AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 7, 2007
REGISTRATION NO. 333-143291
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
REGISTRATION STATEMENT
ON
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
RAND LOGISTICS, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE
(State or Other Jurisdiction of Incorporation)
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20-1195343
(I.R.S. Employer Identification Number)
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461 FIFTH AVENUE, 25TH FLOOR, NEW YORK, NY 10017 (212) 644-3450
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
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LAURENCE S. LEVY, RAND LOGISTICS, INC., 461 FIFTH AVENUE, 25TH FLOOR,
NEW YORK, NEW YORK 10017
(212) 644-3450
COPIES TO: TODD J. EMMERMAN, KATTEN MUCHIN ROSENMAN LLP, 575 MADISON AVENUE, NEW
YORK, NEW YORK 10022 (212) 940-8800; (212) 940-8776 (FACSIMILE)
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
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Approximate Date of Commencement of Proposed Sale to the Public: From time to
time after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: |_|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, 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 of 1933, please check the following box
and list the Securities Act of 1933 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 of 1933, check the following box and list the Securities Act
of 1933 registration statement number of the earlier effective registration
statement for the same offering. |_|
If this form is a registration statement pursuant to General Instruction I.D or
a post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. |_|
If this Form is a post-effective amendment to a registration statement filed
pursuant to General Instruction I.D filed to register additional securities or
additional classes of securities pursuant to Rule 413(b) under the Securities
Act, check the following box. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Amount maximum maximum Amount of
Title of each class of to be offering price aggregate registration
securities to be registered registered per share (1) offering price (1) Fee (1)
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Common stock, par value $.0001 per share 4,822,312 shares (2) $7.08 $34,141,969 $1,049
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(1) Estimated pursuant to Rule 457(c) under the Securities Act solely for the
purpose of calculating the registration fee based upon the average of the
high and low reported sale prices of the common stock on The Nasdaq
Capital Market on May 23, 2007. This amount was previously paid.
(2) Represents 2,419,355 shares issuable upon conversion of Series A
convertible preferred stock and 2,402,957 shares of currently outstanding
common stock being registered for resale. Pursuant to Rule 416 under the
Securities Act, this Registration Statement also covers such number of
additional securities as may be issued to prevent dilution from stock
splits, stock dividends or similar transactions.
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 Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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The information contained in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
================================================================================
Subject to Completion, dated June 7, 2007
Prospectus
4,822,312 Shares
Rand Logistics, Inc.
Common Stock
_______________________________
The stockholders of Rand Logistics, Inc. identified under the caption "Selling
Stockholders" are offering and selling up to 4,822,312 shares of common stock
under this prospectus, including: (i) 2,419,355 shares of common stock issuable
upon conversion of our Series A convertible preferred stock issued in March
2006; and (ii) 2,402,957 shares of common stock which was issued in August 2006.
The shares of series A convertible preferred stock were issued in a private
placement to certain of the selling stockholders, for an aggregate purchase
price of $15,000,000, in connection with the March 2006 acquisition of our
operating business, Lower Lakes. The common stock issued in August 2006 was
issued in a private placement to certain of the selling stockholders, for $5.41
per share, or an aggregate purchase price of approximately $13,000,000, in
connection with a series of transactions between us and a third party pursuant
to which we added three additional vessels to our operating fleet. We are
registering the offer and sale of the shares to satisfy registration rights we
have granted to the selling stockholders. We will not receive any proceeds from
the conversion of the Series A convertible preferred stock or from the sale of
common stock by the selling stockholders.
The selling stockholders may dispose of their shares of common stock or
interests therein in an number of different ways and at varying prices. Please
see "Plan of Distribution."
Our shares of common stock are listed on The NASDAQ Stock Market, Inc.'s Capital
Market and trade under the ticker symbol "RLOG." On June 6, 2007, the closing
price of a share of common stock was $7.24.
Investment in our common stock involves a number of risks. See "Risk Factors"
beginning on page 3 to read about factors you should consider before buying
shares of our common stock.
These securities have not been approved or disapproved by the Securities
Exchange Commission or any state securities commission nor has the SEC 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 ______, 2007
TABLE OF CONTENTS
Page
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SUMMARY.......................................................................1
RISK FACTORS..................................................................2
FORWARD LOOKING STATEMENTS....................................................12
USE OF PROCEEDS...............................................................12
SELLING STOCKHOLDERS..........................................................12
PLAN OF DISTRIBUTION..........................................................14
LEGAL MATTERS.................................................................16
EXPERTS.......................................................................16
WHERE YOU CAN FIND MORE INFORMATION...........................................16
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...............................16
i
SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this prospectus or
incorporated by reference in this prospectus.
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Company Overview
Rand Logistics, Inc. (formerly Rand Acquisition Corporation) was formed on
June 2, 2004 as a blank check company to effect a merger, capital stock
exchange, asset acquisition or other similar business combination with an
operating business. On March 3, 2006, we acquired all of the outstanding shares
of capital stock of Lower Lakes Towing Ltd., a Canadian corporation which, with
its subsidiary Lower Lakes Transportation Company, provides bulk freight
shipping services throughout the Great Lakes region. As part of the acquisition
of Lower Lakes, we also acquired Lower Lakes affiliate, Grand River Navigation
Company, Inc. Prior to the acquisition, we did not conduct, or have any
investment in, any operating business. In this discussion of Rand's business,
unless the context otherwise requires, references to Rand include Rand and its
direct and indirect subsidiaries, and references to Lower Lakes' business or the
business of Lower Lakes mean the combined businesses of Lower Lakes, Lower Lakes
Transportation and Grand River.
Rand's shipping business is operated in Canada by Lower Lakes and in the
United States by Lower Lakes Transportation. Lower Lakes was organized in March
1994 under the laws of Canada to provide marine transportation services to dry
bulk goods suppliers and purchasers operating in ports in the Great Lakes that
were restricted in their ability to receive larger vessels. Lower Lakes has
grown from its origin as a small tug and barge operator to a full service
shipping company with a fleet of 11 cargo-carrying vessels. From its exclusively
Canadian beginnings, Lower Lakes has also grown to offer domestic services to
both Canadian and U.S. customers as well as cross-border routes. Lower Lakes
services the construction, electric utility and integrated steel industries
through the transportation of limestone, coal, iron ore, salt, grain and other
dry bulk commodities.
To finance, in part, our acquisition of Lower Lakes, in March 2006 we
issued 300,000 shares of our series A convertible preferred stock to third party
investors for an aggregate purchase price of $15,000,000. To finance, in part,
expansion of our operating fleet, in August 2006 we issued 2,402,957 shares of
our common stock to a group of third party investors (some of whom were
purchasers of our series A preferred shares) for $5.41 per share, or an
aggregate purchase price of approximately $13,000,000.
Our principal executive offices are located at 461 Fifth Avenue, 25th
Floor, New York, NY 10017 and our telephone number is (212) 644-3450.
Please see "WHERE YOU CAN FIND MORE INFORMATION" for where to find
additional information about our business.
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The Offering
Securities Offered 4,822,312 shares of
common stock, including
(i) 2,419,355 shares of
common stock issuable
upon conversion of our
Series A convertible
preferred stock and (ii)
2,402,957 shares of
common stock issued in
August 2006
Common Stock
Number outstanding before this offering 9,843,400
Number to be outstanding after this offering 12,262,755, assuming
conversion of all Series
A convertible preferred
stock
NASDAQ Capital Market symbol for our common stock RLOG
Offering proceeds We will not receive any
proceeds from the
conversion of Series A
convertible preferred
stock or sale of common
stock by the selling
stockholders.
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1
RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider the following material risks before you decide to buy
our common stock. If any of the following risks actually occur, our business,
results of operations and financial condition would likely suffer. In these
circumstances, the market price of our common stock could decline and you may
lose all or part of your investment.
Our business is dependent upon key personnel whose loss may adversely impact our
business.
We depend on the expertise, experience and continued services of Lower
Lakes' senior management employees, especially Scott Bravener, its President.
Bravener has acquired specialized knowledge and skills with respect to Lower
Lakes and its operations and most decisions concerning the business of Lower
Lakes will be made or significantly influenced by him. Although Lower Lakes
maintains life insurance with respect to Bravener, the proceeds of such
insurance may not be adequate to compensate Lower Lakes in the event of
Bravener's death. The loss of Bravener or other senior management employees, or
an inability to attract or retain other key individuals, could materially
adversely affect our business. We seek to compensate and incentivize executives,
as well as other employees, through competitive salaries and bonus plans, but
there can be no assurance that these programs will allow us to retain key
employees or hire new key employees. As a result, if Bravener were to leave
Lower Lakes, we could face substantial difficulty in hiring a qualified
successor and could experience a loss in productivity while any such successor
obtains the necessary training and experience.
Our officers and directors may allocate their time to other businesses thereby
causing conflicts of interest in their determination as to how much time to
devote to our affairs.
Our officers and directors are not required to commit their full time to
our affairs, which may result in a conflict of interest in allocating their time
between our operations and other businesses. Laurence S. Levy and Edward Levy
are each engaged in several other business endeavors and are not obligated to
contribute any specific number of hours per week to our affairs.
Some of our officers and directors may have conflicts of interest in business
opportunities.
Some of our officers and directors may become aware of business
opportunities which may be appropriate for presentation to us as well as the
other entities with which they are or may be affiliated. Due to our officers'
and directors' existing affiliations with other entities, they may have
fiduciary obligations to present potential business opportunities to those
entities in addition to presenting them to us which could cause additional
conflicts of interest. Accordingly, they may have conflicts of interest in
determining to which entity a particular business opportunity should be
presented.
Weaknesses in the Company's internal controls and procedures could have a
material adverse effect on the Company.
Management is responsible for establishing and maintaining adequate
internal control over financial reporting. Our internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
in accordance with GAAP. Management has determined that material weaknesses in
our internal control over financial reporting exist. A material weakness is a
control deficiency, or combination of control deficiencies that results in a
more than remote likelihood that a material misstatement of the annual or
interim financial statements will not be prevented or detected.
If we are unable to substantially improve our internal controls, our
ability to report our financial results on a timely and accurate basis will
continue to be adversely affected, which could have a material adverse effect on
our ability to operate our business.
2
Capital expenditures and other costs necessary to operate and maintain Lower
Lakes' vessels tend to increase with the age of the vessel and may also increase
due to changes in governmental regulations, safety or other equipment standards.
Capital expenditures and other costs necessary to operate and maintain
Lower Lakes' vessels tend to increase with the age of each vessel. Accordingly,
it is likely that the operating costs of Lower Lakes' older vessels will
increase. In addition, changes in governmental regulations, safety or other
equipment standards, as well as compliance with standards imposed by maritime
self-regulatory organizations and customer requirements or competition, may
require Lower Lakes to make additional expenditures. For example, if the U.S.
Coast Guard, Transport Canada or the American Bureau of Shipping (an independent
classification society that inspects the hull and machinery of commercial ships
to assess compliance with minimum criteria as set by U.S., Canadian and
international regulations) enact new standards, Lower Lakes may be required to
incur significant costs for alterations to its fleet or the addition of new
equipment. In order to satisfy any such requirement, Lower Lakes may be required
to take its vessels out of service for extended periods of time, with
corresponding losses of revenues. In the future, market conditions may not
justify these expenditures or enable Lower Lakes to operate its older vessels
profitably during the remainder of their anticipated economic lives.
If Lower Lakes is unable to fund its capital expenditures and winter work
expenses, Lower Lakes may not be able to continue to operate some of its
vessels, which would have a material adverse effect on our business.
In order to fund Lower Lakes' capital expenditures and winter work
expenses, we may be required to incur borrowings or raise capital through the
sale of debt or equity securities. Our ability to access the capital markets for
future offerings may be limited by our financial condition at the time of any
such offering as well as by adverse market conditions resulting from, among
other things, general economic conditions and contingencies and uncertainties
that are beyond its control. Our failure to obtain the funds for necessary
future capital expenditures and winter work expenses would limit its ability to
continue to operate some of its vessels and could have a material adverse effect
on our business, results of operations and financial condition.
The climate in the Great Lakes region limits Lower Lakes' vessel operations to
approximately nine months per year.
Lower Lakes' operating business is seasonal, meaning that it experiences
higher levels of activity in some periods of the year than in others.
Ordinarily, Lower Lakes is able to operate its vessels on the Great Lakes for
approximately nine months per year beginning in late March and continuing
through December or mid-January. However, weather conditions and customer demand
cause increases and decreases in the number of days Lower Lakes actually
operates.
The shipping industry has inherent operational risks that may not be adequately
covered by Lower Lakes' insurance.
Lower Lakes maintains insurance on its fleet for risks commonly insured
against by vessel owners and operators, including hull and machinery insurance,
war risks insurance and protection and indemnity insurance (which includes
environmental damage and pollution insurance). We can give no assurance that
Lower Lakes will be adequately insured against all risks or that its insurers
will pay a particular claim. Even if its insurance coverage is adequate to cover
its losses, Lower Lakes may not be able to timely obtain a replacement vessel in
the event of a loss. Furthermore, in the future, Lower Lakes may not be able to
obtain adequate insurance coverage at reasonable rates for Lower Lakes' fleet.
Lower Lakes may also be subject to calls, or premiums, in amounts based not only
on its own claim record but also the claims record of all other members of the
protection and indemnity associations through which Lower Lakes may receive
indemnity insurance coverage. Lower Lakes' insurance policies will also contain
deductibles, limitations and exclusions which, although we believe are standard
in the shipping industry, may nevertheless increase its costs.
3
Lower Lakes is subject to certain credit risks with respect to its
counterparties on contracts and failure of such counterparties to meet their
obligations could cause us to suffer losses on such contracts decreasing
revenues and earnings.
Lower Lakes enters into Contracts of Affreightment (COAs) pursuant to
which Lower Lakes agrees to carry cargoes, typically for industrial customers,
who export or import dry bulk cargoes. Lower Lakes also enters into spot market
voyage contracts, where Lower Lakes is paid a rate per ton to carry a specified
cargo from point A to point B. All of these contracts subject Lower Lakes to
counterparty credit risk. As a result, we are subject to credit risks at various
levels, including with charterers, cargo interests, or terminal customers. If
the counterparties fail to meet their obligations, Lower Lakes could suffer
losses on such contracts which would decrease our revenues and earnings.
Lower Lakes may not be able to generate sufficient cash flows to meet its debt
service obligations.
Lower Lakes' ability to make payments on its indebtedness will depend on
its ability to generate cash from its future operations. Lower Lakes business
may not generate sufficient cash flow from operations or from other sources
sufficient to enable it to repay its indebtedness and to fund its other
liquidity needs, including capital expenditures and winter work expenses. The
indebtedness of Lower Lakes under its new senior credit facility bears interest
at floating rates, and therefore if interest rates increase, Lower Lakes' debt
service requirements will increase. Lower Lakes may need to refinance or
restructure all or a portion of its indebtedness on or before maturity. Lower
Lakes may not be able to refinance any of its indebtedness, including the new
senior credit facility, on commercially reasonable terms, or at all. If Lower
Lakes cannot service or refinance its indebtedness, it may have to take actions
such as selling assets, seeking additional equity or reducing or delaying
capital expenditures, any of which could have a material adverse effect on our
operations. Additionally, Lower Lakes may not be able to effect such actions, if
necessary, on commercially reasonable terms, or at all.
A default under Lower Lakes' indebtedness may have a material adverse effect on
our financial condition.
In the event of a default under Lower Lakes' indebtedness, including the
indebtedness under its existing senior credit facility, the holders of the
indebtedness generally would be able to declare all of such indebtedness,
together with accrued interest, to be due and payable. In addition, borrowings
under the existing senior credit facility are secured by a first priority lien
on all of the assets of Lower Lakes, Lower Lakes Transportation and Grand River
and, in the event of a default under that facility, the lenders generally would
be entitled to seize the collateral. In addition, default under one debt
instrument could in turn permit lenders under other debt instruments to declare
borrowings outstanding under those other instruments to be due and payable
pursuant to cross default clauses. Moreover, upon the occurrence of an event of
default under the existing senior credit facility, the commitment of the lenders
to make any further loans to us would be terminated. Accordingly, the occurrence
of a default under any debt instrument, unless cured or waived, would likely
have a material adverse effect on our results of operations.
Servicing debt could limit funds available for other purposes, such as the
payment of dividends.
Lower Lakes will use cash to pay the principal and interest on its debt as
well as to fund required reserves for future capital expenditures and winter
work expenses. These payments limit funds otherwise available for other
purposes, including distributions of cash to our stockholders.
Lower Lakes' loan agreements contain restrictive covenants that will limit its
liquidity and corporate activities.
Lower Lakes' loan agreements impose operating and financial restrictions
that limit Lower Lakes' ability to:
o incur additional indebtedness;
o create additional liens on its assets;
o make investments;
4
o engage in mergers or acquisitions;
o pay dividends; and
o sell any of Lower Lakes' vessels or any other assets outside the
ordinary course of business.
Therefore, Lower Lakes will need to seek permission from its lender in
order for Lower Lakes to engage in some corporate actions. Lower Lakes' lender's
interests may be different from those of Lower Lakes, and no assurance can be
given that Lower Lakes will be able to obtain its lender's permission when
needed. This may prevent Lower Lakes from taking actions that are in its best
interest.
Because Lower Lakes generates approximately 60% of its revenues, and incurs
approximately 60% of its expenses, in Canadian dollars, exchange rate
fluctuations could cause us to suffer exchange rate losses thereby increasing
expenses and reducing income.
Lower Lakes generates a portion of its revenues in Canadian dollars.
Similarly, Lower Lakes incurs a portion of its expenses in Canadian dollars.
This could lead to fluctuations in our net income due to changes in the value of
the U.S. Dollar relative to the Canadian Dollar.
Lower Lakes depends upon unionized labor for its U.S. operations. Any work
stoppages or labor disturbances could disrupt its business.
Substantially all of Grand River's employees are unionized with the
International Organization of Masters, Mates and Pilots, AFL-CIO. Any work
stoppages or other labor disturbances could have a material adverse effect on
our business, results of operations and financial condition. In addition, Lower
Lakes Transportation Company utilizes three vessels under the terms of a Time
Charter Agreement with Wisconsin & Michigan Steamship Company, the owner of the
vessels. On May 9, 2007, the officers on those vessels represented by the
American Maritime Officers returned the vessels to port and began a work
stoppage. Wisconsin & Michigan Steamship has informed Lower Lakes Transportation
that, in its view, the work stoppage is unlawful and that Wisconsin & Michigan
Steamship intends to pursue all available legal remedies to end it. There can be
no assurance that Wisconsin and Michigan Steamship will be successful in its
efforts or as to when the work stoppage may end. While the work stoppage is not
presently having, and is not in the immediate future expected to have, any
material impact upon Lower Lakes Transportation's business or on its ability to
fulfill its obligations to its customers, there can be no assurance that an
extended work stoppage would not have such effects.
A labor union has attempted to unionize Lower Lakes' Canadian employees.
The Seafarers International Union of Canada, or SIU, has attempted without
success to organize Lower Lakes' unlicensed employees periodically over the past
several years. Although we believe that support for this union is low, if SIU is
successful in organizing a union among Lower Lakes' Canadian employees, it could
result in increased labor costs for Lower Lakes, which could have a material
adverse effect on our results of operations.
Lower Lakes employees are covered by U.S. Federal laws that may subject it to
job-related claims in addition to those provided by state laws.
All of Lower Lakes' U.S. seagoing employees are covered by provisions of
the Shipping Act, 1916, and the Merchant Marine Act, 1920, commonly referred to
as the Jones Act, and general maritime law. These laws typically operate to make
liability limits established by state workers' compensation laws inapplicable to
these employees and to permit these employees and their representatives to
pursue actions against employers for job-related injuries in Federal courts.
5
Because Lower Lakes is not generally protected by the limits imposed by state
workers' compensation statutes, Lower Lakes has greater exposure for claims made
by these employees as compared to employers whose employees are not covered by
these provisions.
Restriction on foreign ownership and possible required divestiture of stock.
Under U.S. maritime laws, in order for us to maintain our eligibility to
own and operate vessels in the U.S. domestic trade, 75% of our outstanding
capital stock and voting power is required to be held by U.S. citizens. Although
our amended and restated certificate of incorporation contains provisions
limiting non-citizenship ownership of our capital stock, we could lose its
ability to conduct operations in the U.S. domestic trade if such provisions
prove unsuccessful in maintaining the required level of citizen ownership. Such
loss would have a material adverse effect on our result of operations. If our
board of directors determines that persons who are not citizens of the U.S. own
more than 23% of our outstanding capital stock or more than 23% of our voting
power, we may redeem such stock or, if redemption is not permitted by applicable
law or if our board of directors, in its discretion, elects not to make such
redemption, we may require the non-citizens who most recently acquired shares to
divest such excess shares to persons who are U.S. citizens in such manner as our
board of directors directs. The required redemption would be at a price equal to
the average closing price during the preceding 30 trading days, which price
could be materially different from the current price of the common stock or the
price at which the non-citizen acquired the common stock. If a non-citizen
purchases the common stock, there can be no assurance that he will not be
required to divest the shares and such divestiture could result in a material
loss. Such restrictions and redemption rights may make Rand's equity securities
less attractive to potential investors, which may result in Rand's publicly
traded common stock having a lower market price than it might have in the
absence of such restrictions and redemption rights.
Our outstanding warrants may have an adverse effect on the market price of
common stock and make it more difficult to obtain future public financing.
We currently have outstanding warrants to purchase approximately 7,406,000
shares of common stock and an option to purchase 300,000 shares of common stock
and warrants to purchase an additional 600,000 shares of common stock. The sale,
or even the possibility of sale, of the shares underlying the warrants and
options could have an adverse effect on the market price for our securities or
on our ability to obtain future public financing. If and to the extent these
warrants and options are exercised, you may experience dilution to your
holdings.
The conversion of our series A convertible preferred stock will result in
significant and immediate dilution of our existing stockholders and the book
value of their common stock.
The shares of series A convertible preferred stock issued in connection
with the acquisition of Lower Lakes are convertible into 2,419,355 shares of our
common stock, which, on an "as converted" basis, represents approximately 20% of
our aggregate outstanding common stock. The registration statement of which this
prospectus forms a part registers the resale of these 2,419,355 shares of common
stock. The conversion price of our series A convertible preferred stock is
subject to weighted average anti-dilution provisions whereby, if Rand issues
shares in the future for consideration below the existing conversion price of
$6.20, then the conversion price of the series A convertible preferred stock
would automatically be decreased, allowing the holders of the series A
convertible preferred stock to receive additional shares of common stock upon
conversion. Upon any conversion of the series A convertible preferred stock, the
equity interests of our existing common stockholders, as a percentage of the
total number of the outstanding shares of our common stock, and the net book
value of the shares of our common stock will be significantly diluted.
If our founding officers and directors exercise their registration rights, it
may have an adverse effect on the market price our common stock.
Our founding officers and directors and their affiliates and associates to
whom shares of our common stock were issued prior to our initial public offering
are entitled to demand that we register the resale of their shares of common
stock at any time after October 27, 2007. If our founders exercise their
registration rights with respect to all of their shares of common stock, then
there will be an additional 1,000,000 shares of common stock eligible for
trading in the public market. The presence of this additional number of shares
of common stock eligible for trading in the public market may have an adverse
effect on the market price of our common stock.
6
Future acquisitions of vessels or businesses by Rand or Lower Lakes would
subject Rand and Lower Lakes to additional business, operating and industry
risks, the impact of which cannot presently be evaluated, and could adversely
impact Rand's or Lower Lakes' capital structure.
Rand intends to pursue other acquisition opportunities in an effort to
diversify its investments and/or grow Lower Lakes' business. While neither Rand
nor Lower Lakes is presently committed to any additional acquisition, Rand is
currently actively pursuing one or more potential acquisition opportunities.
Acquisitions may be of individual or groups of vessels or of businesses
operating in the shipping or other industries. Following the acquisition of
Lower Lakes, Rand will not be limited to any particular industry or type of
business that it may acquire. Accordingly, there is no current basis for you to
evaluate the possible merits or risks of the particular business or assets that
Rand may acquire, or of the industry in which such business operates. To the
extent Rand acquires a financially unstable business, we may be affected by
numerous risks inherent in the acquired business's operations. If Rand acquires
a business in an industry characterized by a high level of risk, we may be
affected by the currently unascertainable risks of that industry. Although
Rand's management will endeavor to evaluate the risks inherent in a particular
industry or target business, we cannot assure you that we will properly
ascertain or assess all of the significant risk factors.
In addition, the financing of any acquisition completed by Rand could
adversely impact Rand's capital structure as any such financing would likely
include the issuance of additional equity securities and/or the borrowing of
additional funds. The issuance of additional equity securities may significantly
reduce the equity interest of existing stockholders and/or adversely affect
prevailing market prices for Rand's common stock. Increasing Rand's indebtedness
could increase the risk of a default that would entitle the holder to declare
all of such indebtedness due and payable and/or to seize any collateral securing
the indebtedness. In addition, default under one debt instrument could in turn
permit lenders under other debt instruments to declare borrowings outstanding
under those other instruments to be due and payable pursuant to cross default
clauses. Accordingly, the financing of future acquisitions could adversely
impact our capital structure and your equity interest in Rand.
Except as required by law or the rules of any securities exchange on which
our securities might be listed at the time we seek to consummate an acquisition,
you will not be asked to vote on any proposed acquisition and you will not be
entitled to exercise conversion rights in connection with any such acquisition.
Risks Associated with the Shipping Industry
The cyclical nature of the Great Lakes dry bulk shipping industry may lead to
decreases in shipping rates, which may reduce Lower Lakes' revenue and earnings.
The shipping business, including the dry cargo market, has been cyclical
in varying degrees, experiencing fluctuations in charter rates, profitability
and, consequently, vessel values. Rand anticipates that the future demand for
Lower Lakes' dry bulk carriers and dry bulk charter rates will be dependent upon
continued demand for imported commodities, economic growth in the United States
and Canada, seasonal and regional changes in demand, and changes to the capacity
of the Great Lakes fleet which cannot be predicted. Adverse economic, political,
social or other developments could decrease demand and growth in the shipping
industry and thereby reduce revenue and earnings. Fluctuations, and the demand
for vessels, in general, have been influenced by, among other factors:
o global and regional economic conditions;
o developments in international and Great Lakes trade;
o changes in seaborne and other transportation patterns, such as port
congestion and canal closures;
o weather and crop yields;
7
o political developments; and
o embargoes and strikes.
The market values of Lower Lakes' vessels may decrease, which could cause Lower
Lakes to breach covenants in its credit facility and which could reduce earnings
and revenues as a result of potential foreclosures.
Vessel values are influenced by several factors, including:
o changes in environmental and other regulations that may limit the
useful life of vessels;
o changes in Great Lakes dry bulk commodity supply and demand;
o types and sizes of vessels;
o development of and increase in use of other modes of transportation;
o governmental or other regulations; and
o prevailing level of charter rates.
If the market values of Lower Lakes' owned vessels decrease, Lower Lakes
may breach some of the covenants contained in its new credit facility. If Lower
Lakes does breach such covenants and Lower Lakes is unable to remedy the
relevant breach, its lenders could accelerate its debt and foreclose on the
collateral, including Lower Lakes' vessels. Any loss of vessels would
significantly decrease the ability of Rand to generate revenue and income. In
addition, if the book value of a vessel is impaired due to unfavorable market
conditions, or a vessel is sold at a price below its book value, Rand would
incur a loss that would reduce earnings.
A failure to pass inspection by classification societies and regulators could
result in one or more vessels being unemployable unless and until they pass
inspection, resulting in a loss of revenues from such vessels for that period
and a corresponding decrease in earnings, which may be material.
The hull and machinery of every commercial vessel must be classed by a
classification society authorized by its country of registry, as well as being
subject to inspection by shipping regulatory bodies such as Transport Canada.
The classification society certifies that a vessel is safe and seaworthy in
accordance with the applicable rules and regulations of the country of registry
of the vessel and the United Nations Safety of Life at Sea Convention. Lower
Lakes' owned fleet is currently enrolled with the American Bureau of Shipping.
A vessel must undergo Annual Surveys, Intermediate Surveys, and Special
Surveys by its classification society, as well as periodic inspections by
shipping regulators. As regards classification surveys, in lieu of a Special
Survey, a vessel's machinery may be on a continuous survey cycle, under which
the machinery would be surveyed periodically over a five-year period. Lower
Lakes' vessels are on Special Survey cycles for hull inspection and continuous
survey cycles for machinery inspection. Every vessel is also required to be
drydocked every four to five years for inspection of the underwater parts of
such vessel.
Due to the age of several of the vessels, the repairs and remediations
required in connection with such classification society surveys and other
inspections may be extensive and require significant expenditures. Additionally,
until such time as certain repairs and remediations required in connection with
such surveys and inspections are completed (or if any vessel fails such a survey
or inspection), the vessel may be unable to trade between ports and, therefore,
would be unemployable. Any such loss of the use of a vessel could have an
adverse impact on Rand's revenues, results of operations and liquidity, and any
such impact may be material.
8
Lower Lakes' business would be adversely affected if Lower Lakes failed to
comply with U.S. maritime laws or the Coasting Trade Act (Canada) provisions on
coastwise trade, or if those provisions were modified or repealed.
Rand is subject to the Shipping Act, 1916, and the Merchant Marine Act,
1920, commonly referred to as the Jones Act, and other U.S. laws and the
Coasting Trade Act (Canada) that restrict domestic maritime transportation to
vessels operating under the flag of the subject state. In the case of the United
States, in addition, the vessels must have been built in the United States, be
at least 75% owned and operated by U.S. citizens and manned by U.S. crews.
Compliance with the foregoing legislation increases the operating costs of the
vessels. With respect to its U.S. flag vessels, Rand will be responsible for
monitoring the ownership of its capital stock to ensure compliance with U.S.
maritime laws. If Rand does not comply with these restrictions, Rand will be
prohibited from operating its vessels in U.S. coastwise trade, and under certain
circumstances Rand will be deemed to have undertaken an unapproved foreign
transfer, resulting in severe penalties, including permanent loss of U.S.
coastwise trading rights for its vessels, and fines or forfeiture of the
vessels.
Over the past decade, interest groups have lobbied Congress to modify or
repeal U.S. maritime laws so as to facilitate foreign flag competition. Foreign
vessels generally have lower construction costs and generally operate at
significantly lower costs than vessels in the U.S. markets, which would likely
result in reduced charter rates. Rand believes that continued efforts will be
made to modify or repeal these laws. If these efforts are successful, it could
result in significantly increased competition and have a material adverse effect
on our business, results of operations and financial condition.
We may be unable to maintain or replace our vessels as they age.
As of December 31, 2006, the average age of the vessels operated by Lower
Lakes was approximately 60 years. The expense of maintaining, repairing and
upgrading Lower Lakes' vessels typically increases with age, and after a period
of time the cost necessary to satisfy required marine certification standards
may not be economically justifiable. There can be no assurance that Lower Lakes
will be able to maintain its fleet by extending the economic life of existing
vessels, or that our financial resources will be sufficient to enable us to make
expenditures necessary for these purposes. In addition, the supply of
replacement vessels is very limited and the costs associated with acquiring a
newly constructed vessel are prohibitively high. In the event that Lower Lakes
were to lose the use of any its vessels, our financial performance would be
adversely affected.
Lower Lakes is subject to environmental laws that could require significant
expenditures both to maintain compliance with such laws and to pay for any
uninsured environmental liabilities resulting from a spill or other
environmental disaster.
The shipping business and vessel operation are materially affected by
government regulation in the form of international conventions, United States
and Canadian treaties, national, state, provincial, and local laws, and
regulations in force in the jurisdictions in which vessels operate. Because such
conventions, treaties, laws and regulations are often revised, Rand cannot
predict the ultimate cost of compliance or its impact on the resale price or
useful life of Lower Lakes' vessels. Additional conventions, treaties, laws and
regulations may be adopted which could limit Rand's ability to do business or
increase the cost of its doing business, which may materially adversely affect
its operations, as well as the shipping industry generally. Lower Lakes is
required by various governmental and quasi-governmental agencies to obtain
certain permits, licenses, and certificates with respect to its operations and
any increased cost in connection with obtaining such permits, licenses and
certificates, or the imposition on Lower Lakes of the obligation to obtain
additional permits, licenses and certificates, could adversely affect Rand's
results of operations.
Canada has adopted a regime of strict liability for oil pollution damage
coming out of ships (Part 6 of the Marine Liability Act). In case of non-tanker
vessels, such as Lower Lakes' vessels, a vessel's registered owner is strictly
liable for pollution damage caused on the Canadian territory, in Canadian
territorial waters or in Canada's exclusive economic zone by oil of any kind or
in any form including petroleum, fuel oil, sludge, oil refuse and oil mixed with
wastes, subject to certain defenses. The liability of the shipowner is, however,
limited in accordance with the provisions of the Convention on Limitation of
Liability for Maritime Claims, 1976, as amended by the Protocol of 1996.
Pursuant to this Convention, the shipowner can limit its liability to (i) 1
million Special Drawing Right, or SDR, as defined by the International Monetary
Fund for the first 2,000 tons of tonnage, (ii) 400 SDR for each additional ton
9
up to 30,000 tons of tonnage, (iii) 300 SDR for each additional ton up to 70,000
tons of tonnage and (iv) 200 SDR for each additional ton of tonnage. In addition
to the Marine Liability Act, Lower Lakes' vessels are also subject to other
Canadian laws and regulations that contain significant fine and penalty
provisions relating to the marine environment, pollution and discharges of
hazardous substances, including the Migratory Birds Convention Act, the Canadian
Environmental Protection Act, 1999, and the Fisheries Act.
The United States Oil Pollution Act of 1990, or OPA, established an
extensive regulatory and liability regime for the protection and cleanup of the
environment from oil spills. OPA affects all owners and operators whose vessels
trade in United States waters, which includes the Great Lakes and their
connecting and tributary waterways. Under OPA, vessel owners, operators and
bareboat charterers are "responsible parties" and are jointly, severally and
strictly liable (unless the spill results solely from the act or omission of a
third party, an act of God or an act of war) for all containment and clean-up
costs and other damages arising from vessel discharges of oil of any kind or in
any form.
Lower Lakes currently maintains pollution liability coverage insurance.
However, if the damages from a catastrophic incident exceed this insurance
coverage, it could have a significant adverse impact on Rand's cash flow,
profitability and financial position.
Lower Lakes is subject to vessel security regulations and will incur costs to
comply with recently adopted regulations and may be subject to costs to comply
with similar regulations which may be adopted in the future in response to
terrorism.
Since the terrorist attacks of September 11, 2001, there have been a
variety of initiatives intended to enhance vessel security. On November 25,
2002, the Maritime Transportation Security Act of 2002, or MTSA, came into
effect. To implement certain portions of the MTSA, in July 2003, the U.S. Coast
Guard issued regulations requiring the implementation of certain security
requirements aboard vessels operating in waters subject to the jurisdiction of
the United States. Similarly, in December 2002, amendments to the International
Convention for the Safety of Life at Sea, or SOLAS, created a new chapter of the
convention dealing specifically with maritime security. The new chapter went
into effect in July 2004, and imposes various detailed security obligations on
vessels and port authorities, most of which are contained in the newly created
ISPS Code. Among the various requirements are:
o on-board installation of automatic information systems, or AIS, to
enhance vessel-to-vessel and vessel-to-shore communications;
o the development of vessel security plans; and
o compliance with flag state security certification requirements.
The U.S. Coast Guard regulations are intended to be aligned with these
international maritime security standards. Although Rand does not believe these
additional requirements will have a material financial impact on Lower Lakes'
operations, Rand cannot assure you that there will be no interruption in
operations to bring vessels into compliance with the applicable requirements and
any such interruption could cause a decrease in revenues.
The operation of Lower Lakes' vessels is dependent on the price and availability
of fuel. Continued periods of historically high fuel costs may materially
adversely affect Rand's operating results.
Rand's operating results may be significantly impacted by changes in the
availability or price of fuel for Lower Lakes' vessels. Fuel prices have
increased substantially since 2004. Although price escalation clauses form part
of substantially all of Lower Lakes' contracts of affreightment, which enable
Lower Lakes to pass the majority of its increased fuel costs on to its
customers, these measures may not be sufficient to enable Lower Lakes to fully
recoup increased fuel costs or assure the continued availability of its fuel
supplies. Although we are currently able to obtain adequate supplies of fuel, it
is impossible to predict the price of fuel. Political disruptions or wars
involving oil-producing countries, changes in government policy, changes in fuel
production capacity, environmental concerns and other unpredictable events may
result in fuel supply shortages and additional fuel price increases in the
future. There can be no assurance that Lower Lakes will be able to fully recover
10
its increased fuel costs by passing these costs on to its customers. In the
event that Lower Lakes is unable to do so, Rand's operating results will be
adversely affected.
Governments could requisition Lower Lakes' vessels during a period of war or
emergency, resulting in loss of revenues and earnings from such requisitioned
vessels.
The United States or Canada could requisition title or seize Lower Lakes'
vessels during a war or national emergency. Requisition of title occurs when a
government takes a vessel and becomes the owner. A government could also
requisition Lower Lakes vessels for hire, which would result in the government's
taking control of a vessel and effectively becoming the charterer at a dictated
charter rate. Requisition of one or more of Lower Lakes' vessels would have a
substantial negative effect on Rand, as Rand would potentially lose all or
substantially all revenues and earnings from the requisitioned vessels and
permanently lose the vessels. Such losses might be partially offset if the
requisitioning government compensated Rand for the requisition.
The operation of Great Lakes-going vessels entails the possibility of marine
disasters including damage or destruction of the vessel due to accident, the
loss of a vessel due to piracy or terrorism, damage or destruction of cargo and
similar events that may cause a loss of revenue from affected vessels and damage
Lower Lakes' business reputation, which may in turn, lead to loss of business.
The operation of Great Lakes-going vessels entails certain inherent risks
that may adversely affect Lower Lakes' business and reputation, including:
o damage or destruction of vessel due to marine disaster such as a
collision;
o the loss of a vessel due to piracy and terrorism;
o cargo and property losses or damage as a result of the foregoing or
less drastic causes such as human error, mechanical failure and bad
weather;
o environmental accidents as a result of the foregoing; and
o business interruptions and delivery delays caused by mechanical
failure, human error, war, terrorism, political action in various
countries, labor strikes or adverse weather conditions.
Any of these circumstances or events could substantially increase Lower
Lakes' costs, as for example, the costs of replacing a vessel or cleaning up a
spill, or lower its revenues by taking vessels out of operation permanently or
for periods of time. The involvement of Lower Lakes' vessels in a disaster or
delays in delivery or damages or loss of cargo may harm its reputation as a safe
and reliable vessel operator and cause it to lose business.
If Lower Lakes' vessels suffer damage, they may need to be repaired at
Lower Lakes' cost at a drydocking facility. The costs of drydock repairs are
unpredictable and can be substantial. Lower Lakes may have to pay drydocking
costs that insurance does not cover. The loss of earnings while these vessels
are being repaired and repositioned, as well as the actual cost of these
repairs, could decrease its revenues and earnings substantially, particularly if
a number of vessels are damaged or drydocked at the same time.
Maritime claimants could arrest Lower Lakes' vessels, which could interrupt its
cash flow.
Crew members, suppliers of goods and services to a vessel, shippers of
cargo, and other parties may be entitled to a maritime lien against a vessel for
unsatisfied debts, claims or damages against such vessel. In many jurisdictions,
a maritime lienholder may enforce its lien by arresting a vessel through
foreclosure proceedings. The arrest or attachment of one or more of Lower Lakes'
vessels could interrupt its cash flow and require it to pay large sums of funds
to have the arrest lifted.
11
FORWARD LOOKING STATEMENTS
This prospectus and other documents we file with the SEC contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, such as statements concerning our expected
results of operations, financial resources or our projected plans for the
expansion of our business, as well as other estimates relating to future
operations. Words or phrases of expectation or uncertainty like "expect,"
"believe," "continue," "anticipate," "estimate," "may," "will," "could,"
"opportunity," "future," "project," variations of such words and similar
expressions are intended to identify "forward-looking statements," although not
all forward-looking statements contain these identifying words.
Statements that are not historical facts are based on our current
expectations, beliefs, assumptions, estimates, forecasts and projections for our
business and the industry and markets in which we compete. These statements are
not guarantees of future performance and involve certain risks, uncertainties
and assumptions, which are difficult to predict. Therefore, actual outcomes and
results may differ materially from what is expressed in such forward-looking
statements.
We caution you not to place undue reliance on these forward-looking
statements, which speak only as of the date on which they are made. In addition,
we advise you that the factors listed in the "Risk Factors" section beginning on
page 3, as well as other factors we have not currently identified, could affect
our financial or other performance and could cause our actual results for future
periods to differ materially from any opinions or statements expressed with
respect to future periods or events in any forward-looking statement. We will
not undertake and specifically decline any obligation to publicly release
revisions to these forward-looking statements to reflect either circumstances
after the date of the statements or the occurrence of events which may cause us
to re-evaluate our forward-looking statements, except as may be required by law.
USE OF PROCEEDS
We will not receive any proceeds from the conversion of our Series A
convertible stock or the sale of common stock by the selling stockholders.
SELLING STOCKHOLDERS
The selling stockholders named below may from time to time offer the
shares of common stock offered by this prospectus:
Maximum
Shares Aggregate Percentage
Offered Shares Owned of
Total Shares Pursuant Following Outstanding
Held Prior to to this Completion Shares of
Offering Prospectus of Offering Common Stock
Selling Stockholder (1) (2) (2)(3) (2)(3)
- --------------------------------------------- ------------- ---------- ------------ ------------
Thomas E. Claugus 104,369 81,169 23,200 *
Bay Resources Partners, L.P. 661,645 515,145 146,500 1.2%
Bay II Resource Partners L.P. 416,646 336,346 80,300 *
Bay Resource Partners Offshore Fund LTD 277,016 277,016 0 --
Finderne, LLC 53,670 38,370 15,300 *
Good Steward Trading Company 35,980 9,280 26,700 *
Knott Partners, L.P. 1,591,525 1,073,725 517,800 4.2%
12
Maximum
Shares Aggregate Percentage
Offered Shares Owned of
Total Shares Pursuant Following Outstanding
Held Prior to to this Completion Shares of
Offering Prospectus of Offering Common Stock
Selling Stockholder (1) (2) (2)(3) (2)(3)
- --------------------------------------------- ------------- ---------- ------------ ------------
Knott Partners Offshore Master Fund, LP 1,284,100 384,100 900,000 7.3%
Commonfund Hedged Equity Company 90,000 1,400 88,600 *
Performance Partners Ltd. 21,235 18,115 3,120(4) *
Wynnefield Small Cap Value Offshore Fund Ltd. 92,782 79,482 13,300 *
Islandia L.P. 762,107 462,107 300,000(5) 2.4%
Shoshone Partners LP 835,489 173,089 662,400 5.4%
Mulsanne Partners LP 7,100 7,100 0 --
The Hummingbird Value Fund, L.P. 452,493 184,843 267,650(6) 2.2%
The Hummingbird Microcap Value Fund, LP 471,749 184,843 286,906(7) 2.3%
Terrier Partners LP 246,211 46,211 200,000(8) 1.6%
Performance Partners, LP 158,437 74,307 84,130(9) *
WTC-CIF Micro Cap Equity Portfolio 42,800 5,000 37,800 *
WTC-CTF Mico Cap Equity Portfolio 213,300 60,000 153,300 1.3%
WTC-CIF Global Infrastructure 6,200 6,200 0 --
Ratheon Master Pension Trust 193,100 193,100 0 --
Clariden-Lux Infrastructure Fund 506,000 506,000 0 --
Wynnfield Partners Small Cap Value LP 52,562 44,362 8,200 *
Wynnfield Partners Small Cap Value LP I 76,998 60,998 16,000 *
- ----------
(1) Based on information available to us as of May 21, 2007.
(2) Assumes the selling stockholders that currently own Series A Convertible
Preferred Stock convert all such preferred stock.
(3) Assumes that all shares of common stock offered by this prospectus are
sold in this offering and that no other transactions with respect to
shares of our common stock occur. Percentages in the last column are based
upon 9,843,400 shares of our common stock outstanding as of May 21, 2007.
(4) Does not include 14,965 warrants beneficially owned by Performance
Partners, Ltd.
(5) Does not include 600,000 warrants beneficially owned by Islandia, L.P.
(6) Does not include 64,000 warrants beneficially owned by the Hummingbird
Value Fund, L.P.
(7) Does not include 64,675 warrants beneficially owned by The Hummingbird
Microcap Value Fund, LP.
(8) Does not include 176,696 warrants beneficially owned by Terrier Partners
LP.
(9) Does not include 109,785 warrants beneficially owned by Performance
Partners, LP
* Denotes ownership of less than 1% of our common stock
13
PLAN OF DISTRIBUTION
This prospectus relates to the resale of shares of our common stock by the
selling stockholders named in this prospectus. As used in this section of the
prospectus, the term "selling stockholders" includes the selling stockholders
named in the table above and any of their pledgees, donees, transferees or other
successors-in-interest who receive shares of our common stock offered hereby
from a selling stockholder as a gift, pledge, partnership distribution or other
non-sale related transfer and who subsequently sell any of such shares after the
date of this prospectus.
All costs, expenses and fees in connection with the registration of the
shares of common stock offered hereby will be borne by us. Underwriting
discounts, brokerage commissions and similar selling expenses, if any,
attributable to the sale of the securities covered by this prospectus will be
borne by the respective selling stockholders.
The selling stockholders may sell under this prospectus the shares which
are outstanding at different times. The selling stockholders will act
independently of us in making decisions as to the timing, manner and size of
each sale. The sales may be made on any national securities exchange or
quotation system on which the shares may be listed or quoted at the time of
sale, in the over-the-counter market or other than in such organized and
unorganized trading markets, in one or more transactions, at:
o fixed prices, which may be changed;
o prevailing market prices at the time of sale;
o varying prices determined at the time of sale; or
o negotiated prices.
The shares may be sold by one or more of the following methods in addition
to any other method permitted under this prospectus:
o a block trade in which the broker-dealer so engaged may sell the
shares as agent, but may position and resell a portion of the block
as principal to facilitate the transaction;
o a purchase by a broker-dealer as principal and resale by such
broker-dealer for its own account;
o an ordinary brokerage transaction or a transaction in which the
broker solicits purchasers;
o a privately negotiated transaction;
o an underwritten offering;
o securities exchange or quotation system sale that complies with the
rules of the exchange or quotation system;
o through short sale transactions following which the shares are
delivered to close out the short positions;
o through the writing of options relating to such shares; or
o through a combination of the above methods of sale.
The selling stockholders may enter into derivative transactions with third
parties, or sell securities not covered by this prospectus to third parties in
privately negotiated transactions. In connection with those derivatives, the
third parties may sell shares covered by this prospectus, including in short
sale transactions. If so, the third party may use shares pledged by the selling
stockholders or borrowed from the selling stockholders or others to settle those
sales or to close out any related open borrowings of shares, and may use shares
received from the selling stockholders in settlement of those derivatives to
close out any related open borrowings of shares.
14
The selling stockholders may effect such transactions by selling the
shares covered by this prospectus directly to purchasers, to or through
broker-dealers, which may act as agents for the seller and buyer or principals,
or to underwriters who acquire shares for their own account and resell them in
one or more transactions. Such broker-dealers or underwriters may receive
compensation in the form of discounts, concessions, or commissions from the
selling stockholders and/or the purchasers of the shares covered by this
prospectus for whom such broker-dealers may act as agents or to whom they sell
as principal, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions) and such discounts, concessions, or
commissions may be allowed or re-allowed or paid to dealers. Any public offering
price and any discounts or concessions allowed or paid to dealers may be changed
at different times.
The selling stockholders and any broker-dealers that participate with the
selling stockholders or third parties to derivative transactions in the sale of
the shares covered by this prospectus may be deemed to be "underwriters" within
the meaning of Section 2(a)(11) of the Securities Act, and any commissions
received by such broker-dealers and any profit on the resale of the shares sold
by them while acting as principals might be deemed to be underwriting discounts
or commissions under the Securities Act.
We will make copies of this prospectus available to the selling
stockholders and have informed them of their obligation to deliver copies of
this prospectus to purchasers at or before the time of any sale of the shares.
The selling stockholders also may resell all or a portion of their shares
in open market transactions in reliance upon Rule 144 under the Securities Act,
or any other available exemption from required registration under the Securities
Act, provided they meet the criteria and conform to the requirements of such
exemption.
We will file a supplement to this prospectus, if required, pursuant to
Rule 424(b) under the Securities Act upon being notified by a selling
stockholder that any material arrangements have been entered into with an
underwriter, a broker-dealer for the sale of shares through an underwritten
offering, a block trade, special offering, exchange or secondary distribution or
a purchase by a broker-dealer. Such supplement will disclose:
o the name of each such selling stockholder and of the participating
underwriters or broker-dealers;
o the number of shares involved;
o the price at which such shares were sold;
o the commissions paid or discounts or concessions allowed to such
underwriters or broker-dealers, where applicable;
o as appropriate, that such broker-dealers did not conduct any
investigation to verify the information set out or incorporated by
reference in this prospectus; and
o other facts material to the transaction.
In addition, upon receiving notice from a selling stockholder that a
donee, pledgee or transferee or other successor-in-interest intends to sell more
than 500 shares covered by this prospectus, we will file a supplement to this
prospectus pursuant to Rule 424(b) under the Securities Act to identify the
non-sale transferee.
The selling stockholders are not restricted as to the price or prices at
which they may sell their shares. Sales of such shares may have an adverse
effect on the market price of the securities, including the market price of the
shares. Moreover, the selling stockholders are not restricted as to the number
of shares that may be sold at any time, and it is possible that a significant
number of shares could be sold at the same time, which may have an adverse
effect on the market price of the shares.
We and the selling stockholders may agree to indemnify any underwriter,
broker-dealer or agent that participates in transactions involving sales of the
shares against certain liabilities, including liabilities arising under the
Securities Act.
15
LEGAL MATTERS
The validity of the common stock we are offering by this prospectus was
passed upon for us by Katten Muchin Rosenman LLP, New York, NY.
EXPERTS
Goldstein Golub Kessler LLP have audited our consolidated financial
statements included in our Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2005, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the Registration Statement. Our
financial statements are incorporated by reference in reliance on Goldstein
Golub Kessler LLP's report, given on their authority as experts in accounting
and auditing.
Grant Thornton LLP have audited our consolidated financial statements
included in our Annual Report on Form 10-KSB/A for the three month transitional
period ended March 31, 2006, as set forth in their report, which is incorporated
by reference in this prospectus and elsewhere in the Registration Statement. Our
financial statements are incorporated by reference in reliance on Grant Thornton
LLP's report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, file reports, proxy
statements and other information with the Securities and Exchange Commission.
Such reports, proxy statements and other information can be inspected, without
charge, at the public reference facilities maintained by the Securities and
Exchange Commission at 100 F Street, N.E., Washington, D.C. 20549. Copies of
such material can be obtained at prescribed rates from the Public Reference Room
of the Securities and Exchange Commission at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549, at prescribed rates. You may obtain information on the
operation of the Securities and Exchange Commission's public reference room in
Washington, D.C. by calling the Securities and Exchange Commission at
1-800-SEC-0330. Such materials may also be inspected on the Securities and
Exchange Commission's website at www.sec.gov. Our outstanding shares of common
stock are listed on the Nasdaq Capital Market under the symbol "RLOG".
This prospectus constitutes part of a registration statement on Form S-3
filed by us with the Securities and Exchange Commission under the Securities Act
of 1933. This prospectus does not contain all of the information set forth in
the registration statement, parts of which are omitted in accordance with the
rules and regulations of the Securities and Exchange Commission. For further
information, reference is made to the registration statement. You may also
contact us directly at Rand Logistics, Inc., 461 Fifth Avenue, 25th Floor, New
York, NY, 10017 or by calling (212) 644-3450.
You may also read and copy any materials we have filed with the SEC at the
SEC's Public Reference Room, located at 100 F Street, N.E., Washington, DC
20549. You may obtain information on the operation of the Public Reference Room
by calling the SEC at (800) SEC-0330. In addition, our reports, proxy and
information statements have been filed electronically with the SEC which can be
accessed at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We are incorporating by reference certain information that we have filed
with the SEC under the informational requirements of the Exchange Act, which
means that we are disclosing it to you by referring to another document filed
separately with the SEC. The information contained in the documents we are
incorporating by reference is considered to be a part of this prospectus, and
the information that we later file with the SEC will automatically update and
supersede the information contained or incorporated by reference in this
prospectus. Accordingly, we incorporate by reference:
(1) Our Annual Report on Form 10-KSB/A for the transition period ended
March 31, 2006;
(2) Our Quarterly Reports on Form 10-Q for the fiscal quarters ended
June 30, 2006, September 30, 2006 and December 31, 2006;
16
(3) Our Current Reports on Form 8-K/A filed May 3, 2006, Form 8-K filed
May 4, 2006, Form 8-K filed May 26, 2006, Form 8-K filed June 6,
2006, Form 8-K filed June 7, 2006, Form 8-K filed August 2, 2006,
Form 8-K filed August 10, 2006, Form 8-K filed October 19, 2006,
Form 8-K filed January 18, 2007, Form 8-K filed on March 26, 2007,
Form 8-K filed on May 4, 2007, Form 8-K/A filed on May 10, 2007
and Form 8-K filed on May 11, 2007.
(4) Our Registration Statement on Form 8-A, filed on March 5, 2007,
including any amendment or report filed for the purpose of updating
the description of our common stock contained therein.
All documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing of such
documents.
You may request a copy of these filings, at no cost, by writing or telephoning
us at the following address and telephone number:
RAND LOGISTICS, INC.
461 PARK AVENUE, 25TH FLOOR
NEW YORK, NY 10017
(212) 644-3450
17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses to be paid by us in connection with the issuance and distribution of
the securities being registered are as follows:
Registration Fees $ 1,049
Legal Fees and Expenses $100,000
Accounting Fees and Expenses $ 25,000
Miscellaneous --
Total $126,049
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Amended and Restated Certificate of Incorporation
provides that to the extent permitted by the Delaware General Corporation Law,
or the DGCL, directors of the Registrant shall not be personally liable to the
Registrant or its stockholders for monetary damages for breach of fiduciary duty
as a director. Section 102(b)(7) of the DGCL, however, states that such a
provision may not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the Registrant or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
relating to unlawful dividends, distributions or the repurchase or redemption of
stock or (iv) for any transaction from which the director derives an improper
personal benefit.
Section 145 of the DGCL empowers a Delaware corporation to indemnify its
officers and directors and specific other persons to the extent and under the
circumstances set forth therein.
The Registrant's By-laws provide that the Registrant shall indemnify and
hold harmless, to the fullest extent permitted by the DGCL, any person against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred in connection with any threatened,
pending or completed legal proceedings in which such person is involved by
reason of the fact that he is or was a director, officer, employee or agent of
the Registrant (or serving in any such capacity with another business
organization at the request of the Registrant) if he acted in good faith and in
a manner that he reasonably believed to be in or not opposed to the best
interests of the Registrant, and, with respect to any criminal action or
proceeding, if he had no reasonable cause to believe that his conduct was
unlawful. If the legal proceeding, however, is by or in the right of the
Registrant, such director, officer, employee or agent may not be indemnified in
respect of any claim, issue or matter as to which he shall have been adjudged to
be liable to the Registrant unless a court determines otherwise.
The Registrant maintains insurance policies that insure its directors and
officers against damages arising out of claims which might be made against them
based on their negligent acts or omissions while acting in their capacity as
officers and directors.
ITEM 16. EXHIBITS.
See the Exhibit Index immediately following the signature pages, which is
incorporated by reference herein.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
i. To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(b) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) 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.
(d) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(e) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer 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, as amended,
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
Amendment No. 1 to Registration Statement on Form S-3 to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on June 7, 2007.
RAND LOGISTICS, INC.
By: /s/ Laurence S. Levy
--------------------------------
Name: Laurence S. Levy
Title: Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------ ------------------------------------ ------------
/s/ Laurence S. Levy Chief Executive Officer and Director June 7, 2007
- ------------------------
Laurence S. Levy
/s/ Joseph W. McHugh, Jr. Chief Financial Officer and June 7, 2007
- ------------------------ Chief Accounting Officer
Joseph W. McHugh, Jr.
/s/ H. Cabot Lodge III Director June 7, 2007
- ------------------------
H. Cabot Lodge III
/s/ Isaac Kier Director June 7, 2007
- ------------------------
Isaac Kier
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
2.1 Preferred Stock Purchase Agreement, dated as of
September 2, 2005, among the Registrant, LL Acquisition
Corp. and the stockholders of Lower Lakes Towing Ltd.,
and amendments thereto filed as Annex A to the
Registrant's Definitive Proxy Statement (File No.
000-50908) filed February 2, 2006 and incorporated by
reference.
2.2 Stock Purchase Agreement, dated July 20, 2006, by and
between the Buyers (as defined therein) and Rand
Logistics, Inc., filed as amendment 10.4 to the
Company's current report on Form 8-K, dated August 2,
2006 and incorporated by reference.
4.1 Specimen Common Stock certificate filed as an exhibit to
the Company's registration statement on Form S-1 (File
No. 333-117051) and incorporated by reference.
4.2 Amended and Restated Certificate of Incorporation, filed
as exhibit 3.1 to the Company's current report on Form
8-K, dated March 9, 2006 and incorporated by reference.
4.3 Amended and Restated Certificate of Designations of
Series A Convertible Preferred Stock of Rand Logistics,
Inc., filed as exhibit 3.1 to the Company's current
report on Form 8-K, dated August 10, 2006 and
incorporated by reference.
5.1** Opinion of Katten Muchin Rosenman LLP regarding the
validity of the Common Stock being registered
23.1* Consent of Goldstein Golub Kessler LLP
23.2* Consent of Grant Thornton LLP
23.3** Consent of Katten Muchin Rosenman LLP (included in
Exhibit 5.1)
* Filed herewith.
** Previously filed.