<PAGE>
As filed with the Securities and Exchange Commission
on February 27, 1998
Registration No. 333-
--------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-3
Registration Statement Under the Securities Act of 1933
--------------------
COMPOST AMERICA HOLDING COMPANY, INC.
(Exact name of registrant as specified in its charter)
--------------------
NEW JERSEY 22-2603175
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
--------------------
320 GRAND AVENUE
ENGLEWOOD, NEW JERSEY 07631
(201) 541-9393
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
ROGER E. TUTTLE, PRESIDENT
320 GRAND AVENUE
ENGLEWOOD, NEW JERSEY 07631
(201) 541-9393
(Name, address including zip code, and telephone number,
including area code, of agent for service)
Copies to:
MARK GASARCH, ESQ.
40 West 57th Street
33rd Floor
New York, New York 10019
(212) 956-9595
(212) 956-7216 Fax No.
--------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable 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. [ ]
<PAGE>
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of each Maximum Maximum
class of Offering Aggregate Amount of
Securities to Amount to be Price Per Offering Registration
be Registered Registered Share Price Fee
- ------------- ------------ --------- ----------- ------------
<S> <C> <C> <C> <C>
Common Stock, 759,670 shares $2.10* $1,595,307 $ 484.00
no par value ------------
TOTAL $ 484.00
</TABLE>
* Estimated soley for purposes of calculating the registration fee
pursuant to Rule 457(c). The price indicated is based upon the
average bid and asked price as reported by the National Association of
Securities Dealers Inc. Electronic Bulletin Board on February 26,
1998.
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, AS AMENDED, 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.
<PAGE>
PROSPECTUS
759,670 Shares
COMPOST AMERICA HOLDING COMPANY, INC.
Common Stock
(no par value)
The 759,670 shares (the "Shares") of Common Stock (the "Common Stock")
of Compost America Holding Company, Inc., a New Jersey corporation (the
"Company"), offered hereby are being sold by Lionhart Global Appreciation
Fund, a stockholder of the Company (the "Selling Stockholder"). See "SELLING
STOCKHOLDER." The shares may be offered by the Selling Stockholder from time
to time in open market transactions (which may include block transactions) or
otherwise on the Electronic Bulletin Board ("Bulletin Board") of the National
Association of Securities Dealers ("NASD") or in private transactions at
prices relating to prevailing market prices or at negotiated prices. See
"PLAN OF DISTRIBUTION."
The Shares are listed and traded on Bulletin Board under the symbol
"CAHC". On February 25, 1998 the last reported sale price of the Company's
Common Stock on the Bulletin Board was $ 2.06 per share.
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED IN
CONNECTION WITH AN INVESTMENT IN THE SHARES.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is February , 1998
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus in connection with the offering made hereby, and,
if given or made, such information or representations must not be relied upon as
having been authorized by the Company. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, any securities covered by
this Prospectus to any person to whom, or in any jurisdiction in which, it is
unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in the facts set forth in this
Prospectus since the date hereof.
--------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files annual and quarterly reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information may be inspected and copied
at the public reference facilities maintained by the Commission, Room 1024, 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. Copies of these
materials may be obtained from the Public Reference Section of the Commission,
450 Fifth Avenue, N.W., Washington, D.C. 20549, at prescribed rates.
This Prospectus constitutes a part of a Registration Statement on Form S-3
which the Company has filed with the Commission pursuant to the Securities Act
of 1933, as amended (the "Securities Act"), relating to the Shares (referred to
herein, together with amendments and exhibits, as the "Registration Statement").
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the securities offered hereby, reference is hereby
made to the Registration Statement. Statements made in this Prospectus as to
the contents of any contract, agreement or other document referred to are not
necessarily complete; with respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
such exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference.
Copies of the Registration Statement and the exhibits may be inspected, without
charge, at the offices of the Commission, or obtained at prescribed rates from
the Public Reference Section of the Commission at the address set forth above.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year ended
April 30, 1997.
(b) The Company's Quarterly Report on Form 10-QSB for the fiscal quarter
ended July 31, 1997.
(c) The Company's Quarterly Report on Form 10-QSB for the fiscal quarter
ended October 31, 1997.
(d) The Company's report on Form 8-K dated November 3, 1997 and filed
November 17, 1997, as amended by the Company's report on Form 8-K/A dated
November 3, 1997 and filed January 15, 1998.
(e) The Company's report on Form 8-K dated December 12, 1997 and filed
December 24, 1997.
(f) The description of the Company's common shares contained in its
Registration Statement on Form 8-A, filed February 23, 1996, file no. 0-27832.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of its Quarterly
Report on Form 10-QSB for the fiscal quarter ended October 31, 1997 and prior to
the termination of the offering of the Shares, shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document 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 statement or document so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this
Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any and all of the documents
described above other than exhibits to such documents which are not specifically
incorporated by reference in such documents. Requests should be directed to:
Robert E. Wortmann, Secretary, Compost America Holding Company, Inc., 320 Grand
Avenue, Englewood, New Jersey 07631; (201) 541-9393.
3
<PAGE>
THE COMPANY
The Company was incorporated on August 20, 1981 in the State of New Jersey
under the name Alcor Energy and Recycling Systems, Inc. ("Alcor") for the
purpose of designing, constructing, managing and operating resource recovery
facilities. On January 23, 1995 Alcor acquired all of the outstanding shares of
Compost America Company of New Jersey, Ltd. ("CANJ"), which had been
incorporated on December 17, 1993 in the State of Delaware for similar purposes,
and subsequently changed its name to Compost America Holding Company, Inc. The
Company conducts its business directly and through its five wholly-owned
subsidiaries: CANJ; Gardenlife Sales Company, Inc., incorporated in Delaware on
March 1, 1996 to handle sales of compost by the Company; Compost America
Technologies, Inc., incorporated in Delaware on June 15, 1995 to license certain
rights to composting technology; EPIC, Inc. ("EPIC"), a New Jersey based
intermodal truck/rail transporter of organic waste, acquired on November 3,
1997; and American Soil, Inc. ("ASI"), acquired in October 1996, which operates
a fully permitted outdoor composting facility in Monmouth County, New Jersey.
CANJ itself has six subsidiaries, Newark Recycling and Composting Company, Inc.,
incorporated in Delaware on May 10, 1994, and owned 75% by CANJ and 25% by
Prince Georges Contractors, Inc., doing business as Potomac Technologies, Inc.
("PTI"), an unaffiliated company, with NRCC itself owning 100% of American
Bio-Ag, and five wholly-owned subsidiaries, Monmouth Recycling and Composting
Co., Inc., incorporated in Delaware on May 10, 1994, Chicago Recycling and
Composting Company, Inc., incorporated in Delaware on August 4, 1995, Gloucester
Recycling and Composting Company, Inc., incorporated in Delaware on August 15,
1994, Philadelphia Recycling and Composting Company, Inc., incorporated in
Pennsylvania on March 8, 1995 and Miami Recycling and Composting Company, Inc.,
incorporated in Delaware on November 17, 1995, which itself owns all of the
outstanding common stock of Bedminster Seacor Services Miami Corporation, a
Florida corporation. Unless otherwise indicated, references to the Company
includes the Company and its subsidiaries and CANJ and its subsidiaries.
The Company is a development stage company which will construct and manage
enclosed organic material recycling compost manufacturing plants, while it
operates the EPIC and ASI facilities. Composting is a method of converting the
organic portion of garbage (Municipal Solid Waste--"MSW") and sewage sludge into
a peat moss like product with agronomic benefits. The Company will be paid fees
("tipping fees"), just as landfills and incinerators are paid, for receiving and
processing the organic waste and sewage sludge. The Company also intends to
receive revenues from the sale of the compost it produces. The Company hopes to
be competitive by locating its plants convenient to urban centers, thus
eliminating the need to use local transfer stations and reducing the
transportation costs associated with hauling waste to distant out-of-state
landfills. The Company's first projects
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will be a 200,000 square foot fully enclosed composting facility in Newark, New
Jersey ("Newark Project"), which is 75% owned by the Company through CANJ, and
25% owned by PTI, and a wholly-owned facility in Dade County, Florida.
The Company's executive offices are located at 320 Grand Avenue,
Englewood, New Jersey 07631-4355. The Company's telephone number is (201)
541-9393; fax (201) 541-1303.
RISK FACTORS
An investment in the securities offered hereby involves a high degree of
risk, including, but not limited to, the risk factors described below.
Prospective investors should carefully consider the following risk factors
inherent in and effecting the business of the Company and this offering
before making an investment decision.
1. MINIMAL OPERATING HISTORY. The Company is a development stage company
with regarding to operating composting facilities and, as such, it is subject
to all of the risks inherent in the establishment of a new business
enterprise, including the absence of an operating history, lack of market
recognition for its products and the need to develop new banking and
financial relationships. The Company has not yet demonstrated an ability to
profitably operate any in-vessel compost facilities, including those of the
type proposed to be built by the Company.
2. NO ASSURANCE OF PROFITABLE OPERATIONS. There can be no assurance
that, even if the Company is successful in financing and completing the
development of its compost projects, that such operations will be profitable.
The Company believes that the operations of EPIC will continue to be
profitable.
3. RELIANCE UPON FUNDING FOR CONTINUED COMPANY VIABILITY. The Company is
reliant upon funding from sources other than operations, primarily loans from
shareholders and private sales of restricted securities, for its continued
viability. Through October 31, 1997 funds raised from such loans and sales have
totalled approximately $13,000,000 since the Company's inception in December,
1993. There can be no assurance that the Company will be able to continue to
raise such funds in the future, in which event the future viability of the
Company would be doubtful.
4. RELIANCE UPON PROJECT FINANCING. The Company is reliant upon the
issuance of equity and debt to provide the funds necessary to finance the
construction, equipment and initial working capital for each of its compost
manufacturing plants. The Company and its bond underwriter are contemplating
the issuance of tax exempt bonds secured by these projects for this
financing. There can be no
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<PAGE>
assurances that such tax exempt financing will be available or that the Company
will qualify for such financing, or that the security of each project, including
long term contracts, will be adequate. Should project financing through the sale
of tax exempt bonds prove to be unavailable to the Company, management would
have to explore alternate sources of financing, which may be more difficult to
obtain and be more costly to the Company. As a result, the Company may be unable
to fully implement its operating plan, may not be able to achieve its full
growth potential and its future viability would be doubtful. In addition, tax
exempt financing including a bond issue includes certain risk factors, such as:
* Such issuance of tax exempt bonds requires a bond allocation. The demand for
such bond allocations are extremely competitive since there is generally
insufficient bond allocations available for the number of projects which are
seeking to be financed with tax exempt bonds. There can be no assurance that a
bond allocation will be available when the Company's underwriter is ready to
purchase bonds on behalf of the Company.
* The Company's bond underwriter may require that the Company provide project
equity and/or subordinated debt at the bond closing. The Company has no written
agreements or arrangements for the provision of such financing which would then
be necessary for the bond financing. Without such commitments, the Company would
experience difficulty in completing such a bond financing in a timely fashion.
* The Company's bond underwriter is contemplating the issuance of tax exempt
bonds without credit enhancement. The issuance of bonds is a "best efforts"
private placement of securities. There can be no assurance that there will be
sufficient market demand from institutional or other investors to enable the
underwriter to sell the bonds and thereby complete the project financing.
* While the Company believes that it has all permits necessary to complete its
Newark and Miami projects, there can be no assurance that additional permits
will not be required by regulatory authorities and, if so required, there can be
no assurance that the Company will be able to secure such additional permits.
* Waste procurement contracts may be required by the bond underwriter. There can
be no assurance that the Company will be able to secure these contracts on terms
acceptable to the bond underwriter.
5. COMPETITION IN THE WASTE INDUSTRY. The waste management industry in
which the Company plans to operate, is highly competitive and has for a
number of years been dominated by several large national and international
companies with substantially higher market recognition and substantially
greater financial resources. Additionally, there are many other companies,
virtually
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all of which have greater financial resources and market recognition than the
Company, engaged in the collection, conversion and disposal of waste products.
Consequently, the Company will be competing with such other companies for a
share of the available market and no assurance can be given that in the future
it will be able to obtain an adequate commercial customer base to implement its
operating plan.
6. DEPENDENCE ON KEY PERSONNEL. The Company is substantially dependent on
the personal efforts and abilities of its operating officers and, in particular,
its President and Chief Executive Officer Roger Tuttle, and the President of
EPIC, Robert J. Longo. The loss of any one of these persons could have a
materially adverse effect upon the Company's ability to successfully carry on
its business and achieve its long-term operating goals. Additionally, as the
Company begins commercial operations, it will require the services of additional
skilled personnel. There can be no assurance that it will be able to attract
persons with the requisite skills and training to meet its future needs or, even
if such persons are available, that they can be hired on terms favorable to the
Company.
7. GOVERNMENT REGULATION OF COMPOSTING BUSINESS. The Company's planned
operations are subject to substantial regulation by federal, state and local
regulatory authorities. Specific regulations vary by state and locality. Local
siting approvals require differing levels of design documentation and process
definition, usually requiring public approvals in one or more public hearings.
Following local approval, the Company must apply for and receive air, water,
solid waste and sewage sludge processing permits from state environmental
protection agencies. These permits will generally include specific limits within
which the facilities must operate. In the case of air and water permits, these
include limits on offsite emission and discharge releases. Compost product
composition may also be regulated, requiring continual monitoring to assure
compost product quality. Continued compliance with this broad federal, state and
local regulatory network is essential and costly. Additionally, there can be no
assurance that additional, more restrictive regulations will not be enacted in
the future or that the Company will be in a position to comply with such new
regulations. Consequently, management is unable to predict the effect upon its
future operations of such regulations except that potential investors should be
aware that the failure to comply with such regulations may have a materially
adverse effect on the Company and its operations in the future.
8. UNCERTAINTY AS TO MANAGEMENT'S ABILITY TO CONTROL COSTS AND EXPENSES.
Due to its lack of significant operating history, the Company cannot
accurately project, or give any assurance, with respect to management's
ability to control the Company's development or operating costs and expenses.
Consequently, even if the Company is successful in implementing commercial
operations (of
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which there can be no assurance), if management is not able to adequately
control costs and expenses, such operations may not generate any profit or may
result in operating losses.
9. NECESSITY FOR AND DIFFICULTY OF PERMITTING. There can be no assurances
that the Company will be able to obtain the permits necessary to operate its
organic recycling compost manufacturing centers presently under development. If
and when these permits are issued, the Company must then operate the centers in
conformance with the permits. Further, management is unable to predict the
amount of time which will be required to obtain all necessary permits. Any
delays in such process will delay the Company's ability to begin commercial
operations and may have an adverse impact upon the Company's future operations.
10. NECESSITY FOR AND LACK OF ORGANIC WASTE SUPPLY CONTRACTS. As disclosed
above, management plans to secure a portion of the financing required for each
of its facilities based upon an assignment of revenue contracts with the
Company's waste customers. As of the date of this offering, no such contracts
have, as of yet, been entered into. Until the Company arranges these contracts,
the financing for its projects may not be secured as contemplated.
11. POTENTIAL ENVIRONMENTAL LIABILITY. It is possible that, at such time as
the Company's facilities are in operation, some of the wastes accepted at a
Company facility may contain contaminants which could cause environmental damage
and result in liabilities. In addition, any contaminants which would remain in
the finished compost may cause damage to plants or to land to which the compost
is applied. The Company has not projected and cannot accurately quantify the
costs resulting from any such contamination. As a result, the potential impact
on the Company's business is unknown.
12. NECESSITY OF PROFITABLE PRICING OF SUPPLY CONTRACTS. The Company will
depend upon the supply of MSW, organic waste and sewage sludge from various
waste generators at tipping fees and charges competitive with existing
competitive disposal methods. However, there can be no assurance that long term
contracts for such a supply of MSW or other organic wastes will be available at
prices sufficient for the Company to be profitable, or that the Company's
tipping fees for short term or open market MSW, organic waste and sewage sludge
will generate sufficient revenues for the Company to be profitable.
13. NO CONTRACTS FOR MARKETING OF COMPOST. The Company will produce
quantities of compost when its facilities are operating. There is no assurance
that the Company will be able to sell all of the compost it plans to produce. To
date, the Company has not entered into any significant contracts with users of
compost for its facilities which are under development. Should the Company not
be able to sell the compost, the Company may have to give the compost away and
pay for its transportation costs. In such event,
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the lack of anticipated revenues combined with the additional costs would have a
material adverse impact upon the Company's future profits as well as its ability
to continue its planned composting operations.
14. LIABILITY ASSOCIATED WITH COMPOSTING. The Company's processing and
manufacturing operations will be subject to inherent risks which could result in
property damage, personal injury, pollution or loss of production.
15. RISK OF INSUFFICIENT INSURANCE. While certain of the Company's products
carry express as well as implied warranties from their manufacturers, the
occurrence of an event not fully insured against and the determination of
liability of the Company for the consequent loss or damage, could result in
substantial losses to the Company.
16. RELIANCE UPON PROPRIETARY TECHNOLOGY. The Company will use, under
license and contract, certain proprietary technology. However, there can be no
assurance that this proprietary technology would withstand challenge from
competitors or that competitors will not gain access to this technology or
substantially similar technology.
17. POSSIBLE OBSOLESCENCE OF TECHNOLOGY. There can be no assurance that the
technology upon which the Company will rely will not become obsolete, leaving
the Company with no access to new technology needed to compete in the composting
industry.
18. NO DIVIDENDS. To date, the Company has not paid any cash or other
dividends on its Common Stock and does not anticipate paying dividends in the
foreseeable future. Moreover, the Company's ability to pay dividends on its
Common Stock in the future may be limited by future preferred stock issuances or
by lenders to the Company.
19. LIMITED LIABILITY OF OFFICERS AND DIRECTORS. The Company's Restated
Certificate of Incorporation provides that the Company shall indemnify its
directors and officers against certain liabilities incurred with their service
in such capacities to the fullest extent permitted under New Jersey laws. In
addition, the Restated Certificate of Incorporation provides that the personal
liability of directors and officers of the Company and its stockholders for
monetary damages will be limited.
20. POSSIBLE VOLATILITY OF COMMON SHARES. The trading prices of the Common
Stock could be subject to wide fluctuations in response to quarterly variations
in operating results, announcements of material business events by the Company
or its competitors, significant changes in the environmental regulations related
to the Company's business and other events or factors or to
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general stock market volatility and fluctuations in price and volume.
21. SHARES AVAILABLE FOR RESALE AND POSSIBLE IMPACT UPON MARKET. As at
December 31, 1997, the Company had approximately 35,500,000 shares of Common
Stock issued and outstanding, of which only approximately 5,500,000 are "freely
tradable", and all other outstanding shares are and will be "restricted
securities" as that term is defined in the Securities Act of 1933, as amended
(the "Act"), and in the future may be sold only in compliance with Rule 144
under the Act. In general, under Rule 144 a person (or group of persons whose
shares are aggregated) who has beneficially owned restricted shares of the
Company for at least one year (except two years for affiliates) including any
person who may be deemed to be an "affiliate" of the Company (as the term
"affiliate" is defined in Rule 144 of the Act to include an officer, director or
principal security holder of the Company), is entitled to sell in normal
brokerage transactions during the periods when certain information regarding the
Company is publicly available, within any three-month period, an amount of
shares that does not exceed the greater of (i) the average weekly trading volume
in the Company's shares during the four calendar weeks preceding such sale or
(ii) 1% of the total shares then outstanding. A person who has not been an
"affiliate" of the Company for the three months prior to a sale and who has held
restricted shares for at least two years would be entitled to sell such shares
without restriction. Sales of the Company's Common Stock by present stockholders
pursuant to Rule 144 or otherwise, may, in the future, have a depressive effect
on the price of the Common Stock. Approximately 12,000,000 "restricted" common
shares presently are eligible for sale under Rule 144.
23. PENNY STOCK REGULATION. The Commission has adopted rules that regulate
broker-dealer practices in connection with transaction in "penny stocks." Penny
stocks generally are equity securities with price less than $5.00, other than
securities registered on certain national securities exchanges or listed on
NASDAQ. The penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document prepared by the Commission that provides information
about penny stocks and the nature and level of risks in the penny stock market.
The broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker-dealer and salesperson compensation information
must be given to the customer orally or in writing prior to effecting the
transaction and must be given in writing before or with the customer's
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from such rules, the
broker-dealer must make a special written
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determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules. Since, at present, the Company's securities may be subject to the
penny stock rules, investors in this Offering may find it more difficult to sell
such securities.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby.
SELLING STOCKHOLDER
The Selling Stockholder is Lionhart Global Appreciation Fund. On November
27, 1996 the Selling Stockholder purchased from the Company $1,000,000 face
amount Convertible Debenture ("Debenture"), convertible into freely-tradable
common shares of the Company at a conversion rate which is the lesser of 65% of
the average closing bid price of the Company's common stock for (1) the five
trading days prior to November 27, 1996 (which is $2.47 per share) or (2) the
five trading days prior to the date of any Notice of Conversion. On May 20, 1997
the Selling Stockholder delivered a Notice of Conversion to the Company with
regard to $200,000 face amount of the Debenture, and received from the Company
(including shares issuable for accrued but unpaid interest) 178,253
freely-tradable common shares of the Company. On September 8, 1997 the Selling
Stockholder delivered a Notice of Conversion to the Company with regard to an
additional $200,000 face amount of the Debenture, as a result of which the
Company has issued in the name of the Selling Stockholder 159,670 common shares
(including shares issuable for accrued but unpaid interest), which shares are
being registered for sale herein. In addition, the terms of the Debenture
require the Company to issue in the name of the Selling Stockholder and deposit
with an escrow agent common shares sufficient to cover subsequent conversions by
the Selling Stockholder. In compliance therewith, the Company has issued in the
name of the Selling Stockholder 600,000 common shares, which shares are being
registered for sale herein.
(continued on next page)
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<TABLE>
<CAPTION>
Number of Number of
Shares Shares
Owned Owned Of
Of Record Record After
Name of Prior to Number of Completion
Selling Stockholder Offering Shares Offered of Offering
- ---------------------- ----------- --------------- ------------
<S> <C> <C> <C>
Lionhart Global
Appreciation Fund 759,670 (1) 759,670 0
</TABLE>
(1) Does not include 665,000 common shares owned of record by Lionhart
Investments Limited, an affiliate of the Selling Stockholder.
RESTRICTIONS ON RESALE
Upon conversion of its Debenture, there are no restrictions on resale which
would prevent the Selling Stockholder from reselling some or all of its shares
of Common Stock.
PLAN OF DISTRIBUTION
The Shares may be offered by the Selling Stockholder from time to time in
open market transactions (which may include block transactions) or otherwise on
the Bulletin Board or in private transactions at prices relating to prevailing
market prices or at negotiated prices. See "SELLING STOCKHOLDER." The Selling
Stockholder may effect such transactions by selling Shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholder and/or the
purchasers of Shares for whom such broker-dealers may act as agent or to whom
they sell as principal or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
The Selling Stockholder and any broker-dealer acting in connection with the
sale of the Shares offered hereby may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event any discounts, concessions or
commissions received by them, which are not expected to exceed those customary
in the types of transactions involved, or any profit on resales of the Shares by
them, may be deemed to be underwriting commissions or discounts, under the
Securities Act. The Company will not receive any proceeds from the sale of the
Shares.
The costs, expenses and fees incurred in connection with the registration
of the Shares will be paid by the Company.
12
<PAGE>
LEGAL MATTERS
The legality of the Shares offered hereby will be passed upon for the
Company and the Selling Stockholder by Mark Gasarch, Esq. Mark Gasarch owns
800,000 shares of the Company's common stock and holds options to purchase an
additional 200,000 shares.
EXPERTS
The financial statements of the Company as of April 30, 1997 and 1996 and
for each of the years in the two-year period ended April 30, 1997 and from
December 17, 1993 (inception) through April 30, 1997, have been incorporated by
reference in this Prospectus and Registration Statement in reliance upon the
report of Zeller Weiss & Kahn, independent accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
The financial statements of EPIC, Inc. (f/k/a R. J. Longo Construction Co.,
Inc.) as of December 31, 1996 and 1995 and for each of the years in the two year
period ended December 31, 1996 have been incorporated by reference in this
Prospectus and Registration Statement in reliance upon the report of Paul B.
Radler & Associates, independent accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
INDEMNIFICATION
Title 14A of the New Jersey Statutes, as amended, provides that, except in
cases of breach of duty of loyalty, bad faith, knowing violation of law or
receipt of improper personal benefit, an officer or director of a corporation
shall not be personally liable to a corporation or to its shareholders for
damages for breach of duty if and to the extent that liability has been
eliminated or limited in the corporation's certificate of incorporation.
The Company's restated certificate of incorporation provides that, except
to the extent prohibited by law, no director or officer of the corporation shall
be personally liable to the corporation or its shareholders, provided that a
director or officer shall not be relieved from liability for any breach of duty
based upon an act or omission (a) in breach of such person's duty of loyalty to
the corporation or its shareholders; (b) not in good faith or involving a
knowing violation of the law or (c) resulting in receipt by such person of an
improper personal benefit. To the extent permitted by law, the corporation shall
defend, indemnify and hold its officers and directors harmless for all acts and
omissions in the performance of their duties for the corporation, provided that
such acts or omissions are made in good faith and do
13
<PAGE>
not involve a knowing violation of the law nor result in an improper personal
benefit to the officers or directors.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission (the "Commission") such indemnification is against public policy as
expressed in that Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company 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 Company 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.
14
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION
OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY.
NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY
THE SHARES OF COMMON STOCK OFFERED HEREBY BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION
IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
-----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information.............. 2
Incorporation of Certain........... 3
Documents by Reference
The Company.........................3
Risk Factors........................5
Use of Proceeds....................11
Selling Stockholder................11
Plan of Distribution...............12
Legal Matters......................13
Experts............................13
Indemnification....................13
</TABLE>
-----------------
COMPOST AMERICA HOLDING COMPANY, INC.
759,670 Shares of Common Stock
-----------------
PROSPECTUS
-----------------
February , 1998
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses in connection with this
Registration Statement. All such expenses are estimates, other than the filing
fee payable to the Securities and Exchange Commission.
<TABLE>
<CAPTION>
Item Amount
- ---- ---------------
<S> <C>
Registration Fee .............................. $ 518.00
Legal Fees and Expenses........................ 15,000.00
Accounting Fees and Expenses................... 5,000.00
Total...................................... $ 20,518.00
</TABLE>
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Title 14A of the New Jersey Statutes, as amended, provides that, except in
cases of breach of duty of loyalty, bad faith, knowing violation of law or
receipt of improper personal benefit, an officer or director of a corporation
shall not be personally liable to a corporation or to its shareholders for
damages for breach of duty if and to the extent that liability has been
eliminated or limited in the corporation's certificate of incorporation.
Title 14A provides for indemnity and authorizes other action to protect
any person who is or was serving as a director, officer, employee or agent of
a corporation or who is or was serving, at the request of the corporation, as
a director, officer, trustee, employee or agent of any domestic or foreign
corporation or any partnership, joint venture, sole proprietorship , trust or
other enterprise, whether or not for profit, or any director, officer,
employee or agent of any constituent corporation absorbed by the indemnifying
corporation in consolidation or merger (such person being referred to as a
"corporate agent"). Any corporation is given the power to indemnify a
corporate agent who is or was a party to or was a party to or threatened to
be made a party to. any proceeding by reason of the fact that the corporate
agent was serving or had served the corporation at the request of the
corporation as a corporate agent, against his expenses and liabilities in
connection with such a proceeding if the proceeding is not one brought by or
on behalf of the corporation and if: (1) Such corporate agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and (2) with respect to any criminal
proceeding,
II-1
<PAGE>
such corporate agent had no reasonable cause to believe his conduct was
unlawful and against his expenses if the proceeding is brought by or in the
right of the corporation and if such corporate agent acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation; provided, however, that no indemnification
shall be provided in respect of any claim, issue or matter as to which such
corporate agent shall have been adjudged to be liable to the corporation,
unless and only to the extent that the court in which such proceeding was
brought shall determine, upon application, that despite an adjudication of
liability, but in view of all of the circumstances of the case the corporate
agent is fairly and reasonably entitled to indemnity for such expenses as the
court shall deem proper. Unless otherwise ordered by the court, such
indemnification may be made in a specific case only upon a determination that
the corporate agent had met applicable standards of conduct. Unless otherwise
provided in the corporation's certificate of incorporation or its by-laws,
such determination shall be made by the board of directors or a committee
thereof, acting by a majority vote of a quorum consisting of directors who
were not parties to or otherwise involved in the proceeding or by independent
legal counsel, in written opinion, if designated by a majority vote of a
quorum of disinterested directors or by shareholders if authorized by the
certificate of incorporation, by-laws, resolution of the board of directors
or resolution of the shareholders. Expenses incurred by the corporate agent
in connection with such a proceeding may be paid by the corporation in
advance of the final disposition of the proceeding as authorized by the board
of directors upon their receipt of an undertaking of the corporate agent to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified. A corporation is authorized to purchase and
maintain insurance on behalf of its corporate agents.
Article SECOND of the Registrant's restated certificate of incorporation
provides that:
(3) Except to the extent prohibited by law, no director or officer of the
corporation shall be personally liable to the corporation or its
shareholders, provided that a director or officer shall not be relieved
from liability for any breach of duty based upon an act or omission.
(a) in breach of such person's duty of loyalty to the corporation or its
shareholders;
(b) not in good faith or involving a knowing violation of the law or
(c) resulting in receipt by such person of an improper personal benefit
II-2
<PAGE>
(4) To the extent permitted by law, the corporation shall defend, indemnify and
hold its officers and directors harmless for all acts and omissions in the
performance of their duties for the corporation, provided that such acts or
omissions are made in good faith and do not involve a knowing violation of
the law nor result in an improper personal benefit to the officers or
directors.
No other statute, charter provision, by-law, contract or other arrangement
insures or indemnifies any controlling person, director or officer of the
Registrant against liability incurred in such capacity.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission (the "Commission") such indemnification is against public
policy as expressed in that Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Item 16. EXHIBITS
<TABLE>
<S> <C>
5.1 Opinion of Mark Gasarch, Esq. (1)
23.1 Consent of Mark Gasarch, Esq. (included in Exhibit 5.1)
23.2 Consent of Zeller Weiss & Kahn, Independent Accountants (1)
23.3 Consent of Paul B. Radler & Associates, CPAs (1)
24. Power of Attorney with respect to certain signatures in the Registration Statement (included on Signature page) (1)
</TABLE>
- -----------------------
(1) Filed herewith.
II-3
<PAGE>
Item 17. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes to file during any period in
which offers or sales are made, a post-effective amendment to this Registration
Statement to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
2. The undersigned Registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
3. The undersigned Registrant hereby undertakes 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.
4. 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's plan 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.
5. 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 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant int he
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 of whether such indemnification by it is against
public policy as expressed in
II-4
<PAGE>
the Act and will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the Town of Englewood, State of New Jersey, on
February 26, 1998.
COMPOST AMERICA HOLDING COMPANY, INC.
(Registrant)
By: /s/ Roger E. Tuttle
-----------------------------------------
Roger E. Tuttle, President
(Principal Executive Officer)
KNOW ALL MEN BY THESE PRESENTS, that Compost America Holding Company,
Inc. and each of its undersigned officers and directors hereby constitutes
and appoints Roger E. Tuttle his/her true and lawful attorney-in-fact and
agent with full power of substitution and resubstitution for him/her and in
his/her name, place and stead, in any and all capacities, to sign all or any
amendments (including post-effective amendments) of and supplements to this
Registration Statement on Form S-3 and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each such attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises, to all intents and
purposes and as fully as said Corporation itself and each said officer or
director might or could do in person, hereby ratifying and confirming all
that each such attorney-in-fact and agent, or his substitutes, may lawfully
do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
February 26, 1998 /s/ Roger E. Tuttle
---------------------------------------
Roger E. Tuttle, President
(Principal Executive Officer),
Treasurer (Principal Financial
Officer), Director
February 26, 1998 /s/ Robert E. Wortmann
---------------------------------------
Robert E. Wortmann, Secretary,
Director
<PAGE>
February 26, 1998 /s/ Anthony P. Cipollone
---------------------------------------
Anthony P. Cipollone, Controller
(Principal Accounting Officer)
February 26, 1998 /s/ Charles R. Carson
---------------------------------------
Charles R. Carson, Director
February 26, 1998 /s/ Pasquale Dileo
---------------------------------------
Pasquale Dileo, Director
February 26, 1998 /s/ Robert J. Longo
---------------------------------------
Robert J. Longo, Director
Messrs. Charles R. Carson, Pasquale Dileo, Robert J. Longo, Roger E. Tuttle
and Robert E. Wortmann constitute a majority of the Registrant's Board of
Directors.
<PAGE>
EXHIBIT 5.1
[MARK GASARCH LETTERHEAD]
February 26, 1998
Compost America Holding Company, Inc.
320 Grand Avenue
Englewood, New Jersey 07631
Gentlemen:
Compost America Holding Company, Inc. (the "Company") is filing with the
Securities and Exchange Commission (the "Commission") a Registration
Statement on Form S-3, of which this opinion is to be a part, relating to the
proposed sale by a certain shareholder of the Company ("Selling Shareholder")
of 759,670 previously issued shares of the Company's common stock, no par
value ("Common Stock") (The Registration Statement is hereinafter referred to
as the "Registration Statement").
I have acted as counsel in connection with certain of the transactions that
are the subject matter of the Registration Statement and am familiar with the
various corporate proceedings relating thereto. I have examined such
corporate records of the Company and such other instruments, documents and
certificates as I have deemed necessary as a basis for this opinion.
For the purpose of this opinion, I have assumed that (i) the proposed
transactions are carried out as set forth in the Registration Statement, (ii)
the Commission shall have issued an order under the Securities Act of 1933,
as amended, declaring effective the Registration Statement, and (iii) all
requisite authorizations, approvals, consents or exemptions under the
securities laws of the various states and other jurisdictions of the United
States, shall have been obtained.
Based upon the foregoing, I am of the opinion that the shares of Common Stock
to be sold by the Selling Shareholder in accordance with the Registration
Statement, are duly authorized, and were legally issued, fully paid and
non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and as part of, or as an exhibit to, any document that
may be filed with respect to the proposed transactions under the securities
laws of the various states and other jurisdictions of the United States. I
also consent to the reference to myself under "Legal Matters" in the
Prospectus which is a part of the Registration Statement.
Very truly yours,
/s/ Mark Gasarch
-----------------------
Mark Gasarch
<PAGE>
EXHIBIT 23.2
ZELLER WEISS & KAHN
Certified Public Accountants
1084 Route 22 West
Mountainside, New Jersey 07092
The Board of Directors
Compost America Holding Company, Inc.
320 Grand Avenue
Englewood, New Jersey 07631
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
/s/ Zeller Weiss & Kahn
ZELLER WEISS & KAHN
Mountainside, New Jersey
February 26, 1998
<PAGE>
EXHIBIT 23.3
PAUL B. RADLER & ASSOCIATES
Certified Public Accountants
305 Palmer Road
Denville, New Jersey 07834
The Board of Directors
Compost America Holding Company, Inc.
320 Grand Avenue
Englewood, New Jersey 07631
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
/s/ Paul B. Radler & Associates
PAUL B. RADLER & ASSOCIATES
Denville, New Jersey
February 26, 1998
