AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 10, 1996
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
EVANS ENVIRONMENTAL CORPORATION
(Exact name of registrant as specified in its charter)
COLORADO 84-1061207
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1000 Southern Boulevard, Suite 300
West Palm Beach, Florida 33405
(561) 832-3110
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
A Z Registered Agent Corporation
2601 So. Bayshore Drive
Suite 1600
Miami, Florida 33133
(305) 858-5555
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies of Communications to:
RICHARD M. SPECTOR, Esq.
Adorno & Zeder, P.A.
2601 So. Bayshore Drive
Suite 1600
Miami, Florida 33133
(305) 858-5555
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the Registration Statement becomes effective.
-------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
-------------------------------
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED AMOUNT
TITLE OF EACH CLASS OF AMOUNT TO MAXIMUM MAXIMUM OF
SECURITIES TO BE BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE
<S> <C> <C> <C> <C>
Common Stock, par value
$0.012 per share 817,277 (1) $ 766,197.19(1) $ 264.21(1)
Common Stock Underlying
Warrants 300,000 $2.00 $ 600,000.00 $ 206.90
Common Stock Underlying
Warrants 150,000 $2.50 $ 375,000.00 $ 129.31
Common Stock Underlying
Warrants 150,000 $2.70 $ 405,000.00 $ 139.66
Common Stock Underlying
Warrants 2,460,193 (2) $2,614,868.44(2) $ 901.68(2)
Common Stock Underlying
Warrants 231,250 (3) $ 67,687.50 $ 23.34
========================= ============== ================== ================ =================
TOTAL 4,108,720 -- $4,877,229.22 $1,665.10
========================= ============== ================== ================= =================
</TABLE>
(1) Pursuant to Rule 457(c), the proposed maximum aggregate offering price
and registration fee are based on the sum of the average of the high
and low prices reported on the Nasdaq Small Cap Market for the
Registrant's Common Stock on October 7, 1996, within five days prior
to the date of filing the registration statement which average was
$0.9375 per share.
(2) 175,000 of the shares underlying the warrants have an exercise price
of $2.70 per share. The exercise price per share of the other
2,285,193 warrants cannot be determined as of the date hereof.
Therefore, pursuant to Rule 457(g), the proposed maximum aggregate
offering price and the registration fee for these warrants are based
on the offering price of $0.9375 per share determined in footnote
(1) above.
(3) 31,250 of the shares underlying the warrants have an exercise price of
$0.31 per share. The remaining 200,000 shares underlying the warrants
have an exercise price of $0.29 per share.
--------------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 10, 1996
P R O S P E C T U S
4,108,720 SHARES
EVANS ENVIRONMENTAL CORPORATION
COMMON STOCK
This Prospectus relates to the offer and sale of shares (the "Shares") of
common stock, par value $0.012 per share (the "Common Stock"), of Evans
Environmental Corporation, a Colorado corporation (the "Company"). The Shares
may be offered and sold from time to time by certain selling shareholders of the
Company as described herein (collectively, the "Selling Shareholders") in
transactions in the open market, in negotiated transactions or a combination of
such methods of sale, at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Shareholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the Shares
from whom such broker-dealers may act as agents or to whom they sell as
principals, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions). See "Sale of Shares."
The Selling Shareholders collectively own, or have the right to acquire, an
aggregate of 4,108,720 Shares from the Company. Corporate Relations Group, Inc.,
a Florida corporation, owns 545,000 Shares of Common Stock and has the right to
acquire 600,000 Shares of Common Stock underlying certain warrants. See "Recent
Developments." Strategica Capital Corporation has the right to acquire 2,460,193
Shares of Common Stock underlying certain warrants, R.C. Quintero & Co. has the
right to acquire 231,250 Shares of Common Stock underlying certain warrants, and
certain individuals own in the aggregate 272,277 Shares of Common Stock. See
"Selling Security Holders."
None of the proceeds from the sale of the Shares by the Selling Shareholders
will be received by the Company. The Company has agreed to bear all expenses
(other than underwriting discounts, broker or dealer commissions, and fees and
expenses of counsel or other advisors to the Selling Shareholders) in connection
with the registration and sale of the Shares being offered by the Selling
Shareholders and to indemnify the Selling Shareholders against certain
liabilities, including liabilities under the Securities Act.
The Common Stock is listed on the National Association of Securities Dealers,
Inc. Automated Quotation System Small Cap Market ("Nasdaq"). On________, 1996,
the last reported sale price of the Common Stock of the Company on Nasdaq was
$__________per share.
---------------------------
INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGE 3.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------------------
The date of this Prospectus is__________, 1996
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (the "Registration
Statement"), of which this Prospectus forms a part, covering the
Shares to be sold pursuant to this offering.
As permitted by the rules and regulations of the Commission, this Prospectus
omits certain information, exhibits and undertakings contained in the
Registration Statement. Such additional information, exhibits and undertakings
can be inspected at and obtained from the Commission as set forth below. For
additional information regarding the Company, the Common Stock and related
matters and documents, reference is made to the Registration Statement and
exhibits thereto.
CERTAIN DOCUMENTS PREVIOUSLY FILED BY THE COMPANY WITH THE COMMISSION PURSUANT
TO THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), ARE
INCORPORATED BY REFERENCE IN THIS PROSPECTUS. SEE "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE." COPIES OF ANY DOCUMENTS INCORPORATED HEREIN BY
REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS THEY ARE SPECIFICALLY
INCORPORATED BY REFERENCE THEREIN, ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO
WHOM A PROSPECTUS IS DELIVERED UPON REQUEST TO THE SECRETARY, EVANS
ENVIRONMENTAL CORPORATION, 1000 SOUTHERN BOULEVARD, SUITE 200, WEST PALM BEACH,
FLORIDA 33405, TELEPHONE (561) 832-3110.
The Company is subject to the informational and reporting requirements of the
Exchange Act, and accordingly files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information filed with the Commission, as well as the Registration Statement,
are available for inspection and copying at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549. Copies of such material can be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549, at prescribed rates. Any reports, proxy
statements and other information that the Company files electronically with the
Commission may be viewed on the Internet Web site maintained by the Commission
at http://www.sec.gov.
2
<PAGE>
THE COMPANY
The Company's principal executive offices are located at 1000 Southern
Boulevard, Suite 300, West Palm Beach, Florida 33405. Its telephone number is
(561) 832-3110. The Company provides environmental laboratory, consulting,
management and remediation services, specializing in providing services related
to environmental problems such as contaminated soil and water, underground
storage tanks, asbestos, lead based paint, and wetland or endangered habitat
management. The Company provides its consulting, testing and engineering
services to both public and private clients through its subsidiaries Evans
Environmental & Geological Science & Management, Inc., Evans Habitat
Restoration, Inc., and American Remedial Technologies, Inc.
RISK FACTORS
INVESTMENT IN THE SHARES IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK.
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER, AMONG OTHER THINGS, THE
FOLLOWING RISK FACTORS BEFORE PURCHASING SHARES.
RISKS RELATED TO THE COMPANY
ADDITIONAL FINANCING REQUIRED; GOING CONCERN EXPLANATORY PARAGRAPH INCLUDED
IN THE REPORT OF THE INDEPENDENT PUBLIC ACCOUNTANTS. For the fiscal year ended
March 31, 1996, the Company recorded net losses of $2,051,365 and had negative
cash flow from continuing operations of $1,059,102. In addition, at March 31,
1996 the Company had negative tangible net worth of $1,373,609. No assurance can
be given that the Company will operate profitably in the future. As a result of
the Company's history of losses, the Company's independent public accountants
expressed substantial doubt in its report accompanying the Company's fiscal year
1996 financial statements as to the Company's ability to continue as a going
concern and have stated that continued operations are dependent upon obtaining
profitable operations or obtaining additional financing. The Company intends to
fund its current operations from the combination of cash on hand, cash generated
from operations, potential new equity from the possible exercise of outstanding
warrants, as well as costs savings generated from its restructuring measures.
These sources of capital are expected to largely fund the Company's current
operations through March 31, 1997. Management expects a return to profitability
in fiscal year 1997. However, if the Company does not return to profitability,
then absent alternative sources of financing, there would be a material adverse
effect on the financial condition, operations and business prospects of the
Company. The Company has no arrangements in place for financing, except for a
$500,000 revolving bank line of credit currently in existence. There can be no
assurances that the Company will not require additional debt or equity financing
in the future to increase its revenues, make acquisitions, or become profitable.
ABSENCE OF DIVIDENDS. The Company has never paid cash dividends on its
Common Stock and has no plans to do so in the foreseeable future. Payment of
dividends on the Common Stock is subject to prior payment of accrued and unpaid
dividends on outstanding shares of the Company's Preferred Stock. The Company
intends to retain earnings, if any, to fund continuing operations.
POSSIBLE ISSUANCE OF ADDITIONAL SHARES. The Board of Directors has the power
to issue Common Stock and Preferred Stock without shareholder approval, up to
the number of authorized shares set forth in the Company's Certificate of
Incorporation, as amended. The Company has granted options and warrants to
purchase in the aggregate approximately 4,832,441 shares of the Company's Common
Stock, which includes the warrants being registered herein. See "Selling
Security Holders." In addition, the Company has granted, and has the authority
to grant, options pursuant to its 1996 Stock Option Plan and outside of such
Plan. The issuance of any additional shares by the Company in the future may
result in a reduction of the book value or market price, if any, of the then
outstanding Common Stock. Issuance of additional shares of Common Stock or
Preferred Stock will generally reduce the proportionate ownership and voting
power of then existing stockholders of shares of Common Stock.
3
<PAGE>
SETTLEMENT WITH FORMER LENDER. From time to time over the last 15 months, the
Company has been involved in discussions with a former private lender to the
Company. The purpose of these discussions has been to settle all outstanding
differences between the former lender and the Company regarding a variety of
matters, including, without limitation, the exercise price of the former
lender's outstanding warrants, amounts claimed to be owed to the former lender
for legal fees, shares claimed to be owed to the former lender for the loan of
funds and services rendered, and claimed rights to additional shares of the
Company's stock. Although all cash amounts owed to the former lender for
principal and interest were paid in full in July, 1996, the former lender has
continued to make further demands on the Company. Although the Company has
rejected the validity of all such claims it has agreed to reach an accommodation
with the former lender on some of these claims solely for the purpose of
reaching a definitive settlement of all outstanding differences. To date the
former lender has not agreed to any settlement. The Company is unable to foresee
the ultimate outcome of this matter.
RISKS RELATED TO THE ENVIRONMENTAL BUSINESS
EFFECTS OF GOVERNMENT REGULATION. The demand for environmental consulting,
testing, management and remediation services, as well as their nature and
performance, has substantially benefitted from the existence and enforcement of
federal, state and local regulation. The nature and extent of future regulatory
enforcement and funding, and their impacts on the demand for the Company's
services, cannot be predicted. There can be no assurance that changes in
governmental support and regulation will not have a material adverse effect on
the Company's business. The State of Florida has suspended the processing of
most applications for reimbursement under a remediation program in which the
Company participates. There can be no assurance that suspension of
reimbursements under the program and any legislative changes to the program will
not have a material adverse effect on the Company.
POSSIBLE LIABILITY FROM ENVIRONMENTAL REMEDIATION SERVICES. The Company,
through its wholly-owned subsidiary, Evans Management Co., provides a number of
environmental consulting services, including the assessment and remediation of
contaminated sites related to discharges of petroleum products from petroleum
storage systems that are eligible for reimbursement of cleanup costs under the
Florida Inland Protection Trust Fund (the "Program"). The Company enters into
contracts from time to time with third parties for the purpose of funding such
remediation work, subject to payment of a markup or handling fee to such
funders. In the event the State of Florida were to determine that certain costs
are not reimbursable, such contracts generally provide that the Company is
required to itself reimburse to such funders all costs not reimbursed to them by
the State of Florida. Furthermore, the refusal of claims for reimbursable costs
may affect the ability of the Company to obtain additional advances for
reimbursable costs under the same or other projects. There can be no assurance
that the State of Florida will reimburse all costs in the currently pending
applications or that reimbursements will be timely made. Moreover, recent State
of Florida legislation provides that only reimbursement claims submitted to the
State by December 31, 1996 will be authorized for payment. There can be no
assurance that changes to the Program by the Florida legislature or Governor
will not have a material adverse effect on the Company or that the Program will
not be eliminated altogether.
OTHER ENVIRONMENTAL RISKS. The Company has licensed technology to be used in
connection with the biological destruction of environmental pollution. The
process has not been approved by the State of Florida, and no assurance can be
given that such approval will be obtained. Finally, there is a risk that, if it
were alleged that the Company failed to properly assess environmental issues in
connection with the provision of environmental services, the Company could be
held accountable for substantial consequential and other damages resulting
therefrom. There can be no assurance that the Company would prevail in defending
against any such claims or that, if unsuccessful, the Company's insurance would
be sufficient in amount to cover such claims.
4
<PAGE>
COMPETITION. The Company operates in a highly competitive industry. In the
environmental area there are many companies with greater resources and more
extensive facilities then the Company. The Company's ability to compete, in
part, depends on its ability to continue to obtain performance bonding and bid
bonding which is dependent on the Company's financial condition.
DEPENDENCE ON MANAGEMENT AND SKILLED PERSONNEL. The success of the Company's
environmental business will be particularly dependent on the abilities of
management to coordinate the operations of the Company and to implement the
Company's business plans. The loss of Dr. Charles C. Evans, the Company's
Chairman of the Board of Directors, Enrique A. Tomeu, the Company's President
and Chief Executive Officer, or certain other members of the management team
could have a material adverse effect on the Company's operations. The Company
does not presently maintain "key man" life insurance on any members of
management other than Dr. Evans. In addition, the Company's success will depend
in large part upon the continued ability of the environmental business to
attract and retain skilled employees, which may be difficult because the market
for the services of such individuals is becoming increasingly competitive.
RECENT DEVELOPMENTS
CORPORATE RELATIONS AGREEMENT
On August 13, 1996, the Company entered into a Lead Generation/Corporate
Relations Agreement ("Corporate Relations Agreement") with Corporate Relations
Group, Inc., a Florida corporation ("CRG"), whereby the Company retained CRG to
provide certain corporate relations services. As payment for these corporate
relations services, the Company has issued to CRG 545,000 Shares of Common
Stock. Additionally, the Company has issued warrants to purchase Common Stock as
follows: (i) 300,000 Shares at the exercise price of $2.00 per share,
exercisable within one year from August 13, 1996; (ii) 150,000 Shares at $2.50
per share, exercisable within two years from August 13, 1996; and (iii) 150,000
Shares exercisable at $2.70 per share, exercisable three years from August 13,
1996. The Company has agreed to register all of the above shares for resale by
CRG. Notwithstanding the above, CRG has agreed to return 47,000 shares to the
Company if by the end of the five year term of the Corporate Relations Agreement
the price of the Company's shares as traded on Nasdaq has not traded at or above
$4.50 per share for any period of ten consecutive days.
BOARD OF DIRECTORS
In August, 1996, Richard Salpeter, Scott Salpeter, and Kelly Evans resigned
from the Board of Directors and Luis De la Cruz, Joseph F. Startari, and
Raimundo Lopez-Lima Levi were appointed by the remaining members of the Board
to fill these vacancies.
John McCracken resigned as a Series B Preferred Stock Director and was
appointed by the Board as a Common Stock Director. The remaining Series B
Preferred Stock Directors appointed Michael S. Klein to replace Mr. McCracken.
INFORMATION REGARDING NEW DIRECTORS:
LUIS DE LA CRUZ since 1990 been president and a shareholder of De la Cruz &
Cutler, P.A., a law firm in Coral Gables, Florida. His principal areas of
practice are real estate and commercial transactions. He has a B.S. degree in
civil engineering and a J.D. degree from the University of Florida.
RAIMUNDO LOPEZ-LIMA LEVI has been the managing partner of Lopez Levi &
Associates, P.A., CPA., a public accounting firm in Miami, Florida. From 1985 to
1991 Mr. Levi was in the tax division of Arthur Andersen & Co.
JOSEPH F. STARTARI from December, 1995 has been president and CEO of
Biotechna Environmental Limited, an environmental technology company, traded on
the stock exchange in Alberta, Canada. From June, 1978 until December, 1995 Mr.
Startari worked in a variety of positions in the Ordinance Division
5
<PAGE>
of Olin Corporation, a defense contractor. Most recently, from February, 1995
until he left Olin Corporation, he was Vice President-Recovery Systems and
Executive Vice President of Olin Services, Inc.
MICHAEL S. KLEIN from 1987 to 1995 was chairman and chief executive officer
of ViTel International, a company specializing in network facsimile services.
Since January, 1995 Mr. Klein has devoted his time to a variety of public
service and environmental conservation activities.
CHIEF FINANCIAL OFFICER
On July 16, 1996, David C. Langle became the new Chief Financial Officer of
the Company, replacing Scott Salpeter. Mr. Langle has 16 years of experience in
public and private accounting and business management. Prior to his employment
with American Remedial Technologies, Inc. (which was acquired by the Company in
July, 1996) in May, 1995 he served in various senior management capacities as
vice president, chief financial officer and director for two public companies,
Solar Financial Services, Inc. (1993 to 1995) and Frenchtex, Inc. (1991 to
1993). In March, 1995, Solar Financial Services, Inc. filed a petition for
relief under the federal bankruptcy laws, and the proceeding was converted to a
liquidation proceeding under Chapter 7 of the Bankruptcy Code in June, 1995.
During Mr. Langle's tenure at Frenchtex, he also served as financial director
and acting general manager of the Company's European manufacturing subsidiary.
From 1982 to 1991, Mr. Langle was employed by the Miami office of Spicer &
Oppenheim, an international accounting and consulting firm where he completed
his tenure as an audit partner. He has a Bachelor of Science degree in
Accounting and Business Administration from the University of Illinois at
Chicago and he maintains professional registration as a certified public
accountant in the State of Florida.
PROPOSED DEVELOPMENTS
CHANGE OF COMPANY NAME: The Board of Directors has proposed that the name of
the Company be changed to ECOS Group, Inc. The Board believes that in light of
the Company's expanded activities in the area of remediation since the
acquisition of American Remedial Technologies, Inc., in July, 1996, a new name
would better describe the nature and activities of the Company. The name change
is being submitted to the shareholders of the Company for approval at the
Company's next annual meeting of shareholders, currently scheduled for October
18, 1996. If approved by the shareholders, the Company's Articles of
Incorporation will be amended accordingly.
1996 STOCK OPTION PLAN: The Evans Environmental Corporation 1996 Stock Option
Plan which would make available options for 2,000,000 shares of the Company's
Common Stock was approved by the Board of Directors on August 15, 1996, subject
to shareholder approval at the Company's annual meeting of shareholders,
currently scheduled for October 18, 1996.
INCREASE IN AUTHORIZED SHARES: The Company has submitted for shareholder
approval at the next annual meeting of shareholders, currently scheduled for
October 18, 1996, an increase of its authorized shares of Common Stock from
25,000,000 to 75,000,000. The Company is obligated to maintain sufficient
authorized shares available to permit conversion of the 1,000,000 issued and
outstanding shares of Series B Preferred Stock which are eligible to be
converted into 10,000,000 shares of Common Stock during a three year period
commencing after March 31, 1997 upon the attainment by the Company of certain
earnings goals. Currently, the Company would have only 557,433 authorized shares
of Common Stock available to be used for conversion of the Series B Preferred
Stock after allowing for (i) the conversion by Strategica Capital Corporation
into 2,285,193 Common Stock shares of 761,731 shares of Series A Convertible
Preferred Stock which would be outstanding upon exercise of certain currently
exercisable warrants, (ii) the exercise of 1,004,748 currently exercisable
options held mostly by current and former officers and directors of the Company,
(iii) the exercise of 942,500 other currently exercisable warrants held
6
<PAGE>
principally by a former lender to the Company and by an off-shore broker which
acted as placement agent for the Company in a recent offering of its shares,
(iv) the exercise of the 600,000 currently outstanding warrants held by CRG and
(v) the reservation of 2,000,000 shares under the Company's new 1996 Stock
Option Plan (assuming it is approved by the shareholders).
The increase in authorized shares would also permit the Company to have
approximately 40,557,433 additional authorized but unissued shares available for
sale to raise capital, for issuance to acquire other companies, or for other
corporate purposes.
SELLING SECURITY HOLDERS
The Shares covered by this Prospectus are being offered and sold by the
Selling Shareholders, as listed below. The Company has issued 545,000 Shares of
Common Stock to CRG in connection with the Corporate Relations Agreement. In
addition, CRG owns warrants exercisable for an aggregate 600,000 Shares. "See
Recent Developments."
The following table shows as to each Selling Shareholder the number of Shares
owned by each Selling Shareholder prior to this offering and the number of
Shares being registered hereby:
<TABLE>
<CAPTION>
Number of Number of Shares
Shares Owned Shares Owned
Name Prior to Offering Registered After Offering
<S> <C> <C> <C>
Corporate Relations Group 1,145,000(1) 1,145,000(1) 0
Milton H. Barbarosh 25,000 25,000 0
Charles A. Ramos 50,000 50,000 0
Roger Besu, P.A. 50,000 50,000 0
Trust AC FBO Duncan,
Goodman & Associates, Ltd.
Cyrus E. Hornsby III 25,000 25,000 0
Adela M. Tomeu 122,277 122,277 0
Strategica Capital Corporation 2,540,193(2) 2,460,193(2) 80,000
R.G. Quintero & Co. 231,250(3) 231,250(3) 0
TOTAL......................... 4,188,720 4,108,720 80,000
</TABLE>
(1) Includes 600,000 Shares underlying warrants.
(2) Includes (i) 175,000 Shares underlying warrants granted to a
predecessor corporation and (ii)761,731 shares of the Company's Series A
Convertible Preferred Stock issuable under warrants. The shares of Series A
Convertible Preferred Stock are convertible into 2,285,193 Shares of Common
Stock.
(3) Consisting of 231,250 Shares underlying warrants.
7
<PAGE>
Under the terms of the Corporate Relations Agreement, the Company agreed to
file a registration statement with respect to the 545,000 Shares of Common Stock
and the 600,000 Shares underlying warrants given to CRG.
SALE OF THE SHARES
Sales of the Shares may be made by the Selling Shareholders, or, subject to
applicable law, by pledgees, donees, transferees or other successors in
interest, in the over-the-counter market or otherwise at prices and at terms
then prevailing or at prices related to the then current market price, or in
negotiated transactions. The Shares may be sold by one or more of the following:
(a) a block trade in which the broker or dealer so engaged will attempt to sell
the Shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker or dealer as
principal and resale by such broker or 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 Shareholders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions or discounts from
Selling Shareholders in amounts to be negotiated immediately prior to sale. Such
brokers or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales.
The Company has advised the Selling Shareholders of their obligations under
the Exchange Act to avoid market manipulation of the Shares (including, without
limitation, their obligation not to purchase or solicit purchases by others of
any of the Shares during the two business days preceding the commencement of any
offers or sales of the Shares by any of the Selling Shareholders) until the
offering pursuant to this Prospectus by all Selling Shareholders has been
completed.
The Company also has advised the Selling Shareholders of their obligations
under the Securities Act to deliver copies of this Prospectus to any purchaser
of their Shares. Further, the Company has advised the Selling Shareholders that
they must advise the Company of any changes concerning them contained herein and
that sales of the Shares shall be made only at such times as this Registered
Statement is deemed effective by the Commission.
LEGAL MATTERS
A legal opinion to the effect that the Shares are validly issued, fully paid
and nonassessable has been rendered by Adorno & Zeder, P.A., Miami, Florida.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report on Form 10-KSB for the year ended March 31, 1996, have
been audited by Coopers & Lybrand, L.L.P., independent auditors, and the
financial statements of American Remedial Technologies, Inc., which was acquired
by the Company on July 8, 1996 appearing in the Company's Quarterly Report on
Form 10-QSB for the quarter ended June 30, 1996, have been audited by Lopez Levi
& Associates, P.A., independent auditors, as set forth in their reports thereon
included therein are incorporated herein by reference. The report of Coopers &
Lybrand, L.L.P. contains an explanatory paragraph relating to the Company's
ability to continue as a going concern as described in Note 23 to those
consolidated financial statements. Such financial statements are incorporated
herein by reference in reliance upon such reports given upon the authority of
such firms as experts in accounting and auditing.
8
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the Commission
pursuant to the Exchange Act (Commission File No. 0-16322) are incorporated
herein by this reference:
(1) The Company's Annual Report on Form 10-KSB for the year ended March
31, 1996;
(2) The Amendment to the Company's Form 10-KSB for the year ended March
31, 1996 on Form 10-KSB/A dated September 16, 1996;
(3) The Company's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1996;
(4) The Amendment to the Company's Form 10-QSB for the quarter ended
June 30, 1996 on Form 10-QSB/A dated October 9, 1996;
(5) The Company's current report on Form 8-K dated July 22, 1996; and
(6) The Company's Proxy Statement for the Annual Meeting of Shareholders
to be held on October 18, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date hereof and prior to the date
upon which this offering is terminated shall be deemed to be incorporated by
reference herein and to be part hereof from the date any such document
is filed.
Any statements contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document which also incorporated by reference) modifies
or supersedes such statement. Any statement so modified or superseded shall not
be deemed to constitute a part hereof except as so modified or superseded. All
information appearing in this Prospectus is qualified in its entirety by the
information and financial statements (including notes thereto) appearing in the
documents incorporated herein by reference, except to the extent set forth in
this paragraph.
----------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS
PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
SHAREHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE SHARES OF COMMON STOCK IN ANY JURISDICTION
WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.
---------------------------
9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 1. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Registration fee to the Securities and Exchange $
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . 1,665.10
Nasdaq Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 22,500.00
Accounting fees and expenses . . . . . . . . . . . . . . . . . . 10,000.00
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . 10,000.00
Miscellaneous expenses . . . . . . . . . . . . . . . . . . . . . 2,000.00
Total. . . . . . . . . . . . . . . . . . . . $46,165.10
==========
The foregoing items, except for the SEC registration fee, are
estimated. The Registrant has agreed to bear all expenses (other than
underwriter's discounts, broker or dealer commissions, and fees and expenses
of counsel and other advisors to the Selling Shareholders) in connection with
the registration and sale of the Shares.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 7.1 of the Registrant's By-laws provide as follows:
"INDEMNIFICATION OF DIRECTORS, OFFICERS, AND OTHERS. Any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was at
any time since the inception of the corporation a director, officer or
employee of the corporation, or is or was at any time since the inception of
the corporation serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including serving as trustee, plan
administrator or other fiduciary of any employee benefit plan, shall be
indemnified by the corporation to the full extent permitted by the Colorado
Corporation Code (or any similar provision or provisions of applicable law at
the time in effect). Any such indemnification, however, shall be made by the
corporation only as authorized in the specific case upon a determination that
such indemnification is proper in the circumstances because such director,
officer, employee, or agent has met the applicable standard of conduct set
forth in such subsections (or such similar provision or provisions), such
determination to be made (1) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to the action, suit or
proceeding in question, (2) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders, PROVIDED that
to the extent such director, officer or employee has been successful on the
merits or otherwise in defense of such action, suit or proceeding, or in
defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including
10
<PAGE>
attorneys' fees) actually and reasonably incurred by him in connection
therewith without necessity of such determination.
ITEM 16. EXHIBITS
EXHIBIT NO.
3.1 Amendment to the Company's Articles of Incorporation.
4.1 Warrant Agreement dated July 11, 1994 between the Company and
Strategica Group, Inc.
4.2 Warrant Agreement dated July 11, 1994 between the Company and
Strategica Capital Corporation.
4.3 Warrant Agreement dated April 4, 1995 between the Company and
Strategica Capital Corporation.
4.4 Additional Warrant Agreement dated April 4, 1995 between the
Company and Strategica Capital Corporation.
4.5 Amendment to Warrant Agreement between the Company and Strategica
Capital Corporation dated April 4, 1995.
4.6 Amendment to Warrant Agreement between the Company and Strategica
Group, Inc. dated April 4, 1995.
4 .7 Warrant Agreement dated July 8, 1996 between the Company and
Clubb Capital Ltd.
4.8 Warrant Agreement dated July 8, 1996 between the Company and Karl
Spoddig.
5.1 Opinion of Adorno & Zeder, P.A. as to the legality of the
securities being registered which includes the consent of Adorno
& Zeder, P.A.
10.2 Corporate Relations Agreement, dated August 13, 1996, between the
Company and Corporate Relations Group, Inc.
10.3 The Company's 1996 Stock Option Plan.
23.1 Consent of Coopers & Lybrand, L.L.P., the Company's independent
auditors.
23.2 Consent of Lopez Levi & Associates, P.A.
11
<PAGE>
23.3 Consent of Adorno & Zeder, P.A. included in Exhibit 5.1.
24.1 Power of Attorney, included in the signature pages and this
registration statement.
ITEM 17. UNDERTAKINGS.
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement
(i) To include any prospectus required by Section 10(a)
(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
Provided, however, that paragraphs (l)(i) and (l)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The Company hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
12
<PAGE>
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction to the questions whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, hereunto duly
authorized, in the city of West Palm Beach, Florida, on October 9 , 1996.
EVANS ENVIRONMENTAL
CORPORATION
By:/S/CHARLES C. EVANS
--------------------------
Charles C. Evans
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature
appears below constitutes and appoints Enrique A. Tomeu and Charles C. Evans,
and each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or,
13
<PAGE>
any of them, or their or his substitute or substitutes, may lawfully do or
cause to be Done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- -------------------------- -------------------------- ----------------------
/S/CHARLES C. EVANS Chairman of the Board and 10/9 , 1996
- -------------------------- Director ------
Charles C. Evans
/S/ENRIQUE A. TOMEU President, Chief Executive Officer 10/9 , 1996
- -------------------------- and Director ------
Enrique A. Tomeu
/S/ DAVI D C. LANGLE Chief Financial Officer 10/9 , 1996
- -------------------------- ------
David C. Langle
/S/LUIS DE LA CRUZ DIRECTOR 10/9 , 1996
- -------------------------- ------
Luis De la Cruz
/S/LEON S. EPLAN DIRECTOR 10/9 , 1996
- -------------------------- ------
Leon S. Eplan
/S/ANTONIO L. CONTRERAS Director 10/9 , 1996
- -------------------------- ------
Antonio L. Contreras, Jr.
/S/ENRIQUE J. TOMEU Director 10/9 , 1996
- -------------------------- ------
Enrique J. Tomeu, Sr.
/S/ROBERT J. UNDERBRINK Director 10/9 , 1996
- -------------------------- ------
Robert J. Underbrink
/S/MICHAEL S. KLEIN Director 10/9 , 1996
- -------------------------- ------
Michael S. Klein
/S/CARLOS M. VERGARA Director 10/9 , 1996
- -------------------------- ------
Carlos M. Vergara
14
<PAGE>
EXHIBIT INDEX
3.1 Amendment to the Company's Articles of Incorporation.
4.1 Warrant Agreement dated July 11, 1994 between the Company
and Strategica Group, Inc. incorporated by reference from Exhibit
4.1 of the Company's Quarterly Report on Form 10-QSB for the
quarter ended December 31, 1995 dated February 12, 1996
4.2 Warrant Agreement dated July 11, 1994 between the Company and
Strategica Capital Corporation incorporated by reference from
Exhibit 4.1 of the Company's Quarterly Report on Form 10-QSB for
the quarter ended December 31, 1995 dated February 12, 1996
4.3 Warrant Agreement dated April 4, 1995 between the Company and
Strategica Capital Corporation incorporated by reference from
Exhibit 4.1 of the Company's Quarterly Report on Form 10-QSB
for the quarter ended December 31, 1995 dated February 12,
1996
4.4 Additional Warrant Agreement dated April 4, 1995 between the
Company and Strategica Capital Corporation incorporated by
reference from Exhibit 4.1 of the Company's Quarterly Report on
Form 10-QSB for the quarter ended December 31, 1995 dated
February 12, 1996
4.5 Amendment to Warrant Agreement between the Company and Strategica
Capital Corporation dated April 4, 1995 incorporated by reference
from Exhibit 4.1 of the Company's Quarterly Report on Form 10-QSB
for the quarter ended December 31, 1995 dated February 12, 1996
4.6 Amendment to Warrant Agreement between the Company and
Strategica Group, Inc. dated April 4, 1995 incorporated by
reference from Exhibit 4.1 of the Company's Quarterly Report on
Form 10-QSB for the quarter ended December 31, 1995 dated
February 12, 1996
4.7 Warrant Agreement dated July 8, 1996 between the Company and
Clubb Capital Ltd. incorporated by reference from Exhibit 4.7 of
the Company's Form 10-KSB for the year ended March 31, 1996
dated July 12, 1996
15
<PAGE>
4.8 Warrant Agreement dated July 8, 1996 between the Company and Karl
Spoddig incorporated by reference from Exhibit 4.8 of the
Company's Form 10-KSB for the year ended March 31, 1996 dated
July 12, 1996
5.1 Opinion of Adorno & Zeder, P.A. as to the legality of the
securities being registered which includes the consent of Adorno
& Zeder, P.A.
10.2 Corporate Relations Agreement, dated August 13, 1996, between
the Company and Corporate Relations Group, Inc.
10.3 The Company's 1996 Stock Option Plan, incorporated by reference
from the Company's Proxy Statement for the Annual Meeting of
Shareholders to be held on October 18, 1996
23.1 Consent of Coopers & Lybrand, L.L.P., the Company's independent
auditors.
23.2 Consent of Lopez, Levi & Associates, P.A.
23.3 Consent of Adorno & Zeder, P.A.. included in Exhibit 5.1.
24.1 Power of Attorney, included in the signature page of this
registration statement.
16
EXHIBIT 3.1
Secretary of State
Corporations Section
961090805 C $35.00
SECRETARY OF STATE
07-09-96 14:44
STOCK CHANGE
DF871720767
CERTIFICATE OF CORRECTION
Pursuant to the Colorado Business Corporation Act, the undersigned hereby
executes the following certificate of correction:
FIRST: The exact name of the corporation is Evans Environmental Corporation
organized under the laws of the State of Colorado.
SECOND: The document being corrected is the Articles of Amendment to the
Restated Articles of lncorporation of Evans Environmental Corporation.
THIRD: The document was filed on July 5, 1996.
FOURTH: Statement of incorrect information: See Attachment A.
FIFTH: Statement of corrected information: See Attachment B.
Signature /s/ ILLEGIBLE
-----------------------------
Title Chairman of the Board
-------------------------------
8 July 96
<PAGE>
ATTACHMENT A
C. CONVERSION. (1) Subject to any adjustment as described in Section
C(VII), below, if the Company's consolidated earnings before
debt, interest, and income and franchise taxes ("EBIT") shall
exceed $1,000,000 for a fiscal year of the Company, commencing
with the fiscal year ending March 31, 1997, then 150,000 shares
of the Series B Preferred Stock shall be automatically converted
to 1,500,OOO shares of the Company's Common Stock, par value
$0.012 per share. If for any such fiscal year the Company's
consolidated EBIT is in excess of $1,000,000 then one additional
share of series B Preferred Stock shall be converted into 10
shares of Common Stock for each $10.00 of such EBIT in excess of
STOCK $1,000,000, up to an additional 100,000 shares of Series B
CHANGE Preferred Stock in any one fiscal year. If the Company's
consolidated EBIT is $3,000,000 or more in any fiscal year, then
an additional 250,000 shares of Series B Preferred Stock, or the
amount of the Series B Preferred then remaining unissued, if
less, shall be converted into Common Stock at the rate of 10
shares of Common Stock for each share of Series B Preferred
Stock. Any such EBIT in a given fiscal year which is in excess
of the amount that can be used to cause the foregoing conversion
shall be carried forward to the next fiscal year or years and
combined with the Company's consolidated EBIT for such next
fiscal year or years
43322
<PAGE>
ATTACHMENT B
C. CONVERSION. (1) Subject to any adjustment as described in Section
C(VII), below, if the Company's consolidated earnings before
debt, interest, and income and franchise taxes ("EBIT") shall
exceed $1,000,000 for a fiscal year of the Company, commencing
with the fiscal year ending March 31, 1997, then 15O,000 shares
of the Series B Preferred Stock shall be automatically converted
to 1,50O,OOO shares of the Company's Common Stock, par value
$0.012 per share. If for any such fiscal year the Company's
consolidated EBIT is in excess of $1,000,000 then one additional
share of Series B Preferred Stock shall be converted into 10
shares of Common Stock for each $10.00 of such EBIT in excess of
STOCK $1,000,000, up to an additional 100,000 shares of Series B
CHANGE Preferred Stock in any one fiscal year. If the Company's
consolidated EBIT is $3,000,000 or more in any fiscal year, then
an additional 250,000 shares of Series B Preferred Stock, or the
amount of the Series B Preferred then remaining unissued, if
less, shall be converted into Common Stock at the rate of 10
shares of Common Stock for each share of Series B Preferred
Stock. Any such EBIT in a given fiscal year which is in excess
of the amount that can be used to cause the foregoing conversion
shall be carried forward to the next fiscal year or years and
combined with the Company's consolidated EBIT for such next
fiscal year or years
13366
EXHIBIT 5.1
ADORNO & ZEDER
A PROFESSIONAL ASSOCIATION
2601 SOUTH BAYSHORE DRIVE
SUITE 1600
MIAMI, FLORIDA 33133
TELEPHONE (305) 858-555
October 9, 1996 FACSIMILE
(305) 858-4777
Evans Evironmental Corporation
1000 Southern Boulevard
Suite 300
West Palm Beach, Fl 33405
Gentlemen:
Evans Environmental Corporation (the "Company") has requested us to
pass upon the legality of the 4,108,720 shares of Common Stock, $.012 par value,
to be issued pursuant to a registration statement (the "Registration Statement")
under cover of Form S-3 (the "Offering").
In preparing this opinion we have examined and relied upon originals or
copies, certified or otherwise, authenticated to our satisfaction, of such
documents as we consider necessary or appropriate as a basis for the opinions
hereinafter stated.
Based on the foregoing we are of the opinion that the Company's Common
Stock to be issued in the Offering will have been duly authorized, legally
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
\s\ ADORNO & ZEDER, P.A.
EXHIBIT 10.2
LEAD GENERATION / CORPORATE RELATIONS AGREEMENT
THIS AGREEMENT is made this 13th day of AUGUST, 1996, between CORPORATE
RELATIONS GROUP, INC., a Florida corporation (hereinafter "CRG"), and EVANS
ENVIRONMENTAL CORPORATION, (hereinafter the "Client").
RECITALS
1. The Client wishes to retain CRG to provide corporate relations services
to the Client.
2. CRG is willing to provide such corporate relations services as are more
fully described herein.
NOW THEREFORE, in consideration of the mutual promises contained herein, it
is agreed as follows:
1. FURNISHING OF INFORMATION BY CLIENT. The Client shall furnish to
CRG information about the Client such as copies of disclosure and filing
materials, financial statements, business plans, promotional information
and background of the Client's officers and directors ("Information
Package"). The Client shall update the Information Package on a continuous
basis. The Client understands that the sole purpose for providing CRG with
the Information Package is for utilization in a Lead Generation/Corporate
Relations program. CRG is not obligated to assess the financial viability
of the Client. CRG may rely on, and assume the accuracy of the Information
Package.
2. REPRESENTATIONS AND WARRANTIES OF CLIENT. The Client represents that all
information included in the Information Package furnished to CRG shall
disclose all material facts and shall not omit any facts necessary to make
statements made on behalf of the Client not misleading.
3. COVENANTS OF THE CLIENT. The Client covenants and warrants that any
information submitted for dissemination will be truthful, accurate, in
compliance with all copyright and all other applicable laws and regulations
and will not be submitted in connection with any improper or illegal act or
deed.
-1-
<PAGE>
4. Based on the Information Package, CRG will perform the services more
fully described in Exhibit "A" for a period of twelve (12) months pursuant
to the terms hereof, which services shall specifically include CRG making
oral representations on behalf of the Client pursuant to the following
procedures:
(a) PREPARATION OF PROOFS. CRG shall prepare proofs and or tapes of the
agreed upon materials and information, as set for dissemination, for
the Client's review and approval;
(b) CORRECTION AND CHANGES OF PROOFS AND OR TAPES. CRG shall make all
corrections and changes that the Client may request.
(c) SIGN OFFS. All approvals, corrections and change of proofs by the
Client shall be signed by a duly authorized representative of the
Client. The Client hereby designates the individual(s) listed in
Exhibit "C" hereof as authorized representatives for purposes of
this paragraph 4(a), (b) and (c); and CRG may rely upon this
designation.
5. COMPENSATION. Refer to Exhibit "B".
6. IT IS UNDERSTOOD AND AGREED BY THE PARTIES THAT THE ABOVE COMPENSATION IN
U.S. CURRENCY, OR FREE TRADING SHARES OF THE COMPANY, SHOULD BE PAID TIMELY
UPON EXECUTION OF THIS AGREEMENT. CRG WILL RETAIN THE OPTION, BUT IS NOT
COMPELLED TO BEGIN IT'S PERFORMANCE UNDER THIS AGREEMENT PRIOR TO THE
PAYMENT OF SUCH COMPENSATION IN U.S. CURRENCY OR FREE TRADING SHARES.
7. ASSUMPTION OF LIABILITY AND INDEMNIFICATION. The Client assumes and claims
all responsibility and liability for the content of all information
disseminated on behalf of the Client which have been approved by Client.
The Client shall indemnify and hold CRG, its subsidiaries and parent
company harmless from and against all demands, claims or liability arising
for any reason due to the context of information disseminated on behalf of
the Client. This indemnity shall include any costs incurred by CRG
including, but not limited to, legal fees and expenses incurred both in
administrative proceedings, at trial and appellate levels, in settlement
of claims and payment of any judgment against CRG.
8. ASSIGNMENT AND DELEGATION. Neither party may assign any rights or delegate
any duties hereunder without the other party's express prior written
consent.
-2-
<PAGE>
9. ENTIRE AGREEMENT. This writing contains the entire agreement of the
parties. No representations were made or relied upon by either party, other
than those expressly set forth. Furthermore, the Client understands that
CRG makes no guarantees, assurances or representations in regard to the
results of its corporate relations program. No agent, employee or other
representative of either party is empowered to alter any of the above
terms, unless done in writing and signed by an executive officer of the
respective parties.
10. CONTROLLING LAW AND VENUE. This Agreement's validity, interpretation and
performance shall be controlled by and construed under the laws of the
State of Florida. The proper venue and jurisdiction shall be the Circuit
Court in Orange County, Florida.
11. PREVAILING PARTY. In the event of the institution of any legal proceedings
or litigation, at the trial level or appellate level, with regard to this
Agreement, the prevailing party shall be entitled to receive from the
non-prevailing party all costs, reasonable attorney's fees and expenses.
l2. FAILURE TO OBJECT NOT A WAIVER. The failure of either party to this
Agreement to object to, or to take affirmative action with respect to any
conduct of the other which is in violation of the terms of this Agreement
shall not be construed as a waiver of the violation or breach, or of any
future violation, breach or wrongful conduct.
13. NOTICES. All notices or other documents under this Agreement shall be in
writing and delivered personally or mailed by certified mail, postage
prepaid, addressed to the representative or Company as follows:
COMPANY: CORPORATE RELATIONS GROUP, INC.
1801 Lee Road, Suite 301
Winter Park, FL 32789
Attention: Roberto E. Veitia, President
CLIENT: EVANS ENVIRONMENTAL CORPORATION
1000 Southern Blvd., Suite 300
West Palm Beach, FL 33405
Attention: Enrique A. Tomeu, CEO
-3-
<PAGE>
14. HEADINGS. Headings in this Agreement are for convenience only and shall not
be used to interpret or construe its provisions.
15. TIME. For all intents and purposes, time is of the essence with this
Agreement.
16. AGREEMENT NOT TO HIRE. The Client understands and appreciates that CRG has
invested a tremendous amount of time, energy and expertise in the training
of its employees to be able to provide the very service that Client
desires. Client further understands that should an employee be enticed to
leave, then CRG will be damaged in an amount the parties are incapable of
calculating at this time. Therefore, the Client agrees not to offer
employment to any employee or subcontractor of CRG, nor to allow any
officer or director of Client to offer such employment with Client or any
other company with whom officers and directors of Client are employed or
hold a financial stake for a period of three (3) years.
IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
CORPORATE RELATIONS GROUP, INC.
BY: /S/ ROBERTO E. VEITIA
---------------------
Roberto E. Veitia
President
EVANS ENVIRONMENTAL CORPORATION
BY: /S/ENRIQUE A. TOMEU
-------------------
Enrique A. Tomeu
Chief Executive Officer
-4-
<PAGE>
EXHIBIT "A"
The Corporate Relations Services to be provided by CRG for a sixty (60) month
period are as follows:
I. ADVERTISING and PRINTING SERVICES
A. MONEYWORLD MAGAZINE - Lead Generation mailing (150,000 print run total
for the sixty month period)
/BULLET/ Two eighteen page, four color magazines will be created of
which four page advertorial will be dedicated to the Client.
/BULLET/ Creative concept, color separations, copy work and printing
/BULLET/ 150,000 to be mailed
/BULLET/ Client has the option to purchase one additional four page,
four color advertorial for payment of $135,000.00 (One
Hundred Thirty-Five Thousand Dollars).
B. GROWTH INDUSTRY REPORT - Four page, four color follow-up mail piece
designed for additional informational purposes that is mailed to
respondents. A total of 7,500 will be printed.
C. THE CORE BROKER PROGRAM - CRG will produce a core of 8-10 retail
brokers, market makers and/or money managers who will take positions
in the stock of "EVANS ENVIRONMENTAL CORPORATION". This process will
begin immediately upon CRG receiving the payment as stipulated in
Exhibit "B" and will be completed no later than a month before mailing
occurs. Upon completion, selection and approval of the Core Broker
Group, CRG will arrange a Core Broker meeting. This will last for two
days, which will include; a show and tell from the top management of
"EVANS ENVIRONMENTAL CORPORATION" in intense training of these core
brokers.
D. Public relations exposure to newsletter writers, trade publications
and financial gurus. At CRG's discretion, it will pay for any
special reports that may be required. The Client shall be totally
responsible for all travel expenses for the purpose of due
diligence of the company by financial newsletter writers and/or
brokers. The Client will have total pre-approval rights on these
trips.
E. Inclusion as a featured "Lead Generator of the Month" in CONFIDENTIAL
FAX ALERT, a newsletter transmitted by fax to over 3,000 Brokers.
F. Preparation of a Broker Bullet Sheet to be sent to every broker who
shows interest in working the leads and the stock. (As soon as
possible).
G. Lead Tracking Summary maintained for all response leads generated and
provided.
H. Follow-up with shareholders, brokers, funds and institutions.
-1-
<PAGE>
EXHIBIT "A"
CONTINUED
I. Investor Relations - Press release placements in market publications.
The Client shall pay the actual cost incurred for these wire services.
J. Two Location Road Shows - Locations to be determined. Client will
cover all expenses of Road Shows. Client will have prior approval over
those expenses.
K. Junior Page Advertising in six (6) separate issues of MoneyWorld
Magazine.
L. Advertising Insert in MARKET EXPRESS mailed to 25,000 active
subscribers.
M. CRG will distribute at its cost the due diligence packages to all
inquiring brokers. The Client shall supply the necessary materials for
this package.
N. CRG guarantees a minimum of 3% return of qualified investor leads
specifically generated for the Company.
O. Advice on Fund Raising.
1. If travel is required, the Client will pay transportation and
hotel expenses.
P. Assistance in review of documentation to be sent to brokers.
1. If travel is required, the Client will pay transportation and
hotel expenses.
Q. Assistance in public relations with investment newsletter writers and
financial institutions.
1. If travel is required, the Client will pay transportation and
hotel expenses.
R. Advice on mergers and acquisitions.
1. If travel is required, the Client will pay transportation and
hotel expenses.
-2-
<PAGE>
EXHIBIT "B"
PAYMENT AGREEMENT
made by and between
EVANS ENVIRONMENTAL CORPORATION
and
CORPORATE RELATIONS GROUP, INC.
THIS AGREEMENT is made this 13th day of AUGUST, 1996, and will serve as
confirmation of payment terms for services to be provided EVANS ENVIRONMENTAL
CORPORATION.("CLIENT") whereby CORPORATE RELATIONS GROUP, INC. ("CRG") has
agreed to perform said services as defined in the "Lead Generation/Corporate
Relations Agreement."
TERMS
A. CLIENT will pay to CRG, ONE MILLION NINTY THOUSAND DOLLARS ($1,090,000 U.S.
cy) or as a convenience to Client, 1,090,000 DOLLARS worth of free trading
EVANS ENVIRONMENTAL CORPORATION common shares. The formula shall be the
$1,090,000 U.S. cy divided by the BID PRICE of the shares on the date of
signing this agreement which has been determined to be $2.00 per share.
This will equal the amount of shares payable to CRG. This has been
determined to be 545,000 common shares of EVANS ENVIRONMENTAL CORPORATION.
B. This Agreement is subject to compliance with the rules of the Exchanges and
Securities Commissions on which Client is listed and registered.
C. IT IS UNDERSTOOD AND AGREED BY THE PARTIES THAT THE ABOVE COMPENSATION IN
U.S. CURRENCY, OR FREE TRADING SHARES OF THE COMPANY, SHOULD BE PAID TIMELY
UPON EXECUTION OF THIS AGREEMENT. CRG WILL RETAIN THE OPTION, BUT IS NOT
COMPELLED TO BEGIN IT'S PERFORMANCE UNDER THIS AGREEMENT PRIOR TO THE
PAYMENT OF SUCH COMPENSATION IN U.S. CURRENCY OR FREE TRADING SHARES.
D. In the event of termination of the Agreement by Client, CRG shall be fully
released and forever discharged by Client from any further obligations or
liabilities with respect to the "Lead Generation/Corporate Relations
Agreement" and any results therefrom, save and except liabilities arising
from CRG's own negligence during the term of this Agreement. Concurrently,
Client shall be fully released and forever discharged by CRG from any and
all obligations of further payments or liabilities with respect to the
"Lead Generation/Corporate Relations Agreement." This release in no way
affects Point #7, Page 2 of the"Lead Generation/Corporate Relations
Agreement."
-1-
<PAGE>
EXHIBIT " B "
continued
E. Shares shall be made free trading through the registration that is mutually
agreed upon by the Company's attorney and CRG's attorney.
F. Company shall issue options to CRG as outlined below.
AMOUNT PRICE DURATION
------ ----- --------
300,000 shares at $2.00 One (1) year from the date of this Agreement
150,000 shares at $2.50 Two (2) years from the date of this Agreement
150,000 shares at $2.70 Three (3) years from the date of this Agreement
G. CRG agrees to return 47,000 free trading common shares of Evans
Environmental Corporation or its successor company if during the term of
our contract the price of Evans Environmental Corporation stock doesn't
reach $4.50 a share for a period of 10 consecutive days.
IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
CORPORATE RELATIONS GROUP, INC.
BY: /S/ ROBERTO E. VEITIA
---------------------
Roberto E. Veitia
President
EVANS ENVIRONMENTAL CORPORATION
BY: /S/ENRIQUE A. TOMEU
-------------------
Enrique A. Tomeu
Chief Executive Officer
-2-
<PAGE>
EXHIBIT "C"
EVANS ENVIRONMENTAL CORPORATION hereby designates the following person or
persons to act on its behalf for purposes of signing off on all copies pursuant
to Paragraph 4 of this Corporation Relations Agreement. CRG may rely upon the
signature of any of the following:
- ---------------------------- -----------------------------
DIRECTOR (PLEASE SIGN) DIRECTOR (PLEASE PRINT)
- ---------------------------- -----------------------------
PRESIDENT (PLEASE SIGN) PRESIDENT (PLEASE PRINT)
- ---------------------------- -----------------------------
VICE PRESIDENT (PLEASE SIGN) VICE PRESIDENT (PLEASE PRINT)
-1-
<PAGE>
MONEYWORLD MAGAZINE
ADVERTISING INSERT AGREEMENT
GULF ATLANTIC PUBLISHTNG INC.
THIS AGREEMENT is made this 13th day of AUGUST, 1996, between GULF ATLANTIC
PUBLISHING INC., a Florida corporation (hereinafter "GAP"), and EVANS
ENVIRONMENTAL CORPORATION, (hereinafter the "Client").
RECITALS
1. The Client wishes to retain GAP for an Insert(AD)in MONEYWORLD MAGAZINE.
2. GAP is willing to provide such services as are more fully described herein.
NOW THEREFORE, in consideration of the mutual promises contained herein, it is
agreed as follows:
1. FURNISHING OF INFORMATION BY CLIENT. The Client shall furnish to GAP
information about the Client such as copies of disclosure and filing
materials, financial statements, business plans, promotional information
and background of the Client's officers and directors ("Information
Package"). The Client understands that the sole purpose for providing GAP
with the Information Package is for utilization in the preparation of the
Ad. GAP is not obligated to assess the financial viability of the Client.
GAP may rely on, and assume the accuracy of the Information Package.
2. REPRESENTATIONS AND WARRANTIES OF CLIENT. The Client represents that all
information included in the Information Package furnished to GAP shall
disclose all material facts and shall not omit any facts necessary to make
statements made on behalf of the Client not misleading.
3. COVENANTS OF THE CLIENT. The Client covenants and warrants that any
information submitted for dissemination will be truthful, accurate, in
compliance with all copyright laws and all other applicable laws and
regulations and will not be submitted in connection with any improper or
illegal act or deed.
<PAGE>
4. Based on the Information Package, GAP will perform the services more fully
described in Exhibit "A", and follow the procedures outlined below 4(A),
4(B), and 4(C).
(a) PREPARATION OF PROOFS. GAP shall prepare proofs of the agreed upon
materials and information, as set for dissemination, for the Client's
review and approval;
(b) CORRECTION AND CHANGES OF PROOFS. GAP shall make all corrections and
changes that the Client may request.
(c) SIGN OFFS. All approvals, corrections and change of proofs by the
Client shall be signed by a duly authorized representative of the
Client. The Client hereby designates the individual(s) listed in
Exhibit "C" hereof as authorized representatives for purposes of this
paragraph 4(a), (b) and (c); and GAP may rely upon this designation.
5. COMPENSATION. Refer to Exhibit "B".
6. IT IS UNDERSTOOD AND AGREED BY THE PARTIES THAT THE ABOVE COMPENSATION IN
U.S. CURRENCY, OR FREE TRADING SHARES OF THE COMPANY, SHOULD BE PAID TIMELY
UPON EXECUTION OF THIS AGREEMENT. GAP WILL RETAIN THE OPTION, BUT IS NOT
COMPELLED TO BEGIN IT'S PERFORMANCE UNDER THIS AGREEMENT PRIOR TO THE
PAYMENT OF SUCH COMPENSATION IN U.S. CURRENCY OR FREE TRADING SHARES.
7. ASSUMPTION OF LIABILITY AND INDEMNIFICATION. The Client assumes and claims
all responsibility and liability for the content of all information
disseminated on behalf of the Client which have been approved by Client.
The Client shall indemnify and hold GAP, its subsidiaries and parent
company harmless from and against all demands, claims or liability arising
for any reason due to the context of information disseminated on behalf of
the Client. This indemnity shall include any costs incurred by GAP
including, but not limited to, legal fees and expenses incurred both in
administrative proceedings, at trial and appellate levels, in settlement of
claims and payment of any judgment against GAP.
8. ASSIGNMENT AND DELEGATION. Neither party may assign any rights or delegate
any duties hereunder without the other party's express prior written
consent.
-2-
<PAGE>
9. ENTIRE AGREEMENT. This writing contains the entire agreement of the
parties. No representations were made or relied upon by either party, other
than those expressly set forth. Furthermore, the Client understands that
GAP makes no guarantees, assurances or representations in regard to the
results of the running of Advertising in its publication MoneyWorld
Magazine. No agent, employee or other representative of either party is
empowered to alter any of the above terms, unless done in writing and
signed by an executive officer of the respective parties.
10. CONTROLLING LAW AND VENUE. This Agreement's validity, interpretation and
performance shall be controlled by and construed under the laws of the
State of Florida. The proper venue and jurisdiction shall be the Circuit
Court in Orange County, Florida.
11. PREVAILING PARTY. In the event of the institution of any legal proceedings
or litigation, at the trial level or appellate level, with regard to this
Agreement, the prevailing party shall be entitled to receive from the
non-prevailing party all costs, reasonable attorney's fees and expenses.
12. FAILURE TO OBJECT NOT A WAIVER. The failure of either party to this
Agreement to object to, or to take affirmative action with respect to any
conduct of the other which is in violation of the terms of this Agreement
shall not be construed as a waiver of the violation or breach, or of any
future violation, breach or wrongful conduct.
13. NOTICES. All notices or other documents under this Agreement shall be in
writing and delivered personally or mailed by certified mail, postage
prepaid, addressed to the representative or Company as follows:
COMPANY: GULF ATLANTIC PUBLISHING INC.
1801 Lee Road, Suite 301
Winter Park, FL 32789
Attention: Kurt Ruthenbeck, President
CLIENT: EVANS ENVIRONMENTAL CORPORATION
1000 Southern Blvd., Suite 300
West Palm Beach, FL 33405
Attention: Enrique A. Tomeu, CEO
-3-
<PAGE>
14. HEADINGS. Headings in this Agreement are for convenience only and shall not
be used to interpret or construe its provisions.
15. TIME. For all intents and purposes, time is of the essence with this
Agreement.
16. AGREEMENT NOT TO HIRE. The Client understands and appreciates that GAP has
invested a tremendous amount of time, energy and expertise in the training
of its employees to be able to provide the very service that Client
desires. Client further understands that should an employee be enticed to
leave, then GAP will be damaged in an amount the parties are incapable of
calculating at this time. Therefore, the Client agrees not to offer
employment to any employee or subcontractor of GAP, not to allow any
officer or director of Client to offer such employment with Client or any
other company with whom officers and directors of Client are employed or
hold a financial stake for a period of three (3) years.
IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
BY: /S/ KURT RUTHENBECK
---------------------
Kurt Ruthenbeck
President
BY: /S/ENRIQUE A. TOMEU
-------------------
Enrique A. Tomeu, CEO
President
-4-
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated June 4, 1996, except for Note 22 as for which the
date was July 12, 1996 on our audit of the consolidated financial statements of
Evans Environmental Corporation as of March 31, 1996, and for the years ended
March 31, 1996 and 1995, appearing in the Company's Annual Report on Form 10-KSB
for the year ended March 31, 1996. We also consent to the reference to our firm
under the caption "Experts".
/s/ COOPERS & LYBRAND L.L.P.
Miami, Florida
October 9, 1996
EXHIBIT 23.2
To the Board of Directors of
Evans Environmental Corporation
Miami, Florida 33131
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated June 21, 1996, except for Note H as for which the
date was July 9, 1996 on our audit of American Remedial Technologies, Inc., as
of March 31, 1996, and for the years ended March 31, 1996 and 1995, appearing in
item 6 Exhibit (a) on Form 10QSB, as amended, the quarter ended June 30, 1996 of
Evans Environmental Corporation filed on August 19, 1996 with the Securities and
Exchange Commission. We also consent to the reference to our firm under the
caption "Experts". However, from the date of our consent through the current
date, our firm is not independent.
/S/ LOPEZ LEVI & ASSOCIATES, P.A.
- -------------------------------------
Lopez Levi & Associates, P.A.
Consent date: June 21, 1996, except for Note H
as of which the date was July 9, 1996.
