<PAGE>
As filed with the Securities and Exchange Commission on March 20, 1998
Registration No. 333-45987
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3/A-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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RECYCLING INDUSTRIES, INC.
(Exact name of Registrant specified in charter)
COLORADO 42193
(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization) Classification Code Number)
9780 S. MERIDIAN BOULEVARD
SUITE 180
ENGLEWOOD, COLORADO 80112
84-1103445 (303) 790-7372
(I.R.S. Employer (Address, including zip code, and
Identification No.) telephone number, including area code, of
Registrant's principal executive offices)
THOMAS J. WIENS, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
9780 S. MERIDIAN BOULEVARD, SUITE 180
ENGLEWOOD, COLORADO 80112
(303) 790-7372
(Name, address and telephone number, including area code,
of agent for service)
Copies of communication, including all communication sent to
the agent for service, should be sent to:
RAYMOND L. FRIEDLOB, ESQ.
GERALD RASKIN, ESQ.
JOHN W. KELLOGG, ESQ.
FRIEDLOB SANDERSON RASKIN PAULSON & TOURTILLOTT, LLC
1400 GLENARM PLACE, SUITE 300
DENVER, COLORADO 80202
(303) 571-1400
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
March 20, 1998
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If the only securities being registered on this Form are to be 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 check the following box: /X/
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check this following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. /X/ Registration numbers 333-20289 and 333-16019.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
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Proposed maximum Proposed maximum
Amount to be offering price aggregate offering Amount of
Title of each class of securities to be registered registered per share (1) price (1) registration fee
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value 2,937,595 (6) $14,210,020 $ 4,208
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Common Stock Underlying Series D
Convertible Preferred Stock (2) 82,088 $5.58 458,051 135
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Common Stock Underlying Series E
Convertible Preferred Stock (2) 492,530 $5.58 2,748,317 811
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Common Stock Underlying Series F
Convertible Preferred Stock (2) 574,618 $5.58 3,206,368 946
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Common Stock Underlying Series G
Convertible Preferred Stock (2) 574,618 $5.58 3,206,368 946
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Common Stock Underlying Series H
Convertible Preferred Stock (2) 934,001 $5.58 5,211,726 1,537
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Common Stock Underlying Series I
Convertible Preferred Stock (2) 574,618 $5.58 3,206,368 946
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Common Stock Underlying Series G Warrants (2) 2,136,878 (3) 13,814,707 4,186
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Common Stock Underlying Series H Warrants (2) 283,333 $6.50 1,841,665 558
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Common Stock Underlying Series J Warrants (2) 727,083 (4) 4,624,377 1,401
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Common Stock Underlying Placement Agent's Warrants (2) 139,890 $2.75 384,698 117
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Common Stock Underlying Series K Warrants (2) 315,000 $5.57 1,754,550 518
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Common Stock Underlying Siena Capital Warrants (2) 650,000 $2.00 1,300,000 384
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Common Stock Underlying Subordinated Debt Warrants (2) 1,266,336 $ .01 12,664 4
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Common Stock Underlying Other Options and Warrants (2) 705,267 (5) 2,714,231 857
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TOTAL 58,694,110 17,554
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457, based upon the average of the bid and ask
prices of the Company's Common Stock as quoted on the NASDAQ
National Market on February 2, 1998.
(2) Plus such indeterminable number of shares of Common Stock as may
be issuable by reason of the anti-dilution provisions of such
warrants, options, or convertible preferred stock.
(3) Represents shares underlying 2,106,878 warrants each to acquire
one share of Common Stock for $6.50 and 30,000 warrants each to
acquire one share of Common Stock for $4.00 per share.
(4) Represents shares underlying 686,418 warrants each to acquire
one share of common stock for $6.50 and 40,665 warrants each to
acquire one share of common stock for $4.00.
(5) Represents shares underlying: (i) 180,000 warrants each to
purchase one share of Common Stock for $7.50; (ii) 53,600
warrants each to purchase one share of Common Stock for $5.00;
(iii) 26,667 warrants each to purchase one share of Common
Stock for $3.75; (iv) 20,000 warrants each to purchase one
share of Common Stock for $1.25; (v) 60,000 options, each to
purchase one share of Common Stock for $2.50; (vi) 128,000
warrants each to purchase one share of Common Stock for $1.56;
(vii) 13,000 warrants, each to purchase one share of Common
Stock for $2.75; (viii) 200,000 warrants each to purchase one
share of Common Stock for $2.50; and (ix) 12,000 options each to
purchase one share of Common Stock for $6.25; and (x) 12,000
options, each to purchase one share of Common Stock for $.90.
(6) Pursuant to Rules 457 and 429(b), represents 2,166,666 shares of
Common Stock being registered at a proposed maximum offering price per
share of $5.58, or an aggregate price of $12,089,966 and 770,929
shares of Common Stock with an aggregate offering price of
$2,120,054 being carried forward, along with the applicable
filing fee, from the Registrant's Registration Statement on
Form S-1, Commission File No. 333-16019. See Note (7), below.
(7) Pursuant to Rule 429(b): (i) 770,929 shares of Common Stock,
and 3,651,451 shares of Common Stock underlying warrants and options,
and the applicable filing fee of $7,520 are being carried forward from
the Registrant's Registration Statement on Form S-1, Commission File
No. 333-16019; and (ii) 20,000 shares of Common Stock underlying
warrants, and the applicable filing fee of $15 are being carried
forward from the Registrant's Registration Statement on Form S-1,
commission file No. 333-20289.
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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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
--------------------
THIS REGISTRATION STATEMENT CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 4 TO THE
REGISTRANT'S REGISTRATION STATEMENT ON FORM S-1, COMISSION FILE NO. 333-16019
AND REMOVES FROM REGISTRATION 4,936,550 SHARES OF COMMON STOCK, $.001 PAR VALUE
INCLUDED ON SUCH REGISTRATION STATEMENT AND POST-EFFECTIVE AMENDMENT NO. 1
TO THE REGISTRANT'S REGISTRATION STATEMENT ON FORM S-1, COMMISSION FILE
NO. 333-20289.
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<PAGE>
PROSPECTUS
RECYCLING INDUSTRIES, INC.
12,393,855 SHARES OF COMMON STOCK INCLUDING 3,232,473 SHARES UNDERLYING
CONVERTIBLE PREFERRED STOCK AND 6,223,787 SHARES UNDERLYING COMMON STOCK
PURCHASE WARRANTS AND OPTIONS
This Prospectus relates to the offer and sale of 12,393,855 shares
(the "Shares") of common stock, $.001 par value (the "Common Stock"), of
Recycling Industries, Inc., a Colorado corporation (the "Company"),
being offered by certain selling securityholders (the "Selling
Securityholders"). The Shares include 3,232,473 shares issuable upon
the conversion of the Company's outstanding shares of Series D, E, F, G,
H, and I Convertible Preferred Stock (collectively the "Convertible
Preferred Stock") and 6,223,787 shares of Common Stock issuable upon the
exercise of certain outstanding common stock purchase warrants and
options (collectively the "Warrants"). The Shares are being registered
pursuant to registration rights previously granted to the Selling
Securityholders. None of the shares of Convertible Preferred Stock or
Warrants are being registered.
The 2,937,595 Shares that are not underlying the Warrants or Convertible
Preferred Stock were issued pursuant to the exercise of outstanding options,
warrants or stock acquisition rights, or were issued to various persons in
private placements of the Company's securities.
The Convertible Preferred Stock is comprised of: (i) 10,000 shares
of Series D Convertible Preferred all of which shall be converted on April
7, 1999 into that number of shares of the Company's Common Stock having a
then market value of $500,000; (ii) 10,000 shares of Series E
Redeemable Convertible Preferred Stock ("Series E Preferred"), each share of
which is convertible into that number of shares of the Company's Common Stock
having market value at the time of conversion equal to $300 and is
redeemable by the Company at any time prior to conversion for $300 per share.
If not earlier redeemed or converted, all outstanding shares of Series
E Preferred shall automatically convert into shares of Common Stock on
December 5, 2000. (iii) 14,000 shares of Series F 6 1/2% Redeemable
Convertible Preferred Stock ("Series F Preferred"), each share of which is
convertible into that number of shares of the Company's Common Stock having
market value at the time of conversion equal to $250 and is redeemable by the
Company at any time prior to conversion for $250 per share. If not earlier
redeemed or converted, all outstanding shares of Series F Preferred
shall automatically convert into shares of Common Stock on December 5,
2000; (iv) 14,000 shares of Series G 6 1/2% Redeemable Convertible Preferred
Stock ("Series G Preferred"), each share of which is convertible into that
number of shares of the Company's Common Stock having market value at the
time of conversion equal to $250 and is redeemable by the Company at any
time prior to conversion for $250 per share. If not earlier redeemed or
converted, all outstanding shares of Series G Preferred shall automatically
convert into the greater of (1) that number of shares Common Stock having a
then market value of $3,500,000, or (2) that number of shares of Common
Stock equal to $3,500,000 divided by 2.5 times the market value of the
Common Stock immediately prior to the issuance of the Series G Preferred
shares of Common Stock on December 5, 2000; (v) 11,378 shares of Series H 6%
Secured Redeemable Convertible Preferred Stock ("Series H Preferred"),
each share of which is convertible into that number of shares of the
Company's Common Stock having market value at the time of conversion equal
to $500 and is redeemable by the Company at any time prior to conversion
for $500 per share. If not earlier redeemed or converted, all outstanding
shares of Series H Preferred shall automatically convert into shares of
Common Stock on December 5, 2000; and (vi) 10,000 shares of Series I
Redeemable Convertible Preferred Stock ("Series I Preferred"), each share
of which is convertible into that number of shares of the Company's Common
Stock having market value at the time of conversion equal to $350. If not
earlier redeemed or converted, all outstanding shares of Series H Preferred
shall automatically convert into shares of Common Stock on December 8, 1999.
The Warrants are comprised of: (i) 2,106,878 Series G Warrants, each
entitling the holder to purchase one share of Common Stock for $5.52,
exercisable until December 27, 1999, (ii) 30,000 Series G Warrants, each
entitling the holder to purchase one share of Common Stock for $4.00,
exercisable until December 27, 1999; (iii) 213,388 Series H Warrants, each
entitling the holder to purchase one share of Common Stock for $5.52,
exercisable until July 17, 1999; (iv) 69,945 Series H Warrants, each
entitling the holder to purchase one share of Common Stock for $5.52,
exercisable for three years after the exercise of the Placement Agent's
Warrants; (v) 686,418 Series J Warrants, each entitling the holder to
purchase one share of Common Stock for $5.52, exercisable until December 27,
1999; (vi) 40,665 Series J Warrants, each entitling the holder to purchase
one Share of Common Stock for $4.00, exercisable until December 27, 1999;
(vii)315,000 Series K Warrants, each entitling the holder to purchase one
share of Common Stock for $5.57; (viii) 65,445 Placement Agent's Warrants,
each entitling the holder to purchase two shares of Common Stock and one
Series H Warrant for $2.75, exercisable until January 31, 1999; (ix) 180,000
Caside Warrants, each entitling the holder to purchase one share of Common
Stock for $7.50, exercisable until January 5, 1998; (x) 53,600 Ally Capital
warrants, each entitling the holder to acquire one share of Common Stock for
$5.00, exercisable until November 3,1999; (xi) 650,000 Siena Capital
Warrants, each entitling the holder to purchase one share of Common Stock for
$2.00, exercisable until June 23, 2002; (xii) 1,266,366, Subordinated Debt
Warrants, each entitling the holder to purchase one share of Common Stock for
$.01, exercisable until December 4, 2005; (xiii) 26,667 Coast Warrants, each
entitling the holder to purchase one share of Common Stock for $3.75,
exercisable until August 4, 2001; (xiv) 128,000 Coast Warrants, each
entitling the holder to purchase one share of Common Stock for $1.56,
exercisable until April 6, 2002; (xv) 20,000 Nevada Recycling Warrants, each
entitling the holder to purchase one share of Common Stock for $1.25,
exercisable until January 4, 2004; (xvi) 20,000 Settondown Warrants, each
entitling the holder to purchase one share of common stock for $2.50,
exercisable until December 31, 1998; (xvii) 13,000 Levine warrants, each
entitling the holder to purchase one share of common stock for $2.75
exercisable until December 1, 2001; (xviii) 200,000 RWH warrants, each
entitling the holder to purchase one share of Common Stock for $2.50
exercisable until December 4, 2005; (xix) 40,000 options, each entitling the
holder to purchase one share of common stock at $2.50 per share; (xx) 12,000
options, each entitling the holder to purchase one share of common stock at
an exercise price of $6.25; and (xxi) 12,000 options, each entitling the
holder to purchase one share of common stock at an exercise price of $.90 per
share.
This Prospectus may be used by the Selling Securityholders to sell the
Shares and for the resale of the Shares received upon exercise of the
Warrants or the conversion of the Convertible Preferred Stock. The Company
will not receive any of the proceeds from the sale of the Shares by the
Selling Securityholders. The Company will, however, receive the net proceeds
from any exercise of the Warrants, as described under "Use of Proceeds." See
"Selling Securityholders."
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<PAGE>
THE DISTRIBUTION
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The distribution of the Shares by the Selling Securityholders may be
effected from time to time in one or more transactions (which may involve
block transactions) on the NASDAQ National Market or on any other exchange on
which the Common Stock may be traded, may be effected from time to time in
one or more transactions in the over-the-counter market, in privately-negotiated
transactions, or a combination of such methods of sale. Such sales will be
made at the market prices prevailing at the time of sale, at prices relating
to such prevailing market prices or at negotiated prices. The Selling
Securityholders may effect such transactions by selling the Shares to or
through broker/dealers who may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling
Securityholders or the purchasers of the Shares for whom the broker/dealer
acts as agent. Such compensation may be less than or in excess of customary
commissions. The Selling Securityholders and any broker/dealers who
participate in the distribution of the Shares may be deemed to be
underwriters, and any compensation received by them, including any profit on
their resale of such Shares, may be deemed to be underwriting discounts and
commissions under the Securities Act of 1933, as amended (the "Securities
Act"). Certain of the Selling Securityholders are market makers in the Common
Stock.
The Common Stock is listed on the NASDAQ National Market. On December 31,
1997, the closing price of the Common Stock on the NASDAQ National Market was
$6.00 per share.
Pursuant to agreements between the Company and the Selling Securityholders,
the Company has agreed to pay the expenses incurred in connection with the
registration of the Shares and the Company and certain of the Selling
Securityholders have agreed to indemnify each other against certain liabilities,
including liabilities under the Securities Act.
--------------------
SEE "RISK FACTORS" COMMENCING ON PAGE 11 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON
STOCK OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is March 20, 1998
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information 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 may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, NW, Room
1024, Washington, D.C. 20549; at the Commission's New York Regional Office, 7
World Trade Center, Suite 1300, New York, New York 10048; and at the
Commission's Chicago Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, NW, Washington, D.C.
20549, at prescribed rates. In addition, the Company files its reports, proxy
statements and certain other information with the Commission electronically
through the EDGAR System. Information filed via EDGAR may be obtained at the Web
site maintained by the Commission at http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act") with respect to the Common Stock offered hereby of which
this Prospectus constitutes a part. This Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and the
Common Stock, reference is hereby made to such Registration Statement, exhibits
and schedules. Any statements contained in this Prospectus as to the contents of
any contract or other document are not necessarily complete, and reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, each such
statement being qualified in all respects by such reference.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus the
following documents filed with the Commission:
1. The Company's Annual Report on Form 10-K/A for the year ended
September 30, 1997.
2. The Company's quarterly report on Form 10-Q for the quarter ended
December 31, 1997.
3. The Company's current report on Form 8-K filed December 22, 1997.
4. The Company's current report on Form 8-K filed December 24, 1997.
5. The Company's current report on Form 8-K filed December 31, 1997.
6. The Company's current report on Form 8-K/A filed February 11, 1998.
7. The description of the Company's Common Stock contained in a
Registration Statement on Form 8-A, as filed with the Commission on
June 28, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14,
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering made hereby shall be deemed incorporated by
reference in this Prospectus and to be a part hereof from the date of the filing
of such documents. See "Additional Information." Any statement contained in a
document incorporated or deemed to be incorporated herein by reference shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extend that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon request of any such person, a copy of any or all
of the foregoing documents incorporated herein by reference (other than exhibits
to such documents not specifically incorporated by reference). Written or
telephone requests for such documents should be directed to the Chief Financial
Officer of the Company at 9780 South Meridian Boulevard, Suite 180, Englewood,
Colorado 80112, telephone (303) 790-7372.
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<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN
THIS PROSPECTUS. THIS SUMMARY IS NECESSARILY INCOMPLETE AND SELECTIVE AND IS
QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION CONTAINED ELSEWHERE
IN THIS PROSPECTUS, INCLUDING THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN.
Certain statements contained in this summary, elsewhere in this Prospectus
and in the documents incorporated by reference herein, constitute "forward
looking statements" within the meaning of Section 27A of the Securities Act, as
amended, and Section 21E of the Exchange Act, as amended. These forward-looking
statements can be identified by the use of predictive, future-tense or forward
looking terminology, such as "believes," "anticipates," "expects," "estimates,"
"may," "will" or similar terms. Forward-looking statements also include
projections of financial performance, statements regarding management's plans
and objectives and statements concerning any assumption relating to the
foregoing. Certain important factors regarding the Company's business,
operations and competitive environment which may cause actual results to vary
materially from these forward-looking statements are discussed below under the
caption "Risk Factors."
THE COMPANY
Recycling Industries, Inc. is a full-service metals recycler primarily
engaged in the collection and processing of various ferrous and non-ferrous
metals for resale to domestic and foreign steel producers and other metals
producers and processors. The Company operates fifteen metals recycling
facilities in Nevada, Texas, Missouri, Iowa, Georgia, South Carolina, North
Carolina, Wisconsin, Illinois, and Virginia. The Company commenced its metals
recycling operations in May 1994 and has increased its revenues from
approximately $4.8 million for the year ended September 30, 1994 to $62.4
million for the year ended September 30, 1997.
The largest portion of the Company's operations involves the collection,
processing and sale of ferrous scrap, the primary raw material for mini-mill
steel producers who utilize electric arc furnace ("EAF") technology. The
increase in domestic EAF production from 14.9 million net tons (11.0% of total
domestic steel production) in 1966 to 44.0 million net tons (39.4% of total
domestic steel production) in 1996 has resulted in strong demand and prices for
processed ferrous scrap. According to industry reports, the anticipated
continuing increase in EAF production to an estimated 50.0 million net tons by
the year 2000 may cause ferrous scrap shortages, resulting in further increases
in processed ferrous scrap prices.
The Company is also engaged in the processing of non-ferrous materials such
as copper, aluminum and brass, which are sold to secondary smelters and other
non-ferrous metals processors. The Company's non-ferrous operations complement
its ferrous operations, as most unprocessed scrap contains ferrous and
nonferrous components which require separation in preparation for resale. The
lower cost of producing non-ferrous metals from scrap relative to the cost of
primary smelting has resulted in strong demand for processed non-ferrous scrap.
The Company's objective is to become one of the largest metals recyclers in
North America through targeted acquisitions of independent metals recyclers. The
Company seeks to capitalize on the opportunity presented by the growing demand
for processed ferrous scrap, the expanding markets created by the rapid
proliferation of new EAF operations and the availability of metals recycling
facilities. By pursuing a consolidation strategy within the metals recycling
industry, the Company believes that it can significantly enhance the competitive
position and profitability of the operations that it acquires through improved
managerial and financial resources. The Company also believes that geographic
diversity will reduce its vulnerability to the dynamics of any particular local
or regional market. Furthermore, as EAF capacity and demand for processed
ferrous scrap continue to increase, the Company believes that multi-regional and
national EAF operators such as Nucor Corporation, Birmingham Steel Corporation
and North Star Steel Co. will increasingly rely on suppliers who can provide a
dependable quantity and quality of processed scrap as well as a high degree of
service. The Company believes that it is the only metals recycler pursuing a
consolidation strategy on a national basis and therefore will be in an ideal
position to become a preferred supplier to major EAF operators.
The Company believes that there are over 3,000 independent metals recyclers
in North
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<PAGE>
America. Based upon reports published by the Institute for Scrap Recycling
Industries ("ISRI"), approximately 185 of these independent metals recyclers
operate heavy-duty automotive shredders, which constitute the primary equipment
used in processing large volumes of ferrous and non-ferrous scrap for sale to
steel and other metals producers. Because of the highly fragmented nature of the
industry, the Company believes that no single metals recycler has a significant
share of the national processed scrap market, although certain recyclers may
have a dominant share of their local or regional market. Similar to the ongoing
consolidation within the municipal solid waste industry, the metals recycling
industry has recently begun to experience local market consolidation due to: (i)
increasing capital requirements caused by more stringent environmental and
governmental regulations, and (ii) the exit of aging independent recyclers who
desire to sell closely-held businesses in the absence of a successor owner or
operator.
In implementing its acquisition strategy, the Company seeks to identify
potential acquisition targets with:
- dominant or strategic positions in local or regional markets;
- excess or underutilized capacity;
- the ability to supply an existing or planned metals production
facility, such as an EAF;
- access to rail, water or interstate highway transportation systems;
and
- either operational shredding equipment, the ability to supply the
Company's existing shredding equipment or adequate facilities to
permit the installation of such equipment.
By continuing to acquire facilities that meet these criteria, the Company
believes it can achieve rapid growth and expansion of its customer base.
An essential component of the Company's acquisition strategy is improving
the operating efficiency, output and capacity of each acquired facility by
targeting three phases of the Company's operations: (i) the purchase of raw
scrap; (ii) the processing of raw scrap into saleable product; and (iii) the
sale of processed scrap. Each acquired facility is integrated into the Company's
operations through a comprehensive program that targets these operating phases
through the installation of management and financial reporting systems, the
implementation of expanded purchasing and marketing programs, the centralization
of operating functions to achieve economies of scale, selective reductions in
personnel and improved inventory and other financial controls. Where necessary,
the Company implements a capital improvements program to repair or replace
outdated and inefficient equipment and to improve the facility's scrap
processing operations and processed scrap output.
The Company's executive offices are located at 9780 South Meridian
Boulevard, Suite 180, Englewood, Colorado 80112, and its telephone number is
303-790-7372.
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<PAGE>
THE OFFERING
Common Stock Outstanding before the Offering...........18,006,974 shares (1)
Common Stock Offered by the Selling Securityholders....12,393,855 shares (2)
Common Stock Outstanding after exercise or
Conversion of Warrants and
Convertible Preferred Stock..........................27,463,234 shares (3)
Use of Proceeds........................................The net proceeds from the
.......................................................exercise of the Warrants,
.......................................................if any, will be used to
.......................................................complete future
.......................................................acquisitions and for
.......................................................working capital purposes
.......................................................See "Use of Proceeds."
NASDAQ National Market Symbol .........................RECY
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(1) Does not include Common Stock reserved for issuance as follows: (i)
6,331,027 shares issuable upon exercise of currently outstanding warrants;
(ii) 3,232,473 shares issuable upon conversion of currently outstanding
Convertible Preferred Stock; (iii) 6,279,321 shares issuable upon exercise
of currently outstanding options; and (iv) shares reserved for additional
options to be granted under the Company's stock option plans.
(2) Includes 9,456,260 shares issuable upon exercise or conversion of Common
Stock Purchase, Warrants and Options, and Convertible Preferred Stock.
(3) The Company is not aware of any arrangements for the exercise of the
Warrants and there is no assurance that all or any of the outstanding
Warrants will be exercised.
-10-
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS,
AS WELL AS THE OTHER INFORMATION SET FORTH IN THIS PROSPECTUS, BEFORE MAKING AN
INVESTMENT IN THE COMMON STOCK.
ACCUMULATED DEFICIT AND NET LOSSES
At September 30, 1997, the Company's total accumulated deficit was
approximately $10.7 million, compared to a deficit of approximately $11.4
million at September 30, 1996. The Company had net income of $1.1 million for
the year ended September 30, 1997, compared to a net loss of $3.0 million for
the year ended September 30, 1996. There can be no assurance that the Company
will be able to operate profitably on a consistent basis.
SIGNIFICANT INDEBTEDNESS
At September 30, 1997, the Company had outstanding approximately $29.5
million of long-term indebtedness and approximately $3.3 million of short-term
indebtedness (all of which is secured by substantially all of its operating
assets) and trade payables of approximately $3.1 million. As discussed under
the caption "Recent Developments," below, in connection with the Company's
acquisition of six facilities in December 1997, the Company's total indebtedness
increased to $152.3 million, $3.3 million of which is short-term. While funds
generated by the Company's operating subsidiaries have been sufficient to meet
its debt service obligations, the Company's ability to continue meeting its debt
service obligations will depend on its ability to generate sufficient cash from
its operations
LIMITED CASH FLOW AND NEED FOR ADDITIONAL CAPITAL
The Company has limited cash flow from its operations and continues to seek
additional capital from time to time. If the Warrants are exercised, which is
unlikely unless the market price of the Company's common stock increases
substantially, the net proceeds will be used by the Company for working capital
and future acquisitions. The Company will have to obtain additional capital
either through debt or equity financing in order to continue its acquisition
strategy. There can be no assurance that the Company will be able to obtain such
financing on terms acceptable to the Company.
LIMITED COMBINED OPERATING HISTORY
The Company commenced its metals recycling operations upon the acquisition
of its Nevada facility in May 1994. Prior to May 1994, the Company generated
operating losses and negative cash flow as a development stage enterprise
pursuing the development of technology to recycle municipal solid waste (the
"MSW Technology"). Since May 1994, the Company has acquired metals recycling
facilities in Nevada, Texas, Missouri, Iowa, Georgia, South Carolina, North
Carolina, Wisconsin, Illinois, and Virginia. The Company has only a limited
combined operating history for its current facilities and has been unable to
consistently generate net income and cash flow from these facilities. There can
be no assurance that the Company's existing operations, or those acquired in any
future acquisition, will generate sufficient cash flow to fund the future
operations of the Company. See "Use of Proceeds."
RISKS RELATED TO THE COMPANY'S ACQUISITION STRATEGY
The Company's objective is to increase its revenues and earnings and expand
the markets it serves through the acquisition of additional metals recycling
facilities. There can be no assurance that the Company will be able to identify,
acquire or profitably manage additional facilities or successfully integrate
their operations without substantial costs, delays or other unanticipated
problems. There can be no assurance that acquired companies will achieve sales
and profitability that justify the Company's investment. Acquisitions involve a
number of risks, which may include: adverse short-term effects on the Company's
reported operating results and cash flows; diversion of management's attention;
dependence on retaining, hiring and training key personnel; risks associated
with environmental or legal liabilities; and the effects of amortization of
acquired intangible assets, such as goodwill. Some of these risks could have a
material adverse effect on the Company's operations and financial performance.
As the Company continues to expand, the Company will be required to supplement
its current management team in order to effectively manage the acquired entities
and successfully implement its acquisition and operating strategies.
MARKET CONSIDERATIONS
Sales prices for prepared scrap metal are cyclical in nature and are
subject to local, national and international economic conditions. While recent
increases in demand have resulted in strong sales prices for prepared ferrous
scrap, the Company's operating results are dependent upon the strength of the
national economy and, in particular, the domestic steel industry. A future
downturn in the economy or in steel production could adversely affect the
performance of the Company. The demand for processed ferrous and non-ferrous
scrap is subject to general economic, industry and market-specific conditions
beyond the Company's control which may result in periodic fluctuations in the
sales prices of the Company's products. Although the Company seeks to maintain
its operating margins by adjusting the purchase price for raw ferrous scrap in
response to changing sales prices for prepared ferrous scrap, its ability to
maintain these margins during periods of falling prices may be limited by the
adverse impact of lower prices on the available supply of raw ferrous scrap. The
Company is unable to hedge against changes in ferrous scrap prices and attempts
to minimize this risk by maintaining low inventory levels of raw and processed
scrap and by establishing firm prices with its larger customers at the beginning
of each month.
-11-
<PAGE>
DEPENDENCE ON KEY CUSTOMERS
Each of the Company's facilities is economically dependent on a small
number of significant customers. Three of the Company's customers, The David J.
Joseph Company, John Deere, and Aceros D.M.,S.A. de C.V., accounted for
approximately 42% of the Company's revenues (19%, 12%, and 11% respectively)
during the year ended September 30, 1997. Four of the Company's customers,
Pacific States Cast Iron & Pipe Company, The David J. Joseph Company, Alpert &
Alpert Company and Aceros D.M., S.A. de C.V., accounted for approximately 53% of
the Company's revenues (9.6%, 22.5%, 5.6% and 15.4%, respectively) for the year
ended September 30, 1996. The loss of any one of these customers would have a
material adverse effect on the Company's business.
COMPETITION
The metals recycling business is highly competitive and subject to
significant changes in market conditions. Certain of the Company's competitors
have substantially greater financial, marketing and other resources. There can
be no assurance that the Company will be able to obtain its desired market share
or compete effectively in its markets.
ENVIRONMENTAL MATTERS
Compliance with state and federal environmental laws is a significant
factor in the metals recycling industry. Certain raw materials handled,
processed and disposed of in the metals recycling industry, such as automobiles
and appliances, may contain substances which are subject to a variety of
federal, state and local governmental regulations concerning the discharge of
hazardous materials into the environment. The Company has adopted standards and
policies for accepting raw materials designed to ensure compliance with
applicable environmental regulations. The Company's management does not believe
that the costs associated with environmental compliance will have a material
adverse impact on the Company.
RELIANCE ON KEY PERSONNEL
The Company's operations are dependent on a limited number of key
personnel, including the Company's Chairman and Chief Executive Officer,
Thomas J. Wiens. The Company has entered into an employment agreement with
Mr. Wiens and has obtained a key-man life insurance policy in the amount of
$500,000 for Mr. Wiens.
CONTROL BY PRINCIPAL SHAREHOLDER AND ANTI-TAKEOVER PROVISION
As of the date of this Prospectus, Thomas J. Wiens, the Company's Chairman
and Chief Executive Officer, beneficially owns 2,284,103 shares of the Company's
Common Stock, representing approximately 12.7% of the issued and outstanding
shares.
The Company's Amended and Restated Articles of Incorporation contain
certain provisions which may inhibit a change of control of the Company.
These include scaled voting provisions that, upon a determination by the
Company's Board of Directors, may limit the voting rights of holders of more
than 10% of the Company's outstanding Common Stock. These provisions may
discourage a party from making a tender offer or otherwise attempting to take
control of the Company. As of the date of this Prospectus, the Company's
Board of Directors has not implemented the scaled voting provisions. The
Company's Amended and Restated Articles of Incorporation also authorize the
issuance of 10,000,000 shares of preferred stock, the terms of which are to
be determined by the Board of Directors at the time of issuance. The ability
to issue preferred stock could be used by the Board as a means for resisting
a change of control of the Company and may be considered an "anti-takeover"
device.
-12-
<PAGE>
RISK OF SUBSTANTIAL FUTURE DILUTION
The Company has outstanding convertible preferred stock, options and
warrants to acquire an aggregate of 15,842,821 shares of the Company's Common
Stock, substantially all of which have exercise prices ranging from .01 to $5.52
per share and expire during fiscal years 1998 through 2005. In addition,
Warrants to purchase an aggregate of 4,423,489 shares of Common Stock have
adjustment provisions providing for reduction of their exercise prices in the
event that the Company fails to maintain the registration under the Securities
Act of the underlying shares of Common Stock for specified time frames. The
conversion of the preferred stock or the exercise of such options and warrants
could have a substantial dilutive effect upon the purchasers of shares of Common
Stock offered by this Prospectus.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of the Offering, the Company will have approximately
15,840,307 million shares of Common Stock outstanding that will be eligible for
sale pursuant to Rule 144 under the Securities Act. The utilization of Rule 144
and the exercise of registration rights by the holders of these shares will
increase substantially the number of shares available for sale in the public
markets and may have an adverse impact on the market price of the Common Stock.
USE OF PROCEEDS
It is not likely that any outstanding Warrants will be exercised unless the
market price of the Common Stock increases significantly. Alternatively, the
Company may lower the exercise price of the Warrants to below the current market
price, thereby encouraging their exercise. If the Warrants are exercised at
their current exercise prices, which is unlikely at this time, the Company will
receive net proceeds from such exercise of approximately $25.7 million. See
"Plan of Distribution." The proceeds will be used to finance future
acquisitions, and for working capital purposes.
POTENTIAL ACQUISITIONS
The Company has identified several independent metals recyclers as possible
acquisition targets and has held preliminary acquisition discussions with
certain of these companies. The consummation of any of these acquisitions is
subject to a number of material contingencies, including negotiation of
definitive acquisition terms, obtaining sufficient financing to complete the
acquisition and completion of the Company's due diligence related to the
acquisition.
In addition to the proceeds from the exercise of the Warrants, the Company
proposes to fund these acquisitions through one or a combination of the
following: (i) issuing Common Stock or convertible securities of the Company;
(ii) issuing subordinated debt instruments; (iii) through asset based secured
lending arrangements; or (vi) through seller financing arrangements. As of the
date of this Prospectus, the Company has not received commitments to provide
financing for any proposed acquisition.
-13-
<PAGE>
RECENT DEVELOPMENTS
ACQUISITIONS OF ADDITIONAL SCRAP METAL PROCESSING FACILITIES
- ------------------------------------------------------------
On December 5, 1997 and December 8, 1997, Recycling Industries, Inc. (the
"Company") completed the following six acquisitions:
ACQUISITION OF THE ASSETS OF GROSSMAN BROTHERS COMPANY AND MILWAUKEE METAL
BRIQUETTING CO., INC.
On December 5, 1997, Recycling Industries of Wisconsin, Inc., a
wholly-owned subsidiary of the Company, acquired substantially all of the scrap
metals recycling assets and business of Grossman Brothers Company, Inc. and
Milwaukee Metal Briquetting Co., Inc. (collectively "Grossman"). Grossman was a
privately held metals recycler with operations in the Milwaukee, Wisconsin area.
The assets acquired from Grossman consist of heavy equipment, tools and
rolling stock used in the business of recycling ferrous and non-ferrous metals.
The Company is leasing, with an option to purchase, the real property, buildings
and leasehold improvements used in the metals recycling business.
The total purchase price for Grossman was $3,987,000, comprised of
$3,727,000 of cash and the assumption of $260,000 of Grossman's liabilities. The
purchase price was financed, in part, from the proceeds of the Senior Secured
Credit Facility, Subordinated Notes and Sale of Common Stock described below.
The purchase price was determined through arm's length negotiations and based
upon an independent appraisal.
The Company will continue the metals recycling operations of Grossman.
ACQUISITION OF THE ASSETS OF CENTRAL METALS COMPANY, INC.
On December 5, 1997, Recycling Industries of Atlanta, Inc., a
wholly-owned subsidiary of the Company, acquired substantially all of the scrap
metals recycling assets and business of Central Metals Company, Inc.
("Central"), a privately held metals recycler with operations in the Atlanta,
Georgia area.
The assets acquired from Central consist of heavy equipment, tools and
rolling stock used in the business of recycling ferrous and non-ferrous metals.
The real property and buildings owned and used by Central in the metals
recycling business have been placed into escrow and are being leased by the
Company until Central can provide clear title to these assets, at which time the
Company will complete the purchase of the real property and buildings. The
Company is leasing certain equipment used in the metals recycling business from
an affiliate of Central.
The total purchase price for Central was $30,979,000, comprised of
$20,679,000 of cash and 800,000 shares of the Company's common stock, $.001 par
value per share (the "Common Stock") having an agreed value of $12.50 per share
or $10,000,000. The Company also assumed $300,000 of Central's liabilities.
The Company has guaranteed that the aggregate market value of the
800,000 shares of Common Stock issued to Central will be at least $10,000,000 on
December 4, 1999. If the market value of the Common Stock is less than
$10,000,000, the Company will issue shares of Common Stock to Central having a
market value equal to the difference between $10,000,000 and the market value of
the 800,000 shares of Common Stock initially issued to Central.
In connection with the acquisition, Central was issued warrants to
acquire up to 200,000 shares of the Company's common stock for $15.00 per share,
exercisable upon satisfaction of certain financial performance conditions
related to the operations of Recycling Industries of Atlanta, Inc. (the
"Contingent Warrants"). The exercise price per share of the Contingent Warrants
is subject to adjustment at the time of exercise so that the aggregate spread
between the exercise price of all Contingent Warrants and the market value of
the Common Stock received upon exercise of the Contingent Warrants is not less
than $1,000,000. The Company also granted "piggyback" registration rights to the
holders of the Contingent Warrants with respect to the shares of Common Stock
received upon their exercise.
The cash portion of the purchase price was financed, in part, from the
proceeds of the Senior Secured Credit Facility, Subordinated Notes and Sale of
Common Stock described below. The purchase price was determined through arm's
length negotiations and based upon an independent appraisal.
The Company will continue the metals recycling operations of Central.
-14-
<PAGE>
ACQUISITION OF THE ASSETS OF MONEY POINT LAND HOLDING CORPORATION AND MONEY
POINT DIAMOND CORPORATION
On December 5, 1997, Recycling Industries of Chesapeake, Inc., a
wholly-owned subsidiary of the Company, acquired substantially all of the scrap
metals recycling assets and business of Money Point Land Holding Corporation and
Money Point Diamond Corporation (collectively "Money Point"). Money Point was a
privately held metals recycler with operations in the Chesapeake, Virginia area.
The assets acquired from Money Point consist of heavy equipment, tools
and rolling stock used in the business of recycling ferrous and non-ferrous
metals. The Company also purchased from Money Point certain real property,
buildings and leasehold improvements used in the metals recycling business.
The total purchase price for Money Point was $19,900,000, comprised of
$16,900,000 of cash and 10,000 shares of the Company's Series E Redeemable
Convertible Preferred Stock (the "Series E Preferred") having a stated value of
$3,000,000.
The cash portion of the purchase price was financed, in part, from the
proceeds of the Senior Secured Credit Facility, Subordinated Notes and Sale of
Common Stock described below. The purchase price was determined through arm's
length negotiations and based upon an independent appraisal.
If not earlier redeemed or converted, on December 5, 2000, the Series E
Preferred will automatically convert into that number of shares of Common Stock
having an aggregate market value on the date of conversion of not less than
$3,000,000. Unless Money Point elects to retain the shares of Common Stock
received upon conversion of the Series E Preferred (the "Series E Conversion
Shares"), the Company will assist Money Point in selling the Series E Conversion
Shares on or before January 4, 2001. If the sale of the Series E Conversion
Shares yields net proceeds of less than $3,000,000, the Company will pay the
difference to Money Point. The Company has granted "piggyback" registration
rights to the holder of the Series E Preferred with respect to the Series E
Conversion Shares.
The Company will continue the metals recycling operations of Money
Point.
ACQUISITION OF WM. LANS SONS' CO., INC.
On December 8, 1997, the Company acquired from Bertram Lans, Bruce Lans
and Scott Lans all of the issued and outstanding capital stock of Wm. Lans Sons'
Co., Inc. ("Lans"), a privately held metals recycler with operations in the
South Beloit, Illinois, area.
The assets owned by Lans consist of heavy equipment, tools and rolling
stock used in the business of recycling ferrous and non-ferrous metals. The
Company also purchased from an affiliate of Lans certain real property,
buildings and leasehold improvements used in the metals recycling business.
The total purchase price for Lans was $25,500,000, comprised of
$22,000,000 of cash and 10,000 shares of the Company's Series I 8% Redeemable
Convertible Preferred Stock (the "Series I Preferred") having a stated value of
$3,500,000.
The cash portion of the purchase price was financed, in part, from the
proceeds of the Senior Secured Credit Facility, Subordinated Notes and sale of
Common Stock described below. The purchase price was determined through arm's
length negotiations and based upon an independent appraisal.
If not earlier redeemed or converted, on December 8, 1999, the Series I
Preferred will automatically convert into that number of shares of Common Stock
having a market value on the date of conversion of not less than $3,500,000. The
Company has agreed to register on or before December 5, 2000 the shares of
Common Stock received upon conversion of the Series I Preferred.
The Company will continue the metals recycling operations of Lans.
-15-
<PAGE>
ACQUISITION OF THE ASSETS OF THE BRENNER COMPANIES, INC.
On December 5, 1997, Recycling Industries of Winston-Salem, Inc., a
wholly-owned subsidiary of the Company, acquired substantially all of the scrap
metals recycling assets and business of the Brenner Companies, Inc. ("Brenner"),
a privately held metals recycler with operations in the Winston-Salem, North
Carolina area.
The assets acquired from Brenner consist of heavy equipment, tools and
rolling stock used in the business of recycling ferrous and non-ferrous metals.
The Company also purchased from Brenner certain real property, buildings and
leasehold improvements used in the metals recycling business.
The total purchase price for the Brenner assets was $23,773,000,
comprised of $15,683,000 of cash, 14,000 shares of the Company's Series F 6 1/2%
Redeemable Convertible Preferred Stock (the "Series F Preferred") having a
stated value of $3,500,000, 14,000 shares of the Company's Series G 6 1/2%
Redeemable Convertible Preferred Stock (the "Series G Preferred") having a
stated value of $3,500,000 and the assumption of $1,090,000 of Brenner's
deferred compensation liabilities.
The cash portion of the purchase price was financed, in part, from the
proceeds of the Senior Secured Credit Facility, Subordinated Notes and Sale of
Common Stock described below. The purchase price was determined through arm's
length negotiations and based upon an independent appraisal.
If not earlier redeemed or converted, on December 5, 2000, the Series F
Preferred will automatically convert into that number of shares of Common Stock
having an aggregate market value on the date of conversion of not less than
$3,500,000. Brenner has the right to require the Company to find a purchaser of
the shares of common stock received upon conversion of the Series F Preferred
(the "Series F Conversion Shares") on or before December 5, 2000. If the sale of
the Series F Conversion Shares yields net proceeds of less than $3,500,000, the
Company will pay the difference to Brenner. The Company has agreed to register
on or before December 5, 2000 the Series F Conversion Shares, unless such shares
may be sold by the holder thereof pursuant to Rule 144(k) promulgated under the
Securities Act of 1933, as amended (the "Securities Act") or any equivalent
provision then in effect.
If not earlier redeemed or converted, on December 5, 2000, the Series G
Preferred will automatically convert into that number of shares of Common Stock
having an aggregate market value on the date of conversion of not less than
$3,500,000. The Company has agreed to register on or before December 5, 2000 the
shares of Common Stock received upon conversion of the Series G Preferred,
unless such shares may be sold by the holder thereof pursuant to Rule 144(k)
promulgated under the Securities Act or any equivalent provision then in effect.
The Company will continue the metals recycling operations of Brenner.
ACQUISITION OF THE ASSETS OF UNITED METAL RECYCLERS, INC.
On December 5, 1997, Recycling Industries of Greensboro, Inc., a
wholly-owned subsidiary of the Company, acquired substantially all of the scrap
metals recycling assets and business of United Metal Recyclers, Inc. ("United"),
a privately held metals recycler with operations in the Kernersville, North
Carolina area.
The assets acquired from United consist of heavy equipment, tools and
rolling stock used in the business of recycling ferrous and non-ferrous metals.
The Company also purchased from United certain real property, buildings and
leasehold improvements used in the metals recycling business and United's 50%
interest in another metals recycling facility located in the Greensboro, North
Carolina area.
The total purchase price for the United assets was $41,664,000,
comprised of $35,975,000 of cash and 12,000 shares of the Company's Series H 6%
Secured Redeemable Convertible Preferred Stock having a stated value of
$5,689,000.
The cash portion of the purchase price was financed, in part, from the
proceeds of the Senior Secured Credit Facility, Subordinated Notes and Sale of
Common Stock described below. The purchase price was determined through arm's
length negotiations and based upon an independent appraisal.
If not earlier redeemed or converted, on December 5, 2000, the Series H
Preferred will automatically convert into that number of shares of Common Stock
having an aggregate market value on the date of conversion of not less than
$6,000,000. United has the right to require the Company to find a purchaser of
the shares of common stock received upon conversion of the Series H Preferred
(the "Series H Conversion Shares") on or before December 5, 2000. If the sale of
the Series H Conversion Shares yields net proceeds of less than $6,000,000, the
Company will pay the difference to United. The Company has agreed to register on
or before December 5, 2000 the Series H Conversion shares, unless such shares
may be sold by the holder thereof pursuant to Rule 144(k) promulgated under the
Securities Act or any equivalent provision then in effect.
The Company will continue the metals recycling operations of United.
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<PAGE>
FINANCING TRANSACTIONS
The acquisitions described above were financed, in part, by the
following:
SENIOR SECURED CREDIT FACILITY
On December 5, 1997, the Company and its subsidiaries entered into a
$150 million Senior Secured Credit facility with General Electric Capital
Corporation as agent for the lenders (the "Credit Facility"). The Credit
Facility is comprised of (i) a $45 million revolving credit facility; (ii) a $40
million term loan due December 5, 2003, with accrued interest and principal
payable quarterly; (iii) a $40 million term loan due on the earlier of December
5, 2005 or six months prior to the maturity of the Subordinated Notes discussed
below; and (iv) a $25 million acquisition line of credit due December 5, 2003.
The Credit Facility is secured by substantially all of the Company's assets.
Loans made under the Credit Facility bear interest at either (i) the
higher of (a) the Prime Rate quoted in the WALL STREET JOURNAL plus .75%, and
(b) the Federal Funds rate plus 50 basis points per annum plus .75% (either
rate the "Index Rate"), or (ii) at the option of the Registrant upon
satisfaction of certain conditions, the LIBOR rate plus 2.25% (the "LIBOR
Rate").
Interest on the loans is payable (i) monthly with respect to
interest being calculated by reference to the "Index Rate", or (ii) at the
end of each LIBOR period, but not less than quarterly, with respect to
interest being calculated by reference to the "LIBOR Rate".
Principal on the loans is payable quarterly.
SUBORDINATED NOTES
On December 5, 1997, the Company issued $60 million of 13% Senior
Subordinated Notes due 2005 to a group of investors including Sun America Life
Insurance Company. The Company issued to the purchasers of the Subordinated
Notes warrants to acquire an aggregate of 1,266,336 shares of Common Stock at
an exercise price of $.01 per share.
SALE OF COMMON STOCK
In connection with the Credit Facility and the issuance of the
Subordinated Notes, the Company sold 1,666,666 shares of its Common Stock for an
aggregate of $10 million to various accredited investors in a transaction exempt
from the registration requirements of the Securities Act.
STOCK OPTIONS
On December 3, 1997, the Company's Board of Directors adopted,
subject to shareholder approval, the 1998 Stock Option Plan which provides
for the grant of options to acquire an aggregate of up to 3,000,000 shares of
the Company's common stock to employees, officers and employee directors of
the Company (the "1998 Plan").
On December 30, 1997, the Compensation Committee of the Board of
Directors granted options to the Company's Chairman and Chief Executive
Officer, Thomas J. Wiens, to acquire an aggregate of 2.0 million shares of
Common Stock at an exercise price of $5.71 per share, including 200,000
shares under the 1998 Plan. Vesting of these options is subject to the
satisfaction by the Company of certain performance conditions.
-17-
<PAGE>
SELLING SECURITYHOLDERS
The following tables set forth the total number of Shares and the total
number of Shares assuming the conversion or exercise of all Convertible
Preferred Stock and Warrants owned by each of the Selling Securityholders and
registered hereunder. Except as indicated, the Selling Securityholders are
offering all of the shares of Common Stock owned by them or received by them
upon the exercise or conversion of the Warrants or Convertible Preferred Stock
and none of the Selling Securityholders is the beneficial owner of one percent
or more of the outstanding shares of Common Stock (including the Shares offered
hereby).
Because the Selling Securityholders may offer all or part of the Shares or
the shares of Common Stock received upon conversion or exercise of the
Convertible Preferred Stock and/or Warrants, which they hold pursuant to the
Offering contemplated by this Prospectus, and because their offering is not
being underwritten on a firm commitment basis, no estimate can be given as to
the amount of Convertible Preferred Stock and/or Warrants that will be held upon
termination of this offering. The Shares and the shares of Common Stock received
upon conversion or exercise of the Convertible Preferred Stock and/or Warrants
offered by this Prospectus may be offered from time to time by the Selling
Securityholders named below.
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<PAGE>
TABLE I - SHARES AND SHARES UNDERLYING CONVERTIBLE PREFERRED STOCK AND
WARRANTS TO BE REGISTERED AND OFFERED BY THE SELLING SECURITYHOLDERS
<TABLE>
<CAPTION>
PLACEMENT
SERIES G SERIES H SERIES J AGENT'S TABLE I
SELLING SECURITYHOLDER SHARES WARRANTS WARRANTS WARRANTS WARRANTS TOTALS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Addlestone, Nathan S. 0
Administrative Nominees, Inc. 15,000 15,000
Ahrens, Felice J. IRA 2,000 2,000
Ahrens, Robert K. IRA 10,000 10,000
Ally Capital Corporation 0
Alpert, Larry 1,000 1,000
Alpin, Jason P. 2,000 2,000
AMCO Capital Reserves & Investments SA 5,000 5,000
Anchor National Life Insurance Company 0
Anderson, Roger 2,000 2,000
Anglo Metal, Inc. 127,693 127,693
Arel Company, The 9,000 9,000
Arjomond, Amin 6,000 6,000
Avalon Total Return Fund, L.P. 200,000 200,000
Balle, Michael 8,400 8,400
Bank of Montreal 250,000 250,000
Barnett, Beatrice 3,000 3,000
Beach Capital Reserves, Inc. 2,000 2,000
Becker, Beverly (Joint Tenant with 6,000 6,000
Becker, Marshall M. 123,113 40,002 163,115
Becker, Stanley 148,514 148,514
Becker, Stanley IRA 149,145 149,145
Benenson Capital Company, The 28,200 28,200
Benjamin, Dr. Samuel E. 12,000 12,000
Benjamin, Dr. Samuel E. IRA 212,400 212,400
Benson, Dana 10,000 10,000
Berlijn, Susan 0
Besen, Michael 3,000 3,000
Blitstein, Murray IRA 18,000 18,000
Bloom, Richard Private 30,000 30,000
Boulter, David 6,000 6,000
Bree, Robert L. 6,000 6,000
Brenner Companies, Inc. 0
Brook, Carol and Gordon 20,000 27,600 18,479 66,079
Byrne, E. Blake 12,000 12,000
Caside Associates 36,000 36,000
Cattonar, Ray 3,218 6,436 9,654
Chemco, Inc. (1) 12,000 12,000
Clapp, Clarence P. and Doris E. 40,000 36,747 76,747
Claps, Vito & Maria 2,000 2,000
Coast Business Credit 0
Cohen, Saul 6,600 6,600
Combermere Corp. BSSC Master Defined 0
Contribution Profit Sharing Plan 36,000 36,000
Cooke, Robert and Brenda 10,000 10,000
CPR (USA) Inc. 0
Dehen, Susan L. 2,000 2,000
Detanna, Lisa 2,000 2,000
Doherty, George O. 6,000 6,000
Dushey, Saul 12,000 12,000
Dyke, Kermit 30,000 27,632 57,632
Endowment Restart, LLC 0
Epinal Corporation 10,800 10,800
Eshman, Mark and Jill, Co-Trustees 15,000 15,000
Falsetti, Wendi & Kymberleigh 700 700
Feldman, Jeffrey T. 10,000 10,000
First SunAmerica Life Insurance Company 0
Friedland, Clifford A. 12,000 12,000
FSC Corp. 0
Gale, James C 17,600 17,600
Gay, Robert J. IRA 18,000 18,000
Geertz, Woodrow M. 16,200 16,200
Gelin, Peter 0
General Electric Capital Corporation 833,333 833,333
Gironta, Michael 10,000 10,000
Glass, Eva D. 4,000 4,000
Glassman, Beth IRA 6,000 6,000
Glassman, Leonard 11,000 11,000
Glassman, Steven 12,000 12,000
Glassman, Steven IRA 6,000 6,000
Global Asset Allocation Consultants 51,663 51,663
Goldberg, Steven L. 6,000 6,000
Goldberg, Ted M. 18,000 18,000
Goldsmith, Mark D. 250 500 750
Greenberg, Charles L. and Donna 17,600 17,600
Grills, Ralph J. Jr. 72,000 72,000
Gruntal & Co. 9,680 9,680
Harborside Associates 137,400 137,400
Harff, Christopher P. 5,000 5,000
Heptagon Investments Ltd. 16,000 16,000
Hest, Lional G. and Amy 10,000 10,000
Holstein, Barrie and Scott 9,000 9,000
Homiak, Michael J. 4,599 4,599
Hughes, James C. III TTEE 9,000 9,000
Imperial Capital, LLC 15,500 15,500
Imperial Capital Group, LLC 34,333 34,333
Imprimis Investors, LLC 0
Iovine, Vincent J. 1,187 2,749 2,374 6,310
Jack Levin Foundation 0
John Latshaw Foundation 0
John M. Walsh Securities C. 20,000 20,000
Johnson, Howard 3,000 3,000
Johnson, Kim 2,739 2,739
Jurman, Edward 1,000 1,000
Kantor, Robert 27,600 27,600
Kaplowitz, Gary 9,000 9,000
Kilmartin, John D. 18,000 18,000
Kim, Charles IRA 15,000 15,000
Kim, Y.J. Trust 72,000 72,000
Kinston Pathology PA Profit 9,000 9,000
Koch Industries, Inc. 100,000 100,000
Korman, Lance Stuart 6,000 6,000
Kreissman, James G. 12,000 12,000
Kreissman, Robert H. 12,000 12,000
Krieger, Robert S. 6,000 6,000
KTB Enterprises 3,000 3,000
Lans, Bertram 0
Lans, Bruce 0
Lans, Scott 0
Lattanzio, Steve 5,000 4,564 9,564
Latter, David 12,000 12,000
Lauratex Fabrics, Inc. Pension Plan 6,000 6,000
Lee, Dr. Tzium Shou IRA 115,800 115,800
Leotta, Jospeh B. 10,000 9,218 40,000 59,218
Leshaw, Dale & Gail 10,000 10,000
Levin, Mark Loren 20,000 20,000
Levine, Hal 0
Levine, Kenneth R. 123,112 123,112
Levitin, Eli 6,000 6,000
Liberty View Plus Fund 0
Libsohn, David & Mitzi 1,000 1,000
Lloyd I. Miller Trust C 30,000 30,000
Lloyd Miller D2 Mil Fam II 30,000 30,000
Lubliner, Jerry 6,000 6,000
Lyons, James V. IRA 11,000 11,000
Malinow, Gerald 5,000 5,000
Marcil, Peter 7,500 7,500
Marigold Corp. 3,000 3,000
Martis, Mark C. and Zambriski, Pamela 20,000 20,000
McConnaughy, J.E., Jr. 246,600 246,600
Merhab, Marlan M. 2,000 2,000
Metwalli, Ahmed 10,000 10,000
Miller, Ronald L. Jr. 5,000 5,000
Mincey, John 18,260 36,520 54,780
Mind Works Capital Corp. 79,200 79,200
Misukanis, Jerome B. (2) 0
Money Point Diamond Corporation 0
Monness, Crespi, Hardt & Co., Inc. 0
Morales, Ibra 12,000 12,000
Morgens Waterfall Income Partners 0
Moysak, Thomas J. 293 586 879
Mussoni, Ann-Marie E. 2,000 2,000
Nathanson, Barry F. 117,858 117,858
NCO Investors III, L.P. 60,000 60,000
Nevada Recycling Corporation 0
Nevo, Aviv 5,665 5,665
Northeast Securities, Inc. 5,231 14,129 10,462 29,822
Ong, Beale H. Pension Plan & Trust 18,000 18,000
O'Shea, John P. 30,000 30,000
Palomares, Bernabe P. IRA 23,000 23,000
Palomares, Elba B. IRA 18,000 18,000
Parsons, Frederick C. III, PA 18,000 18,000
Pellett Investments 7,164 7,164
Pellillo, Domenic IRA 3,000 3,000
Perrone, Stephen J. 292 4,582 584 5,458
Pius, Alan and Ann 2,000 2,000
Plost, Barry (3) 6,000 6,000
Popolow, Joseph 1,213 7,666 2,426 11,305
Prime Charter, Ltd. 0
Proctor, Edward 5,000 5,000
Prosperity Investments, Inc. 10,800 10,800
Pumphrey, Robert E. Jr. MD 18,000 18,000
Raitano, AJ 1,000 1,000
Raitano, Candace St. Peter 1,000 1,000
Raitano, Robert E. 300 300
Ramsdell Family Trust dtd 7/7/94 10,000 10,000
Ramsdell Irrevocable Trust 12/28/92 5,000 5,000
Raskin, Laura and Julian A. 6,000 6,000
Recycling Warrant Holdings, G.P. 0
Reese, Jason W. 30,000 30,000
Regal Finance & Holdings, SA 7,000 7,000
Restart Partner, LP 0
Restart Partners II, LP 0
Restart Partners III, LP 0
Restart Partners IV, LP 0
Restart Partners V, LP 0
River Investments & Holdings, Inc. 7,000 7,000
Romain, Gerald TTEE Profit Sharing Plan 5,000 5,000
Rosen, Keith 0
Rothstein, Allan P. 14,000 14,000
Rothstein, Stephen 5,000 5,000
Sablowsky, Robert 5,000 5,000
Schwartz, David W. 50,000 50,000
Settondown Capital International 0
Seymour Levin Foundation 0
Shepard, Christopher P. 5,000 5,000
Shiman, Stewart A. 18,421 18,421
Siena Capital Partners, L.P. 0
Silva, Rosalie and Jerry 30,000 10,000 40,000
Singer Children's Trust 40,000 40,000
Singer Children's Trust #2 40,000 40,000
Snavely, Wayne & Jacqualynne 40,000 40,000
Southern Medical Associates PA Money 33,000 33,000
Spann, Samuel Jr. 3,000 3,000
Steinberg, The Alan W., LP 40,000 40,000
Stern, Allen 9,000 9,000
SunAmerica Life Insurance Company 0
Sundlun, Stuart 1,200 1,200
Sundlun, Tracy Walter 10,800 10,800
Swaim, J. Roddy 5,000 5,000
Tellinger, Billye 0
The Jaguar Investment Group 11,000 11,000
Thomas, James Sr. IRA 45,000 45,000
UBS Mortgage Finance Inc. 200,000 200,000
United Metal Recyclers 0
Villani, Kevin 15,000 15,000
Walsh, John M. 1,000 1,000
Walsh, Michael J. 3,000 3,000
Walsh, Michael J. IRA 3,000 3,000
Wanas Investment Ltd. 60,000 60,000
Weinstein, Robert 3,520 3,520
Weinstock, Jerry 6,000 6,000
Weinstock, Shelley and Steven 6,000 6,000
Weissman Financial 363,636 363,636
Williams, Gibbs A. 10,000 9,230 19,230
Wittenstein, Frederick M. IRA 99,784 99,784
Wittenstein, Frederick M. Pension Plan 0
Wolfenson, Dr. Gilbert B. IRA 12,000 12,000
Wolfson Equities 54,000 54,000
Wood, Eugene W. IRA 8,000 8,000
Wooster, Randall 30,000 30,000
Worden, Andrew B. Retirement Plan 5,177 5,177
Wright, Dickerson 2,000 2,000
Wrigley Holdings, SA 30,000 35,000 65,000
-------------------------------------------------------------------------------------
TOTALS 2,937,595 2,136,878 283,333 727,083 139,890 6,224,779
======================================================================================
</TABLE>
1. Chemco, Inc. is controlled by Graydon H. Neher, a director of the
Company.
2. Mr. Misukanis is a director of the Company.
3. Mr. Plost is a director of the Company.
-19-
<PAGE>
TABLE II - SHARES AND SHARES UNDERLYING CONVERTIBLE PREFERRED STOCK AND
WARRANTS TO BE REGISTERED AND OFFERED BY THE SELLING SECURITYHOLDERS
<TABLE>
<CAPTION>
OTHER SHARES OWNED
TOTAL SUBORDINATED WARRANTS CONVERTIBLE AFTER
FROM DEBT AND PREFERRED TOTAL COMPLETION
SELLING SECURITYHOLDER TABLE I WARRANTS OPTIONS STOCK SHARES OF THE OFFER
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Addlestone, Nathan S. 0 41,298 41,298 0
Administrative Nominees, Inc. 15,000 15,000 0
Ahrens, Felice J. IRA 2,000 2,000 0
Ahrens, Robert K. IRA 10,000 10,000 0
Ally Capital Corporation 0 53,600 53,600 0
Alpert, Larry 1,000 1,000 0
Alpin, Jason P. 2,000 2,000 0
AMCO Reserves & Investments SA 5,000 5,000 0
Anchor National Life Insurance Company 0 52,764 52,764 0
Anderson, Roger 2,000 2,000 0
Anglo Metal, Inc. 127,693 127,693 0
Arel Company, The 9,000 9,000 0
Arjomond, Amin 6,000 6,000 0
Avalon Total Return Fund, L.P. 200,000 200,000 0
Balle, Michael 8,400 8,400 0
Bank of Montreal 250,000 316,584 566,584 0
Barnett, Beatrice 3,000 3,000 0
Beach Capital Reserves, Inc. 2,000 2,000 0
Becker, Beverly (Joint 6,000 6,000 0
Becker, Marshall M. 163,115 163,115 0
Becker, Stanley 148,514 148,514 0
Becker, Stanley IRA 149,145 149,145 0
Benenson Capital Company, The 28,200 28,200 0
Benjamin, Dr. Samuel E. 12,000 12,000 0
Benjamin, Dr. Samuel E. IRA 212,400 212,400 0
Benson, Dana 10,000 10,000 0
Berlijn, Susan 0 20,399 20,399 0
Besen, Michael 3,000 3,000 0
Blitstein, Murray IRA 18,000 18,000 0
Bloom, Richard Private 30,000 30,000 0
Boulter, David 6,000 6,000 0
Bree, Robert L. 6,000 6,000 0
Brenner Companies, Inc. 0 1,575,192 1,575,192 0
Brook, Carol and Gordon 66,079 66,079 0
Byrne, E. Blake 12,000 12,000 0
Caside Associates 36,000 180,000 216,000 0
Cattonar, Ray 9,654 9,654 0
Chemco, Inc. (1) 12,000 12,000 0
Clapp, Clarence P. and Doris E. 76,747 76,747 0
Claps, Vito & Maria 2,000 2,000 0
Coast Business Credit 0 154,667 154,667 0
Cohen, Saul 6,600 6,600 0
Combermere Corp. BSSC Master Defined
Contribution Profit Sharing Plan 36,000 36,000 0
Cooke, Robert and Brenda 10,000 10,000 0
CPR (USA) Inc. 0 14,774 14,774 0
Dehen, Susan L. 2,000 2,000 0
Detanna, Lisa 2,000 2,000 0
Doherty, George O. 6,000 6,000 0
Dushey, Saul 12,000 12,000 0
Dyke, Kermit 57,632 57,632 0
Endowment Restart, LLC 0 10,764 10,764 0
Epinal Corporation 10,800 10,800 0
Eshman, Mark and Jill, Co-Trustees 15,000 15,000 0
Falsetti, Wendi & Kymberleigh 700 700 0
Feldman, Jeffrey T. 10,000 10,000 0
First SunAmerica Life Insurance Company 0 52,764 52,764 0
Friedland, Clifford A. 12,000 12,000 0
FSC Corp. 0 185,714 185,714 0
Gale, James C. 17,600 17,600 0
Gay, Robert J. IRA 18,000 18,000 0
Geertz, Woodrow M. 16,200 16,200 0
Gelin, Peter J. 0 26,000 26,000 0
General Electric Capital Corporation 833,333 833,333 0
Gironta, Michael 10,000 10,000 0
Glass, Eva D. 4,000 4,000 0
Glassman, Beth IRA 6,000 6,000 0
Glassman, Leonard 11,000 11,000 0
Glassman, Steven 12,000 12,000 0
Glassman, Steven IRA 6,000 6,000 0
Global Asset Allocation Consultants 51,663 51,663 0
Goldberg, Steven L. 6,000 6,000 0
Goldberg, Ted M. 18,000 18,000 0
Goldsmith, Mark D. 750 750 0
Greenberg, Charles L. and Donna 17,600 17,600 0
Grills, Ralph J. Jr. 72,000 72,000 0
Gruntal & Co. 9,680 9,680 0
Harborside Associates 137,400 137,400 0
Harff, Christopher P. 5,000 5,000 0
Heptagon Investments Ltd. 16,000 16,000 0
Hest, Lionel G. and Amy 10,000 10,000 0
Holstein, Barrie and Scott 9,000 9,000 0
Homiak, Michael J. 4,599 4,599 0
Hughes, James C. III TTEE Profit 9,000 9,000 0
Imperial Capital, LLC 15,500 15,500 0
Imperial Capital Group, LLC 34,333 34,333 0
Imprimis Investors, LLC 0 63,317 63,317 0
Iovine, Vincent J. 6,310 6,310 0
Jack Levin Foundation 0 213,019 213,019 0
John Latshaw Foundation 0 0 0
John M. Walsh Securities C. 20,000 20,000 0
Johnson, Howard 3,000 3,000 0
Johnson, Kim 2,739 2,739 0
Jurman, Edward 1,000 1,000 0
Kantor, Robert 27,600 27,600 0
Kaplowitz, Gary 9,000 9,000 0
Kilmartin, John D. 18,000 18,000 0
Kim, Charles IRA 15,000 15,000 0
Kim, Y.J. Trust 72,000 72,000 0
Kinston Pathology PA Profit 9,000 9,000 0
Koch Industries, Inc. 100,000 63,317 163,317 0
Korman, Lance Stuart 6,000 6,000 0
Kreissman, James G. 12,000 12,000 0
Kreissman, Robert H. 12,000 12,000 0
Krieger, Robert S. 6,000 6,000 0
KTB Enterprises 3,000 3,000 0
Lans, Bertram 0 14,940 14,940 0
Lans, Bruce 0 279,839 279,839 0
Lans, Scott 0 279,839 279,839 0
Lattanzio, Steve 9,564 9,564 0
Latter, David 12,000 12,000 0
Lauratex Fabrics, Inc. Pension Plan 6,000 6,000 0
Lee, Dr. Tzium Shou IRA 115,800 115,800 0
Leotta, Jospeh B. 59,218 59,218 0
Leshaw, Dale & Gail 10,000 10,000 0
Levin, Mark Loren 20,000 20,000 0
Levine, Hal 0 13,000 13,000 0
Levine, Kenneth R. 123,112 123,112 0
Levitin, Eli 6,000 6,000 0
Liberty View Plus Fund 0 6,332 6,332 0
Libsohn, David & Mitzi 1,000 1,000 0
Lloyd I. Miller Trust C 30,000 30,000 0
Lloyd Miller D2 Mil Fam II 30,000 30,000 0
Lubliner, Jerry 6,000 6,000 0
Lyons, James V. IRA 11,000 11,000 0
Malinow, Gerald 5,000 5,000 0
Marcil, Peter 7,500 7,500 0
Marigold Corp. 3,000 3,000 0
Martis, Mark C. and Zambriski, Pamela 20,000 20,000 0
McConnaughy, J.E., Jr. 246,600 246,600 0
Merhab, Marlan M. 2,000 2,000 0
Metwalli, Ahmed 10,000 10,000 0
Miller, Ronald L. Jr. 5,000 5,000 0
Mincey, John 54,780 54,780 0
Mind Works Capital Corp. 79,200 79,200 0
Misukanis, Jerome B. (2) 0 12,000 12,000 0
Money Point Diamond Corporation 0 492,530 492,530 0
Monness, Crespi, Hardt & Co., Inc. 0 78,750 78,750 0
Morales, Ibra 12,000 12,000 0
Morgens Waterfall Income Partners 0 9,075 9,075 0
Moysak, Thomas J. 879 879 0
Mussoni, Ann-Marie E. 2,000 2,000 0
Nathanson, Barry F. 117,858 117,858 0
NCO Investors III, L.P. 60,000 60,000 0
Nevada Recycling Corporation 0 20,000 20,000 0
Nevo, Aviv 5,665 5,665 0
Northeast Securities, Inc. 29,822 29,822 0
Ong, Beale H. Pension Plan & Trust 18,000 18,000 0
O'Shea, John P. 30,000 30,000 0
Palomares, Bernabe P. IRA 23,000 23,000 0
Palomares, Elba B. IRA 18,000 18,000 0
Parsons, Frederick C. III, PA 18,000 18,000 0
Pellett Investments 7,164 7,164 0
Pellillo, Domenic IRA 3,000 3,000 0
Perrone, Stephen J. 5,458 5,458 0
Pius, Alan and Ann 2,000 2,000 0
Plost, Barry (3) 6,000 6,000 0
Popolow, Joseph 11,305 11,305 0
Prime Charter, Ltd. 0 236,250 236,250 0
Proctor, Edward 5,000 5,000 0
Prosperity Investments, Inc. 10,800 10,800 0
Pumphrey, Robert E. Jr. MD 18,000 18,000 0
Raitano, AJ 1,000 1,000 0
Raitano, Candace St. Peter 1,000 1,000 0
Raitano, Robert E. 300 300 0
Ramsdell Family Trust dtd 7/7/94 10,000 10,000 0
Ramsdell Irrevocable Trust 12/28/92 5,000 5,000 0
Raskin, Laura and Julian A. 6,000 6,000 0
Recycling Warrant Holdings, G.P. 200,000 200,000 0
Reese, Jason W. 30,000 30,000 0
Regal Finance & Holdings, SA 7,000 7,000 0
Restart Partner, LP 0 45,166 45,166 0
Restart Partners II, LP 0 52,975 52,975 0
Restart Partners III, LP 0 51,709 51,709 0
Restart Partners IV, LP 0 32,502 32,502 0
Restart Partners V, LP 0 8,864 8,864 0
River Investments & Holdings, Inc. 7,000 7,000 0
Romain, Gerald TTEE Profit Sharing Plan 5,000 5,000 0
Rosen, Keith 0 20,391 20,391 0
Rothstein, Allan P. 14,000 14,000 0
Rothstein, Stephen 5,000 5,000 0
Sablowsky, Robert 5,000 5,000 0
Schwartz, David W. 50,000 50,000 0
Settondown Capital International, Ltd. 0 20,000 20,000 0
Seymour Levin Foundation 0 212,937 212,937 0
Shepard, Christopher P. 5,000 5,000 0
Shiman, Stewart A. 18,421 18,421 0
Sienna Capital 0 464,286 464,286 0
Silva, Rosalie and Jerry 40,000 40,000 0
Singer Children's Trust 40,000 40,000 0
Singer Children's Trust #2 40,000 40,000 0
Snavely, Wayne & Jacqualynne 40,000 40,000 0
Southern Medical Associates PA 33,000 33,000 0
Spann, Samuel Jr. 3,000 3,000 0
Steinberg, The Alan W., LP 40,000 40,000 0
Stern, Allen 9,000 9,000 0
SunAmerica Life Insurance Company 0 369,348 369,348 0
Sundlun, Stuart 1,200 1,200 0
Sundlun, Tracy Walter 10,800 10,800 0
Swaim, J. Roddy 5,000 5,000 0
Tellinger, Billye 0 26,000 26,000 0
The Jaguar Investment Group 11,000 11,000 0
Thomas, James Sr. IRA 45,000 45,000 0
UBS Mortgage Finance Inc. 200,000 116,081 316,081 0
United Metal Recyclers 0 82,088 82,088 0
Villani, Kevin 15,000 15,000 0
Walsh, John M. 1,000 1,000 0
Walsh, Michael J. 3,000 3,000 0
Walsh, Michael J. IRA 3,000 3,000 0
Wanas Investment Ltd. 60,000 60,000 0
Weinstein, Robert 3,520 3,520 0
Weinstock, Jerry 6,000 6,000 0
Weinstock, Shelley and Steven 6,000 6,000 0
Weissman Financial 363,636 363,636 0
Williams, Gibbs A. 19,230 19,230 0
Wittenstein, Frederick M. IRA 99,784 99,784 0
Wittenstein, Frederick M. Pension Plan 0 0 0
Wolfenson, Dr. Gilbert B. IRA 12,000 12,000 0
Wolfson Equities 54,000 54,000 0
Wood, Eugene W. IRA 8,000 8,000 0
Wooster, Randall 30,000 30,000 0
Worden, Andrew B. Retirement Plan 5,177 5,177 0
Wright, Dickerson 2,000 2,000 0
Wrigley Holdings, SA 65,000 65,000 0
0
TOTALS 6,224,779 1,266,336 1,670,267 3,232,473 12,393,855
======================================================================================
</TABLE>
1. Chemco, Inc. is controlled by Graydon H. Neher, a director of the
Company.
2. Mr. Misukanis is a director of the Company.
3. Mr. Plost is a director of the Company.
-20-
<PAGE>
PLAN OF DISTRIBUTION
The Shares from time to time may be offered for sale either directly by the
Selling Securityholders or by their pledgees, donees, transferees or other
successors in interest. Such sales may be made in the over-the-counter market or
in negotiated transactions. Sales of Shares in the over-the-counter market may
be by means of one or more of the following: (a) a block trade in which a broker
or dealer will attempt to sell the Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchase by
a dealer as principal and resale by such dealer for its account pursuant to this
Prospectus; and (c) ordinary brokerage transactions and transactions in which
the broker solicits purchasers. In effecting sales, brokers or dealers engaged
by the Selling Securityholders may arrange for other brokers or dealers to
participate. In addition, any securities covered by this Prospectus which
qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Selling Securityholders have agreed to limit the sale of their
shares under certain circumstances, including during an underwritten offering
by the Company. In addition, the Selling Securityholders have agreed not to
sell the Shares offered hereby if such sales would violate federal securities
laws, including Regulation M promulgated under the Exchange Act.
Except as set forth above, the Selling Securityholders have advised the
Company that they have made no arrangement or agreements with any underwriters,
brokers or dealers regarding the resale of the Shares prior to the effective
date of this Prospectus. The Selling Securityholders may pay commissions or
allow discounts to any brokers or dealers participating in the resale of the
Shares, which commissions or discounts may be less than or in excess of the
customary rates of such brokers or dealers for similar transactions. The Shares
will be sold at market prices prevailing at the time of sale or at negotiated
prices which, in the case of Weissman Financial, will be not less than
prevailing market prices.
The Selling Securityholders that participate in sales of the Shares and any
underwriters, brokers or dealers engaged by them may be deemed underwriters, and
any profits on sales of the Shares by them and any discounts, commissions or
concessions received by any Selling Securityholder or underwriter, broker or
dealer may be deemed to be underwriting discounts or commissions under the
Securities Act.
Upon the Company being notified by a Selling Securityholder that any
material arrangement has been entered into with an underwriter, broker or dealer
for the sale of the Shares through a secondary distribution or a purchase by an
underwriter, broker or dealer, a supplemented prospectus will be filed, if
required, disclosing such of the following information as the Company believes
appropriate: (i) the name of each such Selling Securityholder and of the
participating underwriter, broker or dealer; (ii) the number of Shares involved;
(iii) the price at which such Shares were sold; (iv) the commissions paid or
discounts or concessions allowed to such underwriter, broker or dealer and (v)
other facts material to the transaction.
The Company has agreed to indemnify the Selling Securityholders, and the
Selling Securityholders have agreed to indemnify the Company, against certain
civil liabilities, including liabilities under the Securities Act.
-21-
<PAGE>
The Company is offering the Shares to the holders of the Warrants and will
amend or supplement this Prospectus, from time to time, to reflect the exercise
of Warrants by the holders thereof and to permit the public sale of the Shares.
The Company is unable to predict the effect which sales of the Shares
offered hereby might have upon the Company's ability to raise further capital.
The Company will pay all of the expenses incident to the offering and sale
of the Shares to the public other than commissions and discounts of
underwriters, dealers or agents.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states, the Shares may not be sold
unless they have been registered or qualified for sale in such states or an
exemption from registration or qualification is available and complied with.
INDEMNIFICATION PROVIDED IN CONNECTION WITH THE OFFERING BY THE SELLING
SECURITYHOLDERS
With respect to a registration statement relating to the shares, the
Selling Securityholders have agreed to indemnify, to the extent permitted by
law, the Company, its directors, certain of its officers and each person who
controls the Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses resulting from any untrue
or alleged untrue statement of material fact or any omission or alleged
omission of a material fact required to be stated in a registration statement
or prospectus, or any amendment thereof or supplement thereto or necessary to
make the statements therein (in the case of a prospectus, in the light of the
circumstances under which they were made) not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage
or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information or affidavits
relating to the Selling Securityholders furnished by the Selling
Securityholders to the Company for use therein.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to Directors, Officers, or persons controlling the Company
pursuant to the foregoing provisions the Company has been informed that in the
opinion of the Commission, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
LEGAL MATTERS
The legality of the shares of Common Stock being offered will be passed on
for the Company by Friedlob Sanderson Raskin Paulson & Tourtillott, LLC, Denver,
Colorado.
EXPERTS
The consolidated balance sheets of Recycling Industries, Inc. and
Subsidiaries as of September 30, 1997 and 1996 and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
three years in the period ended September 30, 1997, which appear in the
Company's Form 10-K for the fiscal year ended September 30, 1997 have been
incorporated by reference herein in reliance upon the report (which indicated
that the financial statements of a Subsidiary as of and for the year ended
September 30, 1996 were audited by another auditor) dated December 30, 1997
of BDO Seidman, LLP, Denver, Colorado, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing.
The consolidated balance sheet of NR Holdings, INC. and subsidiary as
September 30, 1996 and the related consolidated statements of operations and
accumulated deficit and cash flows for the year ended September 30, 1996
which are included in the Company's consolidated financial statements which
appear in the Company's Form 10-K for the fiscal year ended September 30,
1996, have been incorporated by reference herein in reliance upon the report
dated October 18, 1996 of A.J. Robbins, PC. Denver, Colorado, independent
auditors, and upon the authority of said firm as experts in accounting and
auditing.
-22-
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS. ANY INFORMATION OR REPRESENTATIONS NOT HEREIN CONTAINED, IF GIVEN OR
MADE, MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN RESPECT TO THESE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS SHALL NOT, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF THIS PROSPECTUS. HOWEVER, IN THE EVENT OF A MATERIAL
CHANGE, THIS PROSPECTUS WILL BE AMENDED OR SUPPLEMENTED ACCORDINGLY.
-23-
<PAGE>
--------------------
TABLE OF CONTENTS Page
----
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
RECENT DEVELOPMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SELLING SECURITYHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . 18
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
--------------------
-24-
<PAGE>
RECYCLING INDUSTRIES, INC.
12,393,855 SHARES OF COMMON
STOCK, $.001 PAR VALUE, INCLUDING
3,232,473 SHARES UNDERLYING CONVERTIBLE PREFERRED STOCK, AND
6,223,787 SHARES UNDERLYING STOCK PURCHASE WARRANTS AND OPTIONS
March 20, 1998
------------
PROSPECTUS
------------
-25-
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14 - OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemization of all expenses (subject to future
contingencies) incurred or to be incurred by the Registrant in connection
with the issuance and distribution of the securities being offered. All
expenses are estimated except the registration fee.
<TABLE>
<S> <C>
Registration and filing fee $17,554
NASD filing fee 4,958
Printing and engraving 7,500
Accounting fees and expenses 5,000
Legal fees and expenses 100,000
Blue sky fees and expenses 2,500
Transfer and Warrant Agent 500
Other 488
--------
Total $138,500
--------
--------
</TABLE>
ITEM 15 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
INDEMNIFICATION PROVIDED UNDER THE COMPANY'S ARTICLES OF INCORPORATION
The Colorado Business Corporation Act (the "CBCA") authorizes the
indemnification of and advancement of expenses to directors, officers,
employees, fiduciaries and agents of a Colorado corporation against liabilities
which they may incur in such capacities. Article V.B of the Company's Amended
and Restated Articles of Incorporation provides that the Company shall indemnify
and may advance expenses to its directors to the maximum extent permitted by the
CBCA and shall indemnify its officers, employees or agents who are not directors
to the maximum extent permitted by the CBCA or to a greater extent as may be
consistent with law and provided for by resolution of the Company's shareholders
or directors, or in a contract. A summary of the circumstances in which such
indemnification is allowable under the CBCA is provided below, but that
description is qualified in its entirety by reference to the relevant section of
the CBCA.
In general, the CBCA provides that any director may be indemnified against
liabilities (including the obligation to pay a judgment, settlement, penalty,
fine or reasonable expense) incurred in a proceeding and have expenses advanced
for such a proceeding (including any civil, criminal or investigative proceeding
whether threatened, pending or completed) to which the director was made a party
because he is or was a director, except that, if the proceeding is brought by or
in the right of the Company, indemnification is permitted only with respect to
reasonable expenses incurred in connection with the proceeding. The CBCA
prohibits indemnification of a director in connection with a proceeding brought
by or in the right of the Company in which a director is adjudged liable to the
Company, or in connection with any proceeding charging improper personal benefit
to the director in which the director is adjudged liable for receipt of an
improper personal benefit.
II-1
<PAGE>
Indemnity may be provided only if the director's actions resulting in the
liability: (i) were taken in good faith; (ii) were reasonably believed to have
been in the Company's best interest with respect to actions taken in the
director's official capacity; (iii) were reasonably believed not to be opposed
to the Company's best interest with respect to actions other than those taken in
the director's official capacity; and (iv) with respect to any criminal action,
the director had no reasonable cause to believe his or her conduct was unlawful.
Indemnification may be awarded only after the applicable standard of conduct has
been met by the director to be indemnified as determined by (i) a majority vote
of directors not party to the proceeding comprising a quorum of the Board of
Directors or, if a quorum cannot be obtained, by committee thereof consisting of
two or more directors not party to the proceeding; (ii) by independent legal
counsel selected by the Board of Directors; or (iii) by the shareholders.
The CBCA further provides that unless limited by the Company's articles of
incorporation, a director or officer who is wholly successful, on the merits or
otherwise, in defense of any proceeding to which he was a party, is entitled to
receive indemnification against reasonable expenses, including attorneys' fees,
incurred in connection with the proceeding. The Company's Amended and Restated
Articles of Incorporation do not limit the foregoing provisions.
The Company may indemnify or advance expenses to an officer, employee,
fiduciary or agent who is not a director to a greater extent than permitted for
indemnification of directors, if consistent with law and if provided for by its
articles of incorporation, bylaws, resolution of its shareholders or directors
or in a contract. The provision of indemnification to persons other than
directors is subject to such limitations as may be imposed on general public
policy grounds.
Upon petition by a director or officer, a court may order the Company to
indemnify such director or officer against liabilities arising in connection
with any proceeding. A court may order the Company to provide such
indemnification, whether or not he was entitled to indemnification by the
Company. To order indemnification, the court must determine that the director or
officer is fairly and reasonably entitled to indemnification in light of the
circumstances. With respect to liability incurred by a director or officer, or
in any proceeding where liability results on the basis that a personal benefit
was received improperly, a court may only require that the director or officer
be indemnified as to reasonable expenses incurred.
The CBCA specifies that any provisions for indemnification of or advances
for expenses to directors which may be contained in the Company's articles of
incorporation, bylaws, resolutions of its shareholders or directors, or in a
contract (except for insurance policies) shall be valid only to the extent such
provisions are consistent with the CBCA and any limitations upon indemnification
set forth in the articles of incorporation.
The CBCA also grants the power to the Company to purchase and maintain
insurance policies which protect any director, officer, employee, fiduciary or
agent against any liability asserted against or incurred by them in such
capacity arising out of their status as such. Such policies may provide for
indemnification whether or not the corporation would otherwise have the power to
provide for it. No such policies have been obtained by the Company.
Article V.A of the Company's Amended and Restated Articles of Incorporation
provides for the elimination of personal liability for monetary damages for the
breach of fiduciary duty as a director except for liability (i) resulting from a
breach of the director's duty of loyalty to the Company or its shareholders;
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law; (iii) for approving payment of a
dividend, a stock repurchase, a distribution of assets to
II-2
<PAGE>
shareholders during liquidation or the making or guaranteeing of a loan to a
director, to the extent that any such actions are illegal under the CBCA; or
(iv) for any transaction from which a director derives an improper personal
benefit. This Article further provides that the personal liability of the
Company's directors shall be eliminated or limited to the fullest extent
permitted by the CBCA.
ITEM 16 EXHIBITS
- ------- --------
The following is a complete list of exhibits filed as part of this
Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<C> <S>
2.1 Agreements related to the Acquisition of the Assets of Grossman
Brothers Company and Milwaukee Metal Briquetting Co., Inc.
2.1.1 Asset Purchase Agreement dated October 31, 1997, by and among
Recycling Industries of Wisconsin, Inc., a Colorado
corporation, Recycling Industries, Inc., a Colorado
corporation, Grossman Brothers Company, Inc., a Wisconsin
corporation, Milwaukee Metal Briquetting Co., Inc., a
Wisconsin corporation, and Arthur Grossman. Incorporated by
reference to Exhibit 2.1.1 to the Company's current report on
Form 8-K as filed with the Commission on December 22, 1997
and amended on February 11. 1998 on Form 8-K/A, Commission
File No. 0-20179.
2.1.2 Amendment to Asset Purchase Agreement dated December 5, 1997,
by and among Recycling Industries of Wisconsin, Inc.,
Recycling Industries, Inc., Grossman Brothers Company, Inc.
and Milwaukee Metal Briquetting Co., Inc. Incorporated by
reference to Exhibit 2.1.2 to the Company's current report on
Form 8-K as filed with the Commission on December 22, 1997
and amended on February 11. 1998 on Form 8-K/A, Commission
File No. 0-20179.
2.2 Asset Purchase Agreement dated December 4, 1997 by and among
Recycling Industries, Inc., a Colorado corporation, Recycling
Industries of Atlanta, Inc., a Colorado corporation, and Central
Metals Company, Inc., a Georgia corporation. Incorporated by
reference to Exhibit 2.2 to the Company's current report on Form
8-K as filed with the Commission on December 22, 1997 and amended
on February 11. 1998 on Form 8-K/A, Commission File No. 0-20179.
2.3 Asset Purchase Agreement dated December 5, 1997 by and among
Recycling Industries of Chesapeake, Inc., a Colorado corporation,
Recycling Industries, Inc., a Colorado corporation, Money Point
Land Holding Corporation, a Virginia corporation, Money Point
Diamond Corporation, a Virginia corporation, George B. Ginsburg,
the Fred Jacobson Revocable Trust, a Virginia trust, and the
Dorothy G. Jacobson Revocable Trust, a Virginia trust.
Incorporated by reference to Exhibit 2.3 to the Company's current
report on Form 8-K as filed with the Commission on December 22,
1997 and amended on February 11. 1998 on Form 8-K/A, Commission
File No. 0-20179.
2.4 Stock Purchase Agreement dated December 8, 1997, by and among
Recycling Industries, Inc., a Colorado corporation, Wm. Lans
Sons' Co., Inc., an Illinois corporation, Bertram Lans, Bruce
Lans and Scott Lans. Incorporated by reference to Exhibit 2.4 to
the Company's current report on Form 8-K as filed with the
Commission on December 22, 1997 and amended on February 11. 1998
on Form 8-K/A, Commission File No. 0-20179.
2.5 Asset Purchase Agreement dated December 5, 1997 by and among
Recycling Industries of Winston-Salem, Inc., a Colorado
corporation, Recycling Industries, Inc., a Colorado corporation,
Brenner Companies, Inc., a North Carolina corporation, Frank
Brenner, Mike Brenner and the Shareholder of the Brenner
Companies, Inc. Incorporated by reference to Exhibit 2.5 to the
Company's current report on Form 8-K as filed with the Commission
on December 22, 1997 and amended on February 11. 1998 on Form 8-K/A,
Commission File No. 0-20179.
2.6 Asset Purchase Agreement dated December 5, 1997 by and among
Recycling Industries of Greensboro, Inc., a Colorado corporation,
Recycling Industries, Inc., a Colorado corporation, United Metal
Recyclers, a North Carolina general partnership, Brenner
Companies, Inc., a North Carolina corporation, and Levin
Brothers, Inc., a North Carolina corporation. Incorporated by
reference to Exhibit 2.6 to the Company's current report on Form
8-K as filed with the Commission on December 22, 1997 and amended
on February 11. 1998 on Form 8-K/A, Commission File No. 0-20179.
3(i).1 Articles of Amendment to the Amended and Restated Articles of
Incorporation of Recycling Industries, Inc. - Designation of
Preferences, Limitations and Relative Rights of the Series E
Redeemable Convertible Preferred Stock of Recycling Industries,
Inc. Incorporated by reference to Exhibit 3(i).1 to the Company's
current report on Form 8-K as filed with the Commission on December
22, 1997 and amended on February 11. 1998 on Form 8-K/A, Commission
File No. 0-20179.
3(i).2 Articles of Amendment to the Amended and Restated Articles of
Incorporation of Recycling Industries, Inc. - Designation of
Preferences, Limitations and Relative Rights of the Series F 61/2%
Redeemable Convertible Preferred Stock of Recycling Industries,
Inc. Incorporated by reference to Exhibit 3(i).2 to the Company's
current report on Form 8-K as filed with the Commission on December
22, 1997 and amended on February 11. 1998 on Form 8-K/A, Commission
File No. 0-20179.
3(i).3 Articles of Amendment to the Amended and Restated Articles of
Incorporation of Recycling Industries, Inc. - Designation of
Preferences, Limitations and Relative Rights of the Series G 61/2%
Redeemable Convertible Preferred Stock of Recycling Industries,
Inc. Incorporated by reference to Exhibit 3(i).3 to the Company's
current report on Form 8-K as filed with the Commission on December
22, 1997 and amended on February 11. 1998 on Form 8-K/A, Commission
File No. 0-20179.
3(i).4 Articles of Amendment to the Amended and Restated Articles of
Incorporation of Recycling Industries, Inc. - Designation of
Preferences, Limitations and Relative Rights of the Series H 6%
Secured Redeemable Convertible Preferred Stock of Recycling
Industries, Inc. Incorporated by reference to Exhibit 3(i).4 to
the Company's current report on Form 8-K as filed with the
Commission on December 22, 1997 and amended on February 11. 1998 on
Form 8-K/A, Commission File No. 0-20179.
3(i).5 Articles of Amendment to the Amended and Restated Articles of
Incorporation of Recycling Industries, Inc. - Designation of
Preferences, Limitations and Relative Rights of the Series I 8%
Redeemable Convertible Preferred Stock of Recycling Industries,
Inc. Incorporated by reference to Exhibit 3(i).5 to the Company's
current report on Form 8-K as filed with the Commission on December
22, 1997 and amended on February 11. 1998 on Form 8-K/A, Commission
File No. 0-20179.
4.1 Form of Common Stock Certificate, incorporated by reference to Exhibit
4.1 to the Company's Registration Statement on Form S-1, filed May 3,
1996, as amended, Commission File No. 333-4574.
4.2 Form of Series G Warrant Agreement, incorporated by reference to
Exhibit 4.3 to the Company's Registration Statement on Form S-1, filed
May 3, 1996, as amended, Commission File No. 333-4574.
4.3 Form of Series G Registration Rights Agreement, incorporated by
reference to Exhibit 4.4 to the Company's Registration Statement on
Form S-1, filed May 3, 1996, as amended, Commission File No. 333-4574.
4.4 Form of Series I Warrant Agreement, incorporated by reference to
Exhibit 4.5 to the Company's Registration Statement on Form S-1, filed
May 3, 1996, as amended, Commission File No. 333-4574.
4.5 Form of Series J Warrant Agreement, incorporated by reference to
Exhibit 4.6 to the Company's Registration Statement on Form S-1, filed
May 3, 1996, as amended, Commission File No. 333-4574.
4.6 Form of Series J Registration Rights Agreement, incorporated by
reference to Exhibit 4.7 to the Company's Registration Statement on
Form S-1, filed May 3, 1996, as amended, Commission File No. 333-4574.
4.7 Form of 1996 Placement Agents Warrant Agreement, incorporated by
reference to Exhibit 4.11 to the Company's Registration Statement on
Form S-1, filed May 3, 1996, as amended, Commission File No. 333-4574.
4.8 Form of 1996 Placement Agents Registration Rights Agreement,
incorporated by reference to Exhibit 4.12 to the Company's
Registration Statement on Form S-1, filed May 3, 1996, as amended,
Commission File No. 333-4574.
4.10 Designation of Preferences, Limitations and Relative Rights of the
Series D Convertible Preferred Stock of Recycling Industries, Inc.,
incorporated by reference to Exhibit 4.1 to the Company's Current
Report on Form 8-K reporting an event of April 7, 1997, as amended
June 20, 1997 on Form 8-K/A, Commission File No. 0-20179.
4.11 Indenture dated December 4, 1997. Incorporated by reference to
Exhibit 4.1 to the Company's current report on Form 8-K as filed
with the Commission on December 22, 1997 and amended on February
11. 1998 on Form 8-K/A, Commission File No. 0-20179.
10.1 Credit Agreement dated December 4, 1997, among Recycling
Industries, Inc., a Colorado corporation, Nevada Recycling, Inc., a
Nevada corporation, NR Holdings, Inc., a Nevada corporation,
Recycling Industries of Texas, Inc., a Colorado corporation,
Recycling Industries of Missouri, Inc., a Colorado corporation,
Recycling Industries of Georgia, Inc., a Colorado corporation,
Recycling Industries of Atlanta, Inc., a Colorado corporation,
Weissman Industries, Inc., an Iowa corporation, Recycling
Industries of South Carolina, Inc., a Colorado corporation,
Recycling Industries of Chesapeake, Inc., a Colorado corporation,
Recycling Industries of Greensboro, Inc., a Colorado corporation,
Recycling Industries of Winston-Salem, Inc., a Colorado
corporation, William Lans Sons Company, an Illinois corporation,
Recycling Industries of Wisconsin, Inc., a Colorado corporation,
and General Electric Capital Corporation, a New York corporation,
and BankBoston, N.A. Incorporated by reference to Exhibit 10.1 to
the Company's current report on Form 8-K as filed with the
Commission on December 22, 1997 and amended on February 11. 1998 on
Form 8-K/A, Commission File No. 0-20179.
5.1 Opinion of Friedlob Sanderson Raskin Paulson & Tourtillott, LLC.*
10.2 Executive Employment Agreement dated July 1, 1997 between the
Company and Thomas J. Wiens. Incorporated by reference to Exhibit
10.3 to the Company's Annual Report on Form 10-K/A for the fiscal
year ended September 30, 1997, Commission File No. 0-20179.
10.3 Executive Employment Agreement dated September 8, 1997 between the
Company and Luke F. Botica. Incorporated by reference to Exhibit
10.4 to the Company's Annual Report on Form 10-K/A for the fiscal
year ended September 30, 1997, Commission File No. 0-20179.
23.1 Consent of Friedlob Sanderson Raskin Paulson & Tourtillott, LLC - see
Exhibit 5.1
23.2 Consent of AJ. Robbins, P.C.**
23.3 Consent of BDO Seidman, LLP**
24. Power of Attorney - See Signature Page of Registration Statement
</TABLE>
- ------------------
* Filed herewith
** Previously filed
ITEM 17 - UNDERTAKINGS
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 to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement.
2. 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.
II-3
<PAGE>
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.
4. 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 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 the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Englewood, State of Colorado, on March 20, 1998.
RECYCLING INDUSTRIES, INC.
By /s/ Thomas J. Wiens
------------------------------------
Thomas J. Wiens, Chairman and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURES TITLE DATE
- ---------- ----- ----
/s/ THOMAS J. WIENS
- ------------------------------ Principal Executive March 20, 1998
Thomas J. Wiens Officer and Director
/s/ BRIAN L. KLEMSZ*
- ------------------------------ Principal Financial March 20, 1998
Brian L. Klemsz and Accounting
Officer and Director
/s/ LUKE F. BOTICA*
- ------------------------------ Director March 20, 1998
Luke F. Botica
- ------------------------------ Director March 20, 1998
Jerome B. Misukanis
/s/ GRAYDON H. NEHER*
- ------------------------------ Director March 20, 1998
Graydon H. Neher
- ------------------------------ Director March 20, 1998
Barry Plost
*By /s/ Thomas J. Wiens
---------------------------------
Thomas J. Wiens, Attorney-in-Fact
<PAGE>
March 20, 1998
Recycling Industries, Inc.
9780 South Meridian Blvd., Suite 180
Englewood, Colorado 80111
Re: Registration Statement on Form S-3
Opinion of Counsel
Gentlemen:
As counsel for Recycling Industries, Inc., a Colorado corporation (the
"Corporation"), we have examined the Amended and Restated Articles of
Incorporation with amendments, the Bylaws and Minutes of the Corporation and
such other corporate records, documents, certificates and other instruments as,
in our judgment, we deemed relevant for the purposes of this opinion. We have
also, as such counsel, examined the Registration Statement on Form S-3,
Securities and Exchange Commission File No. 333-45987, as amended to date (the
"Registration Statement"), covering the resale by certain Selling
Securityholders named in the Registration Statement (the "Selling
Securityholders") of shares of the Corporation's Common Stock, par value $.001
per share (the "Common Stock") included in the Registration Statement and shares
of Common Stock which may be issued to the Selling Securityholders upon the
exercise of outstanding options and warrants or the conversion of outstanding
convertible preferred stock (the "Underlying Shares").
Based upon the foregoing, we are of the opinion that (i) the Common Stock
to be sold by the Selling Securityholders constitutes legally issued, fully paid
and nonassessable shares of Common Stock, (ii) the Underlying Shares have
been duly authorized for issuance and, (iii) the Underlying Shares, upon
exercise or conversion according to the terms of the respective option or
warrant agreement or certificate of designations, rights and preferences for
the convertible preferred stock, and payment of the applicable exercise or
conversion price, will be legally issued, fully paid and nonassessable shares of
Common Stock.
<PAGE>
Recycling Industries, Inc.
March 20, 1998
Page 2
We know that we are referred to under the caption "Legal Matters" included
in the Prospectus forming a part of the Registration Statement. We hereby
consent to such use of our name in the Registration Statement and to the filing
of this opinion as Exhibit 5.1 thereto. In giving this consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the Rules
and Regulations of the Securities and Exchange Commission promulgated
thereunder.
Very truly yours,
/s/ Friedlob Sanderson Raskin
Paulson & Tourtillott, LLC
