<PAGE>
As filed with the Securities and Exchange Commission on September 3, 1996
Registration No. 33- -
--------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
THE APPLETREE COMPANIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 65-0205933
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
5732 Curlew Drive
Norfolk, Virginia 23502
(757) 466-9200
(Address, including zip code and telephone number,
including area code, of Registrant's Principal Executive Offices)
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this registration becomes effective
If the only securities being registered on this Form are to be 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 a dividend or
interest reinvestment plan, check the following box. {X}
If this Form is filed to register additional securities for an offering
pursuant to rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. { }
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. { }
If delivery of this prospectus is expected to be made pursuant to Rule 434,
please check the following box. { }
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C>Proposed <C>Proposed <C>Amount
Maximum Maximum of
Amount Offering Aggregate Regis-
Title of Securities to be Price Per Offering tration
to be Registered Registered Share (1) Price (1) Fee
Common Stock,
par value $.001 121,300,504 $.08 $9,704,040 $3,346
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933. The
calculation of the registration fee is based on $.08, which was the
average of the high and low prices of the Common Stock for the five days
ended August 30, 1996, as reported in The Wall Street Journal for NASDAQ
SmallCap Market issues.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE> 3
PROSPECTUS
THE APPLETREE COMPANIES, INC.
121,300,504 Shares of Common Stock
Par Value $.001 Per Share
The Common Stock of The AppleTree Companies, Inc. (the "Company")
offered hereby (the "Shares") may be sold by certain shareholders of the
Company (the "Selling Shareholders"). The Company will not receive any of
the proceeds from the offering.
The Common Stock of the Company is traded over-the-counter in the NASDAQ
SmallCap Market. On August 29, 1996 the closing price for the Common Stock
as reported in The Wall Street Journal was $.0625 per share.
The Shares may be offered or sold from time to time by the Selling
Shareholders at market prices then prevailing, in negotiated transactions or
otherwise. Brokers or dealers will receive commissions or discounts from
Selling Shareholders in amounts to be negotiated immediately prior to the
sale. See "Plan of Distribution."
See "Risk Factors" beginning on page 1 for a discussion of certain risks
related to an investment in the Shares.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_______________________
No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained
in this Prospectus. This Prospectus does not constitute an offering in any
jurisdiction in which such offering may not lawfully be made.
________________________
Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the respective dates of which
information has been given herein.
The date of this Prospectus is September 3, 1996.
<PAGE> 4
TABLE OF CONTENTS
Page
THE COMPANY 5
AVAILABLE INFORMATION 5
RISK FACTORS 5
SELLING SHAREHOLDERS 8
PLAN OF DISTRIBUTION 12
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 13
EXPERTS 13
INFORMATION NOT REQUIRED IN THE PROSPECTUS 14
SIGNATURES 16
EXHIBIT INDEX 18
<PAGE> 5
THE COMPANY
The AppleTree Companies, Inc., a Delaware corporation ("AppleTree"), is
a holding company with substantially all of its business operations performed
by its principal wholly owned operating subsidiary, Americas Foods, Inc.
("AFI"). Unless otherwise stated herein the term "Company" includes
AppleTree, its other subsidiaries, and AFI. The Company manufactures
sandwiches and distributes them, together with food resale products made by
others, to convenience stores and vending machine operators. The Company
also sells its products to institutions such as schools and military bases.
The Company has approximately 100 routes which service approximately 8,000
retail accounts in the Mid-Atlantic and Western United States. The Company
sells its sandwiches under the Deli Dan, Audrey's Deli and Sandwich Makers brand
names. The address of the principal executive offices of the Company is 5732
Curlew Drive, Norfolk, Virginia 23502.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith files periodic
reports and other information with the Securities and Exchange Commission
(the "SEC"). Such reports, proxy statements, and other information
concerning the Company may be inspected and copies may be obtained at
prescribed rates at the offices of the SEC, Judiciary Plaza, 450 Fifth
Street, NW, Washington, D.C. 20549. The SEC maintains a Web site on the Internet
that contains reports, proxy and information statements and other information
regarding the Company, the address of which is http://www.sec.gov.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus is delivered, upon written or oral request
to Justin DiMacchia, Corporate Secretary, The AppleTree Companies, Inc., 5732
Curlew Drive, Norfolk, Virginia 23502, (757)466-9200, copies of any and all
of the information that has been incorporated by reference into this
Prospectus, other than exhibits to such information unless such exhibits are
specifically incorporated by reference therein. The information relating to
the Company contained in this Prospectus does not purport to be comprehensive
and should be read together with the information contained in the documents
or portions of documents incorporated by reference into this Prospectus.
RISK FACTORS
1. History of Losses; Uncertainty of Future Profits; and Liquidity
and Financing Requirements. The Company has never realized a profit. On
June 2, 1996, the Company had an accumulated deficit of approximately $34.5
million. During the nine months and the fiscal quarter ended June 2, 1996,
respectively, the Company had revenues of approximately $22.5 million and
$7.3 million and incurred a loss of approximately $6.5 million and $2.5
million. The Company has adopted plans to reduce operating expenses and
increased its sales revenues, but there can be no assurance as to the
Company's earnings producing profit or that the Company will be able to
increase its total revenues.
<PAGE> 6
2. Going Concern. The Company's auditors, Coopers & Lybrand, L.L.P.,
in their report included in the Company's 1995 Annual Report on Form 10-KSB,
stated that there is "substantial doubt about the Company's ability to
continue as a going concern." The Company believes that if it can reflect a
consistent trend of profitable quarters or obtain additional financing, it
should be able to continue as a going concern. There can be no assurance
that any additional capital will become available to the Company on terms
acceptable to the Company, if at all.
3. High Level of Indebtedness and Preferred Stock. During 1995 and
1996, the Company financed its investments and operating deficits through the
issuance of common stock, convertible debentures, exercise of stock options,
convertible preferred stock, and a financing arrangement with Strategica
Capital Corporation ("Strategica"). The Strategica loan documents limit the
Company's ability to raise new capital or engage in new financing without
Strategica's consent.
During February 1996, the Company issued an aggregate of $2,832,500 of
Liquidation Preference of its previously authorized preferred stock. The
preferred stock requires dividends to be paid in cash (or preferred stock, at
the option of the holder) at an annual rate of 11% payable quarterly starting
June 30, 1996; and is convertible into common stock at the option of the
holder at a price of 50% of the bid price per share of the common stock.
The Company had $2,925,000 of convertible debentures outstanding as of
September 3, 1995. During the eleven months ended July 28, 1996, the Company
issued $2,250,000 of convertible debentures at interest rates ranging from
prime rate plus 1% to 10%. The Company issued 2,575 shares of the preferred
stock in exchange for the conversion of a $2,200,000 debenture plus accrued
interest and in exchange for cancellation of a $500,000 note plus fees and
accrued interest and 182 shares of the preferred stock for cash of $200,000.
The Company also issued 21,962,100 shares of common stock as satisfaction of
other indebtedness totaling $2,556,000. Convertible debentures totaling
$500,000 remain outstanding.
The rights of holders of these notes, debentures and convertible
preferred stock are senior to those of common stockholders. Further,
documents underlying these instruments grant holders or their representatives
the right to nominate members of the Company's board of directors and require
holders' consent for certain financing and investing transactions. Dividends
on preferred stock and interest on notes and debentures may significantly
impair the Company's cash flow.
4. Competition. The business in which the Company engages is highly
competitive. There are other companies, with resources substantially greater
than those of the Company, which are engaged in the same business as the
Company and in the "fast food" business which may be considered as competing
directly with the Company.
<PAGE> 6
5. Credit Factor for the Purchase of Ingredients. The Company's
inability to pay trade payables in accordance with their terms has resulted
in the Company being placed on a cash basis with some of its suppliers. In
the absence of additional financing, as to which there is no assurance, and
absent sufficient cash flow from revenues, there can be no assurance that the
Company's vendors will grant credit terms to enable the Company to maintain
a trade payable position which allows it to purchase ingredients for its
sandwiches or resale products, and the Company may not be able to purchase
ingredients or resale products in time to meet obligations imposed upon the
Company by its customers. This may have a material adverse effect on the
Company's ability to profit from the sale of its manufactured or resale
products.
6. Government Regulation. The Company is required to comply with
federal, state, and local government regulations applicable to consumer food
service businesses generally, including those relating to the preparation and
sale of food, minimum wage requirements, overtime, working and safety
conditions, and environmental requirements, as well as regulations relating
to zoning, construction, health, business licensing and employment.
Companies involved in the manufacture, packaging and distribution of food
items are subject to extensive regulation by various government agencies
which, pursuant to statutes, rules and regulations, prescribe quality,
purity, manufacturing and labeling requirements. Food products are often
subject to "standard identity" requirements which are promulgated at either
the federal or state level to determine the permissible qualitative and
quantitative ingredient content of foods. The Company believes that it is in
material compliance with these provisions. Continued compliance with this
broad federal, state and local regulatory network is essential and costly and
the failure to comply with such regulations may have an adverse effect on the
Company.
Each of the Company's manufacturing plants is subject to inspection and
regulation by federal agencies, including the FDA and the United States
Department of Agriculture and to licensing and regulation by state and local
health, sanitation, safety, fire and other departments. Difficulties or
failures in obtaining required licenses for new plants or keeping current
licenses or approvals and to maintaining required standards, could result in
the imposition of sanctions, including the closing of all or a portion of
production facilities which could have material adverse effects on the
Company and its operations.
7. No Continuing Contractual Relationships with Customers. The
Company sells its products to its customers as purchase orders are placed by
such customers. Accordingly, there are no contractual obligations for
business or any assurance that any of the Company's customers or suppliers
will continue to do business with the Company.
8. SEC Investigation. In April, 1994, the SEC initiated a private
investigation ("Investigation") of the Company (known then as Modami
Services, Inc.) with respect to possible violations of the anti-fraud and
reporting requirements of the federal securities laws. There can be no
assurance that, upon the conclusion of the Investigation, the SEC will not
commence administrative or legal proceedings against the Company and certain
former or present officers and directors, seeking disgorgement and other
relief.
9. No Dividends. To date, the Company has not paid any cash
dividends on its Common Stock and does not expect to declare or pay any cash
or other dividends in the foreseeable future.
<PAGE> 7
10. Possible Delisting of Securities from NASDAQ System; Risks of Low
Priced Stocks. The SEC has approved rules imposing more stringent criteria
for listing of securities on NASDAQ. If the Company is unable to satisfy
NASDAQ's revised listing criteria for its Common Stock which require that the
Company maintain total assets of at least $2,000,000, total capital and
surplus of $1,000,000 and a minimum bid price of $1.00 (or, if the bid price
is below $1.00, the Company must have a public float with a market value of
at least $1,000,000 and capital and surplus of $2,000,000), its Common Stock
will be subject to being delisted, and trading, if any, in the Common Stock
would thereafter be conducted in the over-the-counter market on the OTC
Bulletin Board. Consequently, an investor may find it more difficult to
dispose of, or to obtain accurate quotations as to the price of, the
Company's securities. From December 7, 1995 to March 20, 1996, the Company
failed to meet NASDAQ's listing criteria and traded under a conditional
listing.
11. Penny Stock Regulation. The SEC has adopted rules that regulate
broker-dealer practices in connection with transactions in a "penny stock."
Penny stocks generally are equity securities with a price of less than $5.00
(other than securities registered on certain national securities exchanges or
quoted on NASDAQ, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver
a standardized risk disclosure document prepared by the Commission that
provides information about penny stocks and the nature and level of risks in
the penny stock market. The broker-dealer also must provide the customer
with current bid and offer quotations for the penny stock, the compensation
of the broker-dealer and its salesperson in the transaction, and monthly
account statements showing the market value of each penny stock held in the
customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or
in writing prior to effecting the transaction and must be given to the
customer in writing before or with the customer's confirmation. In addition,
the penny stock rules require that prior to a transaction in a penny stock
not otherwise exempt from such rules, the broker-dealer must make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements generally have the effect of significantly
reducing the level of trading activity in the secondary market for a security
that becomes subject to the penny stock rules. If the Company's securities
become subject to the penny stock rules, investors in this Offering may find
it more difficult to sell such securities.
12. Dilution, Common Stock Issued in Regulation S Transactions. Since
June, 1993, the Company has sold approximately 42,000,000 shares of Common
Stock to non-U.S. investors for an aggregate amount of approximately
$22,000,000, reflecting purchase prices with discounts of up to 50% from the
then prevailing market price. The stock sold in these transactions was not
registered in reliance on the exemption provided by Regulation S under the
Securities Act of 1933 and the capital raised was used by the Company to fund
operations. The effect of these transactions has been to significantly
dilute existing shareholder value, and this dilution has been reflected in
the market price of the Company's Common Stock. There can be no guarantee
that the Company will not raise capital through additional Regulation S
transactions or through the issuance of Common Stock in reliance on other
exemptions from registration in the future, or that such transactions will
not result in further dilution of the Company's existing shareholders.
<PAGE> 8
SELLING SHAREHOLDERS
The Selling Shareholders are named and their share holdings are set
forth in the following table, based on certain information provided to the
Company by the Selling Shareholders.
<TABLE>
<CAPTION>
<C> Shares of <C> <C> <C>
<S> Common Stock Shares of
beneficially Percentage Shares of Common Stock Percentage
Name of Selling owned as of of Common Stock to be owned of
Shareholder August 30, 1996 Class Offered after Offering Class
J. Michael Reisert, Inc. 3,557,583 (1) 3.0% 3,557,583 0 0%
Eli and Esther Shapiro 250,000 (6) .2 250,000 0 0
William A. Boyd 1,466,666 (7) 1.3 1,466,666 0 0
Denis Fortin 1,183,333 (8) 1.0 1,183,333 0 0
Lloyd B. Embry 295,833 (9) .3 295,833 0 0
John D. Linn 438,666 (10) .4 438,666 0 0
Harold E. Blaksley 416,666 (11) .4 416,666 0 0
Willard D. Campbell 416,666 (12) .4 416,666 0 0
Robert J. and June G.
Becker 541,666 (13) .5 541,666 0 0
Emanon Partners, L.P. 7,073,333 (14) 6.1 7,073,333 0 0
Abraxas Partners, Ltd. 476,667 (15) .4 476,667 0 0
Thomas T. Grimett PA 858,334 (16) .7 858,334 0 0
Oscar Gruss & Son, Inc. 833,334 (17) .7 833,334 0 0
Michael S. O'Brien 833,334 (18) .7 833,334 0 0
Carl Myers 250,000 (19) .2 250,000 0 0
Edwin Coyle 160,000 .1 160,000 0 0
Harold S. Carpenter 308,333 (20) .3 308,333 0 0
Seabeach & Co. 13,045,454 (21) 10.8 13,045,454 0 0
Michael Taglich 5,679,424 (22) 4.9 5,679,424 0 0
Robert F. Taglich 5,679,424 (23) 4.9 5,679,424 0 0
Russell J. Redgate 2,000 0 2,000 0 0
Joseph G. D'Amadeo 63,567 .1 63,567 0 0
Thomas Wagner 63,567 .1 63,567 0 0
Michael Lauer 3,183,065 (24) 2.7 3,183,065 0 0
Lancer Offshore, Inc. 5,928,571 5.2 5,928,571 0 0
Lancer Partners, L.P. 31,459,530 27.3 31,459,530 0 0
Martin Garvey 360,000 (25) .3 360,000 0 0
Dale Mayol 575,000 (26) .5 575,000 0 0
Taglich Brothers, D'Amadeo,
Wagner & Co. 18,000 0 18,000 0 0
Marlowe & Company 638,161 (2) .6 638,161 0 0
Paul Mitchell 678,571 .6 678,571 0 0
William Dawson 5,000 (27) 0 5,000 0 0
Armando Colombo 10,000 (27) 0 10,000 0 0
Brian Hanley Rev Trust 50,000 (27) 0 50,000 0 0
Dino S. Colombo 10,000 (27) 0 10,000 0 0
Peter & Cathy Munro 8,000 (27) 0 8,000 0 0
Mario Serafini 20,000 (27) 0 20,000 0 0
Greg L. Armstrong 10,000 (27) 0 10,000 0 0
Michael & John Alastanos JTE 4,000 (27) 0 4,000 0 0
<PAGE> 9
William E. Guthner, Jr. Nossaman
Guthner, Knox & Elliott
Profit Sharing Plan #001 30,000 (27) 0 30,000 0 0
William E. Guthner, Jr. 10,000 (27) 0 10,000 0 0
Thomas Heil 20,000 (27) 0 20,000 0 0
R. Bruce Simpson Trust 10,000 (27) 0 10,000 0 0
Stanley & Bonnie Schweiger 10,000 (27) 0 10,000 0 0
Albert C. Korelishn 25,000 (27) 0 25,000 0 0
David Casoria 10,000 (27) 0 10,000 0 0
Phil Kramer 10,000 (27) 0 10,000 0 0
Robert Augenti 10,000 (27) 0 10,000 0 0
George & Mary Fanady JTWROS 6,000 (27) 0 6,000 0 0
Richard S. Fitzgerald 6,000 (27) 0 6,000 0 0
Kenneth H. Robertson 5,000 (27) 0 5,000 0 0
Steven J. Colombo 4,000 (27) 0 4,000 0 0
Cy Case 25,000 (27) 0 25,000 0 0
Peter & Cathrine Casoria Sr. 25,000 (27) 0 25,000 0 0
DJP Investments 5,000 (27) 0 5,000 0 0
Peter & Patricia Casoria, Jr. 25,000 (27) 0 25,000 0 0
Denis Kelleher 20,000 (27) 0 20,000 0 0
William J. Dockery IRA R/O
Oppenheimer & Co.
Custodian 50,000 (27) 0 50,000 0 0
Helen Reisert c/f Justin
Reisert 3,000 (27) 0 3,000 0 0
Thomas L. Schroeder Trust 9,000 (27) 0 9,000 0 0
Allan Sorensen 50,000 (27) 0 50,000 0 0
John Becker 10,000 (27) 0 10,000 0 0
Robert Kennington 40,000 (27) 0 40,000 0 0
Ronald Galowich 50,000 (27) 0 50,000 0 0
Milton & Hoan Morris Rev.
Living Trust 30,000 (27) 0 30,000 0 0
Boston Portfolio Advisors 5,000 (27) 0 5,000 0 0
Thomas L. Schroeder SEP IRA
Oppenheimer & Co. 40,000 (27) 0 40,000 0 0
Crooks & Oscher 100,000 (27) .1 100,000 0 0
Richard Cranmer 50,000 (27) 0 50,000 0 0
Bill Hitchcock 50,000 (27) 0 50,000 0 0
Rich Schroeder 20,000 (27) 0 20,000 0 0
Strategica Capital
Corporation 17,949,931 (3) 13.5 17,949,931 0 0
Europe American Capital
Corporation 12,405,330 (4) 9.7 12,405,330 0 0
TransAtlantic Capital
Corporation 3,330,495 (5) 2.8 3,330,495 0 0
121,300,504 63.8% 121,300,504 0 0%
</TABLE>
(1) Includes warrants to purchase 432,500 shares of the Company's Common
Stock at an exercise price of $0.125 per share and warrants to purchase
2,818,834 shares of the Company's Common Stock at an exercise price of
$0.0125.
(2) Includes warrants to purchase 216,250 shares of the Company's Common
Stock at an exercise price of $0.125 per share.
<PAGE> 10
(3) Consists of warrants exercisable for the purchase of shares of Common
Stock, at a price of $0.5625 per share.
(4) Consists of shares of Common Stock which may be acquired upon conversion
of 2,030 shares of the Company's 11% Convertible Preferred Stock.
(5) Consists of shares of Common Stock which may be acquired upon conversion
of 545 shares of the Company's 11% Convertible Preferred Stock.
(6) Includes warrants to purchase 125,000 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(7) Includes warrants to purchase 633,333 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(8) Includes warrants to purchase 350,000 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(9) Includes warrants to purchase 87,500 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(10) Includes warrants to purchase 230,333 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(11) Includes warrants to purchase 208,333 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(12) Includes warrants to purchase 208,333 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(13) Includes warrants to purchase 333,333 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(14) Includes warrants to purchase 980,000 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(15) Includes warrants to purchase 70,000 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(16) Includes warrants to purchase 441,667 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(17) Includes warrants to purchase 416,667 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(18) Includes warrants to purchase 416,667 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(19) Includes warrants to purchase 125,000 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(20) Includes warrants to purchase 100,000 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(21) Includes warrants to purchase 6,000,000 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
<PAGE> 11
(22) Includes warrants to purchase 175,000 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(23) Includes warrants to purchase 175,000 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(24) Includes warrants to purchase 900,000 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(25) Includes warrants to purchase 150,000 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(26) Includes warrants to purchase 175,000 shares of the Company's Common
Stock at an exercise price of $0.0125 per share.
(27) Includes only warrants to purchase shares of the Company's Common Stock
at an exercise price of $0.0125 per share.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholders, or
by pledgees, donees, transferees or other successors in interest. Such sales
may be made in the over-the-counter market or otherwise at prices and at
terms then prevailing or at prices related to the then prevailing market
price, or in negotiated transactions. The Shares may be sold by one or more
of the following methods: (a) block trades 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 as principal, in a market maker capacity or
otherwise, and resale by such broker or dealer for its account pursuant to
this Prospectus; and (c) ordinary brokerage transactions and transactions in
which the broker solicits purchasers. In effecting sales, brokers or dealers
engaged by the Selling Shareholders may arrange for other brokers or dealers
to participate. Brokers or dealers will receive commissions or discounts
from the Selling Shareholders in amounts to be negotiated immediately prior
to the sale. The Selling Shareholders, such brokers or dealers, and any
other participating brokers or dealers may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933 (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.
Upon the Company being notified by a Selling Shareholder that any
material arrangement has been entered into with a broker or dealer for the
sale of Shares through a block trade or any other purchase by a broker or
dealer as principal, other than a purchase as a market maker in an ordinary
trading transaction, a supplemented prospectus will be filed, if required,
pursuant to Rule 424 under the Act, disclosing (i) the name of such Selling
Shareholder and of the participating brokers or dealers; (ii) the number of
Shares involved; (iii) the price at which such Shares will be sold; (iv) the
commission paid or discounts or concessions allowed to such brokers or
dealers, where applicable; (v) that such brokers or dealers did not conduct
any investigation to verify the information set forth or incorporated by
reference in this Prospectus; and (vi) other facts material to the
transaction.
<PAGE> 12
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated in
this Prospectus by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year
ended September 3, 1995, Commission File No. 0-23020.
2. The Company's Quarterly Reports on Form 10-QSB for the fiscal
quarter ended December 3, 1995, for the fiscal quarter ended March
3, 1996, and the fiscal quarter ended June 2, 1996.
3. The Company's last filed current report on Form 8-K dated February
29, 1996.
4. The Company's Proxy Statement dated January 17, 1996 for its
annual meeting held on February 21, 1996.
5. The Company's Proxy Statement dated May 13, 1996 for a special
meeting held on June 20, 1996.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14, and 15(d) of the Securities Exchange Act of 1934,
as amended, after the date of this Prospectus and prior to the termination of
the Offering shall be deemed to be incorporated by reference herein and to be
a part hereof from the date of the filing of such reports and documents.
EXPERTS
The consolidated balance sheets of The AppleTree Companies, Inc. as of
September 3, 1995 and August 31, 1994 and the consolidated statements of
operations, stockholders' equity (deficiency), and cash flows for the fifty-
three week period ended September 3, 1995 and the year ended August 31, 1994,
included in the Company's reports on Form 10-KSB and incorporated by
reference in this Prospectus, have been incorporated herein in reliance on
the report dated December 1, 1995, which includes explanatory paragraphs
relating to an uncertainty concerning the Securities and Exchange
Commission's order for a private investigation of the Company and certain of
its officers and directors, and the Company's ability to continue as a going
concern, of Coopers & Lybrand, L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
Any financial statements and schedules hereafter incorporated by
reference in this prospectus that have been audited and are the subject of a
report by independent accountants will be so incorporated by reference in
reliance upon such reports and upon the authority of such firms as experts in
accounting and auditing to the extent covered by consents filed with the
Commission.
The validity of the issuance of the securities offered hereby by the Selling
Stockholders is being passed upon for the Company by Holland & Knight, West Palm
Beach, Florida.
<PAGE> 13
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
All expenses in connection with the issuance and distribution of the
securities being registered will be paid by the Company. The following is an
itemized statement of these expenses:
Registration Fee $3,346
Legal Fees 5,000*
Accounting Fees 5,000*
Miscellaneous 100*
Total $13,446
*Estimated
Item 15. Indemnification of Directors and Officers.
The Company is a Delaware corporation. The Company's Certificate of
Incorporation and Bylaws permit the Board of Directors of the Company to
authorize the indemnification of directors, officers and employees of the
Company to the fullest extent permitted by law. Reference is made to the
Delaware General Corporation Law and to Section 145 thereof, which permits,
and in some cases requires, indemnification of directors, officers, employees
and agents of the Company under certain circumstances, subject to certain
limitations.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the provisions described above, the Company has been
informed that in the opinion of the SEC, such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
The Delaware General Corporation Law permits the indemnification by a
Delaware corporation of its directors, officers, employees and other agents
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than derivative actions that are by or in the right of the corporation) if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceedings, had no reasonable cause to believe their
conduct was illegal. A similar standard of care is applicable in the case of
derivative actions, except that indemnification extends only to expenses
(including attorneys' fees) incurred in connection with defense or settlement
of such an action, and court approval is required before there can be any
indemnification if the person seeking indemnification has been found liable
to the corporation.
The rights of indemnification described above are not exclusive of any
other rights of indemnification to which the persons indemnified may be
entitled under any statute, agreement, vote of shareholders or directors or
otherwise.
The Company has also entered into indemnity agreements with certain
directors and officers. The indemnity agreements in large part incorporate
the indemnification provisions as described above.
<PAGE> 14
Item 16. Exhibits.
1. Articles of Incorporation and Amendments thereto of the Company.
1A. A Certificate of Designation as to 11% Convertible Preferred
Stock.
2. Bylaws of the Company
3. Opinion of Counsel.
4. Consent of Coopers & Lybrand, L.L.P. (To be provided in an
amendment to this Registration Statement at a later date.)
5. Powers of Attorney.
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 Act;
(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; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with the SEC by the
registrant pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Act, 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.
<PAGE> 15
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in 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 Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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 Norfolk, State of Virginia, on
September 3, 1996.
THE APPLETREE COMPANIES, INC.
By: /s/
------------------------------
John W. Donlevy
President and Chief Executive Officer
<PAGE> 16
POWER OF ATTORNEY
Each of the undersigned officers and directors of The AppleTree
Companies, Inc. (the "Company"), a Delaware corporation, does hereby
constitute and appoint John W. Donlevy and his substitutes, his true and
lawful attorney in his name, place and stead, in any and all capacities, to
sign his name to any and all amendments to this registration statement,
including post-effective amendments, and to cause the same to be filed with
the Securities and Exchange Commission, granting unto said attorney in fact
full power of substitution and full power and authority to do and perform any
act and thing necessary and proper to be done in the premises, as fully as
the undersigned could do if personally present, and each of the undersigned
for himself hereby ratifies and confirms all that said attorney shall
lawfully do or cause to be done by virtue of the power of attorney granted
hereby.
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.
Signature Title Date
/s/ September 3, 1996
- -------------------------- President, Chief -----------------
John W. Donlevy Executive Officer and Director
(Principal executive officer)
/s/ September 3, 1996
- -------------------------- Senior Vice President, -----------------
Justin A. DiMacchia Finance, Chief Financial
Officer and Director
(Principal financial and
accounting officer)
/s/ September 3, 1996
- -------------------------- Chairman of the Board of -----------------
Allan G. Sorensen Directors
/s/ September 3, 1996
- -------------------------- Director -----------------
George Kelly
September 3, 1996
- -------------------------- Director -----------------
David Klarman, Esq.
/s/ September 3, 1996
- -------------------------- Director -----------------
Harold Rashbaum
<PAGE> 17
EXHIBIT INDEX
Exhibit Number Document Description
5 Opinion of Counsel, Holland & Knight.
23.1 Consent of Holland & Knight (included in Exhibit
5)
23.2 Consent of Coopers & Lybrand, L.L.P. (To be
provided in an amendment to this Registration
Statement at a later date.)
24 Power of Attorney (included on signature pages to
registration statement)
<PAGE> 18
EXHIBIT 5
September 3, 1996
Board of Directors
The AppleTree Companies, Inc.
5732 Curlew Drive
Norfolk, Virginia 23502
We have acted as special counsel for The AppleTree Companies, Inc. (the
"Company") in connection with the filing of a Registration Statement on Form
S-3 (the "Registration Statement") under the Act, as amended, covering the
resale of 121,300,504 shares of common stock, par value $.001 per share (the
"Shares"), of the Company by the holders thereof (the "Selling
Shareholders"). We have reviewed the corporate actions of the Company in
connection with this matter and have examined those documents, corporate
records, and other instruments we deemed necessary for the purpose of this
opinion.
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly existing
under the laws of the State of Delaware.
2. The Shares have been duly authorized and are legally issued, fully
paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Holland & Knight, P.A.
--------------------------------------
<PAGE> 19
EXHIBIT 23.2
Consent of Coopers & Lybrand, L.L.P.
(To be provided in an amendment to this Registration Statement at a later
date.)
<PAGE> 20
