<PAGE> 1
701,809 SHARES
AASCHE TRANSPORTATION SERVICES, INC.
COMMON STOCK
This Prospectus covers 701,809 shares (the "Shares") of common stock, par
value $.0001 per share (the "Common Stock"), of Aasche Transportation Services,
Inc. (the "Company") which may be offered and sold from time to time by the
Selling Stockholders named herein. Of the 701,809 Shares, 54,056 and 53,125
pertain to the assumed exercise of warrants at an exercise price of $4.625,
$5.55 and $8.75 per Share, respectively. See "Selling Stockholders." The
Company will not receive any of the proceeds from the sale of any of the
Shares. The Company will, however, receive proceeds from the exercise of
warrants underlying the Shares issued to certain investors and the warrants
issued to the placement agent in the private offering and to the underwriters in
the initial public offering. Assuming all of the warrants are exercised, the
proceeds to the Company from the exercise of such warrants are estimated to be
approximately $1,015,000. See "Use of Proceeds."
The Shares may be offered and sold from time to time by the Selling
Stockholders, or by pledgees, donees, transferees or other successors in
interest to the Selling Stockholders, directly or through broker-dealers or
underwriters who may act solely as agents, or who may acquire the Shares as
principals. The distribution of the Shares may be effected in one or more
transactions that may take place through the Nasdaq National Market, including
block trades or ordinary broker's transactions, or through privately negotiated
transactions, or through underwritten public offerings, or through a
combination of any such methods of sale, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. Usual and customary or specially negotiated brokerage fees
or commissions may be paid by the Selling Stockholders in connection with such
sales. See "Plan of Distribution."
To the extent required, the specific number of Shares to be sold, the
names of the Selling Stockholders, purchase price, public offering price, the
names of any agent, dealer or underwriter, and any applicable commission or
discount with respect to a particular offering will be set forth in an
accompanying Prospectus Supplement. The aggregate proceeds to the Selling
Stockholders from the sale of the Shares will be the aggregate amount paid by
the purchasers less the aggregate agents' commissions and underwriters'
discounts, if any, and other expenses not borne by the Company. The Company
has agreed to bear certain expenses relating to the registration of the Shares
under applicable federal and state securities laws (currently estimated at
$20,731) and to any offering and sale hereunder not including certain expenses
such as commissions, discounts and fees of underwriters, dealers or agents
attributable to the sale of the Shares.
The Common Stock is traded on the Nasdaq National Market under the symbol
"ASHE." On November 28, 1997, the last sale price of the Common Stock was
$3.125 per share.
___________________________________
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES
TO WHICH IT RELATES OR AN OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH
OFFER WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT
IMPLY THAT INFORMATION SET FORTH HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
___________________________________
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
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.
The date of this Prospectus is November 28, 1997.
<PAGE> 2
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), with the Securities
and Exchange Commission (the "Commission") with respect to the shares offered
by this Prospectus. This Prospectus does not contain all of the information
set forth in the Registration Statement and the exhibits and schedules thereto
which the Company has filed with the Commission under the Securities Act.
Statements contained herein concerning the provisions of any documents are not
necessarily complete and, in each instance, reference is made to the copy of
such documents filed as an exhibit to the Registration Statement, and each such
statement shall be deemed qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Commission.
Such reports, proxy statements and other information filed by the Company with
the Commission may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: Northeast Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 10048; and Midwest
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Section of the Commission, at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. The Company is subject to the electronic
filing requirements of the Commission. Accordingly, pursuant to the rules and
regulations of the Commission, certain documents, including annual and
quarterly reports and proxy statements, filed by the Company with the
Commission have been or will be filed electronically. The Commission maintains
a World Wide Web site that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission at http://www.sec.gov. The Company's Common Stock is listed on the
Nasdaq National Market under the symbol ASHE, and such reports, proxy
statements and other information can also be inspected at the offices of the
Nasdaq National Market, Reports Section, 1735 Street, N.W., Washington, D.C.
20006.
INFORMATION INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997, June 30, 1997 and September 30,1997,
respectively, the Company's Report on Form 8-K filed July 3, 1997 and the
description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A declared effective July 26, 1994, each of
which has been filed with the Commission, are incorporated by reference in this
Prospectus.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the Common
Stock registered hereby shall be deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the respective dates of filing of
such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document 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 and superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the information that has been incorporated by reference in this
Prospectus, excluding exhibits. Such requests should be directed to Aasche
Transportation Services, Inc., 10214 N. Mt. Vernon Road, Shannon, Illinois
61078, Attention: Leon M. Monachos, Chief Financial Officer, Telephone: (815)
864-2421.
2
<PAGE> 3
THE COMPANY
Aasche Transportation Services, Inc. (the "Company"), through its
subsidiaries, Asche Transfer, Inc. and AG Carriers, Inc., is a 58-year-old
non-union, truckload carrier that operates primarily in the
temperature-controlled segment of the transportation services industry. The
Company transports a variety of foods and other products that require
temperature-controlled service and "just-in-time" delivery. The "just-in-time"
concept stresses the importance of precise delivery times and the need for
dependability in order to control inventory levels and limit handling. A
substantial portion of the Company's business is concentrated in target markets
in the Midwest, Southeast and South Central United States. The Company
operates predominately in the long-haul, "full-truckload" segment of the
temperature-controlled transportation services industry and operates less than
10% in the "less-than-truckload" segment. Full truckload operations typically
involve a single shipment occupying the entire carrying capacity of a
semi-trailer, moving directly from origin to destination. The full truckload
segment generally is less capital intensive, more fragmented and populated by
smaller firms than the less-than-truckload segment.
The Company's business strategy is to offer premium-quality service to
high-volume selective customers that have significant temperature-controlled
transportation requirements. The Company believes that these customers provide
more predictable and, in some respects, less price-sensitive business because
the Company believes that service, rather than price, generally is the primary
factor that dictates its customers' choice of carrier. The Company is
currently a "core carrier" for Coca-Cola (including Coca-Cola Foods,
Coca-Cola/Minute Maid, Coca-Cola Company and Coca-Cola USA), Hershey, Tropicana
Foods, Americold, S.C. Johnson Wax, Schreiber Foods, Abbott Laboratories,
Baxter International and Kraft Foods. The Company seeks to expand its core
carrier relationships with well known national producers of foods and other
products.
The Company uses sophisticated satellite tracking and communications
systems manufactured by Qualcomm Incorporated that enable the Company to
monitor scheduling and equipment locations more effectively while communicating
directly with drivers, and informing customers of the location and estimated
delivery time of their freight. In addition, the Company has a centralized,
fully integrated management system that utilizes an IBM AS/400 computer with
software from Innovative Computing Corporation. The system's company-wide
database allows the Company to respond quickly to customer information requests
without having to combine data files from several sources. The Company also
utilizes "electronic data interchange" that permits direct communication of
billing and load tracking information between the Company's computer system and
the computer systems of many of its customers. The Company's ability to
exchange data electronically with customers regarding their shipments has
significantly enhanced quality control and customer service. Management
believes a significant commitment to technologically advanced systems is
important to delivering high-quality services required by the high-volume
customers sought by the Company. These systems have allowed the Company to
improve customer satisfaction, asset and driver utilization and operating
efficiency.
The Company maintains a fleet of approximately 462 late-model tractors,
including 44 tractors which are owned by owner-operators, and approximately 544
refrigerated trailers. Management believes that the maintenance of a
late-model fleet as well as its commitment to advanced technology systems has
and will enable the Company to continue to attract as customers high-volume,
national producers of food and other products requiring temperature-controlled
transportation.
Part of the Company's growth strategy is to increase market share through
acquisitions in the transportation industry. In May 1995, the Company acquired
the assets of AG. Carriers, Inc., a Florida-based, non-union carrier
specializing in the transportation services of temperature-controlled products
for customers in the Southeast, Northeast and Midwestern United States. In
December 1995, the Company acquired, through merger, Polar Express Corporation
("Polar"), an Arkansas-based, non-union truckload carrier transporting a
variety of food and other products primarily in the Southwestern United States.
In May 1997, the Company merged Polar with Asche Transfer, Inc. to form the
Southwest Division. The Company intends to pursue acquisition opportunities to
enhance the Company's strategic, financial and operational objectives. On
October 15, 1997 the Company became the assignee of an assignment of an asset
purchase agreement between Gary L. Goldberg, a director of the Company, and
Jack Gray Transport, Inc. ("JGT") pursuant to which assignment the Company has
the right to purchase certain assets relating to the municipal solid waste
business of JGT for $30 million. Mr. Goldberg is not receiving any
consideration for the assignment of his rights under the asset purchase
agreement. Upon the consummation of the transaction, it is expected that Mr.
Goldberg will enter into an employment agreement with the subsidiary being
formed by the Company to acquire the assets from JGT pursuant to which he will
receive a salary and options to purchase common stock in the Company or
warrants to purchase stock in such subsidiary in consideration for future
services with an exercise price based on the fair value of the stock of the
Company or the subsidiary at the day of closing. For the year ended December
31, 1996, the net revenues of the municipal solid waste business of JGT were
approximately $31 million. The agreement is subject to certain closing
conditions including the Company's obligation to reasonably satisfy JGT that it
has obtained the necessary financing by November 30, 1997. Although no
financing commitment has been obtained by the Company as of the date of this
prospectus, the Company believes that such financing will be obtained.
The Company was organized under the laws of the State of Delaware in July
1994. The Company's executive offices are located at 10214 N. Mt. Vernon Road,
Shannon, Illinois 61078. The Company's telephone number is (815) 864-2421.
3
<PAGE> 4
RISK FACTORS
This Prospectus contains certain forward-looking statements. Actual
results could differ materially from those projected in the forward-looking
statements as a result of certain of the considerations set forth below and
elsewhere in this Prospectus. The following risk factors should be considered
carefully in addition to the other information contained in this Prospectus
before purchasing the Shares offered hereby.
AVAILABILITY OF DRIVERS
Competition for drivers is intense within the trucking industry and the
Company occasionally experiences difficulty attracting and retaining qualified
drivers and owner-operators which results in the temporary idling of revenue
equipment. Currently, the Company's driver turnover rate is approximately 83%.
There is a chronic, industry-wide shortage of such individuals and this
shortage could affect the Company's operations by causing the temporary idling
of revenue equipment which reduces the level of service to existing customers
and impedes the Company's ability to obtain new business. The Company also
incurs additional expenses in recruiting, marketing and training of new
employees and the Company is, from time to time, forced to significantly
increase the compensation it pays to retain its drivers and owner-operators,
all of which affects the Company's profitability and curtails its growth.
Difficulty in attracting and retaining qualified drivers and owner-operators
would have a materially adverse effect upon the Company's operations and
ability to grow.
FINANCIAL CONDITION AND PERFORMANCE
Although the Company has had net income for each of the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997, the Company experienced
net losses in its three most recent fiscal years which were largely the result
of certain non-recurring charges relating to a prior acquisition and other
non-operating charges. The Company's future operating results will depend
upon a number of business factors, including the other factors discussed in
these "Risk Factors," as well as general economic conditions. At September 30,
1997, the Company experienced a working capital deficit of $6.1 million.
Although the Company has historically funded its working capital requirements
through a combination of operating profits, short turnover in trade
receivables, effective cash management practices and borrowings under its
revolving bank line of credit, the Company may in the future continue to have
a working capital deficit, which may have an adverse effect on the financial
condition of the Company. The Company has a revolving bank line of credit with
a $6.0 million borrowing limit based on a percentage of eligible trade
receivables, $4.2 million of which was borrowed against this line of credit at
September 30, 1997, and approximately $0.1 million was available. Although
the Company expects to create future availability through operating profits and
the expected proceeds from the sale of existing equipment which will be
replaced with new equipment to be lease financed, the lack of additional
availability may have a material adverse effect on the financial condition of
the Company.
DIVIDEND RESTRICTIONS AND LOAN COVENANTS
Although the Company's policy has been not to pay any cash dividends, the
Company's ability to pay cash dividends in the future may be restricted by the
Company's future operations and earnings, capital requirements and surplus,
general financial condition, contractual restrictions and such other factors as
the Board of Directors may deem relevant. Under the Company's existing credit
facility, the Company is subject to certain loan covenants, which include
maintaining a specified debt service coverage ratio, debt to equity ratio, a
specified tangible net worth and a restriction on the payment of dividends and
stock redemptions. The violation of any loan covenants which results in the
lender declaring a default under such credit facility would have a material
adverse effect on the financial condition of the Company.
BUSINESS CYCLES AND INDUSTRYWIDE COST INCREASES
The Company has little or no control over economic factors such as fuel
prices, fuel tax and interest rate fluctuations, economic recessions, and
customers' business cycles. Significant increases in fuel prices, other
operating costs, or interest rates, to the extent not offset by increases in
freight rates, would adversely affect the Company's operating results. Prolonged
or further increases could adversely affect future results. Economic recessions
or downturns in customers' business cycles also could have a materially adverse
effect upon the operating results of the Company. If the resale value of the
Company's revenue equipment were to decline, the Company could find it necessary
to retain some of its equipment longer, with a resulting increase in operating
expenses for maintenance and repairs, or the Company may decide to sell such
equipment which may result in a loss on disposition.
SIGNIFICANT CUSTOMERS
The Company has several significant core carrier customers, the loss of
these large customers could adversely affect operations. Most of the Company's
written agreements with shippers are terminable upon thirty days notice.
Further, as the Company expands its core carrier relationships with existing
high-volume customers and develops new core carrier relationships, the Company
expects that a larger percentage of its total revenues will be derived from
fewer customers, the loss of any of which could adversely affect the Company's
profitability.
COMPETITION
The trucking industry in general, and the temperature-controlled
segment in particular, is highly competitive and fragmented. The Company
competes primarily with other long-haul, temperature-controlled truckload
carriers, private fleets operated by existing and potential customers and, to a
lesser extent, railroads. Although the general effect of deregulation of the
trucking industry during the 1980's created substantial downward pressure on the
industry's rate structure, the Company's management believes that competition
for the freight transported by the Company is based primarily upon its ability
to provide premium quality service, i.e., just-in-time performance, advanced
technology capabilities and the reliability made possible through the operation
of a late-model fleet. The five largest companies in the temperature-controlled
segment generated a substantial portion of the revenues of all companies in the
segment and there are many other trucking companies in the
temperature-controlled market segment that possess substantially greater
financial resources, operate more equipment or carry a larger volume of freight
than the Company. The Company also competes with other motor carriers in hiring
qualified drivers.
4
<PAGE> 5
CAPITAL REQUIREMENTS
The trucking industry is capital intensive. The Company historically
has relied upon debt and operating leases to finance new revenue equipment, and
it has granted its lenders a lien on substantially all of its assets. If the
Company were unable to borrow sufficient funds at acceptable rates or raise
additional equity on acceptable terms, or if there were a significant increase
in interest rates, the Company would have to limit its growth and might be
required to operate its fleet for longer periods, which could adversely affect
the Company's operating results.
LIABILITY EXPOSURE
The trucking business requires the operation of large trucks on public
roads, with resulting liabilities, including cargo claims, property damage and
personal injury, arising from vehicle accidents. Although the Company believes
its insurance coverage is adequate, a substantial increase in the number or
severity of claims, a severe accident in which the claim level exceeds policy
limits, or a significant rise in insurance costs could have a materially adverse
effect upon the Company's profitability.
SEASONALITY
The Company's results of operations show a seasonal pattern because
certain of the frozen food companies serviced by the Company generally reduce
shipments during the summer season. During the winter months, the Company has at
times experienced delays in meeting its pick-up and delivery schedules as a
result of severe weather conditions. In addition, the Company's operating
expenses historically have been higher in the winter months due to decreased
fuel efficiency and increased maintenance costs in colder weather. Accordingly,
such factors cause fluctuations in results of operations.
REGULATION
Truckload companies are subject to regulation by various federal and
state agencies, including the United States Department of Transportation
("DOT"). These regulatory authorities govern activities such as operational
safety, accounting systems, and financial reporting. The abolition of the
Interstate Commerce Commission effective January 1, 1996, terminated regulation
by that agency, including regulation of truckload rates and certain mergers,
consolidations, and acquisitions (subject to continued antitrust review by the
Department of Justice and the Federal Trade Commission). If the Company were
found to be in violation of applicable laws or regulations, it could have a
material adverse effect on the Company's business and operating results.
DEPENDENCE UPON KEY PERSONNEL
The Company is dependent upon the services of experienced individuals
who serve as officers and directors. Although the Company believes it has
assembled an experienced and talented management group, the loss of any of these
persons from the Company could have a materially adverse effect upon the
Company's operations and future profitability. The Company maintains "key
person" life insurance of $1,500,000 on each of the lives of Larry L. Asche,
Kevin M. Clark and Diane L. Asche.
POSSIBLE VOLATILITY OF STOCK PRICE
Since the Company's initial public offering in October 1994, the market
price for the Common Stock has fluctuated substantially. The market price of the
Common Stock may continue to experience significant fluctuations in response to
quarter-to-quarter variations in the Company's operating results, general trends
in the industry and other events. In addition, the stock market in recent years
has experienced extreme price and volume fluctuations that have particularly
affected the market prices of many companies and that have often been unrelated
or disproportionate to the operational performance of these companies. These
fluctuations, as well as general economic and market conditions, may materially
and adversely affect the market price of the Common Stock.
CONTROL BY PRINCIPAL STOCKHOLDERS
As of September 30, 1997, Larry L. Asche, Diane L. Asche, Kevin M.
Clark and Richard S. Baugh, officers and directors of the Company, beneficially
owned approximately 30% of the Company's outstanding shares of Common Stock. As
a result, these individuals will, as a practical matter, be able to control the
outcome of matters requiring a stockholder vote, including the election of the
members of the Board of Directors, thereby controlling the affairs and
management of the Company. Such control could adversely affect the market price
of the Common Stock or delay or prevent a change in control of the Company.
EFFECTS OF CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND
DELAWARE LAW
Certain provisions of the Company's Amended Certificate of
Incorporation and of Delaware law could delay or make difficult a merger, tender
offer or proxy contest involving the Company. Directors of the Company are
divided into three classes and are elected to serve staggered three-year terms.
In addition, the Company is subject to Section 203 of the Delaware General
Corporation Law which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with an interested
stockholder for a period of three years following the date such stockholder
became an interested stockholder. These provisions may be deemed to have
antitakeover effects and may delay, defer or prevent a takeover attempt that
stockholders might consider in their best interests.
5
<PAGE> 6
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of any of
the Shares by the Selling Stockholders named herein. The Company will, however,
receive proceeds from the exercise of warrants underlying the Shares issued to
certain investors and the warrants issued to the placement agent in the
private offering and to the underwriters in the initial public offering. See
"Selling Stockholders." Assuming all of the warrants are exercised, the
proceeds to the Company from the exercise of such warrants are estimated to be
approximately $1,015,000. The Company expects to use such proceeds to reduce
indebtedness.
SELLING STOCKHOLDERS
On July 2, 1997, the Company completed an offering of 540,558 shares of
Common Stock, at a price of $3.70 per Share. The net proceeds of the offering
were used to reduce outstanding indebtedness and for general corporate
purposes. The offering included warrants (the "Warrants") to purchase 54,070
shares of Common Stock at an exercise price of $4.625 per share. The Warrants
are exercisable at any time within three years after June 24, 1997. The
offering was made solely to accredited investors in reliance upon Section 4(2)
of the Securities Act of 1933, as amended and Rule 506 of Regulation D
promulgated thereunder. In connection with the offering, the Company issued a
warrant to Madison Securities, Inc., the Company's placement agent in the
offering, to purchase 54,056 shares of Common Stock at a price of $5.55 per
share exercisable at any time within three years after July 2, 1997. Prior to
such date, the Selling Stockholders included below had no material
relationship with the Company or any of its predecessors or affiliates within
the prior three years.
In addition, the Company is registering warrants issued in connection with
its initial public offering to JW Charles Securities, Inc. and Corporate
Securities Group, Inc., the Company's underwriters, to purchase 37,500 and
15,625 shares respectively, at a price of $8.75 per share exercisable at any
time prior to September 23, 1999.
The following table sets forth for each Selling Stockholder the number of
Shares beneficially owned by such Selling Stockholder prior to this offering,
and the maximum number of Shares to be registered. In each case, the
percentage of outstanding Shares held by each Selling Stockholder prior to and
after this offering represents less than one percent of the outstanding
Shares.
<TABLE>
<CAPTION>
Number of Shares Maximum Number of
Beneficially Owned Shares to be
Selling Stockholders Prior to Offering(1) Registered(1)
- --------------------------------------------------------------------------------
<S> <C> <C>
Ronald Stone 44,596 44,596
Ronald Stone as Trustee
of Ronald Stone
Insurance Trust dated
6/1/68 14,866 14,866
Farshid Paul Ohadi 14,866 14,866
Basil Kromelow 29,731 29,731
Ronald L. Wieseneck and
Suzanne C. Wieseneck as
Joint Tenants 29,731 29,731
Microsales, Inc. 14,866 14,866
Chris Iacovelli 14,866 14,866
James L. Mann 14,866 14,866
John G. Phillips 29,731 29,731
Charles Headings and
Elizabeth Headings as
Joint Tenants 14,866 14,866
Ronald L. Antinone 29,731 29,731
Randy Wear and Gail
Kellberg as Tenancy by
Entirety 29,731 29,731
David Kozin 29,731 29,731
CLFS Equities LLP 44,596 44,596
Constance DeBois under
Declaration of Trust
dated 10/7/94 14,866 14,866
TDMR Partners 14,866 14,866
Eugene A. Huske 14,866 14,866
Maksim Lunic 29,731 29,731
James B. Eversole &
Shirley M. Eversole as
Joint Tenants 29,731 29,731
Thomas Gordon & Edna
Gordon as Joint Tenants 14,866 14,866
Robert Jacobs 14,866 14,866
Kathleen E. Grabowski 14,866 14,866
Eric G. Matye 14,866 14,866
Richard H. Solem 14,866 14,866
</TABLE>
____________________________
(1)Includes shares underlying the Warrants.
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<PAGE> 7
<TABLE>
<CAPTION>
Number of Shares Maximum Number of
Beneficially Owned Shares to be
Selling Stockholders Prior to Offering(1) Registered(1)
- --------------------------------------------------------------------------------
<S> <C> <C>
G.P. Kretzschmar 14,866 14,866
Irving Sparage 14,866 14,866
Thomas Fasbinder 14,866 14,866
Marlin Bird 14,866 14,866
Madison Securities, Inc. 54,056(2) 54,056(2)
JW Charles Securities, Inc. 37,500(3) 37,500(3)
Corporate Securities Group, Inc. 15,625(3) 15,625(3)
</TABLE>
_________________________________
(2) Represents shares underlying the warrant issued to Madison Securities, Inc.
as placement agent.
(3) Represents shares underlying the warrants issued to JW Charles Securities,
Inc. and Corporate Securities Group, Inc. as underwriters in the Company's
initial public offering.
PLAN OF DISTRIBUTION
The Company will not receive any proceeds from the sale of the Shares.
Each of the Selling Stockholders may sell his Shares directly or through
broker-dealers or underwriters who may act solely as agents, or who may acquire
shares as principals. The Shares may be sold from time to time by the Selling
Stockholders, or by pledgees, donees, transferees or other successors in
interest to the Selling Stockholders. The distribution of the Shares may be
effected in one or more transactions that may take place through the Nasdaq
National Market, including block trades or ordinary broker's transactions, or
through privately negotiated transactions, or through an underwritten public
offering, or through a combination of any such methods of sale, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. Usual and customary or specifically
negotiated brokerage fees or commissions may be paid by the Selling
Stockholders in connection with such sales.
The aggregate proceeds to the Selling Stockholders from the sale of the
Shares will be the aggregate amounts paid by purchasers of the Shares pursuant
to the offering less the aggregate agents' commissions and underwriters'
discounts, if any, and other expenses of issuance and distribution not borne by
the Company. The Selling Stockholders and any dealers or agents that
participate in the distribution of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profit on the
sale of the Shares by them and any commissions received by any such dealers or
agents might be deemed to be underwriting discounts and commissions under the
Securities Act.
To the extent required, the specific number of Shares to be sold, the
names of the Selling Stockholders, purchase price, public offering price, the
names of any agent, dealer or underwriter, and any applicable commission or
discount with respect to a particular offering will be set forth in an
accompanying Prospectus Supplement.
Under the subscription agreements with each of the investors, the Company
has agreed to bear certain expenses relating to the registration of the Shares
under applicable federal and state securities laws (currently estimated to be
$20,731) and to any offering and sale hereunder not including certain expenses
such as commissions, discounts and fees of underwriters, dealers or agents
attributable to the sale of the Shares.
EXPERTS
The financial statements of the Company as of December 31, 1996 and
December 31, 1995, and for each of the three years in the period ended December
31, 1996, have been incorporated by reference herein in reliance upon the
report of Ernst & Young LLP, independent certified public accountants, also
incorporated by reference herein, and given upon the authority of said firm as
experts in accounting and auditing.
The consolidated balance sheet of Polar Express Corporation as of December
29, 1995, and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the year ended December 29, 1995 and
the period from August 27, 1994 (inception) to December 30, 1994, have been
incorporated by reference herein in reliance upon the report by Baird, Kurtz &
Dobson, independent certified public accountants, also incorporated by
reference herein, given on the authority of said firm as experts in accounting
and auditing.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby has been passed
upon for the Company by Sachnoff & Weaver, Ltd., Chicago, Illinois.
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