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As filed with the Securities and Exchange Commission on September ___, 1999.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
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(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. [ ]
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. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $.0001 per share............. 2,553,571 $8.25 $21,066,960 $5,856.63
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</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 amount for which
the Common Stock was sold.
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.
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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 SEPTEMBER ___, 1999
PROSPECTUS
U.S. PLASTIC LUMBER CORP.
2,553,571 SHARES OF COMMON STOCK
The selling shareholders named in this prospectus under "Selling
Shareholders" are offering 2,553,571 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. 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 August 31, 1999, the last sale prices of our common stock as
reported on the Nasdaq Stock Market was $10.675 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 September ___, 1999.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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Prospectus Summary........................................................ 2
Risk Factors.............................................................. 2
The Company............................................................... 12
Forward Looking Statements................................................ 13
Use of Proceeds........................................................... 13
Selling Shareholders...................................................... 14
Plan of Distribution...................................................... 15
Experts................................................................... 16
Legal Matters............................................................. 16
Where You Can Find More Information....................................... 17
</TABLE>
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.
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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 reported 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:
X manufacture, market and sell our products;
X open new manufacturing facilities;
X develop new products;
X manufacture, market and sell our new product line;
X consolidate our existing operations;
X implement our plan of operations;
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X working capital; and
X 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 June 30, 1999, we had reserved approximately 11,883,191 shares
for issuance pursuant to options, warrants, earnout agreements, convertible
preferred stock, and convertible debentures. On such date, we had 27,600,038
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 March 29, 1996. 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 Earth Care
Global Holdings achieved net sales or production of 2.0 million pounds of
plastic lumber per month for three consecutive months, subject to certain
limitations contained in the Agreement. In the event we reach these sales or
production levels 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 June 30, 1999, our net tangible book value was
$34,887,796, or $1.26 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 June 30, 1999 would have been $1.08 per share
which represents an immediate dilution of $0.18 per share to all of our
shareholders who are not Historical Shareholders.
THE PLASTIC LUMBER PRODUCTS OF THE COMPANY CARRY LONG WARRANTIES, AS
MUCH AS 50 YEARS ON SOME PRODUCTS, AND AS THE PRODUCT IS FAIRLY NEW, THE
COMPANY DOES NOT HAVE SUFFICIENT HISTORICAL TRACK RECORD TO DETERMINE THE
FUTURE LIABILITY THAT MAY RESULT FROM OFFERING EXTENDED WARRANTIES OR FROM
PRODUCT LIABILITY MATTERS AND THIS COULD HAVE A MATERIAL ADVERSE AFFECT ON THE
BUSINESS AND FINANCIAL CONDITION OF THE COMPANY.
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Our plastic lumber products are fairly new and have not been on the
market for long periods of time and may be used in applications that the
Company may have no knowledge of or limited experience in. Our plastic lumber
products are used in applications that the Company has little or no historical
track record to measure the potential liability of the Company as it relates to
product warranty or product liability issues. If the products of the Company
fail to perform over the extended warranty periods offered by the Company, for
some product the warranty period is as long as 50 years, the Company may not
have the ability to adequately protect itself against such potential liability
and such an event or series of events can cause a material adverse affect on
the business and financial condition of the Company.
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 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 foresee any material
adverse effects from its major customers and suppliers.
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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:
X integration of acquisitions;
X consolidation of plants and operations;
X increased consumer acceptance of alternative wood products;
X an increased distribution network;
X increased production capacity; and
X ability to finance growth.
Our ability to implement this strategy will depend in large part on
whether we are able to:
X expand through strategic acquisitions of companies in new and
complementary industries;
X obtain adequate financing on favorable terms to fund this growth
strategy;
X develop and expand its customer base; hire, train and retain
skilled employees;
X strengthen brand identity and successfully implement its marketing
campaigns;
X continue to expand in the face of increasing competition; continue
to negotiate our supply contacts and sales agreements on terms
that increase or maintain our current profit margins; and
X 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.
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.
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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:
X we may not be able to identify suitable companies to buy;
X we may not be able to purchase companies at favorable prices, or
at all;
X we may not be able to obtain financing on favorable terms, or at
all, to pay for future acquisitions; and
X 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.
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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.
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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.
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
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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.
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. We also
purchased patents to manufacture structural lumber.
To the extent we do have patents on some of our technology there can
be no assurances that our patents will adequately protect us from similar
technology being developed with different formulations or from use in countries
in which we do not have patent protection. The Company will seek to protect
itself against known infringement cases against our patents, but there can be
no assurance that our efforts will be successful.
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 operations.
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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:
X fires, explosions or blow outs;
X environmental hazards;
X hurricanes, floods, fires or other acts of God; or
X product liability occurrences.
Any of these occurrences could result in substantial losses due to:
X injury;
X loss of life;
X severe damage;
X clean-up responsibilities;
X regulatory investigation; or
X penalties and suspension of operations.
We maintain insurance coverage against some, but not all, potential
risks. However, we cannot assure you that:
X insurance will be adequate to cover all losses or exposure for
liability;
X insurance will continue to be available at premium levels that
justify its purchase; or
X 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 operations.
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 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 repayment terms under certain other credit
agreements, all of which could have a material adverse effect on our liquidity
and capital resources.
10
<PAGE> 14
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 operations.
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 that
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 operations.
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 28.1 million shares of our common stock
outstanding as of July 31, 1999. In addition, we intend to continue to issue
common stock in connection with acquisitions, financings 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.
11
<PAGE> 15
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, John Poling, Chief
Financial 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.
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:
X 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.
X Our articles of incorporation and bylaws provide for staggered
terms for the members of the board of directors, with each board
member serving a staggered four year term.
X 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.
12
<PAGE> 16
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:
X operating losses;
X limited access to capital;
X dilution which could result from issuance of additional shares
pursuant to earn-out agreements;
X ability to maintain level of employee expertise;
X risks associated with Year 2000 issues;
X potential conflicts of interest with directors and large
shareholders;
X agreements not subject to arms length negotiations;
X ability to implement growth strategy;
X environmental concerns;
X seasonality;
X risks related to the newly developing plastic lumber industry;
X availability of raw materials used to make plastic lumber;
X competition and marketing in the plastic lumber industry;
X newly developing technologies;
X lack of industry standards in the plastic lumber industry;
X extensive governmental regulations;
X loss of permits;
X protection of technology;
X reliance in the bidding process; and
X 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.
13
<PAGE> 17
SELLING SHAREHOLDERS
The following table provides certain information regarding the
beneficial ownership of U.S. Plastic Lumber Corp. 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 AFTER
SELLING SHAREHOLDER PRIOR TO THE OFFERING OFFERED FOR SALE THE OFFERING
------------------- --------------------- ----------------- -----------------------
<S> <C> <C> <C>
Apodaca Investment Partners(1) 12,500 12,500 -0-
Apodaca Investment Offshore(1) 25,000 25,000 -0-
Sears Investment Management(1) 12,500 12,500 -0-
Apogee Fund L.P.(1) 125,000 125,000 -0-
Foxhound Partners LP(1) 90,000 90,000 -0-
Zeke LP(1) 80,000 80,000 -0-
Clarion Capital Corp.(1) 37,500 37,500 -0-
Clarion Partners, L.P. 29,250 29,250 -0-
Clarion Offshore Fund Ltd. 8,250 8,250 -0-
Marcaud Cook & Cie S.A.(1) 40,000 40,000 -0-
Fidelity National Title Insurance Co.(1) 55,000 55,000 -0-
Stuart G. Gauld(1) 5,000 5,000 -0-
Whitney Partners L.P.(1) 46,000 46,000 -0-
Ultra Whitney Offshore(1) 14,000 14,000 -0-
Bryco Investments(1) 10,000 10,000 -0-
Hollis Capital Partners(1) 25,000 25,000 -0-
Apex Limited Partners, L.P.(1) 20,000 20,000 -0-
EDJ Limited(1) 25,000 25,000 -0-
Verita SG Investment Trust(1) 40,000 40,000 -0-
Stichting Pensioenfonds ABP(1) 150,000 150,000 -0-
Houvis Co. FBO NFIB Emp Pension(1) 40,000 40,000 -0-
Hare & Co.(1) 45,000 45,000 -0-
Mellon Bank NA cust PERSI-Zesiger(1) 300,000 300,000 -0-
Westcoast & Co.(1) 550,000 550,000 -0-
Batrus & Co.(1) 35,000 35,000 -0-
Cudd & Co.(1) 10,000 10,000 -0-
Daly & Co.(1) 30,000 30,000 -0-
Hare & Co.(1) 10,000 10,000 -0-
First Union & Co.(1) 30,000 30,000 -0-
Daly & Co.(1) 15,000 15,000 -0-
HBL Charitable UniTrust 10,000 10,000 -0-
Aulis & Co.(1) 20,000 20,000 -0-
Cudd & Co.(1) 25,000 25,000 -0-
Frederick L. Jacobsen(1) 5,000 5,000 -0-
Psychology Associates(1) 5,000 5,000 -0-
Morgan Trust Co of the Bahamas(1) 35,000 35,000 -0-
Hare & Co.(1) 15,000 15,000 -0-
William B. Lazar(1) 10,000 10,000 -0-
Atwell & Co.(1) 25,000 25,000 -0-
Albert L. Zesiger(1) 15,000 15,000 -0-
Barrie Ramsay Zesiger(1) 10,000 10,000 -0-
Wolfson Investment Partners LP(1) 10,000 10,000 -0-
Environmental Opport. Fund II LP(2) 97,064 97,064 -0-
Environmental Opp. Fund II(Instit)(2) 356,507 356,507 -0-
</TABLE>
14
<PAGE> 18
(1) Represents shares issued as part of a private placement in the amount of
2,100,000 shares at $8.25 per share closed on or about August 19, 1999.
(2) Represents a portion of 453,571 shares of common stock previously issued
by the Company.
PLAN OF DISTRIBUTION
The shareholders selling common stock under this prospectus, or their
pledgees, may offer their shares of U.S. Plastic Lumber Corp. common stock at
various times through dealers or brokers or other agents or directly to one or
more purchasers in one or more of the following transactions:
X on the Nasdaq Stock Market or other exchange on which the common
stock may be listed for trading;
X in the over-the-counter market;
X in privately negotiated transactions;
X in brokerage transactions; or
X in a combination of any of the above transactions.
The shareholders selling common stock under this prospectus may sell
their shares:
X at market prices prevailing at the time of sale;
X at prices related to those prevailing market prices; or
X 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. The discounts concessions or commissions as to a particular broker,
dealer or other agent may be in excess of those customary in the type of
transaction involved.
This prospectus also may be used, with our consent, by donees of the
shareholders selling common stock under this prospectus, or by other persons
acquiring common stock from these shareholders and who wish to offer and sell
that common stock under circumstances requiring or making desirable its use. To
the extent required, we will file, during any period in which offers or sales
are being made, one or more supplements to this prospectus to set forth:
X the names of donees of the shareholders;
X the number of shares of common stock involved;
X the price at which those shares are sold;
X the commissions paid or discounts or concessions allowed, where
applicable; and
X any other material information with respect to the plan of
distribution not previously disclosed.
15
<PAGE> 19
Neither U.S. Plastic Lumber Corp. nor the shareholders selling common
stock under this prospectus can presently estimate the amount of this
compensation. We know of no existing arrangements between any shareholder and
any other shareholder, broker, dealer or other agent relating to the sale or
distribution of the common stock. Under applicable rules and regulations under
the Securities Exchange Act, any person engaged in a distribution of any of the
common stock may not simultaneously engage in market activities with respect to
the common stock for the applicable period under Regulation M prior to the
commencement of that distribution.
The shareholders selling common stock under this prospectus will be
subject to applicable provisions of the Securities Exchange Act and its rules
and regulations, including without limitation Rule 10b-5 and Regulation M,
which may limit the timing of purchases and sales of any of the common stock by
those shareholders. All of this may affect the marketability of the common
stock.
We will pay substantially all of the expenses incident to this
offering other than commissions, concessions and discounts of brokers, dealers
or other agents. Each shareholder selling common stock under this prospectus
may indemnify any broker, dealer, or other agent that participates in
transactions involving sales of the common stock against certain liabilities,
including liabilities arising under the Securities Act. We may agree to
indemnify the selling shareholders and any statutory "underwriters" and
controlling persons of those "underwriters" against certain liabilities,
including certain liabilities under the Securities Act. In order to comply with
certain states' securities laws, if applicable, the common stock will be sold
in those jurisdictions only through registered or licensed brokers or dealers.
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 Vice President, General Counsel and Secretary
of the Company. Mr. Rosetto did not receive any additional compensation in
connection with rendering this opinion other than his salary and benefits as an
officer of the Company which include options to purchase 75,000 shares at $3.50
per share and 75,000 shares at $4.00 per share.
16
<PAGE> 20
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 BY REFERENCE 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 quarterly report on Form 10-QSB for the six months ended June
30, 1999 which was filed on August 13, 1999.
17
<PAGE> 21
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.
18
<PAGE> 22
===============================================================================
2,553,571 SHARES
U.S. PLASTIC LUMBER CORP.
COMMON STOCK
--------------
PROSPECTUS
--------------
The date of this Prospectus is September ___, 1999
===============================================================================
<PAGE> 23
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.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... 5,857*
--------
Accounting Fees and Expenses................................ 5,000**
--------
Legal Fees and Expenses..................................... 100,000**
--------
Printing and Engraving Expenses............................. 2,000**
--------
Blue Sky Fees and Expenses.................................. 2,000**
--------
Total.................................. $114,857
========
</TABLE>
* 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 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
II-1
<PAGE> 24
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
(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.
II-2
<PAGE> 25
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.
<TABLE>
<CAPTION>
ITEM 16. EXHIBITS.
<S> <C>
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.
23.2 Consent of Bruce C. Rosetto (included in Exhibit 5.1).
24.1 Power of Attorney of certain signatories (included on the Signature
Page).
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
II-3
<PAGE> 26
(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 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.
II-4
<PAGE> 27
(c) Insofar as indemnification for liabilities arising under the
Securities 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 such indemnification is against public policy as expressed in the
Securities 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
Securities Act and will be governed by the final adjudication of such issue.
II-5
<PAGE> 28
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
September 3, 1999.
U.S. PLASTIC LUMBER CORP.
By: /s/ Mark S. Alsentzer
-------------------------------------
Mark S. Alsentzer, Chief
Executive Officer and President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons
on September 3, 1999 in the capacities indicated.
<TABLE>
<CAPTION>
Name Title
- ---- -----
<S> <C>
/s/ Louis D. Paolino, Jr.
- ----------------------------- Chairman
Louis D. Paolino, Jr.
/s/ Mark S. Alsentzer
- ----------------------------- Chief Executive Officer and
Mark S. Alsentzer President (Principal Executive Officer)
/s/ Michael D. Schmidt
- ----------------------------- Vice President - Finance
Michael D. Schmidt (Principal Accounting Officer)
/s/ John Poling
- ----------------------------- Chief Financial Officer
John Poling (Principal Financial Officer)
/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
</TABLE>
<PAGE> 29
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.
23.2 Consent of Bruce C. Rosetto (included in Exhibit 5.1).
24.1 Power of Attorney of certain signatories (included on the Signature
Page).
<PAGE> 1
EXHIBIT 5.1
OPINION OF BRUCE ROSETTO, ESQUIRE
August 29, 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 2,553,571 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 and 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 all
respects 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,
Bruce C. Rosetto
