASSETS. A significant portion of Dominion Bridge's assets have been pledged as
collateral to secure the Company's obligations under its arrangements with
UDIL. Additionally, the inventory and book debts and other assets of Dominion
Bridge have been pledged to a Canadian bank to secure its line of credit. In
the event Dominion Bridge fails to comply with its obligations, Dominion
Bridge's assets, inventory and book debts could be foreclosed upon. Moreover,
to the extent that Dominion Bridge's assets, inventory and book debts continue
to be pledged to secure the obligations and line of credit, such assets,
inventory and book debts will be unavailable to secure additional debt
financing, which may adversely affect Dominion Bridge's ability to borrow in
the future.
5. LIMITATIONS ON NET OPERATING LOSS CARRYFORWARDS. The Company
had federal net operating loss carryforwards for financial reporting and income
tax purposes, however, these carryforwards are subject to limitations on the
amount that can utilized by the Company in a fiscal year due to change of
ownership rules as defined by applicable federal tax statutes. Consequently, the
Company may not receive future benefits from existing net operating loss
carryforwards available to offset future taxable income.
6. NEED TO OBTAIN PERFORMANCE BONDS. Many of the projects
undertaken by Dominion Bridge and by Steen are subject to a requirement that
Dominion Bridge and Steen post a performance bond. If the Company is unable to
secure bonding it will not be able to undertake additional projects which would
have a significant adverse effect on the Company's financial condition.
7. POSSIBLE ENVIRONMENTAL LIABILITY. Government regulations in
Canada and the United States prohibit the discharge into the environment of
hazardous substances. Although the Company believes that it complies with these
regulations, there can be no assurance that the Company will not be held
financially responsible for environmental contamination that may have occurred
prior to its acquisition of its operating businesses.
8. ASSUMED LITIGATION. As a result of its acquisition of Dominion
Bridge, the Company has assumed certain pending and threatened litigation. It
is impossible at this time for the Company to predict with any certainty the
outcome of such litigation. However, management is of the opinion, based upon
information presently available, that it is unlikely that any liability, to the
extent not provided for through insurance or otherwise, would be material in
relation to the Company's consolidated financial position.
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9. DEPENDENCE ON KEY PERSONNEL. To a material extent, the
Company's future success is dependent upon the continued efforts of its Chairman
and Chief Executive Officer, Mr. Michel L. Marengere and its President and Chief
Operating Officer, Mr. Nicolas Matossian, the loss of their services would
likely have a material adverse effect on the Company's business. The Company
has obtained "key-man" insurance on Mr. Marengere's life.
10. COMPETITION. The markets in which the Company competes are
highly competitive. In particular, a significant portion of the business
sought by its Dominion Bridge and Steen subsidiaries is awarded on a
competitive bid basis. Many of the companies with which the Company competes
have substantially greater financial, managerial and other resources than those
of the Company. As a result, the Company may be at a competitive disadvantage
when bidding for new projects.
11. FOREIGN JOINT VENTURES. The Company's principal operating
subsidiary, Dominion Bridge, has formalized or reached agreements in principle
with respect to six large scale infrastructure joint venture projects in China
and a water treatment project in Indonesia to be undertaken by one of its
subsidiaries. These joint ventures are subject to significant conditions,
including the negotiation of definitive agreements, third party participation
and the raising of required capital. There can be no assurances that these
arrangements will lead to completed projects, or that the projects, if
completed, will prove to be profitable to the Company. Furthermore, doing
business in China entails significant additional risk factors, including, among
others, the need to comply with Chinese currency restrictions and that country's
federal, state and local laws. The Company believes the present attitude to
foreign investment in the People's Republic of China and to infrastructure
projects, in general, to be favorable, however, investors should assess the
political risks of investing in a foreign country. Similar risks apply in
Indonesia and in other countries where Dominion Bridge and Steen may be
undertaking business opportunities.
12. POSSIBLE VOLATILITY OF STOCK PRICES. Taking into account the
registration under the Securities Act of the securities offered hereby, the
Company may have approximately 15,497,582 shares of Common Stock outstanding,
substantially all of which will be eligible for public trading. This amount
does not include the shares of TCI, which are convertible into shares of the
Company, which will be issued in the offshore private placement currently being
undertaken by TCI, the investors in which will have certain rights to register
under the Securities Act the resale of shares of Common Stock received upon
conversion of the TCI shares. Although it is impossible to predict market
influences and prospective values for securities, it is possible that, in and
of itself, the substantial increase in the number of shares available for sale
could have a depressive effect upon the
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market value of the Company's Common Stock. Furthermore, certain of the
Selling Security Holders have obtained significant unrealized appreciation in
their investment and may desire to realize all or a portion of these gains.
Because of the factors described above and elsewhere in this Prospectus, the
market prices of the Company's Common Stock following the date of this
Prospectus may be highly volatile.
13. ADDITIONAL POSSIBLE DILUTION. The Company is authorized to
issue 20,000,000 shares of Common Stock of which 15,497,582 shares were
outstanding as of February 1, 1996. In addition, the Company has reserved for
issuance an additional 1,592,167 shares of Common Stock in connection with its
acquisition of Dominion Bridge, and 2,435,000 share purchase warrants and stock
options issued to its directors, executive officers and investment bankers. In
connection with other business matters deemed appropriate by the Company's
management, there can be no assurances that the Company will not, in fact,
undertake the issuance of more shares of Common Stock without notice to then
existing stockholders. This may be done in order to, among other things,
facilitate a business combination, acquire assets or stock of another business,
generate debt or equity financing, or for other valid business reasons in the
discretion of the Company's Board of Directors.
14. EFFECT OF OUTSTANDING OPTIONS AND WARRANTS. As of February 1,
1996, the Company had outstanding options and warrants to purchase 2,435,000
shares of Common Stock upon exercise. Additionally, there are outstanding Cdn
$9,952,000 Class "A" Preferred Shares of Dominion Bridge which are held by UDIL
and convertible into the Company's Common Stock. To the extent that the shares
underlying the options, warrants and Class "A" Preferred Shares enter the
market, the price of the Common Stock in the market may be substantially
reduced. For the term of the options and warrants issued by the Company, the
holders thereof are given an opportunity to profit from a rise in the market
price of the Company's Common Stock, with a resulting dilution in the interest
of the other stockholders. Further, the terms on which the Company may obtain
additional financing during that period may be adversely affected by the
existence of such options and warrants. The holders of such options and
warrants may exercise them at a time when the Company might be able to obtain
additional capital through a new offering of securities on terms more favorable
than those provided therein.
15. STAGGERED BOARD OF DIRECTORS. The Company's Certificate of
Incorporation provides for a staggered Board of Directors pursuant to which the
Board is divided into three classes of directors and the members of only one
class (or one-third of the Board) are elected each year to serve a three-year
term. A
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director may be removed only for cause by a vote of the holders of eighty
percent (80%) of the voting power of the Company's outstanding securities. This
provision makes it more difficult to change majority control of the Board which
may discourage attempts by third parties to make a tender offer or otherwise
obtain control of the Company, even if such attempt would be beneficial to the
Company and its stockholders.
16. DIVIDENDS NOT LIKELY. The Company does not intend to declare
or pay cash dividends in the foreseeable future. Earnings, if any, are expected
to be retained to finance and develop its businesses. See "DESCRIPTION OF
SECURITIES."
17. AUTHORIZATION AND DISCRETIONARY ISSUANCE OF PREFERRED STOCK.
The Company's Certificate of Incorporation authorizes the issuance of up to an
aggregate of 5,000,000 shares of "blank check" preferred stock with such
designations, rights and preferences as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors is empowered,
without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights which would adversely affect the
voting power or other rights of the holders of the Company's Common Stock. In
the event of issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company, which could have the effect of discouraging bids for the
Company and thereby prevent stockholders from receiving the maximum value for
their shares. The Company has no present intention to issue any additional
shares of its preferred stock. However, there can be no assurance that the
preferred stock of the Company will not be issued at some time in the future.
18. EXCHANGE RATE FLUCTUATIONS. Although the Company's financial
results are reported in United States dollars, a substantial portion of its
business is conducted in other currencies, principally the Canadian dollar. The
exchange rate between the Canadian and United States dollars, although
historically less volatile than that of certain other currencies, has varied
significantly over the last five years.
19. DIVESTED BUSINESSES. Effective July 1, 1994, the Company decided
to divest the Canadian commodity fastener distribution businesses formerly
conducted by Edinov Corporation. The transaction was completed on December 20,
1994 by the receipt of Cdn. $1,000,000 in cash and Cdn. $5,135,000 preferred
shares of the acquiror. These preferred shares are redeemable at varying
amounts annually through the year 2009, commencing at Cdn. $250,000 in 1995 and
1996 and Cdn. $350,000 each year thereafter. The Company's ability to realize
the value of the preferred shares is dependent
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on future operations of the divested businesses. There can be no assurance
that the future operations of the divested businesses will be profitable and
that the preferred shares held by the Company will be able to be redeemed.
USE OF PROCEEDS
The Company will not realize any proceeds from the sale of shares of
Common Stock by the Selling Security Holders. Other than with respect to
ordinary brokerage commission or other costs of sale, the costs of this
offering, including among others, printing, blue sky and professional fees,
estimated at $72,422, will be borne entirely by the Company. See "SELLING
SECURITY HOLDERS."
The gross proceeds which may be realized by the Company upon the
exercise of one hundred (100%) percent of the Ladenburg Warrants will be
$725,000. Inasmuch as the Company has received no firm commitments for their
exercise, there can be no assurance that any or a substantial portion of the
Ladenburg Warrants will be exercised.
Management cannot predict with any certainty the amount of proceeds, if
any, which may be generated from the exercise of the Ladenburg Warrants. The
net proceeds which may be realized by the Company, if any, upon the exercise
of the Ladenburg Warrants will not be utilized for any specific purpose
other than to contribute to the Company's working capital and be used to
continue the operations of the Company in accordance with the business strategy
identified by management.
RECENT DEVELOPMENTS
On January 12, 1996, the Company executed an Agreement whereby the
Company acquired the right to purchase 19.9% of the total issued ordinary
shares of MDC, a corporation publicly traded in Australia, from Morrison Knudsen
Corporation ("MK") for a cash purchase price of Australian $10,341,606.25 (US
$5,747,012.32). MDC is an Australian infrastructure, including pipeline,
mechanical and electrical, engineering and construction group with operations
throughout Asia, Australia and New Zealand. The purchase of the shares of MDC
is to occur in two phases through the Company's wholly-owned subsidiary, Cedar
Group Australia Pty Ltd. ("CGA"). The first phase occurred on January 19, 1996
which consisted of an acquisition of 6,194,570 ordinary shares of MDC,
representing approximately 14.9% of the total issued ordinary shares of MDC,
in exchange for Australian $7,743,212.50.
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The second phase of the acquisition, whereby CGA will acquire an
additional 2,078,715 ordinary shares of MDC in exchange for Australian
$2,598,393.75, is conditioned upon the Company receiving certain approvals
including permission from the Australian Treasurer under the Foreign
Acquisitions and Takeover Act of 1975 for the acquisition of the additional 5%
interest of MDC.
The Company has announced its intention to make a tender offer for the
remaining ordinary shares of MDC, subject to regulatory approval. The tender
offer is contingent upon the Company acquiring an aggregate minimum of 40.1% of
the ordinary shares of MDC which it does not own.
The payment for the purchase price of the ordinary shares of MDC was
obtained by the Company through the funds raised by an offshore private
placement ("TCI Placement") undertaken by a wholly-owned subsidiary of
the Company, Cedar Group (TCI) Inc. LLC ("TCI"). To date, TCI has accepted
subscriptions of $8.5 million and is attempting to raise a further $15 million.
Furthermore, the Company is attempting to finalize banking arrangements for
debt financing to proceed with the tender offer for the remaining ordinary
shares of MDC. However, there can be no assurance this additional placement
amount will be raised or that the financing will be arranged. The shares
issued by TCI on the accepted subscriptions are convertible into shares of
Common Stock of the Company at $7.375 per share.
SELLING SECURITY HOLDERS
The shares of Common Stock of the Company offered by this Prospectus are
being sold for the account of the selling security holders identified in the
following table (the "Selling Security Holders").
The Selling Security Holders are offering for sale an aggregate of
633,412 shares of Common Stock previously issued by the Company in certain
private placement transactions, 200,000 shares of Common Stock which may be
issued pursuant to the Ladenburg Warrants and 1,592,167 shares of Common Stock
which have been or may be issued in the future upon exercise of Class A
Preferred Shares of the Company's subsidiary, Dominion Bridge.
The following table sets forth the number of shares of Common Stock
being held of record or beneficially (to the extent known by the Company) by
such Selling Security Holders and provides (by footnote reference) any material
relationship between the Company and such Selling Security Holder, all of which
is based upon information currently available to the Company.
13
<PAGE> 16
<TABLE>
<CAPTION>
Number of
Number of Shares of Number of
Shares of Common Shares of
Common Stock Common
Stock to be Stock Percentage Percentage
Before Sold In After Before After
Name Offering Offering Offering Offering Offering
- ---- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Porter Pibb 5,770 5,770 -0- * -0-
Polaris Partners, L.P. 160,000 160,000 -0- 1.0 -0-
Jerome J. Giuliano 30,770 30,770 -0- * -0-
John Miller 52,000 32,000 20,000 * *
Yakil Polak 130,808 130,808 -0- * -0-
Theodore Allocca 16,885 15,385 1,500 * *
Kate L. Miller Trust 400 400 -0- * -0-
Helen E. Miller Trust 400 400 -0- * -0-
Gary Albert 20,000 20,000 -0- * -0-
Pierre LaFleur 6,979 6,979 -0- * -0-
Sylvia Goldberg 50,000 32,000 18,000 * *
Miriam Gold 28,500 25,000 3,500 * *
Baninsa International, Ltd. 173,900 173,900 -0- 1.1 -0-
Ladenburg, Thalmann 200,000 200,000 -0- 1.3 -0-
United Dominion
Industries Limited 1,592,167 1,592,167 -0- 10.2 -0-
</TABLE>
*Less than one (1) percent.
PLAN OF DISTRIBUTION
The Common Stock may be sold from time to time by the Selling
Security Holders or by their pledgees, donees, transferees or other successors
in interest. Such sales may be made on NASDAQ, on the over-the-counter market
or otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The Common Stock may
be sold by one or more of the following: (a) a block trade in which the broker
or dealer so engaged will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction;
(b) purchases by a broker or dealer for its account pursuant to this
Prospectus; and (c) ordinary brokerage transactions and transactions in which
the broker solicits purchases. In effecting sales, brokers or dealers engaged
by the Selling Security Holders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions or discounts from
Selling Security Holders in amounts to be negotiated immediately prior to the
sale. Such brokers or dealers and any other participating brokers or dealers
may be deemed to be "underwriters" within the meaning of the Act in connection
with such sales. In addition, any securities covered by this Prospectus which
qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus. The Company will not receive any of the proceeds
from the sale of these shares, although it has paid the expenses of preparing
this Prospectus and the related Registration Statement. The Selling Security
Holders have been advised that they are subject to the applicable provisions of
the Securities Exchange Act of 1934, including without limitation, Rules 10b-5,
10b-6 and 10b-7 thereunder.
14
<PAGE> 17
The Company will use its best efforts to file, during any period in
which offers or sales are being made, one or more post-effective amendments to
the Registration Statement of which this Prospectus is a part to describe any
material information with respect to the plan of distribution not previously
disclosed in this Prospectus or any material change to such information in this
Prospectus.
15
<PAGE> 18
DESCRIPTION OF SECURITIES
COMMON STOCK
The Company is authorized to issue 20,000,000 shares of Common
Stock, of which 15,497,582 were outstanding as of February 1, 1996.
Holders of Common Stock have equal rights to receive dividends when,
as and if declared by the Board of Directors, out of funds legally available
therefor. Holders of Common Stock have one vote for each share held of record
and do not have cumulative voting rights.
Holders of Common Stock are entitled upon liquidation of the Company
to share ratably in the net assets available for distribution, subject to the
rights, if any, of holders of any preferred stock then outstanding. Shares of
Common Stock are not redeemable and have no pre-emptive or similar rights. All
outstanding shares of Common Stock are fully paid and non-assessable.
PREFERRED STOCK
Within the limits and restrictions contained in the Certificate of
Incorporation, the Board of Directors has the authority, without further action
by the stockholders, to issue up to 5,000,000 shares of preferred stock, $.001
par value per share (the "Preferred Stock"), in one of more series, and to fix,
as to any such series, the dividend rate, redemption prices, preferences on
liquidation or dissolution, sinking fund terms, if any, conversion rights,
voting rights, and any other preference or special rights and qualifications.
Shares of Preferred Stock issued by the Board of Directors could be
utilized, under certain circumstances, to make an attempt to gain control of
the Company more difficult or time consuming. For example, shares of Preferred
Stock could be issued with certain rights which might have the effect of
diluting the percentage of Common Stock owned by a significant stockholder or
issued to purchasers who might side with management in opposing a takeover bid
which the Board of Directors determines is not in the best interest of the
Company and its stockholders. This provision may be viewed as having possible
anti-takeover effects. A takeover transaction frequently affords stockholders
the opportunity to sell their shares at a premium over current market prices.
The Board of Directors has not authorized any series of Preferred Stock, and
16
<PAGE> 19
there are no agreements, understandings or plans for the issuance of any
Preferred Stock.
LIMITED GRANT OF REGISTRATION RIGHTS.
The Company has granted registration rights to the Selling Security
Holders.
In connection with any such registration, the Company shall have no
obligation: (i) to assist or cooperate in the offering or disposition of such
shares; (ii) to indemnify or hold harmless the holders of any such shares or
any underwriter designated by such holders; (iii) to obtain a commitment from
an underwriter relative to the sale of any such shares; or (iv) to include such
shares within an underwritten offering of the Company. Accordingly, the
Company's only obligation is to include any such shares in a Registration
Statement to be filed by the Company. The Company will assume no obligation or
responsibility whatsoever to determine a method of disposition for such shares
or to otherwise include such shares within the confines of the registered
offering.
TRANSFER AGENT
Pacific Corporate Trust of Vancouver, British Columbia, serves as
transfer agent for the Common Stock. Continental Stock Transfer & Trust
Company, located in New York, serves as a co-transfer agent for the Common
Stock.
CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION, THE BY-LAWS
AND DELAWARE LAW.
The Company has a classified Board of Directors pursuant to which the
Board is divided into three classes, and the term of office of one class
expires in each year.
The Company is governed by the provisions of Section 203 of the
General Corporation Law of the State of Delaware (the "GCL"), an anti-takeover
law. In general, the law prohibits a public Delaware corporation from engaging
in a "business combination" with an "interested stockholder" for a period of
three years after the date of the transaction in which the person became an
interested stockholder, unless the business combination is approved in a
prescribed manner. "Business combination" includes mergers, asset sales and
other transactions resulting in a financial benefit to the stockholder. An
"interested stockholder" is a person who, together with its affiliates and
associates, owns (or within three years, did own) fifteen percent or more of
the corporation's voting stock.
17
<PAGE> 20
The classified Board of Directors, the super majority voting
provisions, the provisions authorizing the Board to issue Preferred Stock
without stockholder approval, and the provisions regarding certain business
combinations in the Certificate of Incorporation and under the GCL could have
the effect of delaying, deferring or preventing a change in control of the
Company or the removal of existing management. A takeover transaction
frequently affords stockholders the opportunity to sell their shares at a
premium over current market prices.
The Company has adopted the provisions of Section 102(b)(7) of the GCL
which eliminate or limit the personal liability of a director to the Company or
its stockholders for monetary damages for breach of fiduciary duty under
certain circumstances. Furthermore, under Section 145 of the GCL, the Company
may indemnify each of its directors and officers against his expenses
(including reasonable costs, disbursements and counsel fees) in connection with
any proceeding involving such person by reason of his having been an officer or
director to the extent he acted in good faith and in a manner reasonably
believed to be in, or not opposed to the best interest of the Company, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The determination of whether indemnification
is proper under the circumstances, unless made by a court, shall be determined
by the Board of Directors.
18
<PAGE> 21
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon
for the Company by Clark, Ladner, Fortenbaugh & Young, One Commerce Square,
2005 Market Street, 22nd Floor, Philadelphia, Pennsylvania 19103.
EXPERTS
The financial statements of the Company for the fiscal years ended
September 30, 1995 and 1994 which are incorporated by reference into this
Prospectus from the Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1995, have been audited by Ernst & Young, independent auditors,
to the extent and for the periods set forth in their reports incorporated
herein by reference, and are incorporated herein in reliance upon such reports
given upon the authority of said firms as experts in accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-3 with respect to the Common Stock being
registered hereby. This Prospectus does not contain all the information
contained in such Registration Statement, as permitted by the Rules and
Regulations of the Securities and Exchange Commission. The Registration
Statement, including exhibits thereto, may be inspected without charge, and
copies of all or any part thereof may be obtained from the Commission's
principal office in Washington, D.C. at Room 1024, 450 Fifth Street N.W.,
Washington, DC. 20549, and at the Commission's regional offices at 7 World
Trade Center, Suite 1300, New York, New York 10048 and Northwest Atrium Center
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of
such materials can be obtained upon written request addressed to the
Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, DC
20549, at prescribed rates. For further information with respect to the
Company, the Common Stock being registered hereby and the contents of any
contract or document referred to herein, reference is made to the Registration
Statement and the exhibits filed as a part thereof.
19
<PAGE> 22
<TABLE>
<S> <C>
No dealer, salesperson or other person has been
authorized in connection with this offering to
give any information or to make any ========================
representations other than those contained in or
incorporated by reference into this Prospectus. 2,425,579 SHARES OF COMMON STOCK
This Prospectus does not constitute an offer or a OFFERED BY CERTAIN
solicitation in any jurisdiction to any person to SELLING SECURITY HOLDERS
whom it is unlawful to make such an 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 circumstances
of the Company or the facts herein set forth since
the date hereof.
----------------------
TABLE OF CONTENTS CEDAR GROUP, INC.
Page
----
Prospectus Summary . . . . . . . . . . . . . . .
The Company . . . . . . . . . . . . . . . . . . . -------------------
The Offering . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . P R O S P E C T U S
Use of Proceeds . . . . . . . . . . . . . . . . .
Description of Securities . . . . . . . . . . . . -------------------
Selling Security Holders . . . . . . . . . . . .
Plan of Distribution . . . . . . . . . . . . . .
Legal Matters . . . . . . . . . . . . . . . . . .
Experts . . . . . . . . . . . . . . . . . . . . .
Additional Information . . . . . . . . . . . . . February __, 1996
-------------------
</TABLE>
<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is a list of the estimated expenses to be incurred by
the Registrant in connection with the preparation and filing of this
Registration Statement.
<TABLE>
<S> <C>
S.E.C. Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,422
Printing and Engraving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Accountants' Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Blue Sky Filing Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
TOTAL: . . . . . . . . . . . . . . . . . . . . . . . . . 72,422.00
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has adopted the provisions of Section 102(b)(7) of the
Delaware General Corporation Law (the "Delaware Act") which eliminate or limit
the personal liability of a director to the Company or its stockholders for
monetary damages for breach of fiduciary duty under certain circumstances.
Furthermore, under Section 145 of the Delaware Act, the Company may indemnify
each of its directors and officers against his expenses (including reasonable
costs, disbursements and counsel fees) in connection with any proceeding
involving such person by reason of his having been an officer or director to
the extent he acted in good faith and in a manner reasonably believed to be in,
or not opposed to the best interest of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The determination of whether indemnification is proper under the
circumstances, unless made by a court, shall be determined by the Board of
Directors.
Reference is made to Item 17 for the undertakings of the Registrant
with respect to indemnification for liabilities arising under the Securities
Act of 1933, as amended.
21
<PAGE> 24
ITEM 16. EXHIBITS
The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C> <C>
4.0 Copy of Specimen Stock Certificate (Incorporated by reference to Exhibit
4.0 of the Registration Statement on
Form S-3 filed on January 26, 1995)
5.0 Opinion of Clark, Ladner, Fortenbaugh & Previously filed
Young
23.1 Consent of Independent Auditors Filed herewith
23.2 Consent of Clark, Ladner, Fortenbaugh & Included as part of Exhibit 5.0
Young
24.0 Power of Attorney Included as part of the signature page
</TABLE>
22
<PAGE> 25
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 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.
Insofar as indemnification for liabilities 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 a successful defense of any action, suit or
proceeding) is asserted by a 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 issuer.
23
<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Lachine, Province of Quebec, on February 14,
1996.
CEDAR GROUP, INC.
By:/s/Michel L. Marengere By:/s/Nicolas Matossian
--------------------------- ---------------------------
Michel L. Marengere Nicolas Matossian
Chairman of the Board of President and Chief
Directors, Chief Executive Operating Officer
Officer and Director (Principal Financial Officer)
By:/s/Robert Chartier
---------------------------
Robert Chartier
Vice President, Corporate
Comptroller
(Principal Accounting
Officer)
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 dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
* Chairman of the February 14, 1996
- ----------------------- Board of Directors,
Michel L. Marengere Chief Executive
Officer and Director
* Secretary and February 14, 1996
- ----------------------- Director
Micheline Prud'homme
* President and Chief February 14, 1996
- ----------------------- Operating Officer
Nicolas Matossian
</TABLE>
24
<PAGE> 27
<TABLE>
<S> <C>
* Vice President, February 14, 1996
- ----------------------- Corporate Comptroller
Robert Chartier
* Director February 14, 1996
- -----------------------
Rene Amyot
* Director February 14, 1996
- -----------------------
Reynald Lemieux
* Director February 14, 1996
- -----------------------
Rt. Hon. Marc Lalonde
Director
- -----------------------
Louis Berlinguet
By: /s/Michel L. Marengere
-----------------------
Michel L. Marengere (attorney-in-fact)
</TABLE>
* Power of Attorney previously filed under the Registration Statement on Form
S-3 filed January 26, 1995 and as amended twice on Form SB-2, filed on April 7,
1995 and May 3, 1995.
25
<PAGE> 28
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C> <C>
4.0 Copy of Specimen Stock Certificate Incorporated by reference to
Exhibit 4.0 of the Registration
Statement on Form S-3 filed on
January 26, 1995.
5.0 Opinion of Clark, Ladner, Fortenbaugh Previously filed
& Young
23.1 Consent of Independent Auditors Filed herewith
23.2 Consent of Clark, Ladner, Fortenbaugh Included as part of Exhibit 5.0
& Young
24.0 Power of Attorney Included as part of the
signature page
</TABLE>
26
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference into Post-Effective Amendment on
Form S-3 to the Registration Statement of Form SB-2 (Commission File No.
33-88796) of Cedar Group, Inc. (the "Company"), of our report dated December
20, 1995 on the financial statements of the Company as of and for the fiscal
years ended September 30, 1995 and September 30, 1994.
/s/ ERNST & YOUNG
------------------
February 15, 1995 Ernst & Young
