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As filed with the Securities and Exchange Commission on July 29, 1999.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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U.S. PLASTIC LUMBER CORP.
(Exact name of Registrant as specified in its charter)
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NEVADA 3080 87-0404343
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(State or other jurisdiction of (Primary Standard Industrial (I.R.S. employer
incorporation or organization) Classification Code Number) identification number)
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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 securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, 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, 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(d) 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 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 interest reinvestment plans, please check the following box. [X]
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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 OFFERING PRICE FEE
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Common Stock, par value $.0001 per share....... 10,000,000 (1) (2) $85,000,000(2) $23,630.00
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(1) This Registration Statement covers shares which may be offered from
time to time by the Company in connection with certain acquisition
transactions.
(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 July 27, 1999 of $8.50 with respect to 10,000,000 shares
registered on this registration statement.
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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The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state in which the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED AUGUST , 1999
PROSPECTUS
U.S. PLASTIC LUMBER CORP.
10,000,000 SHARES OF COMMON STOCK
With this prospectus, we may offer and issue, from time to time, up to
10,000,000 shares of common stock in connection with the acquisition of other
businesses and such other uses as may be determined by the Company from time to
time. We may structure the acquisition of businesses as:
o a merger with U.S. Plastic Lumber Corp. or a subsidiary of U.S.
Plastic Lumber Corp.;
o a purchase of all of the stock of the other business; or
o a purchase of the assets of the other business.
We will negotiate the price and other terms of the acquisitions with
the owners of the businesses that are acquired. We will pay all expenses of the
offering of these shares. We will not pay underwriting discounts or concessions,
although fees may be paid to persons who bring specific acquisitions to our
attention. Any person receiving such fees may be deemed to be an underwriter
within the meaning of the Securities Act of 1933.
PLEASE READ THE RISK FACTORS BEGINNING ON PAGE 2 FOR INFORMATION THAT
YOU SHOULD CONSIDER BEFORE ACCEPTING STOCK AS ALL OR PART OF THE PURCHASE PRICE
FOR OUR ACQUISITION OF YOUR BUSINESS OR ASSETS.
This prospectus may be used by persons who receive shares of common
stock in connection with acquisitions and who wish to resell the shares. We have
not authorized any person to use this prospectus in connection with resales of
shares without our prior written consent.
Our common stock is traded on the Nasdaq Stock Market under
the symbol "USPL". On July 27, 1999, the last sale prices of our common stock as
reported on the Nasdaq Stock Market was $8.5625 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 August ___, 1999.
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TABLE OF CONTENTS
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PAGE
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Prospectus Summary................................................................................................2
About this Prospectus.............................................................................................2
Risk Factors......................................................................................................2
Forward Looking Statements.......................................................................................12
Use of Proceeds..................................................................................................13
Offered Securities...............................................................................................13
Restrictions on Resale...........................................................................................14
Plan of Distribution.............................................................................................18
Experts..........................................................................................................18
Legal Matters....................................................................................................18
Where You Can Find More Information..............................................................................18
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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. WE MAY NOT MAKE AN OFFER OF
THE SHARES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS DECLARED EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO
SELL THE SHARES AND IS NOT SOLICITING AN OFFER TO BUY THESE SHARES IN ANY STATE
WHERE THE OFFER OR SALE 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.
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL
INFORMATION ABOUT U.S. PLASTIC LUMBER THAT IS NOT INCLUDED IN OR DELIVERED WITH
THIS PROSPECTUS. THIS INFORMATION IS AVAILABLE WITHOUT CHARGE TO SECURITY
HOLDERS UPON WRITTEN OR ORAL REQUEST TO BRUCE C. ROSETTO, 2300 W. GLADES ROAD,
SUITE 400 W, BOCA RATON, FLORIDA 33431; TELEPHONE NO. (561) 394-3511. REQUESTS
MUST BE MADE AT LEAST 5 BUSINESS DAYS BEFORE THE DATE ON WHICH AN INVESTOR
PURCHASES SHARES OF COMMON STOCK.
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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.
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.
Our principal executive offices are located at 2300 Glades Road, Suite
440W, Boca Raton, Florida 33431 and our telephone number is (561) 394-3511.
We intend to use this prospectus to acquire companies or assets of
businesses in similar or complementary businesses.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission which will allow us to issue, from time
to time, up to 10,000,000 shares of our common stock in connection with
acquisitions of other businesses or assets. Each time we issue common stock
under the registration statement we will provide a prospectus supplement that
will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described under the heading
WHERE YOU CAN FIND MORE INFORMATION.
RISK FACTORS
You should consider carefully the following risks before you accept our
common stock as all or part of the purchase price for our acquisition of your
business. If any of the following risks actually occur, our business, financial
condition or results of operations would likely suffer. In addition, the
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trading price of our common stock could decline, and you may lose all or part of
your investment in our 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.
Although 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.
WE HAD A FINANCIAL RESTRUCTURING CHARGE IN THE FIRST QUARTER OF 1999,
THE PLAN FOR WHICH MUST BE IMPLEMENTED SUCCESSFULLY OR IT COULD RESULT IN A
MATERIAL ADVERSE EFFECT UPON THE COMPANY.
During the first quarter of 1999, the Company recorded a financial
restructuring charge of $5.6 million. The Company has adopted a plan to manage
existing operations, consolidate certain of its plants, and write-down certain
inventory. There can be no guarantee or assurances that the Company will be
successful in implementing its restructuring plan. The failure of the Company
to successfully implement its restructuring plan can result in a material
adverse effect on the Company.
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;
o increase production capacity;
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.
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:
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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.
INVESTORS CANNOT EVALUATE THE MERITS OF OTHER ACQUISITIONS.
Because in most cases we do not seek, and are not required to seek,
stockholder approval of acquisitions, investors will have no basis on which to
evaluate the possible merits or risks of any future acquisitions, or of
acquisitions that we may be pursuing simultaneously. We cannot guarantee that we
will be able to discover all of the risks of every acquisition, or that every
acquisition will be beneficial to our financial condition.
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 11,849,965 shares for issuance
pursuant to these agreements. On such date, we had 27,584,038 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 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
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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 March 31,
1999, our Net Book value was $35,731,392 million, or $1.60 per share of common
stock. Net 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 March 31, 1999 would have been
$1.33 per share which represents an immediate dilution of $.27 per share to all
of our shareholders who are not Historical Shareholders.
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.
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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:
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;
o 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.
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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.
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
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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.
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
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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 EFFECT 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.
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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.
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.
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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.
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.
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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 27.6 million shares of our common stock
outstanding as of June 30, 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, John Poling, Chief Financial Officer 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:
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.
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
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<PAGE> 15
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;
o operating hazards and insurance coverage; and
o Inability of investor to evaluate the merits of future acquisitions.
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
This prospectus relates to shares of common stock which may be offered
and issued by U.S. Plastic Lumber Corp. from time to time in connection with
acquisitions of other business or assets. Other than the businesses or assets
acquired, there will be no proceeds to U.S. Plastic Lumber Corp. from these
offerings.
OFFERED SECURITIES
We propose to issue and sell the shares of common stock offered hereby
in connection with acquisitions of other businesses or assets. The shares of
common stock shall be offered on terms to
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<PAGE> 16
be determined at the time of sale. Such shares of common stock may be issued
in exchange for shares of capital stock, partnership interests or other
assets representing an interest, direct or indirect, in other entities, in
exchange for assets used in or related to the business of such entities or
otherwise pursuant to agreements providing fur such acquisitions. The
consideration for such acquisitions may consist of common stock, cash,
assumption of liabilities or a combination thereof. The terms of such
acquisitions and of the issuance of any such shares of common stock in
connection therewith will generally be determined by direct negotiations with
the owners of the business or assets to be acquired or, in the case of
entities which are more widely held, through exchange offers to stockholders
or documents soliciting the approval or statutory mergers, consolidations or
sales of assets. Underwriting discounts or commissions will generally not be
paid by us. However, under certain circumstances, we may issue shares of
common stock covered by this prospectus to pay brokers' commissions incurred
in connection with acquisitions.
This prospectus, as amended or supplemented if appropriate, has also
been prepared for use by persons who receive shares of common stock in
acquisitions, including shares sold hereunder ("selling stockholders");
provided, however, that no selling stockholder is authorized to use this
prospectus to reoffer any such shares without first obtaining our prior
written consent. Resales may be made in the manner described in this
prospectus, as amended or supplemented, in the manner permitted by Rule
145(d) under the Securities Act or under an exemption from the Securities
Act. Profits realized on resales by selling stockholders under certain
circumstances may be regarded as underwriting compensation under the
Securities Act.
RESTRICTIONS ON RESALE
Affiliates of entities that we acquire who do not become affiliates of
our company may not resell common stock under the registration statement to
which this prospectus relates unless:
o pursuant to an effective registration statement under the Securities
Act covering such shares; or
o in compliance with Rule 145 under the Securities Act or another
applicable exemption from the registration requirements of the
Securities Act
Generally, Rule 145 permits such affiliates to sell such shares
immediately following the acquisition in compliance with certain volume
limitations and manner of sale requirements in Rule 144 under the Securities
Act. In general, under Rule 144, a stockholder who owns restricted shares
that have been outstanding for at least one year is entitled to sell, within
any three-month period, a number of these restricted shares that does not
exceed the greater of:
o one percent of the then outstanding shares of common stock; or
o the average weekly trading volume in the common stock on the Nasdaq
Stock Market during the four calendar weeks preceding the sale.
In addition, our affiliates must comply with the restrictions and
requirements of Rule 144, other than the one-year holding period requirement,
to sell shares of common stock which are not
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<PAGE> 17
restricted securities.
Under Rule 144(k), a stockholder who is not currently, and who has not
been for at least three months before the sale, an affiliate of ours and who
owns restricted shares that have been outstanding for at least two years may
resell these restricted shares without compliance with the above requirements.
The one- and two-year holding periods described above do not begin to run until
the full purchase price is paid by the person acquiring the restricted shares
from us or an affiliate of ours.
Resales by selling stockholders may be made directly to investors or
through a securities firm acting as a underwriter, broker or dealer. When
resales are to be made through a securities firm, such firm may be engaged to
act as the selling stockholder's agent in the sale of the shares by such selling
stockholder, or the securities firm may purchase shares from the selling
stockholders as principal and thereafter resell such shares from time to time.
The fees earned by or paid to such securities firm may be the normal stock
exchange commission or negotiated commissions or underwriting discounts to the
extent permissible. In addition, such securities firm may effect resales through
other securities dealers, and customary commissions or concessions to such other
dealers may be allowed. Sales of shares may be at negotiated prices, at fixed
prices, at market prices or at prices related to market prices then prevailing.
Any such sales may be made on The Nasdaq National Market or other exchange on
which such shares are traded, in the over-the-counter market, by block trade, in
special or other offerings, directly to investors or through a securities firm
acting as agent or principal, or a combination of such methods. Any
participating securities firm may be indemnified against certain liabilities,
including liabilities under the Securities Act. Any participating securities
firm may be deemed to be and underwriter within the meaning of the Securities
Act, and any commissions under the Securities Act.
In connection with resales, a prospectus supplement, if required, will
be filed under Rule 424(b) under the Securities Act, disclosing the name of the
selling stockholder, the participating securities firm, if any, the number of
shares involved and other details of such resale to the extent appropriate.
INDEMNIFICATION
The Company's articles of incorporation 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
15
<PAGE> 18
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
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;
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(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.
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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
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PLAN OF DISTRIBUTION
We will offer and issue our common stock from time to time in
connection with our acquisition of our businesses, assets or securities. We
expect that the terms of the acquisitions involving the issuance of securities
covered by this prospectus will be determined by direct negotiations with owners
or controlling persons of the businesses, assets or securities that we will
acquire. We will not pay underwriting discounts or commissions, although we may
pay a finder's fee from time to time with respect to specific mergers or
acquisitions. Any person receiving such fees may be deemed to be an underwriter
within the meaning of the Securities Act.
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 certified 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.
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-4 to register the
shares of common stock offered under this prospectus. This prospectus is a part
of the registration statement on Form S-4 and
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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-4 or the exhibits to the registration statement
on Form S-4.
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 with the SEC on 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. Our quarterly report on Form 10-QSB for the quarter ended March 31,
1999, which we filed with the SEC on May 14, 1999.
3. 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
4. Our current report on Form 8-K, which we filed on February 10, 1999,
and the amendment thereto filed on April 13, 1999.
5. Our current report on Form 8-K, which we filed on April 7, 1999, and
the amendment thereto filed on May 11, 1999.
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.
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================================================================================
10,000,000 SHARES
U.S. PLASTIC LUMBER CORP.
COMMON STOCK
--------------
PROSPECTUS
--------------
The date of this Prospectus is August __, 1999
================================================================================
<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. 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
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
II-1
<PAGE> 24
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.
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.
II-2
<PAGE> 25
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 21. 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 certified
accountants
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).
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes that:
(1) To file, during any period in which any offers or sales are being
made, a post-effective amendment to the registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the Securities act
of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered (if the total dollar
value of securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than
II-3
<PAGE> 26
20 percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or an other
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Act,
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 the 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 which are being registered which remain unsold at the
termination of the offering.
(4) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
(5) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement by any person or party who is deemed to be an underwriter within the
meaning Rule 145(c), the issuer undertakes that such reoffering prospectus will
contain the information called for by the other items of the applicable
registration form with respect to reoffering by persons who may be deemed
underwriters, in addition, in addition to the information called for by the
other items of the applicable form.
(6) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (5) immediately preceding; or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes 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 the time shall be deemed to be
initial bona fide offering thereof.
(e) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or 14c-3 under the Securities Exchange Act of 1934;
and, where interim financial information required to be presented by Article 3
of Regulation S-X are not set forth in the prospectus, to deliver, or cause to
be delivered to each person to whom the prospectus is sent or given, the latest
report that is specifically incorporated by reference in the prospectus to
provide such interim financial information.
II-4
<PAGE> 27
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against 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 of
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.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-5
<PAGE> 28
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant 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 July __, 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.
<PAGE> 29
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons on July __,
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 E. Drury Director
- -----------------------------------
John E. Drury
/s/ Kenneth Ch' uan-Kai Leung Director
- -----------------------------------
Kenneth Ch' uan-Kai Leung
</TABLE>
<PAGE> 30
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 certified
accountants
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
July 28, 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-4
------------------------------------------------------------
Gentlemen:
I have acted as general counsel to U.S. Plastic Lumber Corp. (the
"Company") in connection with the Registration Statement on Form S-4 (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 10,000,000 shares of common stock, par value $.0001 per
share (the "Common Stock"), by U.S. Plastic Lumber Corp. (the "Company") as 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 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
shares of Common Stock of the Company which are being offered by the Company
pursuant to the Registration Statement, when sold in the manner and for the
consideration contemplated by the Registration Statement, will be legally
issued, fully paid and non-assessable.
<PAGE> 2
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.
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
<PAGE> 1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-4 of our
report, dated February 19, 1999, included in U.S. Plastic Lumber Corp.'s Form
10-KSB for the year ended December 31, 1998 and to all references to our Firm
included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Miami, Florida,
June 17, 1999.
