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As filed with the Securities and Exchange Commission on February 26, 1996
Registration No. 33-60035
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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Pollution Research and Control Corp.
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(Exact name of registrant as specified in its charter)
California
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(State or other jurisdiction of incorporation or organization)
95-2746949
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(I.R.S. Employer Identification No.)
506 Paula Avenue, Glendale, California 91201
(818) 247-7601
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Albert E. Gosselin, Jr.
506 Paula Avenue, Glendale, California 91201
(818) 247-7601
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Please send copies of all correspondence to:
PATRICIA CUDD, ESQ.
Patricia Cudd & Associates
50 South Steele Street, Suite #222
Denver, Colorado 80209
Telephone: (303) 394-2197
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
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DOCUMENTS INCORPORATED BY REFERENCE:
Certain exhibits to this Registration Statement on Form S-3 as set forth in the
Exhibit Index located at page E-1.
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PROSPECTUS
2,490,998 SHARES OF COMMON STOCK, NO PAR VALUE
POLLUTION RESEARCH AND CONTROL CORP.
________
This Prospectus relates to an aggregate of 2,490,998 shares of common
stock, no par value per share (the "Common Stock"), underlying the outstanding
warrants (collectively, the "Warrants") and options (collectively, the
"Options") of Pollution Research and Control Corp. (the "Company") which may be
issued upon exercise by the holders of all of the Warrants and Options on or
prior to the various expiration dates thereof commencing on March 29, 1996,
through May 28, 2001. The Warrants and the Options are exercisable to purchase
a total of 2,170,998 shares and 320,000 shares of Common Stock, respectively.
Information regarding the holders of the Warrants and Options and the
circumstances under which they may exercise their respective Warrants or
Options so as to acquire the underlying shares of Common Stock are set forth
herein under "Description of Securities."
The Warrants are exercisable by the holders thereof at prices ranging
from $.60 to $2.00 and the Options are exercisable by the holders thereof at
prices in a range from $.55 to $1.38. The Warrants and Options were issued by
the Company on various dates commencing in July 1989 through July 1995. The
exercise periods of Warrants which expired prior to March 29, 1996,
exercisable to purchase 2,105,998 shares of Common Stock, have been extended
through March 29, 1996. After the exercise of the Warrants and the Options,
the shares of Common Stock may be offered and sold to the public from time to
time by the holders of Warrants or Options who exercise such Warrants or
Options (the "Selling Shareholders"), or by pledgees, donees, transferees or
other successors to the Selling Shareholders, in each case in open market
transactions, in private or negotiated transactions or in a combination of such
methods of sale, at fixed prices, at prices then prevailing on the NASDAQ
SmallCap Market System at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. To the extent required at
the time of a particular offer of Common Stock by the Selling Shareholders, a
supplement to this Prospectus will be distributed which will set forth the
number of shares of Common Stock being offered and the terms of the offering,
including the name or names of any underwriters, dealers, brokers or agents,
the purchase price paid by any underwriter for shares of Common Stock purchased
from the Selling Shareholders, any discounts, commissions and other items
constituting compensation from the Selling Shareholders and any discounts,
commissions or concessions allowed or re-allowed to dealers, including the
proposed selling price to the public.
The Selling Shareholders reserve the sole right to accept and,
together with any agent of the Selling Shareholders, to reject in whole or in
part any proposed purchase of the shares of Common Stock. The Selling
Shareholders will pay any sales commissions or other seller's compensation
applicable to such transactions. The Selling Shareholders and agents who
execute orders on their behalf may be deemed to be underwriters as that term is
defined in Section 2(11) of the Securities Act of 1933, as amended (the
"Securities Act"), and a portion of any proceeds of sales and discounts,
commissions or other seller's compensation may be deemed to be underwriting
compensation for purposes of the Securities Act. (See "Plan of Distribution.")
This Prospectus also covers such additional shares of Common Stock as may be
issuable to the Selling Shareholders in the event of a stock dividend, stock
split, recapitalization or other similar change in the Common Stock.
The Company will not receive any of the proceeds from the sale of the
shares of Common Stock by the Selling Shareholders. Prior to such sale of
Common Stock, however, the Company will have received up to a maximum of
$1,375,599 ($.60 to $2.00 per share) from the exercise of
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the Warrants and up to a maximum of $227,500 ($.55 to $1.38 per share) from the
exercise of the Options referred to above. If all of the Warrants and Options
are exercised on or before their respective expiration dates on March 29,
1996, through May 28, 2001, the Company would receive gross proceeds
aggregating $1,603,099 in cash.
The Company has agreed to pay all costs of the registration of the
shares of Common Stock underlying the Warrants and Options. Such costs, fees
and disbursements are estimated to be approximately $28,897.
SEE "RISK FACTORS" FOR CERTAIN CONSIDERATIONS RELEVANT TO AN
INVESTMENT IN THE SHARES OF COMMON STOCK.
The Company's Common Stock and Warrants are traded over-the-counter
and are quoted on the NASDAQ SmallCap Market System under the symbols "PRCC"
and "PRCCW." On February 22, 1996, the last sale price of the Common Stock on
the NASDAQ SmallCap Market System was $.56 and the last sale price for the
Warrants was $.03.
__________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
__________
The date of this Prospectus is February , 1996.
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TABLE OF CONTENTS
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Page
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Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . 5
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Market Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Description of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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AVAILABLE INFORMATION
The Company is subject to the informational and reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and,
in accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information filed with the Commission by the Company
may be inspected and copied at the public reference facilities maintained by
the Commission at its principal offices at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's regional offices located
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of these materials can also be obtained at prescribed rates from the
Public Reference Section of the Commission at its principal offices in
Washington, D.C., set forth above. Additional information with respect to this
offering may be provided in the future by means of supplements or "stickers" to
the Prospectus.
The Company has filed a Registration Statement on Form S-3 (including
all amendments and supplements thereto, the "Registration Statement") with the
Commission under the Securities Act with respect to the shares of Common Stock
underlying the Warrants and Options offered hereby. This Prospectus, which
forms a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement and the Exhibits filed
therewith, certain parts of which have been omitted in accordance with the
rules and regulations of the Commission. Statements contained herein
concerning the provisions of such documents are not necessarily complete and,
in each instance, reference is made to the Registration Statement or to the
copy of such document filed as an Exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference. Copies of the Registration Statement and the
Exhibits thereto can be obtained upon payment of a fee prescribed by the
Commission or may be inspected free of charge at the public reference
facilities and regional offices referred to above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1994, and the Company's Quarterly Reports on Form 10-QSB for the
quarters ended March 31, June 30 and September 30, 1995, which were previously
filed with the Commission (File No. 0-14266), are incorporated by reference in
this Prospectus and the Registration Statement of which it is a part.
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All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the shares of Common Stock, shall be deemed
to be incorporated by reference herein and to be part hereof from the
respective dates of the filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and the Registration Statement of which it is a
part to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus or the Registration
Statement of which it is a part.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or
verbal request of such person, a copy of any or all of the documents
incorporated herein by reference, other than exhibits to such documents.
Requests should be addressed to: Secretary, Pollution Research and Control
Corp., 506 Paula Avenue, Glendale, California 91201; telephone number (818)
247-7601.
THE COMPANY
The Company primarily designs, manufactures and markets electronic
analytical instruments used to detect and measure various types of air
pollution, such as "acid rain," "ozone depletion" and "smog episodes" through
its wholly-owned subsidiary, Dasibi Environmental Corp. The Company's products
are generally used to measure air pollution levels in geographic areas which
range in size from small industrial sites to entire states or countries. The
Company also supplies computer-controlled calibration systems that verify the
accuracy of its instruments, data loggers to collect and manage pollutant
information and final reporting software for remote centralized applications.
The Company's instruments have been sold during the past three years to over
300 customers worldwide, including industrial manufacturers; federal, state,
city, local and foreign governmental agencies; major industrial companies; and
educational and research institutions in over 30 countries. These customers
use the Company's products principally for environmental protection compliance
programs.
The Company intends to continue its sales growth by adapting its
existing technologies for new pollution measurement applications and acquiring
or developing new related technologies. The Company intends to expand its
market share by concentrating a large portion of its marketing efforts in
foreign countries, particularly the Peoples' Republic of China.
The Company's principal executive offices are located at 506 Paula
Avenue, Glendale, California 91201, and its telephone number is (818)
247-7601.
The Company's Common Stock and Common Stock Purchase Warrants are
traded in the over-the-counter market and reported on the NASDAQ SmallCap
Market System under the symbols "PRCC" and "PRCCW," respectively.
THE OFFERING
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Upon Exercise of the Warrants . . . . . . . . . . . . 2,170,998 shares of Common Stock
Upon Exercise of the Options . . . . . . . . . . . . . 320,000 shares of Common Stock
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USE OF PROCEEDS
The Company will receive no proceeds from the sale of the shares of
Common Stock underlying the Warrants and the Options, but will receive proceeds
upon the exercise of the Warrants and Options. If all of the outstanding
Warrants and Options are exercised at exercise prices in a range from $.55 to
$2.00 per Warrant or Option, the proceeds to the Company will be approximately
$1,603,099. The Company will use the proceeds from the exercise of the
Warrants and Options for working capital for general corporate purposes.
RISK FACTORS
Prospective investors should consider carefully, in addition to the
other information contained in and incorporated into this Prospectus and the
Registration Statement of which it is a part, the following factors before
purchasing the shares of Common Stock offered hereby.
1. Liquidity. The Company has experienced cash shortages from
time to time preventing it from paying its operating expenses on a timely basis
or forcing management to raise funds from private sources for equity or debt
financing or, if available, bank loans. The Company has historically financed
operations through bank borrowings and the issuance of Common Stock in both
public and private offerings. Working capital at September 30, 1995, was
$2,299,310. The Company has no sources of financing presently except the
proceeds of this offering and its bank line of credit in the amount of
$200,000. Any amounts borrowed bear interest at the prime rate plus 2% per
annum and are due and owing on June 1, 1996. The sum of $150,000 is outstanding
as of the date hereof. While the Company is presently seeking to increase its
bank line of credit, there can be no assurance that such an increase can be
obtained when and if the Company experiences working capital shortages in the
future. All of the proceeds in the maximum amount of $1,603,099, which may
be received by the Company upon the exercise of the Warrants and Options by
the Selling Shareholders, has been allocated for working capital for general
corporate purposes. This funding, which is not assured, will result in the
dilution of the equity of existing shareholders upon the issuance of shares
of Common Stock to the Selling Shareholders who exercise their Warrants or
Options. If additional funding is required, it may not be available upon
terms acceptable to the Company and/or the Company may be required to forego
a substantial interest in its revenues or further dilute the equity of
existing shareholders.
2. Decline in Net Revenues and Gross Profit. The Company's net
revenues ($5,129,000) and gross profit for fiscal 1994 decreased significantly
as compared to net revenues ($6,622,000) and gross profit for fiscal 1993.
These declines were principally because of
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significant competitive price pressure for the Company's instruments, thus
forcing the Company to lower its domestic and foreign bids, reducing the number
of the Company's bid awards and reducing the profit margin on the bids awarded
to the Company. Also because of these competitive price pressures in the
industry, the Company's gross profit decreased from 46% of net revenues in
fiscal 1993 to 41% of net revenues in fiscal 1994. Selling, general and
administrative expenses increased 19% from $1,635,000 in 1993 to $1,951,000 in
1994 due, primarily, to increased sales and marketing efforts early in the year
and additional costs resulting from the move to the Company's larger facility,
offset in part by cost reduction efforts begun in the third quarter in reaction
to the competitive industry price pressures. Beginning in the third quarter of
fiscal 1994, the company implemented certain cost reduction measures in its
operating expenses, suspended major new product development efforts and scaled
back its efforts to improve or modify existing technologies in response to the
competitive price pressures. Although the Company experienced an improvement
in net revenues ($4,279,630) and gross profit for the nine-month period ended
September 30, 1995, as compared to net revenues ($3,648,270) and gross profit
for the nine-month period ended September 30, 1994, there can be no assurance
that revenues and profits will not decline in the future.
3. Reliance on One Product Line; Dependence on Major Types of
Customers. Approximately 45% of the Company's revenues are derived from the
sale of its line of ozone monitors. Any substantial decrease in demand for
this product could have a material adverse effect upon the business of the
Company. During the fiscal years ended December 31, 1994 and 1993, sales to
two multi-customer overseas distributors represented 24% and 21% of net sales,
respectively. While there has been no significant change in recent years in
the percentage of revenue contributed by foreign and domestic government
agencies (approximately 45%), foreign distributors (approximately 45%) and
industrial companies and research facilities (10%), a significant loss in the
number of government agencies, industrial companies or research agencies which
typically purchase the Company's instruments could have a material adverse
effect on the Company.
4. Risks of New Product Line. As part of its expansion strategy,
the Company intends to enter the market for continuous emission monitoring
systems ("CEMS"), or air pollution instrumentation systems, although it is
extremely competitive and the Company's competitors in such market have
substantially greater experience and financial resources than the Company.
Until recently, the Company's products were not applicable to the source
instrumentation market. However, because of new governmental regulations
requiring greater accuracy and dilution conditioning as a standard (reducing
pollution concentrations to the parts per billion level) for source
instrumentation involving a CEMS, the Company's products are now applicable.
The Company is not currently able to offer customers a CEMS because it does not
manufacture the additional equipment needed to complete the system. The
Company commenced a research and development program in July 1992 for the
purpose of developing an innovative CEMS which is currently in the prototype
stage of development. None of the proceeds which may be received by the
Company from the exercise by the Selling Shareholders of their Warrants or
Options, the receipt of which funding is not assured, has been allocated by
the Company for the continuation of the development of an innovative CEMS or
any other research and development activities. While the Company does not
require EPA approval of any of its instruments in order to complete a CEMS,
there can be no assurance that the Company's efforts to enter the CEMS market
will be successful.
5. Governmental Approval. The Company must obtain approval by
the Environmental Protection Agency of new air pollution monitoring instruments
it produces before such instruments can be sold in the United States.
Currently, all air pollution monitoring instruments that the Company sells in
the United States have received EPA approval. However, if the Company were to
invest in the development of new air pollution monitoring instruments in the
future that did not receive approval of the EPA, the Company would not be able
to sell such instruments in the United States and such inability could have an
adverse effect on the Company's business. With the exception of West Germany,
no foreign country requires governmental
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approval of air pollution monitoring instruments. While the Company's ozone
and carbon monoxide monitors have received the approval of the West German
equivalent of the EPA, the sulfur dioxide monitor is currently being tested.
The failure to receive such approval for the Company's other air pollution
monitoring instrument(s) would have a material adverse effect on the Company's
business efforts in West Germany.
6. Dependence On Legislation and Regulation. The products
developed and manufactured by the Company monitor air pollutants in accordance
with standards established generally by federal, state, local and foreign
governmental agencies. Changes in legislation or regulations or a relaxation
of standards determined by such agencies could adversely affect the market for
the Company's products. In 1982 and 1983, the Company experienced a decrease
in demand for its products which it attributes to a relaxation in such
standards by the federal government.
7. Competition. Management believes that the Company is the
smallest competitor in the ambient air pollution instrumentation market. There
are other established firms in the same field, both in the United States and in
foreign countries, which have substantially greater experience and financial
and personnel resources than does the Company. Furthermore, unlike a number of
its principal competitors, the Company is presently unable to offer its
customers a CEMS. Therefore, it is subject to the effects of better-financed
competitors and their research and development efforts, and price discounting.
The Company competes on the basis of technical advances in its products and its
reputation among customers as a quality provider of products and services and,
to a lesser extent, on the basis of price. Although the Company is not aware
of any other company that competes with it in all of its product lines, all of
its competitors have resources substantially greater than those of the Company.
There are also smaller companies that specialize in a limited number of the
types of products manufactured by the Company. The Company's primary
competitors in the domestic market are Thermo Instrument Systems, Inc. ("Thermo
Instrument Systems"), and Monitor Labs, Inc. ("Monitor Labs"). In the foreign
market, the Company's primary competitors are Thermo Instrument Systems,
Monitor Labs and Kimoto Instruments Co. of Japan. All of the Company's
competitors also offer a wider range of equipment, monitoring additional
pollutants, than does the Company.
8. Technological Obsolescence; Limited Research and Development.
The markets served by the Company are characterized by rapid technological
advances, downward price pressure in the marketplace as technologies mature,
changes in customer requirements and frequent new product enhancements. The
Company's business requires substantial ongoing research and development
efforts and expenditures, and its future success will depend on its ability to
enhance its current products, reduce product costs and develop and introduce
new products that keep pace with technological developments in response to
evolving customer requirements. The Company's failure to anticipate or respond
adequately to technological development or introduction could result in a loss
of anticipated future revenues and impair the Company's competitiveness. In
the past, the Company has actively engaged in research and development in order
to produce new products. None of the proceeds to be received by the Company
upon the exercise of the Warrants and Options, of which there is no assurance,
has been allocated for the continuation of the Company's two ongoing research
and development projects involving the development of an innovative CEMS and
a flue gas purification system. The Company spent only $187,353 of its own
funds on research and development, including the foregoing projects, in the
nine-month period ended September 30, 1995, as compared to $199,092 spent by
the Company on research and development in the nine months ended September 30,
1994, a 6% decrease. Research and development costs were $236,000 in 1994
as compared to $303,000 in 1993, a 22% decrease.
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9. Risks of Foreign Sales. During the last three fiscal years,
foreign sales have represented approximately 55% to 70% of the Company's total
revenue and are expected to represent a significant portion of the Company's
future sales. Foreign sales are subject to numerous risks, including political
and economic instability in foreign markets, restrictive trade policies of
foreign governments, inconsistent product regulation by foreign agencies or
governments, the imposition of product tariffs and the burdens of complying
with a wide variety of international and U.S. export laws and differing
regulatory requirements. To date, the Company's foreign sales have been
transacted in U.S. dollars only. To the extent, however, that future foreign
sales are transacted in a foreign currency, the Company would be subject to the
risk of losses due to foreign currency fluctuations and difficulties associated
with accounts receivable collection.
10. Reliance on Certain Suppliers. While the Company manufactures
many components and subsystems for use in its products, other components,
including packaging materials, integrated circuits, microprocessors and
minicomputers, are purchased from unaffiliated suppliers. The Company is
generally not dependent upon any one supplier for any raw material or component
which it purchases, and currently there are available alternative sources for
such raw materials and components. The Company is currently dependent,
however, on a limited number of vendors with respect to the availability and
quality of certain key instrument components, such as printed circuit board
designs and lamps. A vendor's inability to supply these components to the
Company in a timely fashion, or to the Company's satisfaction, can affect the
Company's ability to deliver its instruments on time.
11. Limited Marketing Capability. The Company's success depends
in large part upon its ability to identify and adequately penetrate the markets
for its products. As compared to the Company, most of its competitors have
much larger budgets for marketing, advertising and promotion. No proceeds
from the exercise of Warrants or Options by the Selling Shareholders, the
receipt of which cannot be assured, have been allocated for marketing. The
Company has historically lacked the financial, personnel and other resources
required to enable the Company to undertake a comprehensive national or
foreign marketing and advertising campaign and to compete with its larger,
better-financed competitors in marketing its instruments.
12. Dependence on Key Personnel. Management believes that the
Company's success depends in part upon its ability to attract and/or retain
highly skilled management, technical and marketing personnel. Loss of the
services of Albert E. Gosselin, Jr., President, Chief Executive Officer and
Chairman of the Board of Directors of the Company, could adversely affect the
development of the Company's business and its ability to realize or sustain
profitable operations. However, Mr. Gosselin, together with Cynthia L.
Gosselin, the Company's Chief Financial Officer, have employment contracts with
the Company. The Company does not maintain key-man life insurance on any of
its personnel.
13. Limited Protection of Intellectual Property and Proprietary
Rights. The Company regards all or portions of the designs and technologies
incorporated into its products as proprietary and attempts to protect them with
a combination of trademark and trade secret laws, employee and third-party
nondisclosure agreements and similar means. It has generally been the
Company's policy to proceed without patent protection since it is management's
belief that the disclosure requirements of the federal patent laws provide
competitors with easy access to the secrets of rapidly changing technology.
Despite these precautions, it may be possible for unauthorized third parties to
copy certain portions of the Company's products or to "reverse engineer" or
otherwise obtain and use to the Company's detriment information which the
Company regards as proprietary. Moreover, the laws of some foreign countries
do not afford the same protection to the Company's proprietary rights as do
U.S. laws. There can be no assurance, therefore, that any of these
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protections will be adequate or that the Company's competitors will not
independently develop technologies that are substantially equivalent or
superior to the Company's technologies.
14. Absence of Products Liability Insurance. The Company does not
maintain products liability insurance since it does not perceive a risk of
liability to which it may be exposed. The Company has never had a products
liability claim; however, in the event that the Company experiences a material
liability as a result of a products liability claim, such a liability could
have a material adverse effect on the Company.
15. Possible Volatility of Stock Price. The trading price of the
Company's Common Stock has from time to time fluctuated widely and in the
future may be subject to similar fluctuations in response to quarter-to-quarter
variations in the Company's operating results, announcements of technological
innovations or new products by the Company or its competitors, general
conditions in the air pollution monitoring industry in which the Company
competes and other events or factors. In addition, in recent years broad stock
market indices, in general, and the securities of technology companies, in
particular, have experienced substantial price fluctuations. Such broad market
fluctuations also may adversely affect the future trading price of the Common
Stock. In addition, sales of substantial amounts of shares of Common Stock in
the public market following this offering could adversely affect the future
trading price of the Common Stock. (See "MARKET INFORMATION.")
16. Possible Dilutive Effect and Other Disadvantages of
Outstanding Warrants and Options. This Prospectus relates to an aggregate
of 2,490,998 shares of Common Stock reserved for issuance upon the exercise
of outstanding Warrants and Options currently exercisable at prices in a
range from $.55 to $2.00. Unless the exercise period of Warrants exercisable
to purchase 2,105,998 of such shares of Common Stock is extended, of which
there is no assurance, the exercise period of all such Warrants terminates on
March 29, 1996, and they will expire, become void and be of no further force
or effect at 5:00 p.m., Pacific time, on March 29, 1996. (See "DESCRIPTION
OF SECURITIES.") To the extent that the trading price of the Common Stock at
the time of the exercise of any such Warrants or Options exceeds the exercise
price, such exercise will have a dilutive effect on the Company's shareholders.
In connection with the Underwriter's Unit Purchase Warrant (see "DESCRIPTION OF
SECURITIES - Underwriter's Warrants"), the Company has undertaken to amend this
Prospectus, as required, in order to maintain an effective registration
statement to cover the offer and sale of the Common Stock, Underwriter's
Warrants and Common Stock issuable upon the exercise of the Underwriter's
Warrants. The cost to the Company of maintaining such registration could be
substantial and could adversely affect the Company's ability to obtain
financing.
17. Dividend Po1icy. The Company plans to retain earnings for
the purpose of expanding business opportunities and does not believe it will
pay dividends to its shareholders in the foreseeable future. Investors should
refrain from purchasing the shares of Common Stock offered hereby if they
anticipate the need for immediate or future income from dividends. (See
"DESCRIPTION OF SECURITIES - Capital Stock - Common Stock.")
18. Market Price of Common Stock Substantially Below Certain
Warrant and Option Exercise Prices. The high closing bid quotation (which was
identical to the low closing bid quotation) in the over-the-counter market
reported by the relevant market makers for the Common Stock was $.56 on
February 22, 1996. An aggregate of 115,000 shares of the Company's Common
Stock to which this Prospectus relates, is issuable upon the exercise of
certain warrants and options at prices in a range from $1.38 to $2.00 per
share. Accordingly, unless the Company's Common Stock trades in the
over-the-counter market at prices substantially higher than
11
<PAGE> 12
current market prices prior to the expiration of the exercise periods on
or prior to various dates from June 30, 1997, through November 7, 1998, certain
of the Company's outstanding Warrants and Options exercisable to purchase an
aggregate of 115,000 shares of Common Stock will expire worthless and the
Company will receive no funds, or only limited funds, from the exercise by the
Selling Shareholders of these warrants or options, if any.
PLAN OF DISTRIBUTION
The shares of Common Stock may be offered and sold from time to time
by the Selling Shareholders or by pledgees, donees, transferees or other
successors in interest. The Selling Shareholders will act independently of the
Company in making determinations with respect to the timing, manner and size of
each offer or sale. Such sales may be made on the over-the-counter market or
otherwise at prices and at terms then prevailing or at prices related to the
then current market prices, or in negotiated transactions.
The Selling Shareholders may sell shares of Common Stock in any of the
following ways: (i) through dealers; (ii) through agents; or (iii) directly to
one or more purchasers. The distribution of the shares of Common Stock may be
effected from time to time in one or more transactions (which may involve
crosses or block transactions) in the over-the-counter market. Any such
transaction may be effected at market prices prevailing at the time of sale, at
prices related to such prevailing market prices, at negotiated prices or at
fixed prices. The Selling Shareholders may effect such transactions by selling
shares of Common Stock to or through broker-dealers, and such broker-dealers
may receive compensation in the form of discounts, concessions or commissions
from Selling Shareholders and/or commissions from purchasers of shares of
Common Stock for whom they may act as agent. The Selling Shareholders and any
broker-dealers or agents which participate in the distribution of Common Stock
by them might be deemed to be underwriters and any discounts, commissions or
concessions received by any such broker-dealers or agents might be deemed to be
underwriting discounts and commissions under the Securities Act.
In offering the shares of Common Stock, the Selling Shareholders and
any broker-dealers and any other participating broker-dealers which execute
sales for the Selling Shareholders may be deemed to be "underwriters" within
the meaning of the Securities Act in connection with such sales, and any
profits realized by the Selling Shareholders and the compensation of such
broker-dealers may be deemed to be underwriting discounts and commissions. In
addition, any shares of Common Stock covered by this Prospectus which qualify
for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant
to this Prospectus.
Rule 10b-2 under the Exchange Act prohibits persons who are
participating in or financially interested in a distribution of securities from
making payments to another person for the solicitation of a third party to
purchase the securities that are the subject of the distribution, except that
Rule 10b-2 does not apply, among other exceptions, to brokerage transactions
not involving the solicitation of customer orders. Rule 10b-6 under the
Exchange Act prohibits participants in a distribution from bidding for or
purchasing, for an account in which the participant has a beneficial interest,
any of the securities that are the subject of the distribution. Rule 10b-7
governs bids and purchases made in order to stabilize the price of a security
in connection with a distribution of the security.
The public offering of the Common Stock by the Selling Shareholders
will terminate on the date on which all shares of Common Stock offered hereby
have been sold by the Selling Shareholders, or on such earlier date on which
the Company files a post-effective amendment which de-registers all shares of
Common Stock then remaining unsold.
The Company will pay certain expenses incidental to the offering and
sale of the shares of Common Stock to the public estimated to be approximately
$28,897. The Company will not pay
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<PAGE> 13
for, among other expenses, selling expenses, underwriting discounts or fees and
expenses of counsel for the Selling Shareholders.
To the extent required at the time a particular offer of Common Stock
by the Selling Shareholders is made, a supplement to this Prospectus will be
distributed which will set forth the number of shares of Common Stock being
offered and the terms of the offering, including the name or names of any
underwriters, dealers, brokers or agents, the purchase price paid by any
underwriter for shares of Common Stock purchased from the Selling Shareholders,
any discounts, commissions and other items constituting compensation from the
Selling Shareholders and any discounts, commissions or concessions allowed or
re-allowed to dealers, including the proposed selling price to the public.
The Company will not receive any of the proceeds from the sale of
shares of Common Stock by the Selling Shareholders.
MARKET INFORMATION
The Company's Common Stock and Common Stock Purchase Warrants are
traded over-the-counter and reported on the NASDAQ SmallCap Market System under
the symbols "PRCC" and "PRCCW," respectively. Set forth below are the high and
low closing bid quotations in the over-the-counter market for the Common Stock
and the Common Stock Purchase Warrants as reported by the relevant market
makers for fiscal years 1995, 1994 and 1993. The high closing bid quotation
(which was identical to the low closing bid quotation) in the over-the-counter
market reported by the relevant market makers on February 22, 1996, was $.56
for the Common Stock and $.03 for the Common Stock Purchase Warrants.
Quotations represent inter-dealer quotations, without adjustment for retail
mark-ups, mark-downs or commissions, and may not necessarily represent actual
transactions.
<TABLE>
<CAPTION>
Fiscal 1995 Fiscal 1994 Fiscal 1993
Quarter Ended High Bid Low Bid High Bid Low Bid High Bid Low Bid
- ------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Common Stock:
March 31 $ .69 $.62 $2.38 $1.50 $2.50 $1.12
June 30 .91 .59 1.95 1.25 2.12 1.25
September 30 1.22 .62 1.25 .75 2.00 1.50
December 31 .88 .56 .78 .44 1.75 1.18
Warrants:
March 31 $.12 $.09 .63 .19 .75 .21
June 30 .16 .09 .41 .13 .56 .25
September 30 .16 .09 .25 .13 .53 .37
December 31 .10 .03 .19 .06 .37 .09
</TABLE>
As of February 22, 1996, the number of shareholders of record of the
Company's Common Stock was 810. The Company has never paid or declared any
dividends on its Common Stock and does not anticipate paying dividends in the
foreseeable future.
The Company cannot predict the market price for the Common Stock upon
the commencement or the completion of this offering. Since the market for the
Company's Common Stock is thinly traded, the exercise of the Warrants and
Options and sales of the underlying shares of Common Stock could cause the
Common Stock to trade at levels lower than would otherwise be anticipated.
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<PAGE> 14
DESCRIPTION OF SECURITIES
Capital Stock
The Company's authorized capital stock consists of 30,000,000 shares
of Common Stock, no par value per share (the "Common Stock"), and 20,000,000
shares of preferred stock, $.01 par value per share (the "Preferred Stock").
Common Stock. All shares of Common Stock have equal voting rights and,
when validly issued and outstanding, are entitled to one vote per share in all
matters to be voted upon by shareholders. The shares of Common Stock have no
preemptive, subscription, conversion or redemption rights and may be issued
only as fully-paid and nonassessable shares of Common Stock. Cumulative voting
in the election of directors is permitted; however, cumulative voting may occur
only if a shareholder announces his intention to cumulate his votes prior to
the voting, in which case all shareholders may cumulate their votes. In the
event of liquidation of the Company, each shareholder is entitled to receive a
proportionate share of the Company's assets available for distribution to
shareholders after the payment of liabilities and after distribution in full of
preferential amounts, if any, to be distributed to holders of the preferred
stock. All shares of the Company's Common Stock issued and outstanding are
fully-paid and nonassessable. Holders of the shares of Common Stock are
entitled to share pro rata in dividends and distributions with respect to the
Common Stock, as may be declared by the Board of Directors out of funds legally
available therefor. As of February 22, 1996, there were 6,932,662 shares of
Common Stock issued and outstanding held of record by 810 shareholders. The
Common Stock is traded over-the-counter and reported on the NASDAQ SmallCap
Market System under the symbol "PRCC."
Holders of shares of Common Stock are entitled to share pro rata in
dividends and distributions with respect to the Common Stock when, as and if
declared by the Board of Directors out of funds legally available therefor.
The Company has not paid any dividends on its Common Stock and currently
intends to retain earnings, if any, to finance the development and expansion of
its business. Future dividend policy is subject to the discretion of the Board
of Directors and will depend upon a number of factors, including future
earnings, capital requirements and the financial condition of the Company.
Preferred Stock. Shares of Preferred Stock may be issued from time to
time in one or more series as may be determined by the Board of Directors. The
voting powers and preferences, the relative rights of each such series and the
qualifications, limitations and restrictions thereof shall be established by
the Board of Directors, except that no holder of Preferred Stock shall have
preemptive rights. The Company has no outstanding Preferred Stock, and the
Board of Directors does not plan to issue any for the foreseeable future unless
the issuance thereof shall be in the best interests of the Company.
Warrants
The following description of the warrants (the "Warrants") issued as
part of the units (the "Units") in the Company's public offering in 1989 (the
"Public Offering") of 1,453,497 Units, each Unit including one share of Common
Stock and one Warrant exercisable to purchase one share of Common Stock at an
exercise price of $1.75 per share, by J.W. Gant & Associates, Inc. (the
"Underwriter") is a brief summary of certain provisions of the Warrants and is
qualified in its entirety by the more detailed provisions of the Warrant
Agreement between the Company and OTR, Inc., as Warrant Agent, a copy of which
is incorporated herein by reference to Exhibit 4.1 to the Registration
Statement on Form S-1 (File No. 33-26558) of Dasibi Environmental Corp., dated
January 17, 1989. The Warrants are traded in the over-the-counter market and
reported on the NASDAQ SmallCap Market system under the symbol "PRCCW."
14
<PAGE> 15
The holder of each Warrant is entitled to receive one share of Common
Stock for an exercise price of $1.75 per share. The Company extended, on June
3 and August 27, 1992, on June 6, 1994, and on October 17, 1995, the exercise
period of the Warrants, which were initially exercisable through June 29, 1992.
As a result of the last extension, the Warrants are now exercisable on or prior
to the expiration thereof on March 29, 1996. The shares of Common Stock, when
issued upon the exercise of the Warrants in accordance with the terms thereof,
will be fully-paid and nonassessable.
The Warrants contain provisions that protect the holders thereof
against dilution by adjustment of the exercise price in certain events, such as
stock dividends and distributions, stock splits, recapitalizations, mergers,
consolidations and the issuance of Common Stock or the issuance of options or
rights to subscribe for or securities convertible into or exchangeable for
Common Stock at a price below the exercise price, except that there will be no
adjustment for the issuance of Common Stock upon the exercise of options
granted pursuant to the Employees' Incentive Stock Option Plan.
The Company is not required to issue fractional shares of Common Stock
and, in lieu thereof, will make a cash payment based upon the current market
value of such fractional share (determined as the last reported sales price of
the Common Stock on NASDAQ, as of the business day prior to the date of
exercise). The holder of a Warrant will not possess any rights as a
shareholder of the Company unless and until he exercises his Warrant.
Underwriter's Warrants
The Company sold to the Underwriter for $130 a warrant (the "Unit
Purchase Warrant") to purchase up to 130,000 units in connection with the
Public Offering. The units subject to the Unit Purchase Warrant were identical
to the Units sold in the Public Offering, except that the warrants included
therein, together with the additional warrants issued pursuant to the
anti-dilution provisions contained in the Unit Purchase Warrant (the
"Underwriter's Warrants"), are not subject to redemption by the Company. The
Underwriter exercised its Unit Purchase Warrant at a price of $2.10 per unit to
purchase 130,000 units, including 130,000 shares of the Company's Common Stock
and 130,000 Underwriter's Warrants exercisable to purchase 130,000 shares of
Common Stock. Because of the anti-dilution provisions contained in the Unit
Purchase Warrant providing for adjustment of the exercise price thereof upon
the occurrence of certain events, including recapitalizations,
reclassifications, stock dividends, stock splits, stock combinations or similar
transactions, the Underwriter received Underwriter's Warrants exercisable to
purchase 522,501 shares of the Company's Common Stock in addition to the
Underwriter's Warrants exercisable to purchase 130,000 shares of Common Stock
received by the Underwriter upon exercise of the Unit Purchase Warrant. In
addition, the Unit Purchase Warrant provided for reduction of the exercise
price thereunder to any lower price for which shares of Common Stock are issued
or at which any warrants, options or other rights to purchase Common Stock are
exercisable. The Company agreed to an undertaking in connection with the
Public Offering to amend the Prospectus, as required, in order to maintain an
effective registration statement to cover the offer and sale by the Underwriter
of any units, Common Stock and/or Underwriter's Warrants received by it. The
Underwriter's Warrants contained in the units received by the Underwriter upon
the exercise of its Unit Purchase Warrant, together with the additional
Underwriter's Warrants received by the Underwriter as a result of the
anti-dilution provisions contained in the Underwriter's Unit Purchase Warrant,
which are exercisable altogether to purchase an aggregate of 652,501 shares of
the Company's Common Stock at an exercise price of $1.75 per share, have since
been sold, assigned or otherwise transferred by the Underwriter to third
parties. The exercise period of the Underwriter's Warrants has been extended
through March 29, 1996.
15
<PAGE> 16
Miscellaneous Warrants
On August 31, 1993, the Company granted to The Equity Group Inc., a
public relations firm, a warrant exercisable on or prior to August 31, 1998, to
purchase 60,000 shares of the Company's Common Stock at an exercise price of
$1.70 per share. On November 8, 1993, the Company granted a warrant
exercisable on or prior to November 7, 1998, to purchase 5,000 shares of the
Company's Common stock at an exercise price of $2.00 per share, to Mr. Edward
G. Lowell. The brief descriptions of certain provisions of the warrants set
forth hereinabove are qualified in their entirety by the more detailed
provisions of the warrants, copies of which are attached to the Registration
Statement of which this Prospectus is a part as Exhibits 4.29 and 4.36, and
are incorporated herein by this reference.
Transfer Agent, Registrar and Warrant Agent
OTR, Inc., 1130 Southwest Morrison, Suite #250, Portland, Oregon
97205, is the Transfer Agent and Registrar for the Common Stock and the Warrant
Agent for the Warrants.
Options
On May 28, 1991, the Company granted options exercisable on or prior
to May 28, 2001, to purchase an aggregate of 145,000 shares of Common Stock at
an exercise price of $.55 per share to the following individuals, as follows:
(i) Lee Sion - 50,000 shares; (ii) Albert E. Gosselin, Jr. - 50,000 shares;
and (iii) Gary Dudley - 45,000 shares. Mr. Sion is the record owner of
approximately 7.2% (including the aforementioned options) of the issued and
outstanding shares of the Company's Common Stock and Messrs. Gosselin and
Dudley are executive officers and/or directors of the Company. The terms and
conditions of the options are more fully described in the Stock Option
Agreements dated May 28, 1991, with the respective optionees named hereinabove,
copies of which are incorporated herein by reference to Exhibits 10.13 through
10.15 to the Company's Transition Report on Form 10-K for the transition period
ended June 30, 1991. The foregoing brief description of certain provisions of
the options is qualified in its entirety by the more detailed provisions of the
Stock Option Agreements.
On June 29, 1995, the Company granted options exercisable on or prior
to June 28, 2000, to purchase an aggregate of 125,000 shares of Common Stock at
an exercise price of $.63 per share to the following individuals, as follows:
(i) Cynthia L. Gosselin - 20,000 shares; (ii) Barbara L. Gosselin - 20,000
shares; (iii) Marcia Smith - 20,000 shares; (iv) Craig E. Gosselin - 20,000
shares; (v) Keith Gosselin - 20,000 shares; (vi) Mike Chu - 10,000 shares;
(vii) Kimberly Chiu - 10,000 shares; and (viii) Tolly Smith - 5,000 shares.
Mr. Craig E. Gosselin and Mesdames Cynthia L. Gosselin, Barbara L. Gosselin and
Marcia Smith are all executive officers and/or directors of the Company.
Messrs. Keith Gosselin, Chu and Smith and Ms. Chiu are all employees of the
Company. The terms and conditions of the options are more fully described in
the Option Agreements dated June 29, 1995, with the respective optionees named
hereinabove, copies of which are incorporated herein by reference to Exhibits
4.41, 4.42 and 4.44 through 4.49 to this Registration Statement on Form S-3
(Registration No. 33-60035). A total of 60,000 shares of the Company's Common
Stock underlying options also granted on June 29, 1995, to Messrs. Albert E.
Gosselin, Jr., and Gary Dudley, executive officers and/or directors of the
Company, are not included herein and, therefore, could not be offered or sold
pursuant to this Prospectus upon the exercise of said options by Messrs.
Gosselin and/or Dudley to purchase 40,000 shares, and 20,000 shares, of Common
Stock, respectively, prior to the expiration thereof.
The Company also has an option outstanding exercisable by Randy Foy,
an employee of the Company, to purchase, at an exercise price of $1.38 per
share, 25,000 shares of Common Stock of the Company on or prior to June 30,
1997. The foregoing brief description of this option is qualified in its
entirety by reference to the more detailed provisions of the Option to Purchase
16
<PAGE> 17
25,000 Shares of Common Stock of Pollution Research and Control Corp., dated as
of July 1, 1994, a copy of which is incorporated herein by reference to
Exhibit 4.37 to the Registration Statement on Form S-3 of which this
Prospectus forms a part.
The Company issued another option exercisable by Randy Foy to purchase
an additional 25,000 shares of Common Stock at an exercise price of $1.38 per
share on or prior to June 30, 1998. The terms and conditions of this option
are more fully described in the Option Agreement dated July 1, 1995, a copy
of which is incorporated herein by reference to Exhibit 4.50 to this
Registration Statement on Form S-3.
LEGAL MATTERS
Certain legal matters in connection with the validity of the issuance
of the shares of Common Stock of Common Stock being offered hereby will be
passed upon for the Company by Patricia Cudd & Associates, 50 South Steele
Street, Suite #222, Denver, Colorado 80209.
EXPERTS
The financial statements of the Company are incorporated herein by
reference to the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1994. Such financial statements have been audited by
Greenberg & Jackson, an Accountancy Corporation, independent auditors, as
stated in their report which is incorporated herein by reference.
17
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is an itemized statement of the expenses incurred in
connection with this Registration Statement and the issuance and distribution
of the shares of Common Stock being registered hereby. All such expenses will
be paid by the Company.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee . . . . . . $ 695
NASD fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 702
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . $12,500
Accounting fees and expenses . . . . . . . . . . . . . . . . . . $ 3,000
Blue sky fees and expenses . . . . . . . . . . . . . . . . . . . $ 4,000
Transfer agent fees and expenses . . . . . . . . . . . . . . . . $ 3,000
Printing, electronic filing and engraving expenses . . . . . . . $ 3,000
Miscellaneous expenses . . . . . . . . . . . . . . . . . . . . . $ 2,000
-------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $28,897
</TABLE>
All of the above items except the Securities and Exchange Commission
registration and NASD fees are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation, as amended, provide for (i)
the elimination of directors' liability for monetary damages for certain
breaches of their fiduciary duties to the Company and its shareholders as
permitted by California law; and (ii) permit the indemnification by the Company
to the fullest extent under California law. At present, there is no pending
litigation or proceeding involving a director or officer of the Company as to
which indemnification is being sought. Section 317 of the California
Corporations Code, as amended, provides for the indemnification of the
officers, directors and controlling persons of a corporation as follows:
"(a) For the purposes of this section, "agent" means any person who
is or was a director officer, employee or other agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee, or agent of another foreign or domestic corporation, partnership,
joint venture, trust, or other enterprise, or was a director, officer,
employee, or agent of a foreign or domestic corporation which was a predecessor
corporation of the corporation or of another enterprise at the request of such
predecessor corporation; "proceeding" means any threatened, pending or
completed action or proceeding, whether civil, criminal, administrative or
investigative; and "expenses" includes without limitation attorneys' fees and
any expenses of establishing a right to indemnification under subdivision (d)
or paragraph (3) of subdivision (e).
(b) A corporation shall have the power to indemnify any person who
was or is a party or is threatened to be made a party to any proceeding (other
than an action by or in the right of the corporation to procure a judgment in
its favor, an action brought under Section 9243, or an action brought by the
Attorney General pursuant to Section 9230) by reason of the fact that such
person is or was an agent of the corporation, against expenses, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with such proceeding if such person acted in good faith and in a
manner such person believed to be in the best interests of the corporation and,
in the case of a criminal proceeding, had no reasonable cause to believe the
conduct of such
18
<PAGE> 19
person was unlawful. The termination of any proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which the person believed to be in the best interests of
the corporation or that the person had reasonable cause to believe that the
person's conduct was unlawful.
(c) A corporation shall have power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action by or in the right of the corporation, or brought under
Section 9243, or brought by the Attorney General pursuant to Section 9230, to
procure a judgment in its favor by reason of the fact that such person is or
was an agent of the corporation, against expenses actually and reasonably
incurred by such person in connection with the defense or settlement of such
action if the person acted in good faith, in a manner in which such person
believed to be in the best interests of the corporation and with such care,
including reasonable inquiry, as an ordinary prudent person in a like position
would use under similar circumstances. No indemnification shall be made under
this subdivision:
(1) In respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the
corporation in the performance of such person's duty to the
corporation, unless and only to the extent that the court in which
such proceeding is or was pending shall determine upon application
that, in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for the expenses which
such court shall determine;
(2) Of amounts paid in settling or otherwise disposing of
a threatened or pending action, with or without court approval; or
(3) Of expenses incurred in defending a threatened or
pending action which is settled or otherwise disposed of without court
approval unless it is settled with the approval of the Attorney
General.
(d) To the extent that an agent of a corporation has been
successful on the merits in defense of any proceeding referred to in
subdivision (b) or (c) or in defense of any claim, issue or matter therein, the
agent shall be indemnified against expenses actually and reasonably incurred by
the agent in connection therewith.
(e) Except as provided in subdivision (d), any indemnification
under this section shall be made by the corporation only if authorized in the
specific case, upon a determination that indemnification of the agent is proper
in the circumstances because the agent has met the applicable standard of
conduct set forth in either subdivision (b) or (c) by:
(1) A majority vote of a quorum consisting of directors
who are not parties to such proceedings;
(2) Approval of the members (Section 5034), with the
persons to be indemnified not being entitled to vote thereon; or
(3) The court in which such proceeding is or was pending
upon application made by the corporation or the agent or the attorney
or other person rendering services in connection with the defense,
whether or not such application by the agent, attorney or other person
is approved by the corporation.
(f) Expenses incurred in defending any proceeding may be advanced
by the corporation prior to the final disposition of such proceeding upon
receipt of an undertaking by or
19
<PAGE> 20
on behalf of the agent to repay such amount unless it shall be determined
ultimately that the agent is entitled to be indemnified as authorized in this
section.
(g) No provision made by a corporation to indemnify its or its
subsidiary's directors or officers for the defense of any proceeding, whether
contained in the articles, bylaws, a resolution of members or directors, an
agreement or otherwise, shall be valid unless consistent with this section.
Nothing contained in this section shall affect any right to indemnification to
which persons other than such directors and officers may be entitled by
contract or otherwise.
(h) No indemnification or advance shall be made under this
section, except as provided in subdivision (d) or paragraph (3) of subdivision
(e), in any circumstances where it appears that:
(1) It would be inconsistent with a provision of the
articles, bylaws, a resolution of the members or an agreement in
effect at the time of the accrual of the alleged cause of action
asserted in the proceeding in which the expenses were incurred or
other amounts were paid, which prohibits or otherwise limits
indemnification; or
(2) It would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
(i) A corporation shall have power to purchase and maintain
insurance on behalf of any agent of the corporation against any liability
asserted against or incurred by the agent in such capacity or arising out of
the agent's status as such whether or not the corporation would have the power
to indemnify the agent against such liability under the provisions of this
section; provided, however, that a corporation shall have no power to purchase
and maintain such insurance to indemnify any agent of the corporation for a
violation of Section 9243.
(j) This section does not apply to any proceeding against any
trustee, investment manager or other fiduciary of an employee benefit plan in
such person's capacity as such, even though such person may also be an agent as
defined in subdivision (a) of the employer corporation. A corporation shall
have power to indemnify such trustee, investment manager or other fiduciary to
the extent permitted by subdivision (f) or Section 207."
ITEM 16. EXHIBITS.
The Exhibit Index commences on page 24.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the Registration Statement;
20
<PAGE> 21
(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 the undertakings set forth in paragraphs
(a)(1)(i) and (a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
21
<PAGE> 22
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities and Exchange
Act of 1934, the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Date: February 22, 1996 POLLUTION RESEARCH AND CONTROL CORP.
(Registrant)
By: /s/ Albert E. Gosselin, Jr.
----------------------------------
Albert E. Gosselin, Jr.,
President, Chief Executive Officer
and Chairman of the Board of
Directors
22
<PAGE> 23
EXHIBIT INDEX
The following Exhibits are filed as part of this Registration
Statement on Form S-3 or are incorporated herein by reference.
<TABLE>
<CAPTION>
ITEM
NUMBER DESCRIPTION
- ------ ---------------------------------------------------------------
<S> <C>
4.1 Form of Warrant Agreement. (Incorporated herein by reference to
Exhibit 4.1 to the Registration Statement on Form S-1 (File No.
33-26558) of Pollution Research and Control Corp., dated
January 17, 1989.)
4.2 Form of Unit Purchase Warrant. (Incorporated herein by reference
to Exhibit 4.2 to the Registration Statement on Form S-1 (File No.
33-26558) of Pollution Research and Control Corp., dated
January 17, 1989.)
4.3 Form of Stock Purchase Warrant. (Incorporated herein by reference
to Exhibit 4.3 to the Registration Statement on Form S-1 (File No.
33-26558) of Pollution Research and Control Corp., dated
January 17, 1989.)
4.4 Warrant to Purchase 7,500 shares of Common Stock issued to Frost
& Company P.S. on February 10, 1987. (Incorporated herein by
reference to Exhibit 10.2 to the Registration Statement on Form S-1
(File No. 33-26558) of Pollution Research and Control Corp., dated
January 17, 1989.)
4.5 Stock Option Agreement, dated May 28, 1991, between Pollution
Research and Control Corp. and Lee Sion. (Incorporated herein by
reference to Exhibit 10.14 to the Transition Report on Form 10-K
for the transition period ended June 30, 1991.)
4.6 Stock Option Agreement, dated May 28, 1991, between Pollution
Research and Control Corp. and Albert E. Gosselin, Jr.
(Incorporated herein by reference to Exhibit 10.15 to the Transition
Report on Form 10-K for the transition period ended June 30,
1991.)
4.7 Stock Option Agreement, dated May 28, 1991, between Pollution
Research and Control Corp. and Gary L. Dudley. (Incorporated
herein by reference to Exhibit 10.13 to the Transition Report on
Form 10-K for the transition period ended June 30, 1991.)
4.8 Agreement, dated March 5, 1992, between Pollution Research
and Control Corp. and Lee Sion. (Incorporated herein by
reference to Exhibit 10.27 to the Annual Report on Form 10-K for
the fiscal year ended December 31, 1992.)
4.9 Warrant to Purchase 40,000 Shares of Common Stock of Pollution
Research and Control Corp., dated January 22, 1990, issued to
Marty Williams.
</TABLE>
23
<PAGE> 24
<TABLE>
<S> <C>
4.10 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of Marty Williams, dated effective June
6, 1994.
4.11 Warrant to Purchase 202,500 Shares of Common Stock of Pollution
Research and Control Corp., dated December 2, 1991, issued to
CSC Industries, Inc. and affiliated companies Pension Plans
Trust.
4.12 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of CSC Industries, Inc. and affiliated
companies Pension Plans Trust, dated effective June 6, 1994.
4.13 Warrant to Purchase 67,500 Shares of Common Stock of Pollution
Research and Control Corp., dated December 8, 1991, issued to
Richard M. Molinsky.
4.14 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of Richard M. Molinsky,
dated effective June 6, 1994.
4.15 Warrant to Purchase 135,000 Shares of Common Stock of Pollution
Research and Control Corp., dated December 11, 1991, issued to
Kingsley & Co. (formerly Global Environment Fund).
4.16 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of Kingsley & Co. (formerly Global
Environment Fund), dated effective June 6, 1994.
4.17 Warrant to Purchase 67,500 Shares of Common Stock of Pollution
Research and Control Corp., dated December 13, 1991, issued to
Robert Tantleff.
4.18 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of A. Robert Tantleff, dated effective
June 6, 1994.
4.19 Warrant to Purchase 101,250 Shares of Common Stock of
Pollution Research and Control Corp., dated December 16, 1991,
issued to Stanley Becker.
4.20 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of Stanley Becker, dated effective
June 6, 1994.
4.21 Warrant to Purchase 27,000 Shares of Common Stock of
Pollution Research and Control Corp., dated December 16, 1991,
issued to John Kilmartin.
4.22 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of John Kilmartin, dated effective June
6, 1994.
</TABLE>
24
<PAGE> 25
<TABLE>
<S> <C>
4.23 Warrant to Purchase 74,250 Shares of Common Stock of
Pollution Research and Control Corp., dated December 16, 1991,
issued to Bruce Lynch.
4.24 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of Bruce Lynch, dated effective June
6, 1994.
4.25 Warrant to Purchase 25,000 Shares of Common Stock of Pollution
Research and Control Corp. of Michael Young dated May 24, 1991.
4.26 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of Michael Young, dated effective June
6, 1994.
4.27 Warrant to Purchase 12,000 Shares of Common Stock of Pollution
Research and Control Corp. of Kennedy Capital Management dated
November 26, 1991.
4.28 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of Kennedy Capital Management, dated
effective June 6, 1994.
4.29 Pollution Control and Research Corp. Common Stock Purchase
Warrant for the Purchase of 60,000 Shares of The Equity Group
Inc. dated August 31, 1993.
4.30 Warrant to Purchase 7,500 Shares of Common Stock of Pollution
Research and Control Corp. of Stanley Becker dated November 8,
1993.
4.31 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of Stanley Becker, dated
effective June 6, 1994.
4.32 Warrant to Purchase 5,500 Shares of Common Stock of Pollution
Research and Control Corp. of Bruce Lynch dated November 8,
1993.
4.33 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of Bruce Lynch, dated effective June 6,
1994.
4.34 Warrant to Purchase 7,500 Shares of Common Stock of Pollution
Research and Control Corp. of Robert Tantleff dated November 8,
1993.
4.35 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of Robert Tantleff, dated
effective June 6, 1994.
4.36 Warrant to Purchase 5,000 Shares of Common Stock of Pollution
Research and Control Corp. of Edward G. Lowell dated November
8, 1993.
</TABLE>
25
<PAGE> 26
<TABLE>
<S> <C>
4.37 Option to Purchase 25,000 Shares of Common Stock of Pollution
Research and Control Corp. of Randy Foy dated as of July 4, 1994.
4.38 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of Frost and Company P.S., dated
effective February 9, 1992.
4.39 Amendment to Warrant to Purchase Common Stock of Pollution
Research and Control Corp. of Kial, Ltd., dated effective
January 9, 1992.
4.40 Option to Purchase 40,000 Shares of Common Stock of Pollution
Research and Control Corp. of Albert E. Gosselin, Jr.,
dated as of June 29, 1995.
4.41 Option to Purchase 20,000 Shares of Common Stock of Pollution
Research and Control Corp. of Cindy Gosselin dated as of
June 29, 1995.
4.42 Option to Purchase 20,000 Shares of Common Stock of Pollution
Research and Control Corp. of Barbara L. Gosselin dated as of
June 29, 1995.
4.43 Option to Purchase 20,000 Shares of Common Stock of Pollution
Research and Control Corp. of Gary L. Dudley dated as of
June 29, 1995.
4.44 Option to Purchase 20,000 Shares of Common Stock of Pollution
Research and Control Corp. of Marcia Smith dated as of
June 29, 1995.
4.45 Option to Purchase 20,000 Shares of Common Stock of Pollution
Research and Control Corp. of Craig E. Gosselin dated as of
June 29, 1995.
4.46 Option to Purchase 20,000 Shares of Common Stock of Pollution
Research and Control Corp. of Keith Gosselin dated as of
June 29, 1995.
4.47 Option to Purchase 10,000 Shares of Common Stock of Pollution
Research and Control Corp. of Mike Chu dated as of June 29,
1995.
4.48 Option to Purchase 10,000 Shares of Common Stock of Pollution
Research and Control Corp. of Kimberly Chiu dated as of
June 29, 1995.
4.49 Option to Purchase 5,000 Shares of Common Stock of Pollution
Research and Control Corp. of Tolly Smith dated as of
June 29, 1995.
4.50 Option to Purchase 25,000 Shares of Common Stock of Pollution
Research and Control Corp. of Randy Foy dated as of July 1,
1995.
4.51 Option to Purchase 200,000 Shares of Common Stock of Pollution
Research and Control Corp. of J. Paul Consulting Corp. dated
effective July 18, 1995.
5.0 Opinion and Consent of Patricia Cudd & Associates.
23.1 Consent of Patricia Cudd & Associates (included in Exhibit 5.0 hereto).
23.2 Consent of Greenberg & Jackson, an Accountancy Corporation,
independent auditors.
25.0 Power of Attorney (included on the signature page hereto).
</TABLE>
26
