<PAGE>
PROSPECTUS
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249,646 Shares
COMMUNITY MEDICAL TRANSPORT, INC.
Common Stock
The 249,646 shares of common stock, par value $.001 per share (the
"Common Stock"), to which this Prospectus relates (the "Shares") are being
offered, from time to time, on behalf of and for the account of certain
stockholders (the "Selling Stockholders") of Community Medical Transport, Inc.
(the "Company") as identified herein under "Selling Stockholders." The Shares
are comprised of 174,646 shares which have been issued to the Selling
Stockholders and 75,000 shares which are issuable upon exercise of certain
rights (the "Rights"), each issued to the Selling Stockholders by the Company.
The distribution of the Shares by the Selling Stockholders, or by pledgees,
donees, distributees, transferees or other successors in interest, may be
affected from time to time by underwriters who may be selected by the Selling
Stockholders and/or broker-dealers, in one or more transactions (which may
involve crosses and block transactions) on The Nasdaq SmallCap Market or other
over-the-counter markets or, in special offerings, exchange distributions or
secondary distributions pursuant to and in accordance with rules of such
over-the-counter markets or exchanges, in negotiated transactions or otherwise,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. In connection with the
distributions of the Shares or otherwise, the Selling Stockholders may enter
into hedging or option transactions with broker-dealers and may sell Shares
short and deliver the Shares to close out such short positions. The Company has
agreed to indemnify the Selling Stockholders, underwriters who may be selected
by the Selling Stockholders and certain other persons against certain
liabilities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act"). See "Selling Stockholders" and "Plan of Distribution."
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These securities involve a high degree of risk. See "Risk Factors"
commencing on page 6.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The Company has agreed to pay all expenses of registration in
connection with this offering but will not receive any of the proceeds from the
sale of the Shares being offered hereby. All brokerage commissions and other
similar expenses incurred by the Selling Stockholders will be borne by such
Selling Stockholders. The aggregate proceeds to the Selling Stockholders from
the sale of the Shares will be the purchase price of the Shares sold, less the
aggregate brokerage commissions and underwriters' discounts, if any, and other
expenses of issuance and distribution not borne by the Company.
The Common Stock being offered hereby by the Selling Stockholders has
not been registered for sale under the securities laws of any state or
jurisdiction as of the date of this Prospectus. Brokers or dealers effecting
transactions in the Common Stock should confirm the registration thereof under
the securities law of the state in which such transactions occur, or the
existence of any exemption from registration.
The Common Stock is listed for trading on The Nasdaq SmallCap Market.
On August 28, 1997, the closing bid price of the Common Stock as reported by The
Nasdaq SmallCap Market was $2-17/32 per share.
The date of this Prospectus is August 28, 1997.
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TABLE OF CONTENTS
Page
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Available Information.................................................. 2
Incorporation of Certain Documents by Reference........................ 3
The Company ........................................................... 4
Risk Factors........................................................... 6
Use of Proceeds........................................................ 8
Selling Stockholders................................................... 8
Plan of Distribution................................................... 9
Legal Matters..........................................................10
Experts................................................................10
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus or
incorporated by reference to this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or by the Selling Stockholders. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the
securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction. The delivery
of this Prospectus at any time does not imply that the information contained
herein is correct as of any time subsequent to its date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance
therewith, the Company files reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Regional Offices of the
Commission at 7 World Trade Center, New York, New York 10048 and Northwestern
Atrium Center, 500 West Madison Street, Chicago, Illinois 60621. Copies of such
material may be obtained from the Public Reference Section of the Commission at
prescribed rates by writing to the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or from the Commission's web site at http://www.sec.gov.
The Common Stock is traded on The Nasdaq National Market and reports and other
information concerning the Company may be inspected and copied at The Nasdaq
Stock Market, Inc. at 1735 K Street, N.W., Washington, DC 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act with respect to the Common Stock offered
hereby. This Prospectus does not contain all 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 made to the Registration Statement, copies of which can be obtained from the
Public Reference Section of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of the fees prescribed by the Commission.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated herein by reference are the following documents filed by
the Company with the Commission (File No. 0-24640) under the Exchange Act:
(a) The Company's Annual Report on Form 10-KSB and Form 10-KSB/A-1 for
its fiscal year ended December 31, 1996;
(b) The Company's Quarterly Reports on Form 10-QSB for its fiscal
quarters ended March 31, 1997 and June 30, 1997; and
(c) The Company's Registration Statement on Form 8-A for a description
of the Common Stock.
All documents filed by the Company with the Commission pursuant to
Sections 13, 14 and 15(d) of the Exchange Act subsequent hereto, but prior to
the termination of this offering, shall be deemed to be incorporated herein by
reference and to be a part hereof from their respective dates of filing. 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 which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owners, to whom a copy of this Prospectus is delivered, upon the
written and oral request of any such person, a copy of any or all of the
documents referred to above which have been incorporated into this Prospectus by
reference (other than the exhibits to such documents). Requests for such copies
should be directed to Dean L. Sloane, President, 45 Morris Street, Yonkers, New
York 10705; telephone number (914) 963-6666.
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THE COMPANY
General
Community Medical Transport, Inc. (the "Company"), through its
subsidiaries, provides medical transportation and other specialized services in
the New York-New Jersey metropolitan area. These services include specialized
transportation for the handicapped, disabled, mentally retarded, elderly and
chronically ill to and from day treatment centers, day care programs, hospitals,
nursing homes, dialysis centers, and other health care facilities. This service
is provided in ambulettes -- specialized vans that contain ramps and other
equipment designed to secure and safely transport wheelchair bound passengers.
These services also include emergency and non-emergency ambulance transportation
services, including limited "911" emergency service, for patients who require
basic medical care or supervision during transport to and from hospitals,
nursing homes and other health care facilities.
The Company was incorporated in Delaware in November 1988 under the
name Med Management, Inc., and thereafter changed its name first to Regent
Management Group, Inc. in 1989 and then to Community Medical Transport, Inc. in
1994. The Company consummated an initial public offering in October 1994 (the
"IPO").
As overall demand for ambulance and ambulette services is increasing,
contracting parties and regulatory authorities are imposing more stringent
requirements in terms of quality of care and cost of service. Ambulance and
ambulette service providers are facing increasing demand to deploy vehicles more
efficiently, employ more highly trained personnel and otherwise operate more
cost- efficiently. These requirements and their associated costs are producing
consolidation opportunities as smaller service providers seek to combine with
larger providers to gain access to greater financial, technological and
managerial resources to improve dispatch systems, fleet maintenance, training of
personnel, accounts receivable recovery and marketing capability. In addition,
there are significant barriers to entry into this industry, particularly with
respect to ambulance services. As a result, the Company believes that
well-established transportation providers with a strong customer base, a
reputation for high quality of service, and profitable operations will have
considerable opportunity to expand their operations through acquisitions and
consolidation of smaller local providers.
The Company believes that the fragmented nature of its industry
combined with increasing performance requirements and cost burdens imposed on
smaller companies creates favorable acquisition and expansion opportunities for
the Company.
In the New York - New Jersey metropolitan and surrounding area the
Company had intended, through acquisitions and expansion, to build a network of
and become a significant provider of ambulette and ambulance services. The
Company believes it is now a significant medical transportation provider in the
New York - New Jersey metropolitan area and intends to further expand through
acquisitions and internal growth. The Company intends to achieve this by:
o Continuing its commitment to high quality, specialized and medical
transportation services provided by qualified personnel;
o Acquiring ambulance and ambulette service providers in the New York -
New Jersey metropolitan area, and integrating and consolidating these
companies and their operations with the operations of the Company. The
Company believes such acquisitions and consolidations will improve the
efficiency of existing operations;
o Expansion of services through increased marketing efforts to day care
centers, nursing homes, hospitals, and other health care facilities and
providers;
o Preserving ties to the local community and providing continuity of
service and community relations, which may include retaining management
of its acquired service providers, where necessary.
The Company may also seek to expand through the acquisition of
ambulance and ambulette providers outside of the New York - New Jersey
metropolitan area with high quality management and strong performance records.
The Company will consider acquisition candidates that it believes offer
attractive opportunities for intrinsic growth and expansion into nearby service
areas and where the Company believes it may become a significant provider.
Management believes that such acquisitions would enable it to achieve
economies of scale, improve its gross margins and increase its ability to
compete with other service providers. The Company may retain senior management
of acquired companies outside of the New York - New Jersey metropolitan area
after the acquisition to manage local operations. The Company will also
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consider acquiring businesses that provide related health care services
including the distribution of durable medical equipment and supplies.
The principal executive offices of the Company are located at 45 Morris
Street, Yonkers, New York 10705 and its telephone number is (914) 963-6666.
Unless the context otherwise requires, references to the "Company"
contained in this Prospectus include all subsidiaries of the Company.
Recent Developments
In April 1997, a former employee of a subsidiary of the Company
commenced an action against the Company and the subsidiary entitled Allen Bemus
v. Community Medical Transport, Inc. and Empire Ambulance and Ambulette, Inc.,
in the Superior Court of Connecticut (the "Bemus Action"). The Bemus Action
alleges breach of an employment agreement and a covenant not to compete, a
breach of the covenant of good faith and fair dealing in connection with the
aforesaid agreements, defamation, lost wages and negligent infliction of
emotional distress. The Bemus Action seeks damages of approximately $250,000,
plus punitive damages. The Company believes that it has valid and meritorious
defenses to the Bemus Action, as well as offsets against the claims asserted in
the complaint, and is preparing an appropriate answer. The Company intends to
vigorously oppose the Bemus Action.
In June 1997, a second action was filed against the Company and the
subsidiary by two former officers and shareholders of A-1 Ambulance Service
("A-1 Ambulance"). In June 1996, the Company had acquired from A-1 Ambulance
certain assets pursuant to an asset purchase agreement dated December 29, 1995.
That action, entitled A-1 Ambulance Service, Inc., David J. Warburg and Helen H.
Hendrie v. Community Medical Transport, Inc. and Empire Ambulance and Ambulette,
Inc. (the "Warburg Action"), was filed on June 25, 1997 in the Supreme Court of
the State of New York, County of Westchester and was served upon the Company on
July 10, 1997. The Warburg Action alleges breach of the employment agreements
entered into between the Company and the former A-1 shareholders and seeks
damages, in the aggregate, of approximately $325,000. The Company intends to
serve a response to the Warburg Action and is contemplating moving to stay the
action and compel arbitration since the written agreements upon which the claims
in the Warburg Action are based provide that disputes under those agreements are
subject to arbitration. The Company believes that it has valid and meritorious
defenses to the Warburg Action, as well as offsets against the claims asserted
in the complaint, and therefore intends to vigorously oppose that action.
In May 1997, the Company completed its purchase of the Hudson Valley
companies by acquiring all the shares of Richards Decker Operating Company and
issuing shares and notes for the balance of the purchase price pursuant to an
amendment dated as of December 31, 1996 ("December Amendment") to a Purchase
Agreement dated February 28, 1996 and amended on August 12, 1996 (the "Original
Agreement"), among the Company, Alan McGeorge, Harvey H. McGeorge Co., Inc. and
Hudvalco, Inc. Pursuant to the December Amendment the balance of the purchase
price for the Hudson Valley companies was increased by $125,000 to $1,175,000
leaving a balance of $1,132,772 after adjustments. The unpaid purchase price was
paid by (i) issuing 153,846 shares of the Company's Common Stock to Alan
McGeorge pursuant to a conversion right of the original note (ii) agreeing to
issue 7,979 additional shares of the Company's Common Stock (iii) issuing a five
month note in the amount of $566,386 payable in five equal installments
convertible into shares of the Company's Common Stock in certain circumstances.
The Company through the issuance of additional shares or cash payment guaranteed
the price of its Common Stock at $3.50 per share.
In July 1997, the Company renegotiated the amount due on the New Note
and the New Note was repaid in full for the amount of $500,000. In conjunction
with the repayment of the New Note, the Company issued 166,667 shares of its
Common Stock to a third party, Ronald Davis, in consideration for $500,000.
In July 1997, the Company entered into an agreement with Fox Ridge
Transportation, Inc. ("Fox Ridge") for the acquisition of certain vehicles and
contracts. The consummation of such agreement is subject to the delivery of
certain documents by Fox Ridge. Pending delivery of such documents, the Company
will operate the business of Fox Ridge and be entitled to the revenues
therefrom.
Commencing on August 1, 1997, the Company's Common Stock and Warrants
were quoted on The Nasdaq SmallCap Market. Although the Company did not agree
with the decision to terminate the listing of the Company's securities from The
Nasdaq National Market, in the view of The Nasdaq Stock Market Inc., the Company
did not comply with certain Nasdaq criteria not related to the financial
condition of the Company.
Pursuant to the federal/state statutory scheme for the regulation and
administration of the Medicaid program, each state has a Medicaid Fraud Control
Unit. In New York State that Unit is placed within the Office of the Attorney
General. This office has broad civil and criminal jurisdiction over Medicaid
providers. In the course of its operations, it reviews Medicaid providers. The
Company was the subject of such a review, together with several other medical
transportation providers in the same general geographic area. The Company
believes that it has complied with all appropriate regulations. Based on
conversations with the Attorney General's office, the Company does not
anticipate that any charges will be lodged by the Attorney General as a result
of this review. Nevertheless, the State disputed certain claims for which the
Company received reimbursement during a four and one-half year period. The
Company entered into a stipulation pursuant to which it paid $97,000 for
disputed claims and received a release from the State.
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RISK FACTORS
An investment in the securities offered hereby involves a high degree
of risk. Prospective investors should consider carefully the following risks and
speculative factors, among other things, in making a decision concerning the
purchase of securities offered hereby:
Dependence Upon Third Party Reimbursement. A substantial majority of
the Company's revenues are attributable from reimbursement by third-party
payors, particularly Medicare and Medicaid, typically invoicing and collecting
payments directly from the third-party payor. During the fiscal year ended
December 31, 1996 and the six months ended June 30, 1997, the Company derived
approximately 60% and 49%, respectively, of its net revenues from Medicaid and
Medicare, approximately 11% and 9%, respectively, of its net revenues from Beth
Abraham Hospital (the Company's only fixed-cost provider) and approximately 29%
and 42%, respectively, of its net revenues from private insurers and other
non-governmental sources. The revenues, cash flows and profitability of the
Company, like those of other companies in the health care industry, are affected
by the continuing efforts of third-party payors to control expenditures for
health care. In addition, reimbursement can be influenced by the financial
instability of private third-party payors and by budget pressures and cost
shifting by governmental payors. A reduction in coverage or reimbursement rates
by third-party payors could have a material adverse effect on the Company's
results of operations. Various measures are being considered by federal, state
and local governments which could result in a reduction in coverage or
reimbursement amounts.
Growth Strategy - Acquisition of Ambulette and Ambulance Service
Providers; Possible Capital Requirements. The Company's growth strategy depends
in large measure on its ability to acquire and successfully operate additional
ambulette and ambulance service providers. There can be no assurance that
suitable additional acquisitions can be identified, consummated or successfully
operated or that the Company's goals will otherwise be achieved. In addition,
increased competition may increase purchase prices for acquisitions to levels
beyond the Company's financial capability. The Company may require cash to
complete future acquisitions.
Dilutive Effect of Issuances of Securities. The Company may use
securities and notes as a significant portion of the consideration for future
acquisitions. Issuance of such securities will dilute the interests of the then
existing stockholders of the Company.
Government Regulation. The Company's business is subject to
governmental regulation at the federal, state and local levels. Such regulation
covers licensing, rates, employee certification, environmental matters, vehicle
and equipment review and other factors. Failure to comply with applicable
regulatory requirements can result in, among other things, fines, operating
restrictions or suspensions and loss of essential licenses. If the Company fails
to comply with governmental requirements pertaining to Medicaid and Medicare
reimbursements, the Company can be terminated as a service provider compensated
by Medicaid and Medicare. This could jeopardize the ability of the Company to
maintain reimbursement from other programs. There can be no assurance that
federal, state or local laws or regulations will not be adopted which could
increase the Company's cost of doing business, reduce reimbursement levels or
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otherwise have a material adverse effect on the Company's business, financial
condition or operating results. There is also an inherent risk in the
acquisition of any provider that, despite a comprehensive due diligence
investigation by the Company, past noncompliance by the acquired provider may
not be discovered until after the acquisition is completed, and remediation by
the Company of such noncompliance may be necessary. Additionally, all of the
Company's operations as well as its records are subject to review and inspection
by various governmental agencies from time to time.
Competition. The ambulance and ambulette industry is highly
competitive. Principal participants include government entities, large regional
ambulance service providers, hospitals and numerous local providers. The Company
competes with several large firms in its market, including Med-Trans, a
subsidiary of Laidlaw, Transcare and Metropolitan Ambulance. The Company also
encounters competition, particularly with respect to ambulette services, from
small providers operating in the New York-New Jersey metropolitan area. In
addition to present competition, other companies that do not currently operate
ambulance or ambulette services may enter the ambulance/ambulette service
business. There can be no assurance that health care facilities that presently
contract for ambulance or ambulette services will not choose to provide
ambulance or ambulette services directly in the future. Furthermore, the Company
believes that it may encounter significant competition for acquisitions of other
medical transportation service providers from competitors with greater capital
and other resources than the Company which are actively seeking to acquire
service providers.
Liability Claims in Excess of Insurance Coverage. The Company is
subject to automobile and other liability claims relating to the services
performed by it in the ordinary course of its business. The Company maintains
liability insurance policies providing insurance coverage which it believes to
be adequate. However, there can be no assurance that claims in excess of the
Company's insurance coverage or claims not covered by insurance, such as claims
for punitive damages, will not arise. In addition, the Company's insurance
policies generally must be renewed on an annual basis. Although the Company has
not experienced difficulty in obtaining insurance coverage at acceptable rates,
there can be no assurance that it will continue to be able to do so in the
future.
Uncertainty Regarding Health Care Reform Proposals. Political, economic
and regulatory influences are subjecting the health care industry in the United
States to fundamental change. The Company anticipates that Congress and state
and local legislatures will review and assess alternative health care delivery
systems and cost-control measures, and public debate of these issues will likely
continue in the future. The Company cannot predict the effect any measures, if
adopted in the future, will have on the Company's business.
Reliance on Key Personnel. The Company is dependent on its senior
management, particularly Dean L. Sloane, President, and Craig V. Sloane, Vice
President-Operations. The Company has key man insurance on the life of Dean L.
Sloane in the amount of $1,000,000, with proceeds payable to the Company. The
Company has entered into employment agreements with Dean L. Sloane and Craig V.
Sloane which expire in October 1997. The loss of Dean L. Sloane or Craig V.
Sloane or other key personnel, or the failure to recruit and retain necessary
additional personnel, could have an adverse effect on the Company and its
operations. In addition, execution of the Company's acquisition program will
increase the demands on the Company's management and could create a need for new
personnel or the development of additional expertise by existing personnel. The
failure of the Company to attract and retain personnel with the requisite
expertise or to develop such expertise internally could adversely affect the
prospects for the Company's success. Finally, ties between local management of
an acquired ambulance/ambulette service provider and the community which it
serves are often important in continuing community relations following an
acquisition. To the extent that the Company is unable to retain the management
of an acquired provider, the Company's business relations with the relevant
community could be adversely affected.
Control by Directors and Officers. The Company's directors and
executive officers and their affiliates beneficially own approximately 30.3% of
the shares of the Company's Common Stock. Consequently, these stockholders will
have a substantial influence on the outcome of any matters submitted to the
Company's stockholders for approval, including the election of directors. Such
concentration of ownership may also have the effect of preventing a change in
control of the Company.
Possible Volatility of Stock Price. There has been volatility in the
market price of securities of health care companies. Future announcements
concerning the Company or its competitors, including variations in financial
results, changes in general market conditions, governmental regulations,
reimbursement changes, or other developments may have a significant impact on
the market price of the Company's securities and could cause the market price of
the Company's securities to fluctuate significantly. In addition, broad market
fluctuations and general economic or political conditions may adversely affect
the market price of the Company's securities, regardless of the Company's actual
performance.
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Dividend Policies. The Company plans to retain future earnings for use
in its business and, accordingly, the Company does not anticipate paying
dividends in the foreseeable future. Payment of dividends is within the
discretion of the Company's Board of Directors and will depend, among other
factors, upon the Company's earnings, financial condition and capital
requirements.
Potential Adverse Effect of Future Issuances of Authorized Preferred
Stock. The Company's Certificate of Incorporation authorizes the issuance of
serial 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 such rates of dividends, redemption provisions, liquidation
preferences, voting rights, conversion privileges and other characteristics as
the Board of Directors may deem necessary. Such preferred stock, if issued,
could adversely affect the holders of the Common Stock. In addition, the
preferred stock could discourage, delay or prevent a takeover of the Company.
Series BB preferred stock is currently issued and outstanding and convertible
into shares of the Company's Common Stock.
Anti-Takeover Provisions. The Company's Restated Certificate of
Incorporation and By-laws contain certain provisions which may have the effect
of delaying or preventing a change in control of the Company. Such provisions
include limitations on stockholder action (including limitations on the ability
to remove Board members). Additionally the employment agreement between the
Company and Dean L. Sloane provides for certain payments to be made to Mr.
Sloane in the event of a "change in control" of the Company, as defined in such
agreement. This may also have the effect of discouraging or preventing a change
in control of the Company.
Dilutive Effect of Warrants and Options. In addition to the shares of
Common Stock that may be issued upon the exercise of the Rights (an aggregate of
75,000 shares), the Company has reserved for issuance 2,406,104 shares of Common
Stock upon the exercise or conversion, as appropriate, of outstanding options,
warrants, convertible notes and convertible preferred stock. If the options,
warrants, notes and preferred stock are exercised or converted, as appropriate,
the percentage of Common Stock then held by the existing stockholders will be
reduced. These options, warrants, notes and preferred stock can be expected to
be exercised at a time when the Company would be able to obtain funds from the
sale of Common Stock or other securities at a price higher than the exercise
price thereof.
USE OF PROCEEDS
The Shares of Common Stock being offered hereby are for the account of
the Selling Stockholders. Accordingly, the Company will not receive any of the
proceeds from the sale of the Shares by the Selling Stockholders. See "Selling
Stockholder."
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to
Selling Stockholders. The number of Shares that may actually be sold by the
Selling Stockholders will be determined by such Selling Stockholders, and may
depend upon a number of factors, including, among other things, the market price
of the Common Stock. The table below sets forth information as of July 31, 1997,
concerning the beneficial ownership of Common Stock of the Selling Stockholder.
All information concerning beneficial ownership has been furnished by the
Selling Stockholders.
<TABLE>
<CAPTION>
Shares of Common Shares of Common Shares of Common
Stock Owned Stock Offered Stock Owned
Before Offering in the Offering After Offering
---------------------------- --------------- -----------------------
Name of Stockholder Number(1) Percent(2) Number Number Percent
- ---------------------------- ----------- ------------ -------- -------- --------
<S> <C> <C> <C> <C> <C>
Alan McGeorge, 82,979 1.4% 82,979(3) (4) (4)
as attorney
Ronald V. Davis 376,667 6.3% 166,667 (4) (4)
</TABLE>
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(1) Represents those shares of Common Stock held by the Selling Stockholder
together with those shares that such Selling Stockholder has the right
to acquire within 60 days from the date of this Prospectus.
(2) The percentages indicated are based on 5,640,739 shares of Common Stock
issued and outstanding as of July 31, 1997.
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(3) Includes 75,000 shares which are issuable upon exercise of the Rights.
The Rights are only exercisable upon the occurrence of certain events.
(4) Because the Selling Stockholder may sell all, some or none of the Shares
that he holds, and because the offering contemplated by this Prospectus
is not now a "firm commitment" underwritten offering, no estimate can be
given as to the number of Shares that will be held by the Selling
Stockholder upon or prior to termination of this offering. See "Plan of
Distribution."
The Selling Stockholders identified above may have sold, transferred or
otherwise disposed of all or a portion of their Shares since the date on which
they provided the information regarding their Common Stock in transactions
exempt from the registration requirements of the Securities Act. Additional
information concerning the above listed Selling Stockholders may be set forth
from time to time in prospectus supplements to this Prospectus. See "Plan of
Distribution."
Pursuant to certain agreements between the Company and the Selling
Stockholders, the Company has agreed to file the Registration Statement to which
this Prospectus forms a part for the purpose of registering the potential resale
of the Shares.
Except as specifically set forth herein, the Selling Stockholders have,
and within the past three years have had, no position, office or other material
relationship with the Company or any of its predecessors or affiliates. Between
August 15, 1996 and December 31, 1996, Alan McGeorge was an employee of the
Company and prior thereto was the principal stockholder and an executive
officer and a director of an entity acquired by the Company.
PLAN OF DISTRIBUTION
Sales of the Shares may be made from time to time by the Selling
Stockholders, or, subject to applicable law, by pledgees, donees, distributees,
transferees or other successors in interest. Such sales may be made on The
Nasdaq SmallCap Market, in another over-the-counter market, on a national
securities exchange (any of which may involve crosses and block transactions),
in privately negotiated transactions or otherwise or in a combination of such
transactions at prices and at terms then prevailing or at prices related to the
then current market price, or at privately negotiated prices. In addition, any
Shares covered by this Prospectus which qualify for sale pursuant to Section
4(1) of the Securities Act or Rule 144 promulgated thereunder may be sold under
such provisions rather than pursuant to this Prospectus. Without limiting the
generality of the foregoing, the Shares may be sold in one or more of the
following types of transactions: (a) a block trade in which the broker-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 and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) an exchange distribution in accordance
with the rules of such exchange; (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (e) face-to-face
transactions between sellers and purchasers without a broker-dealer. In
effecting sales, brokers or dealers engaged by the Selling Stockholder may
arrange for other brokers or dealers to participate in the resales.
In connection with distributions of the Shares or otherwise, the Selling
Stockholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the Shares registered hereunder in the course of hedging the positions they
assume with the Selling Stockholders. The Selling Stockholders may also sell
Shares short and deliver the Shares to close out such short positions. The
Selling Stockholders may also enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the Shares
registered hereunder, which the broker-dealer may resell pursuant to this
Prospectus. The Selling Stockholders may also pledge the Shares registered
hereunder to a broker or dealer and upon a default, the broker or dealer may
effect sales of the pledged Shares pursuant to this Prospectus.
Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Stockholder in amounts to be
negotiated in connection with the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act.
Information as to whether underwriters who may be selected by the
Selling Stockholders, or any other broker-dealer, is acting as principal or
agent for the Selling Stockholder, the compensation to be received by
underwriters who may be selected by the Selling Stockholders, or any
broker-dealer, acting as principal or agent for the Selling Stockholders and the
compensation to be received by other broker-dealers, in the event the
compensation of such other broker-dealers is in excess of usual and customary
commissions, will, to
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<PAGE>
the extent required, be set forth in a supplement to this Prospectus (the
"Prospectus Supplement"). Any dealer or broker participating in any distribution
of the Shares may be required to deliver a copy of this Prospectus, including
the Prospectus Supplement, if any, to any person who purchases any of the Shares
from or through such dealer or broker.
The Company has advised the Selling Stockholders that during such time
as they may be engaged in a distribution of the Shares included herein they are
required to comply with Regulation M promulgated under the Exchange Act. In
general, Regulation M precludes the Selling Shareholders, any affiliated
purchasers and any broker-dealer or other person who participates in such
distribution from bidding for or purchasing, or attempting to induce any person
to bid for or purchase any security which is the subject of the distribution
until the entire distribution is complete. A "distribution" is defined in the
rules as an offering of securities that is distinguished from ordinary trading
activities and depends on the "magnitude of the offering and the presence of
special selling efforts and selling methods." Regulation M also prohibits any
bids or purchases made in order to stabilize the price of a security in
connection with the distribution of that security.
It is anticipated that the Selling Stockholders will offer all of the
Shares for sale. Further, because it is possible that a significant number of
Shares could be sold at the same time hereunder, such sales, or the possibility
thereof, may have a depressive effect on the market price of the Company's
Common Stock.
LEGAL MATTERS
Certain legal matters in connection with the securities being offered
hereby will be passed upon for the Company by Parker Duryee Rosoff & Haft, New
York, New York 10017.
EXPERTS
The consolidated financial statements of Community Medical Transport,
Inc. and subsidiaries included in the Company's annual report on Form 10-KSB for
the year ended December 31, 1996 incorporated herein by reference have been
audited by Richard A. Eisner & Company, LLP, independent auditors, as indicated
in their report with respect thereto, and are incorporated herein by reference
in reliance upon the report of said firm given upon their authority as experts
in accounting and auditing.
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