<PAGE> 1
As filed with the Securities and Exchange Commission on May 13, 1999.
Registration No. 333-76845
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
PRE-EFFECTIVE AMENDMENT NO. ONE TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
U.S. PLASTIC LUMBER CORP.
(Exact name of Registrant as specified in its charter)
NEVADA 87-0404343
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
2300 W. Glades Road, Suite 400 W
Boca Raton, Florida 33431
Telephone (561)394-3511
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
Bruce C. Rosetto
Vice President, General Counsel and Secretary
U.S. Plastic Lumber Corp.
2300 W. Glades Road, Suite 400 W
Boca Raton, Florida 33431
Telephone (561)394-3511
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Jane K. Storero, Esq.
Blank Rome Comisky & McCauley LLP
One Logan Square
Philadelphia, Pennsylvania 19103
Telephone: (215) 569-5500
Facsimile (215) 569-5555
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.
/ /
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, 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 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 delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
<PAGE> 2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=========================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.0001 per share....... 6,851,485 (1) (2) $59,496,465.31(2) $16,598(3)
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement covers shares owned by certain selling
shareholders which shares may be offered from time to time by the
selling shareholders.
(2) Estimated solely for the purpose of calculating the registration fee.
Calculated in accordance with Rule 457(c) based upon the average of
the high and low closing prices for the Common Stock as reported on
the Nasdaq Stock Market on: (i) April 19, 1999 of $8.5625 with respect
to 5,743,865 shares registered on the initial registration statement,
and (ii) May 10, 1999 of $9.50 with respect to the 1,107,500 shares
registered hereby.
(3) 5,743,985 shares were registered in connection with the initial filing
of the Registration Statement and the appropriate fee of $13,673 was
paid. An additional 1,107,500 shares are being registered on this
Pre-Effective Amendment No. One to the Registration Statement and a
fee of $2,925 is being paid herewith.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
===============================================================================
<PAGE> 3
- -------------------------------------------------------------------------------
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
- -------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED MAY 13, 1999
PROSPECTUS
U.S. PLASTIC LUMBER CORP.
6,851,485 SHARES OF COMMON STOCK
The selling shareholders named in this prospectus under "Selling
Shareholders" are offering 6,851,485 shares of common stock pursuant to this
prospectus. U.S. Plastic Lumber Corp. will not receive any of the proceeds from
the sale of the common stock, except for common stock underlying options and
warrants. U.S. Plastic Lumber Corp. will bear certain expenses incident to the
registration of the shares sold by the selling shareholders. Some of the selling
shareholders are currently subject to Stock Sale Restriction Agreements between
us and some of the shareholders, which limit the ability of some of the selling
shareholders to sell all or a portion of their stock being registered by this
Registration Statement for the time periods and under the terms of each of the
agreements between us and the selling shareholders. See "Selling Shareholders"
and "Plan of Distribution."
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER "RISK FACTORS"
BEGINNING ON PAGE 2 OF THIS PROSPECTUS.
The selling shareholders may sell their U.S. Plastic Lumber Corp.
common stock in one or more transactions on the Nasdaq Stock Market at market
prices prevailing at the time of sale or in private transactions at negotiated
prices.
These selling shareholders may use broker, dealers or other agents to
sell their shares. If this happens, the brokers, dealers or other agents may
receive discounts, concessions or commissions from the shareholders, or they
may receive commissions from purchasers of common stock for whom they acted as
agents. See "Plan of Distribution."
Our common stock is traded on the Nasdaq Stock Market under the symbol
"USPL". On May 10, 1999, the last sale prices of our common stock as reported
on the Nasdaq Stock Market was $9.50 per share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May ___, 1999.
<PAGE> 4
TABLE OF CONTENTS
PAGE
----
Prospectus Summary...................................................... 2
Risk Factors............................................................ 2
The Company............................................................. 13
Forward Looking Statements.............................................. 14
Use of Proceeds......................................................... 14
Selling Shareholders.................................................... 15
Plan of Distribution.................................................... 17
Experts................................................................. 18
Legal Matters........................................................... 18
Where You Can Find More Information..................................... 18
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU
WITH DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR
INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON IT. THE SHAREHOLDERS SELLING
COMMON STOCK UNDER THIS PROSPECTUS WILL NOT MAKE AN OFFER OF THEIR SHARES IN
ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE
ON THE FRONT PAGE OF THIS PROSPECTUS. OUR BUSINESS, FINANCIAL CONDITION,
RESULTS OF OPERATIONS AND PROSPECTS MAY HAVE CHANGED SINCE THAT DATE.
1
<PAGE> 5
PROSPECTUS SUMMARY
This summary highlights information contained in other parts of this
prospectus. it is not complete and may not contain all of the information that
you should consider before investing in the shares. You should read the entire
prospectus carefully.
As used in this prospectus, the terms "we," "us," "our" and "U.S.
Plastic Lumber Corp." mean U.S. Plastic Lumber Corp. and its subsidiaries, and
the term "common stock" means U.S. Plastic Lumber Corp. common stock, $0.0001
par value. Unless otherwise stated, reference to a "year" in this prospectus
means our fiscal year, which ends on December 31.
Our principal executive offices are located at 2300 Glades Road, Suite
440W, Boca Raton, Florida 33431 and our telephone number is (561) 394-3511.
RISK FACTORS
In considering whether to acquire U.S. Plastic Lumber Corp. common
stock, you should consider carefully the risks associated with the ownership of
U.S. Plastic Lumber Corp. common stock. These risks are described in detail
below.
WE HAVE A HISTORY OF LOSSES AND IF WE ARE NOT ABLE TO MAINTAIN OUR
CURRENT PROFITABILITY, IT COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON
STOCK.
We incurred an operating loss of $291,000 for the year ended December
31, 1996 and an operating loss of $321,000 for the year ended December 31,
1997. We were successful in reporting an operating profit of $1,437,226 for the
year ended December 31, 1998, but we cannot assure you that our profitability
will continue. If we are not able to maintain our current profitability, which
will depend largely on our ability to substantially increase sales revenues and
limit the growth of overhead and direct expenses, it could adversely affect the
market price of our common stock.
OUR LIMITED ACCESS TO CAPITAL COULD RESULT IN OUR INABILITY TO OBTAIN
FINANCING IN ADEQUATE AMOUNTS AND ON ACCEPTABLE TERMS, WHICH COULD HAVE AN
ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
We have limited access to capital and there is no assurance that we
will be able to obtain the capital necessary and appropriate to operate our
business. We will require additional capital in order to:
o manufacture, market and sell our products;
o develop new products;
o manufacture, market and sell our new product line;
o consolidate our existing operations;
2
<PAGE> 6
o implement our plan of operations;
o working capital; and
o capital expenditures.
While we do have existing lines of credit, we cannot be sure that this
debt financing will be available to us in the future or that it will be
available in the amounts we require or on terms acceptable to us. Our failure
to obtain financing in adequate amounts and on acceptable terms could have an
adverse effect on our business, financial condition and results of operations.
THE ISSUANCE OF ADDITIONAL SHARES PURSUANT TO EARNOUT AGREEMENTS WILL
RESULT IN DILUTION TO CERTAIN SHAREHOLDERS OF THE COMPANY.
We have reserved for issuance a substantial number of shares which will
be issued to certain shareholders upon the Company meeting certain conditions
set forth in the earnout agreements entered into with such shareholders. On
December 31, 1998, we had reserved approximately 10,475,545 shares for issuance
pursuant to these agreements. On such date, we had 18,230,528 shares of common
stock outstanding. Of the shares which we reserved for issuance pursuant to
earnout agreements, 4,573,686 shares were related to an earnout provision
contained in the Agreement and Plan of Reorganization entered into by the
Company on December 15, 1995. In connection with this transaction, the parties
to the Agreement and Plan of Reorganization agreed that the earnout shares would
be paid to certain shareholders who held the common stock as of the date of the
Agreement and Plan of Reorganization in the event net sales or production of
Earth Care Global Holdings, on a consolidated basis, meet or exceed 2.0 million
pounds of plastic lumber per month for three consecutive months are achieved,
subject to certain limitations contained in the Agreement. The Company
subsequently entered into earnout agreements with each of these shareholders.
Certain questions have arisen with respect to the meaning of the production
quotas set forth in these agreements and the Company has appointed a committee
of independent directors who have selected independent counsel to review this
matter. In the event these sales or production levels are reached, the
shareholders of Earth Care Global Holdings as of March 29, 1996 and Clean Earth,
Inc., which shareholders are referred to as the "Historical Shareholders" would
receive approximately 4.6 million earnout shares. No additional assets or cash
would be received by us in the event such sales or production goals were
achieved which would result in the dilution from the issuance of additional
shares which would directly impact all shareholders who purchased our common
stock subsequent to March 29, 1996 and who still owned our common stock on the
date the earnout shares are issued, assuming the sales or production goal is
met. As of December 31, 1998, our net tangible book value was $13.1 million, or
$0.72 per share of common stock. Net tangible book value per share represents
total assets less total liabilities, divided by the number of shares of common
stock outstanding. After making the accounting adjustments necessary to give
effect to the issuance of the 4,573,686 earnout shares, the adjusted net book
value as of December 31, 1998 would have been $0.57 per share which represents
an immediate dilution of $0.15 per share to all of our shareholders who are not
Historical Shareholders.
3
<PAGE> 7
IF WE ARE NOT ABLE TO ATTRACT AND KEEP EMPLOYEES WITH THE REQUISITE
LEVELS OF EXPERTISE, IT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATION.
Our business requires a significant amount of expertise in a wide
variety of functions. We cannot assure you that we will be able to maintain
employees with the requisite levels of expertise or that we will be able to
attract and keep these employees in the future. Our failure to attract and keep
employees with the requisite levels of expertise could have a material adverse
effect on our business, financial condition and results of operation.
OUR COMPUTER SYSTEMS AND/OR THE COMPUTER SYSTEMS OF OUR CUSTOMERS OR
VENDORS MAY NOT BE YEAR 2000 COMPLIANT WHICH COULD RESULT IN AN INABILITY TO
ENGAGE IN NORMAL BUSINESS ACTIVITIES FOR A PERIOD OF TIME AFTER JANUARY 1, 2000
WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION
AND RESULTS OF OPERATION.
Although we believe our accounting software is Year 2000 compliant and
currently estimate that our information technology systems will be Year 2000
compliant by the end of 1999, we cannot assure you that our information
technology systems will be Year 2000 compliant on a timely basis. We are in the
process of developing a contingency plan in the event our systems are not Year
2000 compliant on a timely basis.
We are also in the process of conducting an internal audit of our
non-information technology systems (e.g. manufacturing equipment embedded
computer systems) and software to determine what issues, if any, exist. After
we complete this internal audit, we will evaluate the full scope of issues,
related costs, and available remedies to insure that our non-information
systems and those of our major customers and vendors continue to meet our
internal needs. We do not anticipate significant costs to become Year 2000
compliant. Although we have no control over Year 2000 compliance by our
customers or vendors, we are in the process of developing a contingency plan in
the event our customers or vendors are not Year 2000 compliant on a timely
basis. If we or our customers or vendors are not Year 2000 compliant on a
timely basis, it could result in an inability to engage in normal business
activities for a period of time after January 1, 2000 which could have a
material adverse effect on our business, financial condition and results of
operation. The Company has sent a survey to its major customers and suppliers
and based upon the responses the Company has received on its survey, the
Company does not anticipate any material adverse effects from its major
customers and suppliers.
4
<PAGE> 8
SEVERAL OF OUR DIRECTORS, OFFICERS AND EMPLOYEES ARE AFFILIATED WITH
ENTITIES WHICH ARE SIGNIFICANT SHAREHOLDERS OF OURS, WHICH COULD RESULT IN A
CONFLICT OF INTEREST.
Several of our of directors, officers and employees are affiliated,
through ownership or otherwise, with the Stout Partnership and Schultes, Inc.,
each of which is a significant shareholder. When our directors who are
affiliated with these entities are faced with decisions where we have interests
adverse to those entities, a conflict of interest could arise. Since a majority
of our directors are affiliated with those entities, agreements related to
monies provided by those entities were not the result of arm's-length
negotiations. We have attempted to have these agreements be as similar to those
negotiated by us with third parties, however, these agreements may include
terms and conditions that may be more or less favorable to us than terms
contained in similar agreements negotiated with third parties.
IF WE ARE UNABLE TO SUCCESSFULLY IMPLEMENT OUR GROWTH STRATEGY, IT
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The success of our growth strategy depends on our ability to continue
to increase profit margins through:
o integration of acquisitions;
o consolidation of plants and operations;
o increased consumer acceptance of alternative wood products;
o an increased distribution network;
o increased production capacity; and
o ability to finance growth.
Our ability to implement this strategy will depend in large part on
whether we are able to:
o expand through strategic acquisitions of companies in new and
complementary industries;
o obtain adequate financing on favorable terms to fund this growth
strategy;
o develop and expand its customer base; hire, train and retain
skilled employees;
o strengthen brand identity and successfully implement its marketing
campaigns;
o continue to expand in the face of increasing competition;
o continue to negotiate our supply contacts and sales agreements on
terms that increase or maintain our current profit margins; and
o create sufficient demand for plastic lumber and other products.
Our inability to implement any or all of these strategies could have a
material adverse effect on our results of operations and financial condition.
5
<PAGE> 9
OUR GROWTH STRATEGY INCLUDES ACQUISITIONS AND IF WE ARE UNABLE TO MAKE
ACQUISITIONS, OR IF THOSE ACQUISITIONS ARE NOT SUCCESSFUL, IT COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
As part of our growth strategy, we have made, and plan to continue to
make acquisitions of other companies. We may not be able to make acquisitions
in the future. In addition, any acquisition that we make could have a material
adverse effect on our business, financial condition and results of operations.
Future acquisitions are subject to many risks, including the risks that:
o we may not be able to identify suitable companies to buy;
o we may not be able to purchase companies at favorable prices, or
at all;
o we may not be able to obtain financing on favorable terms, or at
all, to pay for future acquisitions; and
o we may not be able to effectively integrate the acquired
businesses or technologies into our operations.
In addition, in order to consummate future acquisitions, we may be required to
borrow money or incur other liabilities, which could have a material adverse
effect on our liquidity and capital resources. We may also be required to issue
additional shares of stock, which could result in dilution to our shareholders.
AS A RESULT OF OUR ACQUISITION OR LEASE OF REAL ESTATE, WE MAY BECOME
LIABLE FOR THE REMEDIATION AND/OR REMOVAL OF HAZARDOUS OR TOXIC SUBSTANCES FROM
THAT REAL ESTATE.
From time to time, we acquire or lease storage facilities or other
properties in connection with the operation of our business. Under various U.S.
federal, state or local environmental laws, ordinances and regulations, we
could be required to investigate and clean up hazardous or toxic substances or
chemical releases at property we acquire or lease. We could also be held liable
to a governmental entity or to third parties for property damage, personal
injury and investigation and cleanup costs incurred by those parties in
connection with any contamination. The costs of investigation, remediation or
removal of hazardous or toxic substances may be substantial, and the presence
of those substances, or the failure to properly remediate the property, may
adversely affect our ability to sell or rent the property or to borrow using
the property as collateral. In addition, we could be subject to common law
claims by third parties based on damages and costs resulting from environmental
contamination emanating from these properties.
THE SEASONAL NATURE OF OUR BUSINESS COULD HAVE AN ADVERSE AFFECT ON
OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Our business is seasonal in nature. Historically, we have generated a
substantial portion of our revenues and profits during the second and third
quarters of our fiscal year. If for any reason our revenues fall below those
normally expected during the second and third quarters of our fiscal year, our
business, financial condition and results of operation could be adversely
affected.
6
<PAGE> 10
SOME OF OUR BUSINESSES OPERATE IN RELATIVELY NEW INDUSTRIES WHICH
PROSPECTIVE CUSTOMERS MAY RESIST.
The reclamation and recycling of plastic and the manufacture of
plastic lumber for use in construction, and other composite materials
containing recycled plastics, are relatively new industries. There is a general
reluctance in the construction industry to use new materials before they have
been extensively tested, particularly in certain segments which have exacting
performance standards for component materials. In the case of our recycled
plastic lumber and composite materials in particular, this testing may be
extensive for each prospective customer and may require substantial additional
time and resources. In addition, we may experience resistance from prospective
customers who are accustomed to more conventional, non-artificial wood
materials. Moreover, we may not have sufficient financial and other resources
to undertake extensive marketing and advertising activities or to afford the
cost of the necessary marketing and sales personnel when it becomes appropriate
to broaden our marketing efforts.
IF WE ARE NOT ABLE TO OBTAIN OUR RAW MATERIALS AT COMMERCIALLY
REASONABLE TERMS, IT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The availability of low-cost raw materials, namely post-consumer and
industrial plastic waste products, is a material factor in our costs of
operations. Historically, suppliers have provided adequate quantities of these
raw materials at favorable costs. We believe that our current sources of raw
materials will continue to be available on commercially reasonable terms.
However, unavailability, scarcity or increased cost of these raw materials
could have a material adverse effect upon our business. We purchase most of our
raw materials through generators of post-consumer & industrial recycled plastic
materials. We do not rely on contractual arrangements with our raw materials
suppliers and we have no long-term supply contracts. Disruption of our supply
sources could have a material adverse effect on our business, financial
condition and results of operation.
IF WE ARE UNABLE TO DEVELOP NEW TECHNOLOGIES, WE MAY NOT BE ABLE TO
COMPETE EFFECTIVELY WHICH COULD HAVE AN ADVERSE EFFECT ON OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Our products and services involve newly developing technologies and we
cannot be sure that we will be able to compete effectively in developing and
marketing new products and services or in developing or maintaining the
know-how, technology, and patents to compete effectively. There is a general
lack of public awareness of these newly developing products and services
generally, or as alternatives to more traditional and well established
products. To compete effectively, we must increase public knowledge and
acceptance of our products and services and develop and maintain certain levels
of know-how and technical expertise. Our failure to compete effectively could
have an adverse effect on our business, financial condition and results of
operations.
7
<PAGE> 11
THERE IS A LACK OF UNIFORM STANDARDS IN THE PLASTIC LUMBER INDUSTRY IN
WHICH WE OPERATE WHICH COULD RESTRICT THE GROWTH OF PLASTIC LUMBER PRODUCTS AND
LIMIT THE MARKET FOR THESE PRODUCTS.
The American Society for Testing and Materials and other industry
trade organizations have established general standards and methods for
measuring the characteristics of specific building materials. Users of building
materials (and frequently, issuers of building codes) generally specify that
the building materials comply with the standards relative to the proposed
applications. Since uniform, recognized standards or methods have only recently
been established for measuring the characteristics of plastic lumber, potential
users may not be aware of this method of judging whether or not plastic lumber
may be suitable for their particular requirements, without being informed of
such standards by the plastic lumber supplier or otherwise becoming aware of
them. The fact that these standards are not well known for plastic lumber may
limit the market potential for our building materials and make potential
purchasers of such building materials reluctant to use them. The Plastic Lumber
Trade Association, of which we are a member, is pursuing increased public
awareness of such standards, but we cannot be sure that public awareness will
successfully be increased or that increased awareness will increase the market
for our products.
8
<PAGE> 12
THE INDUSTRIES IN WHICH WE OPERATE ARE SUBJECT TO EXTENSIVE REGULATION
AND THE COST OF COMPLYING WITH THOSE REGULATIONS, OR THE LIABILITY FOR NOT
COMPLYING, COULD BECOME SUBSTANTIAL, WHICH COULD HAVE A MATERIAL ADVERSE EFFECT
ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Our businesses are subject to extensive laws and regulations designed
to protect the environment from toxic wastes and hazardous substances or
emissions and to provide a safe workplace for employees. Under current federal
regulations, the Resource Conservation & Recovery Act, and Comprehensive
Environmental Responsibility, Compensation & Liability Act, the generator of
toxic or hazardous waste is financially and legally responsible for that waste
forever, and strictly liable for the clean up and disposal costs. In
particular, the business of treating or otherwise handling toxic or hazardous
waste materials is fraught with potential liability to such handlers if the
handling and tracking of such wastes is not completed properly. We believe we
are either in material compliance with all currently applicable laws and
regulations or that we are operating in accordance with appropriate variances
or similar arrangements, but we cannot be sure that we will always be deemed in
compliance, nor can we be sure that compliance with current laws and
regulations will not require significant capital expenditures that could have a
material adverse effect on our operations. These laws and regulations are
always subject to change and could become more stringent in the future.
Although state and federal legislation currently provide for certain
procurement preferences for recycled materials, the preferences for materials
containing waste plastics are dependent upon the eventual promulgation of
product or performance standard guidelines by state or federal regulatory
agencies. The guidelines for recycled plastic building materials may not be
released or, if released, the product performance standards required by those
guidelines may be incompatible with our manufacturing capabilities. It may be
necessary to expend considerable time, effort and money to keep our existing or
acquired facilities in compliance with applicable environmental, zoning, health
and safety regulations and as to which there may not be adequate insurance
coverage. In addition, due to the possibility of unanticipated factual or
regulatory developments, the amounts and timing of future environmental
expenditures and compliance could vary substantially from those currently
anticipated.
IF WE ARE NOT ABLE TO MAINTAIN OUR PERMITS AND LICENSES, IT COULD HAVE
AN ADVERSE AFFECT ON OUR BUSINESS.
Our business, especially our environmental recycling operation,
depends on our maintaining permits and licenses from many different federal,
state, and local agencies. We cannot assure you that we will be able to
maintain our permits and licenses in the future or that we will be able to
modify our permits and licenses, if necessary, to be able to compete
effectively.
9
<PAGE> 13
WE RELY SIGNIFICANTLY ON OUR TRADE SECRETS AND OUR INABILITY TO
PROTECT THOSE TRADE SECRETS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Our businesses involve many proprietary trade secrets, including
certain methods, processes and equipment designs for which we have not sought
patent protection. Although we have taken measures to safeguard our trade
secrets by limiting access to manufacturing and processing facilities and
requiring confidentiality and nondisclosure agreements with third parties, we
cannot assure you that our trade secrets will not be disclosed or that others
will not independently develop comparable or superior technology. Rather than
rely on patent protection, we have generally chosen to rely on the unique and
proprietary nature of our processes. We have obtained exclusive worldwide
licensing rights with respect to patent technology related to railroad
crossties and the process to manufacture them, but there is no assurance we
will be able to maintain those rights for any specific length of time.
IF WE ARE NOT ABLE TO SUCCESSFULLY OBTAIN BID WORK AT SUITABLE
PROFITABLE MARGINS, IT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Our environmental recycling operation consists of certain subsidiaries
which are highly reliant upon contract bidding as a significant source of
revenues. We cannot assure you that we will be successful in obtaining bid work
in the future or that if we do obtain bid work that it will be at suitable
profitable margins. Our failure to successfully obtain bid work at suitable
profitable margins could have a material adverse effect on our business,
financial condition and results of operation.
THE OCCURRENCE OF AN EVENT NOT FULLY COVERED BY INSURANCE COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
Our business could be disrupted by a variety of occurrences,
including:
o fires, explosions or blow outs;
o environmental hazards;
o hurricanes, floods, fires or other acts of God; or
o product liability occurrences.
Any of these occurrences could result in substantial losses due to:
o injury;
o loss of life;
o severe damage;
o clean-up responsibilities;
o regulatory investigation; or
o penalties and suspension of operations.
10
<PAGE> 14
We maintain insurance coverage against some, but not all, potential
risks. However, we cannot assure you that:
o insurance will be adequate to cover all losses or exposure for
liability;
o insurance will continue to be available at premium levels that
justify its purchase; or
o insurance will continue to be available at all.
If an event occurs which is not fully covered by insurance, it could
have a material adverse effect on our business, financial condition and results
of operation.
A SUBSTANTIAL INCREASE IN INTEREST RATES COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATION, WHILE OUR
FAILURE TO COMPLY WITH OUR CREDIT AGREEMENTS COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR LIQUIDITY AND CAPITAL RESOURCES.
A substantial portion of our outstanding indebtedness is at floating
interest rates. Therefore, a substantial increase in interest rates could
adversely affect our cost of indebtedness for borrowed money, which could have
an adverse effect on our business, financial condition and results of
operation. In addition, most of our debt instruments contain covenants
establishing certain financial and operating restrictions. Our failure to
comply with any covenant or obligation contained in any credit agreement could
result in an event of default which could accelerate debt under certain other
credit agreements, all of which could have a material adverse effect on our
liquidity and capital resources.
OUR PENDING OR FUTURE ADMINISTRATION AND LEGAL PROCEEDINGS COULD
RESULT IN A SIGNIFICANT JUDGMENT AGAINST US, THE LOSS OF A SIGNIFICANT PERMIT
OR LICENSE OR THE IMPOSITION OF A SIGNIFICANT FINE, ANY OF WHICH COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
We are generally involved in administrative and legal proceedings in
the ordinary course of our business. Citizen's groups have become increasingly
active in challenging the grant or renewal of permits and licenses for waste
facilities and responding to these challenges has further increased the costs
associated with establishing new facilities or expanding current facilities. A
significant judgment against us, the loss of a significant permit or license or
the imposition of a significant fine could have a material adverse effect on
our business, financial condition and results of operation.
11
<PAGE> 15
THE INDUSTRIES IN WHICH WE OPERATE ARE VERY COMPETITIVE AND OUR
INABILITY TO COMPETE EFFECTIVELY COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
All of our businesses operate in highly competitive industries. Our
recycled plastic lumber business faces competition from other producers of
recycled plastic lumber as well as producers of vinyl and aluminum decking, and
traditional wood, especially pressured treated wood. We compete against other
makers of recycled plastic principally upon the basis of price and quality, as
well as the immediate availability of the product, and compete against other
products such as pressure treated lumber by emphasizing the superior
suitability characteristics of plastic lumber for certain applications, as well
as appealing to the environmental consciousness of consumers. Our environmental
recycling operations face competition from several large competitors which
provide similar services throughout the northeast and midatlantic states. The
resources of these competitors, financial or otherwise are such that it is very
difficult for us to effectively compete. In some instances, our competitors
have more revenues, market share, better name recognition and capital available
which could make it difficult for us to compete. In addition, the environmental
industry is changing as a result of rapid consolidation and our future success
may be affected by those changes. Our failure to compete successfully in either
the plastic lumber or the environmental industry could have a material adverse
effect on our business, financial condition and results of operation.
FUTURE SALES OF OUR COMMON STOCK IN THE PUBLIC MARKET COULD ADVERSELY
AFFECT OUR STOCK PRICE AND OUR ABILITY TO RAISE FUNDS IN NEW STOCK OFFERINGS.
There were approximately 21.4 million shares of our common stock
outstanding as of March 31, 1999. In addition, we intend to continue to issue
common stock in connection with acquisitions or in other transactions. Future
sales of substantial amounts of our common stock in the public market, or the
perception that these sales could occur, could adversely affect prevailing
market prices of our common stock and could impair our ability to raise capital
through future offerings of equity securities.
OUR SUCCESS DEPENDS ON OUR KEY PERSONNEL AND, IF WE ARE NOT ABLE TO
RETAIN THEM, IT COULD HAVE A MATERIAL ADVERSE EFFECT UPON OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We believe that our success is dependent to a significant extent upon
the continued employment of certain key executive officers. The loss of
services of Mark S. Alsentzer, our Chief Executive Officer, Bruce C. Rosetto,
Vice President and General Counsel, or Michael D. Schmidt, Vice President -
Finance, for any reason could have a material adverse effect upon our business,
financial condition and results of operations.
12
<PAGE> 16
ANTI-TAKEOVER PROVISIONS MAY MAKE IT MORE DIFFICULT FOR A THIRD PARTY
TO ACQUIRE CONTROL OF US, COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON
STOCK AND COULD REDUCE THE AMOUNT THAT SHAREHOLDERS MIGHT RECEIVE IF WE ARE
SOLD.
"Anti-takeover" provisions contained in Nevada law and in our articles
of incorporation, bylaws and contracts could make it more difficult for a third
party to acquire control of us, even if that change in control would be
beneficial to shareholders. These provisions could adversely affect the market
price of our common stock and could reduce the amount that shareholders might
receive if we are sold. These anti-takeover provisions include the following:
o Our articles of incorporation give our board of directors the
authority to issue shares of preferred stock without shareholder
approval. Any preferred stock could have rights, preferences and
privileges that could adversely affect the voting power and the
other rights of the holders of our common stock.
o Our articles of incorporation/bylaws provide for staggered terms
for the members of the board of directors, with each board member
serving a staggered four year term.
o Options to purchase our common stock will immediately become
exercisable upon a change in control.
THE COMPANY
U.S. Plastic Lumber Corp. is a diversified holding company with
subsidiaries operating in the plastic lumber manufacturing, plastic sheet
manufacturing, plastic raw material processing, and environmental recycling
industries. We are the largest manufacturer of plastic lumber in the United
States and are aggressively building our existing lines of business through
internal growth and acquisitions. We are actively negotiating to acquire
additional companies in our existing and complementary lines of business.
U.S. Plastic Lumber Corp., a Nevada corporation, was incorporated in
June 1992.
13
<PAGE> 17
FORWARD LOOKING STATEMENTS
Some of the information in this prospectus may contain
"forward-looking statements". Forward-looking statements can be identified by
the use of forward-looking language such as "will likely result," "may," "are
expected to," "is anticipated," "estimate," "projected," "intends to" or other
similar words. Our actual results, performance or achievements could differ
materially from the results expressed in, or implied by, these forward-looking
statements. Forward-looking statements are subject to certain risks and
uncertainties, including but not limited to the following risks which are
described in detail under "Risk Factors" beginning on page 2 hereof:
o operating losses;
o limited access to capital;
o dilution which could result from issuance of additional shares
pursuant to earn-out agreements;
o ability to maintain level of employee expertise;
o risks associated with Year 2000 issues;
o potential conflicts of interest with directors and large
shareholders;
o agreements not subject to arms length negotiations;
o ability to implement growth strategy;
o environmental concerns;
o seasonality;
o risks related to the newly developing plastic lumber industry;
o availability of raw materials used to make plastic lumber;
o competition and marketing in the plastic lumber industry;
o newly developing technologies;
o lack of industry standards in the plastic lumber industry;
o extensive governmental regulations;
o loss of permits;
o protection of technology;
o reliance in the bidding process; and
o operating hazards and insurance coverage.
When considering these forward-looking statements, you should keep in mind
these risk factors and other cautionary statements in this prospectus. You
should not place undue reliance on any forward-looking statement which speaks
only as of the date made.
USE OF PROCEEDS
All net proceeds from the sale of U.S. Plastic Lumber Corp. common
stock will go to the shareholders selling common stock under this prospectus.
U.S. Plastic Lumber will not receive any proceeds from the sale of the common
stock sold by the selling shareholders, except that the Company will receive
the exercise price from the exercise of 645,000 options and warrants underlying
the common stock registered.
14
<PAGE> 18
SELLING SHAREHOLDERS
The following table provides certain information regarding the
beneficial ownership of U.S. Plastic Lumber Corp., except as otherwise provided
in footnote 1, common stock by the shareholders selling common stock under this
prospectus prior to and after the offering. Beneficial ownership is determined
under the rules of the SEC, and generally includes voting or investment power
with respect to securities. After the offering, none of the shareholders
selling common stock under this prospectus will own any of the outstanding U.S.
Plastic Lumber Corp. common stock.
<TABLE>
<CAPTION>
# OF SHARES OWNED # OF SHARES BEING # OF SHARES OWNED
SELLING SHAREHOLDER PRIOR TO THE OFFERING OFFERED FOR SALE AFTER THE OFFERING
- ------------------- --------------------- ----------------- ------------------
<S> <C> <C> <C>
Halifax Fund LP(1) 1,643,538 1,643,538 -0-
Societe Generale(1) 1,057,680 1,057,680 -0-
Andrew Stephens(2) 599,740 599,740 -0-
Robert Thompson(2) 599,740 599,740 -0-
Michael Dahl(2) 335,571 335,571 -0-
Columbine Financial Solutions(3) 127,500 127,500 -0-
Miron Leshem(3) 10,000 10,000 -0-
Pro Futures(4) 25,216 25,216 -0-
Joseph Paolino(5) 50,000 50,000 -0-
James Blosser(6) 5,000 5,000 -0-
Stout Partnership(7) 320,000 320,000 -0-
James Cole(8) 20,000 20,000 -0-
Louis D. Paolino, Jr.(9) 1,800,000 1,800,000 -0-
Louis Paolino, Sr.(10) 50,000 50,000 -0-
Matthew Paolino(11) 100,000 100,000 -0-
Lawrence Adams(12) 15,000 15,000 -0-
Griffin Capital(13) 30,000 30,000 -0-
Michael Jordan(14) 62,500 62,500 -0-
</TABLE>
- -----------------------------
(1) On December 22, 1998 and January 26, 1999 we issued an aggregate of
$4,000,000 of convertible debentures to Halifax Fund LP, ("Halifax")
and an aggregate of $2,500,000 of convertible debentures to Societe
Generale which debentures are convertible into common stock at the
lower of $5.29 per share or 90% of the lowest trading price in the
four days preceding the conversion date. The conversion price is
adjustable downward if, during the first twelve months from the
issuance of the respective debentures, we issue convertible securities
or common stock at a more favorable price than the debenture
conversion price. For purposes of determining the amount of securities
being registered for resale and listed above, a purchase price of
$5.29 per share at the time of conversion was assumed since that price
is significantly less that the current trading price of the common
stock as of the date of this prospectus. The convertible debentures
carry a 5% coupon, which is payable at the election of the Company as
a payment in kind in the form of convertible debentures. As part of
the transaction, we agreed to register common stock underlying the
debentures, at which time the shareholders can elect to
15
<PAGE> 19
convert all or any portion of their debentures into common stock. We
also agreed to register the shares underlying 50,000 warrants
beneficially owned by each Halifax and Societe Generale which we
issued at an exercise price of $7.21 per share as part of the
consideration of the investment made in U.S. Plastic Lumber on
December 21, 1998. On January 26, 1999, 37,500 warrants were granted
to Halifax and 25,000 warrants were granted to Societe Generale at an
exercise price of $7.21 per share. For purposes of calculating the
number of shares to be registered for Halifax and Societe Generale,
the registration rights agreement requires us to register and reserve
200% of the common stock underlying the debt and 150% of common stock
underlying the warrants to ensure adequate shares are reserved and
registered due to the floating conversion price and anti-dilution
provisions in these securities. Pursuant to our debentures and
warrants issued to Halifax and Societe Generale, such selling
shareholders cannot convert the debentures or exercise warrants to the
extent such conversion and/or exercise would cause the number of
shares of common stock beneficially owned by any such selling
shareholder and its affiliates (other than shares deemed beneficially
owned through ownership of unconverted debentures and exercised
warrants) to exceed 4.9% (subject to adjustment) of the then issued
and outstanding shares of common stock following such conversion
and/or exercise. As a result of this limitation on conversion as well
as the fact that the number of shares listed opposite the names of
Halifax and Societe Generale represent amounts in excess of the number
of shares into which the convertible debentures are currently
convertible and the warrants are exercisable as described above, the
number of shares listed opposite the names of Halifax and Societe
Generale do not represent the number of shares of common stock
beneficially owned by such person.
(2) Messrs. Stephens, Thompson and Dahl serve as officers of U.S. Plastic
Lumber Ltd., a subsidiary of U.S. Plastic Lumber, Inc. As part of the
stock purchase agreements in connection with the acquisition of
Eaglebrook Plastics, Inc. and Eaglebrook Products, Inc., Messrs.
Stephens, Thompson and Dahl were granted "piggyback" registration
rights. Each have executed a Stock Sale Restriction Agreement for a
period of two years, of which during the first twelve months they
cannot sell any shares, and during the second twelve months they can
only sell subject to the limitations of the agreement.
(3) Comprised of options to purchase shares of common stock which are
currently exercisable by Columbine Financial Solutions and Mr. Leshem.
On or about January 10, 1999, we granted options to purchase 127,500
shares of its common stock to Columbine Financial Solutions, Inc. as
consideration for assisting in financial public relations and raising
money. The exercise price on 85,000 of these options is $5.00 per
share and the remaining 42,500 options have an exercise price of $7.50
per share. On or about September 16, 1998, we granted 10,000 options
to Mr. Leshem at an exercise price of $3.50 per share as compensation
for his assistance in connection with raising money.
(4) Represents dividends paid to Pro Futures on Series B Preferred Stock
purchased by Pro Futures in a private placement in June 1998.
(5) As part of the acquisition of Brass Investment Co., the shareholder of
Soil Remediation of Philadelphia, Inc. and Allied Waste Services,
Inc., we agreed to register the shares delivered to Mr. Joseph Paolino
in consideration of that transaction. Mr. Paolino has executed a Stock
Sale Restriction Agreement with the Company for a period of one year
restricting him from selling any shares except upon the terms as set
forth in the Agreement.
(6) Comprised of options to purchase common stock which are currently
exercisable by Mr. Blosser at an exercise price of $2.50 per share in
connection with a loan Mr. Blosser previously gave to the Company.
Mr. Blosser is a former director of the Company.
(7) Comprised of options to purchase common stock which are currently
exercisable by Stout Partnership at an exercise price of $2.25 per
share in connection with a loan guarantee provided by Stout
Partnership on behalf of the Company. Stout Partnership is in part
owned by three current directors of the Company, August C. Schultes,
III, Gary J. Ziegler, and Mark S. Alsentzer, Mr. Alsentzer is also
Chief Executive Officer and President of the Company.
(8) Comprised of options to purchase common stock which are currently
exercisable by Mr. Cole at an exercise price of $5.00 per share in
connection with a merger of Cycle Masters, Inc. into the Company.
(9) As part of the acquisition of Brass Investment Co., the shareholder of
Soil Remediation of Philadelphia, Inc. and Allied Waste Services, Inc.,
we agreed to register the shares delivered to Mr. Louis Paolino, Jr. in
consideration of that transaction. Mr. Paolino is also Chairman of the
Company. Mr. Paolino has executed a Stock Sale Restriction Agreement
with the Company for a period of one year restricting him from selling
any shares except upon the terms as set forth in the Agreement.
(10) As part of the acquisition of Brass Investment Co., the shareholder of
Soil Remediation of Philadelphia, Inc. and Allied Waste Services,
Inc., we agreed to register the shares delivered to Mr. Louis Paolino,
Sr. in consideration of that transaction. Mr. Paolino has executed a
Stock Sale Restriction Agreement with the Company for a period of one
year restricting him from selling any shares except upon the terms as
set forth in the Agreement.
(11) As part of the acquisition of Brass Investment Co., the shareholder of
Soil Remediation of Philadelphia, Inc. and Allied Waste Services, Inc.,
we agreed to register the shares delivered to Mr. Matthew Paolino in
consideration of that transaction. Mr. Paolino has executed a Stock
Sale Restriction Agreement with the Company for a period of one year
restricting him from selling any shares except upon the terms as set
forth in the Agreement.
(12) The Company granted shares of its common stock to Lawrence Adams as
consideration for assisting in financial public relations.
16
<PAGE> 20
(13) The Company granted shares of its common stock to Griffin Capital as
consideration for assisting in financial public relations and business
development services.
(14) The Company granted shares of its common stock to Michael Jordan as
consideration for assisting in financial public relations.
PLAN OF DISTRIBUTION
The selling shareholders, or their pledgees, donees, transferees or
other successors in interest may, from time to time, sell all or a portion of
the shares at fixed prices that may be changed, at market prices prevailing at
the time of sale, at prices related to such market prices or at negotiated
prices. The selling shareholders may offer their shares at various times in one
or more of the following transactions:
o on any national securities exchange, the Nasdaq Stock Market, or
other market on which our common stock may be listed at the time
of sale, including the American Stock Exchange;
o in the over-the-counter market;
o through block trades in which the broker or dealer so engaged will
attempt to sell the shares as agent, but may position and resell a
portion of the block as principal to facilitate the transaction;
o through purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this prospectus;
o in ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
o through options, swaps or derivatives;
o in privately negotiated transactions;
o in transactions to cover short sales; and
o through a combination of any such methods of sale.
The selling shareholders may also sell the shares in accordance with Rule 144
under the Securities Act of 1933, rather than pursuant to this prospectus.
The selling shareholders may sell their shares directly to purchasers
or may use brokers, dealers, underwriters or agents to sell their shares. In
effecting sales, brokers and dealers engaged by the selling shareholders may
arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions, discounts or concessions from a selling stockholder or, if
any such broker-dealer acts as agent for the purchaser of such shares, from
such purchaser in amounts to be negotiated. Such compensation may, but is not
expected to, exceed that which is customary for the types of transactions
involved. Broker-dealers may agree with a selling shareholder to sell a
specified number of such shares at a stipulated price per share, and, to the
extent such broker-dealer is unable to do so acting as agent for a selling
shareholder, to purchase as principal any unsold shares at the price required
to fulfill the broker-dealer commitment to the selling shareholders.
Broker-dealers who acquire shares as principal may thereafter resell such
shares from time to time in transactions, which may involve block transactions
and sales to and through other broker-dealers, including transactions of the
nature described above, in the over-the-counter market or otherwise at prices
and on terms then prevailing at the time of sale, at prices then related to the
then-current market price or in negotiated transactions. In connection with
such resales, broker-dealers may pay to or receive from the purchasers of such
shares commissions as described above.
17
<PAGE> 21
The selling shareholders and any broker-dealers or agents that
participate with the selling shareholders in sales of the shares may be deemed
to be "underwriters" within the meaning of the Securities Act of 1933 in
connection with such sales. In such event, any commissions received by such
broker-dealers or agents and any profit on the resale of the shares purchased
by them may be deemed to be underwriting commissions or discounts under the
Securities Act of 1933.
From time to time the selling shareholders may be engaged in short
sales, short sales against the box, puts and calls and other hedging
transactions in our securities, and may sell and deliver the shares in
connection with such transactions or in settlement of securities loans. These
transactions may be entered into with broker-dealers or other financial
institutions. In addition, from time to time, a selling stockholder may pledge
its shares pursuant to the margin provisions of its customer agreements with
its broker-dealer. Upon delivery of the shares or a default by a selling
shareholder, the broker-dealer or financial institution may offer and sell the
pledged shares from time to time.
EXPERTS
The audited consolidated financial statements and schedules of U.S.
Plastic Lumber as of December 31, 1998 and 1997 and for each of the two years
in the period ended December 31, 1998 incorporated by reference in this
prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference in this prospectus in reliance upon the authority of
that firm as experts in accounting and auditing in giving those reports.
LEGAL MATTERS
Bruce C. Rosetto, will give his opinion as to the validity of the
shares of common stock offered by the shareholders selling common stock under
this prospectus. Mr. Rosetto is our Vice President, General Counsel and
Secretary. Mr. Rosetto did not receive any additional compensation in
connection with rendering this opinion other than his salary and benefits as an
officer which include options to purchase 150,000 shares, 75,000 of which are
at $3.50 per share and the remaining 75,000 are at $4.00 per share.
18
<PAGE> 22
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC under the Securities Exchange Act. You may read
and copy any reports, statements and other information we file with the SEC at
the SEC's public reference room at 450 Fifth Street, NW, Washington, D.C.,
20549 and at the SEC's regional offices in Illinois and New York. You may
obtain information on the operation of the public reference rooms by calling
the SEC at 1-800-SEC-0330. Our SEC filings are also available on the SEC's
Internet site (http://www.sec.gov). You may also inspect our SEC filings and
other information concerning U.S. Plastic Lumber Corp. at the offices the
Nasdaq Stock Market, 1735 K Street, NW, Washington, D.C. 20006-1500.
We have filed a registration statement on Form S-3 to register the
shares of common stock offered under this prospectus. This prospectus is a part
of the registration statement on Form S-3 and constitutes a prospectus of U.S.
Plastic Lumber Corp. As allowed by SEC rules, this prospectus does not contain
all the information you can find in the registration statement on Form S-3 or
the exhibits to the registration statement on Form S-3.
The SEC also allows us to "incorporate by reference" the information
we file with the SEC, which means we can disclose information to you by
referring you to another document filed separately with the SEC. Information
incorporated by reference is deemed to be part of this prospectus. Later
information filed by us with the SEC updates and supersedes this prospectus.
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT
U.S. PLASTIC LUMBER THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS.
COPIES OF ANY OF THAT INFORMATION ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO
WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST. WRITTEN
REQUESTS FOR THOSE DOCUMENTS SHOULD BE DIRECTED TO THE SECRETARY, U.S. PLASTIC
LUMBER CORP., 2300 GLADES ROAD, SUITE 440W, BOCA RATON, FLORIDA 33431, AND
TELEPHONE REQUESTS MAY BE DIRECTED TO THE SECRETARY AT (561) 394-3511.
We incorporate by reference the documents listed below which we
previously filed with the SEC:
1. Our annual report on Form 10-KSB for the year ended December
31, 1998, which we filed March 30, 1999 (including those
portions of the proxy statement for our 1999 annual meeting
of shareholders incorporated by reference in our annual
report on Form 10-KSB);
2. The description of our common stock in our registration
statement on Form 8-A12G filed with the SEC on March 2, 1998
under the Securities Exchange Act; and
3. Our current report on Form 8-K, which we filed on February
10, 1999, and the amendment thereto filed on April 13, 1999.
4. Our current report on Form 8-K, which we filed on April 7,
1999, and the amendment thereto filed on May 11, 1999.
19
<PAGE> 23
All documents we file with the SEC under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act after the date of this prospectus until
this offering is completed will be deemed to be incorporated by reference in
this prospectus and to be a part of this prospectus from the date that document
is filed.
20
<PAGE> 24
===============================================================================
6,851,485 SHARES
U.S. PLASTIC LUMBER CORP.
COMMON STOCK
--------------
PROSPECTUS
--------------
The date of this Prospectus is May __, 1999
===============================================================================
<PAGE> 25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection
with the issuance and distribution of the securities being registered, all of
which are being borne by the Registrant.
Securities and Exchange Commission Registration Fee........ $ 16,598*
--------
Accounting Fees and Expenses............................... 5,000**
--------
Legal Fees and Expenses.................................... 10,000**
--------
Printing and Engraving Expenses............................ 2,000**
--------
Blue Sky Fees and Expenses................................. 2,000**
--------
Total................................... $ 35,598
========
- ----------------------
* Actual
** Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's articles of incorporation (a copy of which is filed as
Exhibit 3.5 to the Company's Registration Statement on Form SB-2 filed with the
SEC on March 7, 1997) limit liability of its officers and directors to the
fullest extent permitted by the Nevada Business Corporation Act.
Sections 18.7502 and 78.751 of the Nevada Business Corporation Act
provides that each corporation:
(1) may indemnify any person who was or is a party or is threatened to
be made party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, except an
action by or in the right of the corporation, by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct
II-1
<PAGE> 26
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, does not, of itself create a presumption that the person did not act
in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and that, with respect to any
criminal action or proceeding, he had reasonable cause to believe that his
conduct was unlawful; and
(2) may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action
or suit was brought or other court of competent jurisdiction, determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court
deems proper.
To the extent that a director, officer, employee or agent of a Nevada
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 1 and 2 above, or in defense
of any claim, issue or matter therein, he must be indemnified by the
corporation against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense.
Any indemnification under Sections 1 and 2, unless ordered by a court
or advanced as provided by the Nevada statute and the Company's articles of
incorporation, must be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances. The determination
must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting
of directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were
not parties to the action, suit or proceeding so orders, by independent legal
counsel, in a written opinion; or
II-2
<PAGE> 27
(d) If a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion.
The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by
the corporation. The provisions of this Section do not affect any rights to
advancement of expenses to which corporate personnel other than director of
officers may be entitled under any contract or otherwise by law.
The indemnification and advancement of expenses authorized in or
ordered by a court: (a) does not exclude any other rights to which a person
seeking indemnification or advancement of expenses may be entitled under the
articles of incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his official
capacity or an action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to subsection 2 or for the
advancement of expenses made pursuant to the requirements of the Nevada statute
and the Company's articles of incorporation, may not be made to or on behalf of
any director or officer if a final adjudication establishes that his acts or
omissions involved intentional misconduct, fraud or a knowing violation of the
law and was material to the cause of action, and (b) continues for a person who
has ceased to be a director, officer, employee or agent and inures to the
benefit of the heirs, executors and administrators of such a person."
The Company has obtained insurance to cover its directors and
executive officers for liabilities which may be incurred in connection with the
offer, sale and registration of the common stock.
ITEM 16. EXHIBITS.
5.1 Opinion of Bruce C. Rosetto as to the validity of the issuance of the
common stock of U.S. Plastic Lumber Corp. being registered.
23.1 Consent of Arthur Andersen LLP, independent auditors. *
23.2 Consent of Bruce C. Rosetto (included in Exhibit 5.1).
24.1 Power of Attorney of certain signatories (included on the Signature
Page).
- -------------------
* Previously filed.
II-3
<PAGE> 28
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 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 SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in this Registration Statement;
(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) of this section 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 SEC by the Registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under
the 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) 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.
(b) 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
II-4
<PAGE> 29
Act of 1934) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
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
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-5
<PAGE> 30
SIGNATURES AND POWER OF ATTORNEY
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 the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Boca Raton, state of Florida on May
12, 1999.
U.S. PLASTIC LUMBER CORP.
By: /s/ Mark S. Alsentzer
-------------------------------------
Mark S. Alsentzer, Chief Executive
Officer and President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mark S. Alsentzer, his true and lawful
attorney-in fact and agent with full power of substitution or resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign
any and all amendments to this Registration Statement, and to file the same,
with all exhibits thereto, and other documentation in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents 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, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
II-6
<PAGE> 31
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons
on May 12, 1999 in the capacities indicated.
<TABLE>
<CAPTION>
NAME TITLE
- ---- -----
<S> <C>
/s/ Louis D. Paolino, Jr. Chairman of the Board
- ----------------------------------
Louis D. Paolino, Jr.
/s/ Mark S. Alsentzer Chief Executive Officer and President (Principal Executive
- ----------------------------------- Officer)
Mark S. Alsentzer
/s/ John Poling Chief Financial Officer (Principal Financial Officer)
- -----------------------------------
John Poling
/s/ Michael D. Schmidt Vice President - Finance (Principal Accounting Officer)
- -----------------------------------
Michael D. Schmidt
/s/ August C. Schultes III Director
- -----------------------------------
August C. Schultes III
/s/ Gary J. Ziegler Director
- -----------------------------------
Gary J. Ziegler
/s/ Roger N. Zitrin Director
- -----------------------------------
Roger N. Zitrin
/s/ John Drury Director
- -----------------------------------
John Drury
</TABLE>
II-7
<PAGE> 32
EXHIBIT INDEX
5.1 Opinion of Bruce C. Rosetto as to the validity of the issuance of the
common stock of U.S. Plastic Lumber Corp. being registered.
23.1 Consent of Arthur Andersen LLP, independent auditors. *
23.2 Consent of Bruce C. Rosetto (included in Exhibit 5.1).
24.1 Power of Attorney of certain signatories (included on the Signature
Page).
- -----------------------
* Previously filed.
<PAGE> 1
EXHIBIT 5.1
OPINION OF BRUCE ROSETTO, ESQUIRE
May 12, 1999
U.S. Plastic Lumber Corp.
2300 Glades Road, Suite 440W
Boca Raton, Florida 33431
RE: U.S. PLASTIC LUMBER CORP. REGISTRATION STATEMENT ON FORM S-3
Gentlemen:
I have acted as general counsel to U.S. Plastic Lumber Corp. (the
"Company") in connection with the Registration Statement on Form S-3 (the
"Registration Statement") filed by the Company with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, relating to the
offer and sale of up to 6,851,485 shares of common stock, par value $.0001 per
share (the "Common Stock"), by the certain Selling Shareholders ("Selling
Shareholders") set forth on the Registration Statement. This opinion is
furnished pursuant to the requirements of Item 601(b)(5) of Regulation S-K.
In rendering this opinion, I have examined only the following
documents: (i) the Company's articles of incorporation, as amended, and amended
and restated bylaws, (ii) resolutions adopted by the Board of Directors of the
Company related to the issuance of shares being registered hereby and (iii) the
Registration Statement. I have not performed any independent investigation other
than the document examination described above. My opinion is therefore qualified
in allrespects by the scope of that document examination. I have assumed and
relied, as to questions of fact and mixed questions of law and fact, on the
truth, completeness, authenticity and due authorization of all certificates,
documents, and records examined and the genuineness of all signatures. This
opinion is limited to the laws of the State of Nevada.
Based upon and subject to the foregoing, I am of the opinion that the
outstanding shares of Common Stock offered by the Selling Shareholders are
legally issued, fully paid and non-assessable.
This opinion is given as of the date hereof. I assume no obligation to
update or supplement this opinion to reflect any facts or circumstances which
may hereafter come to my attention or any changes in laws which may hereafter
occur.
<PAGE> 2
This opinion is strictly limited to the matters stated herein and no
other or more extensive opinion is intended, implied or to be inferred beyond
the matters expressly stated herein.
I hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement.
Sincerely,
/s/ Bruce C. Rosetto
Bruce C. Rosetto
