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As filed with the Securities and Exchange Commission on August __, 1996
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
___________
ATC ENVIRONMENTAL INC.
(Exact name of Registrant as specified in its charter)
Delaware 4950 46-0399408
(State or jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
ATC Environmental Inc.
104 East 25th Street, 10th Floor
New York, New York 10010
(Address of principal place of business)
Morry F. Rubin, President
ATC Environmental Inc.
104 East 25th Street, 10th Floor
New York, New York 10010
(212) 353-8280/(212) 598-4283(Fax)
(Name, address, and telephone number of principal executive offices and
agent for service)
Copies to:
Steven Morse, Esq.
Lester Morse P.C.
111 Great Neck Road
Great Neck, New York 11021
(516) 487-1446
(516) 487-1452 (Fax)
Approximate date of proposed sale to the public: As soon as practicable
after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933 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 of the Securities
Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
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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. [ ]
Pursuant to Rule 429, this Registration Statement constitutes a Post-
Effective Amendment to the Registrant's Form S-1 Registration Statement,
File No. 33-36387 which relates to 284,803 shares of Common Stock issuable
upon exercise of a like number of Class C Warrants.
Pursuant to rule 429, this Registration Statement constitutes a Post-
Effective Amendment to the Registrant's Form S-1 Registration Statement,
File No. 33-39092 which relates to an additional 285,817 shares of Common
Stock issuable upon exercise of a like number of Class C Common Stock
Purchase Warrants.
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of Securities to be Amount to be price per offering registration
registered registered(1) unit(2) price(2) fee
Common Stock, par value 570,620 shares $13.000 $7,418,060 $2,557.96
$.01 per share
(1) Includes 570,620 shares of Common Stock, par value $.01 per share,
which are issuable upon exercise of a like number of publicly held
outstanding Class C Common Stock Purchase Warrants.
(2) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933, as amended.
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 Section 8(a), may determine.
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CROSS REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K
Showing Location in Prospectus of Part I Items of Form S-3
Item Number of Form S-3 Location or Caption
in Prospectus
1. Front of the Registration
Statement and Cover Pages of Registration
Outside Front Cover Page of Statement and Prospectus
Prospectus
2. Inside Front and Outside Back Inside Front and Outside Back
Cover Pages Cover Pages of Prospectus
of Prospectus
3. Summary Information, Risk Factors
and Ratio The Company; Risk Factors
of Earnings to Fixed Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Outside Front Cover Page of
Prospectus;
6. Dilution Not applicable
7. Selling Security Holders Not Applicable
8. Plan of Distribution Outside Front Cover Page of
Prospectus;
Plan of Distribution
9. Description of Securities to be Description of Capital Stock
Registered
10. Interests of Named Experts and Legal Matters; Experts
Counsel
11. Material Changes Recent Developments
12. Incorporation of Certain
Information Incorporation of Certain
by Reference Information by Reference
13. Disclosure of Commission Position
on Description of Capital Stock
Indemnification for Securities Act
Liabilities
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Subject to Completion, Dated August__, 1996 PROSPECTUS
570,620 Shares
Common Stock
This Prospectus of ATC Environmental Inc. ("ATC") relates to the
exercise of 570,620 shares of ATC Common Stock issuable upon exercise
of a like number of Class C Redeemable Common Stock Purchase Warrants
(the "Class C Warrants" or "Warrants"). Each Class C Warrant entitles
the holder to purchase one share of ATC Common Stock at an exercise
price of $10.00 per share until January 11, 1992, which date was
extended by the Board of Directors until January 11, 1993,
January 11, 1994, September 30, 1994, September 30, 1996 and which
date was later extended by the Board until April 30, 1997. (No
consideration was received by ATC to extend the expiration dates of
the Warrants.) ATC has the right to redeem the Class C Warrants at a
price of $.001 per Warrant at any time upon 30 days prior written
notice. The exercise price of the Warrants was arbitrarily determined
by ATC and bears no relationship to the book value, assets, or other
recognized criteria of value. See "Risk Factors" and "Description of
Capital Stock."
The Common Stock is quoted on the Nasdaq National Market under
the symbol "ATCE." The last reported sale price of the Common Stock on
August 19, 1996 as reported by the Nasdaq National Market, was
$12.9375 per share. See "Price Range of Common Equity."
For a discussion of certain material factors that should be
considered in connection with an investment in the Common Stock, see
"Risk Factors" commencing on page 5 hereof.
___________
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.
RESIDENTS OF THE STATE OF NEW JERSEY MAY ONLY EXERCISE THEIR WARRANTS
THROUGH A BROKER/DEALER REGISTERED IN THE STATE OF NEW JERSEY OR IN
RELIANCE UPON AN EXEMPTION OR EXCEPTION UNDER N.J.S.A. (NEW JERSEY
STATUTES, ANNOTATED, AS AMENDED) 49:3-47 ET.SEQ. HOWEVER, ATC DOES
NOT INTEND TO PAY BROKER/DEALERS SOLICITATION FEES FOR THE EXERCISE OF
ITS WARRANTS.
RESIDENTS OF THE STATE OF MARYLAND MAY ONLY EXERCISE THEIR WARRANTS
THROUGH A BROKER/DEALER REGISTERED IN THE STATE OF MARYLAND OR IN
RELIANCE UPON AN EXEMPTION OR EXCEPTION UNDER THE ANNOTATED CODE OF
MARYLAND, AS AMENDED.
RESIDENTS OF THE STATE OF HAWAII MAY ONLY EXERCISE THEIR WARRANTS
THROUGH A BROKER/DEALER REGISTERED IN THE STATE OF HAWAII, OR IN
RELIANCE UPON AN EXEMPTION OR EXCEPTION UNDER THE HAWAII REVISED
STATUTES.
Security holders who desire to exercise their Warrants should
execute the Subscription Form contained in the security and submit
same together with any appropriate check made payable to "ATC
Environmental Inc." to the transfer agent, American Stock Transfer &
Trust Co., 40 Wall Street, New York, New York 10005. ATC does not
intend to pay broker-dealers solicitation fees for the exercise of its
Warrants. See "Plan of Distribution."
The date of this Prospectus is ________, 1996
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The following legend should appear in red on the left side of the
cover 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 by 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."
AVAILABLE INFORMATION
ATC is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and in accordance therewith files periodic reports, proxy
statements, and other information with the Securities and
Exchange Commission (the "Commission"). The Registration
Statement (as defined below), of which this Prospectus forms a
part, as well as reports, proxy statements and other information
filed by ATC, may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, DC 20549 and at the Commission's regional
offices at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and 7 World Trade Center, New York, NY 10048. Copies
of such material can be obtained at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, DC 20549.
ATC has filed with the Commission a Registration Statement
on Form S-3 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to
the Common Stock being offered pursuant to this Prospectus. This
Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. The
Registration Statement may be inspected and copies at the public
reference facilities maintained by the Commission at the address
set forth in the preceding paragraph. Statements contained
herein concerning the provisions of any documents are not
necessarily complete and, in each instance, reference is made to
the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed with the Securities and
Exchange Commission (the "Commission") (File No. 1-10583)
pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K, as amended,
for the fiscal year ended February 29, 1996,
2. The Company's Form 8-K dated May 24, 1996, as amended,
relating to certain recent acquisitions; and
3. The Company's Form 10-Q for the quarter ended May 31,
1996.
All documents filed by ATC after the date of this Prospectus
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment which
indicates that all Common Stock offered hereby has been sold or
which deregisters such stock then remaining unsold, shall be
deemed to be incorporated herein by reference and to be a part
hereof from the date of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statements as
modified or superseded shall be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
ATC will provide without charge to each person, including
any beneficial owner, to whom a copy of this Prospectus is
delivered, upon written or oral request of such person, a copy of
any or all of the documents referred to above which have or may
be incorporated by reference in this Prospectus (other than
certain exhibits to such documents unless such exhibits are
specifically incorporated by reference into the information that
the Prospectus incorporates). Requests for such documents may be
made by writing ATC, 104 East 25th Street, Tenth Floor, New York,
NY 10010 (Attention: Shareholder Relations) or by calling (212)
353-8280.
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THE COMPANY
ATC Environmental Inc. (the "Company" or "ATC") is a
specialized provider of technical and project management services
to a large, diverse client base of Fortune 500 corporations,
other businesses and federal, state and local government. The
Company's technical and project management services consist
primarily of environmental consulting and engineering and
information technology consulting services offered to national,
regional and local clients. The Company has grown in recent years
through internal expansion and through the acquisition of
businesses primarily in the environmental engineering and
consulting industry. At June 30, 1996, the Company operated
through 60 branch offices in 30 states.
ATC's environmental technical and project management
services include industrial hygiene consulting, environmental
site management, environmental risk management, health and safety
consulting and management information systems for comprehensive
environmental risk assessment and management. The Company
operates in-house testing laboratories that support its
environmental services. The Company has developed offerings in
several growing niche environmental markets within its areas of
specialization, including lead-based paint management,
occupational safety and industrial hygiene consulting, indoor air
quality consulting and environmental software.
ATC's information technology consulting services group
provides high-level programming, systems analysis, project
management, information technology consulting and related
computer services, including web site development. The level of
involvement of the Company's consultants ranges from meeting the
client's staffing and specific programming needs to comprehensive
management of information solutions, outsourcing and the
implementation of leading-edge information technologies.
ATC's growth strategy is focused on strategic
acquisitions of information technology consulting businesses,
acquisitions of environmental consulting businesses and through
internal growth. The Company intends to continue to expand its
information technology consulting business through strategic
acquisitions of businesses that increase its geographic presence
and have capabilities in niche outsourcing markets. The Company
believes that it can significantly improve the operating
performance of acquired businesses through the integration of the
businesses into ATC's existing offices and operations and through
emphasis on basic business management such as employee
utilization, credit and collections management and profit center
accountability. As a result, the Company targets both profitable
and under-performing businesses. The Company intends to grow
internally through the development of existing service markets
and through expansion into additional niche service
specializations that the Company believes have the potential to
grow more rapidly than the overall market.
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Unless otherwise indicted, all references herein to "ATC" or
the "Company" refer to ATC Environmental Inc., its subsidiaries
and predecessors. The Company's principal executive office is
located at 104 East 25th Street, Tenth Floor, New York, New York
10010 and its telephone number is (212) 353-8280.
The Offering
Common Stock Offered by the Company 570,620 shares
Common Stock Outstanding Before
the Offering 7,786,049 shares (1)
Common Stock to be Outstanding after the
Offering 8,356,669 shares (2)
Use of Proceeds To expand the
Company's operations
through acquisitions
and internal growth;
to reduce the debt
outstanding under the
Company's revolving
credit facility; and
for general working
capital purposes.
Nasdaq National Market Symbol "ATCE"
___________
(1) Does not include the following: (a) 570,620 shares reserved
for issuance under outstanding Class C Common Stock Purchase
Warrants (see "Description of Capital Stock"); (b) Existing Stock
Option Plans covering 781,750 shares reserved for issuance upon
exercise stock options granted or to be granted pursuant to such
Plans ; (c) 50,000 shares reserved for issuance outside of the
Company's Stock Option Plans; and (d) 490,500 shares reserved for
issuance upon exercise of stock purchase warrants issued in
exchange for previously outstanding stock purchase warrants of
Aurora Environmental Inc. ("Aurora") pursuant to the merger of
Aurora into ATC.
(2) Assumes the exercise of all Class C Warrants.
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RISK FACTORS
In evaluating an investment in the Common Stock being
offered hereby, investors should consider carefully, among other
things, the following risk factors, as well as the other
information contained in this Prospectus and the documents
incorporated herein by reference. This Prospectus contains
forward-looking statements which involve risks and uncertainties.
The Company's actual results may differ significantly from the
results discussed in the forward-looking statements. Factors
that might cause such a difference include, but are not limited
to, those discussed in "Risk Factors."
Growth and Acquisition Risks
One of the Company's primary strategies is to pursue the
acquisition of other companies or assets that either complement
or expand its existing business. The Company completed one
acquisition in fiscal 1994, three acquisitions in fiscal 1995,
and two acquisitions in fiscal 1996, (excluding a merger with
Aurora Environmental Inc., which at the time of the merger owned
approximately 57% of ATC and had no other business operations
except those conducted through ATC and its subsidiaries) and to
date two acquisitions in fiscal 1997. The Company has also had
preliminary acquisition discussions with or has evaluated the
potential acquisition of numerous other companies over the past
several years. The Company is unable to predict the likelihood
of a material acquisition being completed in the future. If the
Company proceeds with an acquisition for cash, the Company may
use a portion or all of the proceeds the Company receives from
the exercise of Warrants to consummate such transaction. See
"Use of Proceeds." The Company may also seek to finance any such
acquisition through additional debt or equity financings.
The Company anticipates that one or more potential
acquisition opportunities, including those that would be
material, may become available in the near future. If and when
appropriate acquisition opportunities become available, the
Company intends to pursue them actively. Although the Company
has successfully completed several acquisitions, there can be no
assurance that the Company will be able to identify, acquire or
profitably manage additional companies or successfully integrate
such additional companies into ATC's operations without
substantial costs, delays or other problems. In addition, there
can be no assurance that any companies acquired will be
profitable at the time of their acquisition or will achieve sales
and profitability that justify the investment therein.
Acquisitions may involve a number of special risks, including
adverse effects on the Company's reported operating results,
diversion of management's attention, dependence on retention and
hiring of key personnel, risks associated with unanticipated
problems or legal liabilities and amortization of acquired
intangible assets, some or all of which could have a material
adverse effect on the Company's operations and financial
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performance. The expansion of the Company's operations, whether
through acquisitions or internal growth, may place substantial
burdens on the Company's management resources and financial
controls. There is no assurance that the increasing burdens on
the Company's management resources and financial controls will
not have an adverse effect on the Company's operations. See "Use
of Proceeds."
Risks Associated with Expansion of Information Consulting
Services
The Company intends to significantly expand its presence as
a provider of information technology consulting services, both
through acquisition and through internal growth. Since the
Company's management has limited experience in acquiring or
managing information technology consulting services, such
acquisitions are likely to subject the Company to additional
acquisition risks and there can be no assurance that any such
acquisition will be successful in enhancing the Company's
business. In particular, effective May 28, 1996, the Company
purchased certain assets and assumed certain specified
liabilities of 3D Information Services, Inc. ("3D"), an
information services company providing technical information
system consulting services in all phases of information system
design service and system programming services to help clients in
building new computer systems and modifying existing computer
systems. There can be no assurance that the acquisition will
prove successful in enhancing the Company's business, that the
Company will be able to successfully integrate such business into
is existing business, or that the Company will be able to manage
its growth, if any, successfully.
The Company's success in the information consulting services
markets will depend in part on its ability to develop information
consulting solutions which keep pace with the continuing changes
in information processing technology, evolving industry
standards, and changing client preferences. There can be no
assurance that the Company will be successful in addressing these
developments in a timely manner or that, if it does address them,
the Company will be successful in the marketplace. The Company's
delay or failure to address these developments could have a
material adverse effect on the Company's business, financial
condition and results of operations. There can be no assurance
that products or technologies developed by third parties will not
render the Company's services noncompetitive or obsolete.
Potential Liability and Insurance
The Company is engaged in a wide range of advisory services,
from lead-based paint risk management and industrial hygiene to
health and safety training programs. Due to the nature of the
Company's services, ATC is exposed to a significant risk of
professional liability for environmental damage, property damage,
personal injury and economic loss which may substantially exceed
the fees derived from such services. ATC currently maintains a
"claims made" professional liability insurance policy, including
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contractor's pollution liability coverage, for claims with a per
claim and aggregate limit of $10,000,000 and a deductible of
$250,000, although increased limits have been obtained on a
specific endorsement basis to meet the needs of particular
clients or contracts. The Company's policy covers both errors and
omissions. A "claims made" policy only insures against claims
filed during the period in which the policy is in effect. The
Company also carries general liability insurance of $1,000,000
with a $9,000,000 umbrella. Although the Company believes that
its current level of insurance coverage is adequate to protect it
from the type and level of liability exposure that it can
reasonably expect to encounter during its ordinary course of
business, the coverage would most likely be inadequate if a
catastrophic event occurred for which the Company was found to be
liable. The relatively low dollar amount of the policy limit
currently maintained, the possible future unavailability or
modification of this insurance or any significant increase in
insurance rates could have a material adverse effect on ATC's
operations. Further, because clients may require that ATC
maintain liability insurance, the possible future unavailability
of such insurance could adversely affect ATC's ability to compete
effectively. In the event the Company expands its services into
new markets, no assurance can be given that the Company will be
able to obtain insurance coverage for such activities or, if
insurance is obtained, that the dollar amount of any liabilities
incurred in connection with the performance of such services will
not exceed policy limits.
Changing Regulatory Environment
The growth of the environmental consulting and engineering
services industry has been largely attributed to the increase in
environmental regulation and the response of governmental and
commercial entities and financial institutions to public concern
with environmentally contaminated facilities. The demand for
environmental consulting and engineering services has been, in
part, the result of facility owners or operators attempting to
comply with or avoid liability under environmental regulations at
the federal, state or local levels. Because of the burden imposed
with respect to complying with such regulations, various groups
have sought to relax or repeal certain forms of environmental
regulation. There can be no assurance that such regulation will
not be curtailed in the future. While the Company believes that
the demand for its services is also attributable to factors other
than regulatory compliance, there can be no assurance that
changes in environmental laws and regulations would not have a
material adverse effect on the Company's business.
Potential Environmental Liability
The Company's operations include advising clients on the
handling, storage and disposal of hazardous material, toxic
wastes and other pollutants and the remediation of contamination.
These services may expose the Company's employees and others to
dangerous elements and may involve a significant risk to the
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Company for liability for environmental damage, personal injury,
property damage and fines and costs imposed by regulatory
agencies. Claims may be asserted against the Company under
federal and state statutes and regulations, common law,
contractual indemnification agreements or otherwise. There can be
no assurance that the Company will not be subject to claims which
could materially and adversely affect the operations of the
Company.
Attraction and Retention of Professional Personnel
The Company's ability to attract and retain qualified
engineers, scientists, and other professionals, either through
direct hiring or acquisition of other firms employing such
professionals, will be an important factor in determining the
Company's future success. There is significant competition for
employees with the skills required to perform the services
offered by the Company. There can be no assurance that the
Company will be successful in attracting a sufficient number of
highly skilled employees in the future, or that it will be
successful in training, retaining and motivating employees. The
Company's inability to attract, train and retain skilled
employees or the Company's employees' inability to achieve
expected levels of performance could impair the Company's ability
to adequately manage and complete its existing projects and to
bid for or obtain new projects, which could have an adverse
effect on the Company's business, financial condition and results
of operations.
Fixed-Price Contracts and Other Project Risks
Through the three months ended May 31, 1996, a substantial
portion of the Company's revenue was generated on a fixed-price,
fixed-delivery-schedule (``fixed-price'') basis, rather than on a
time and materials basis. The Company's failure to accurately
estimate the resources required for a fixed-price project or its
failure to complete its contractual obligations in a manner
consistent with the project plan upon which its fixed-price
contract was based could adversely affect the Company's results
of operations and could have a material adverse effect on the
Company's business and financial condition. In the past, the
Company has been required to commit unanticipated additional
resources to complete certain projects, which negatively affected
the profitability generated on such projects, and has found it
necessary to revise project plans during the project, and to
change project managers to ensure projects are completed on
schedule. The Company may experience similar situations in the
future. Failure to anticipate such needs could have a material
adverse effect on the Company's business, financial condition and
results of operations. In addition, the Company may establish a
price before the design specifications are finalized, which could
result in a fixed price that turns out to be too low and
therefore adversely affects the Company's business, financial
condition and results of operations. The Company has undertaken
and may in the future undertake projects in which the Company
guarantees performance based upon defined operating
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specifications or guaranteed delivery dates. Unsatisfactory
performance or unanticipated difficulties in completing such
projects may result in client dissatisfaction and a reduction in
payment to, or payment of damages by, the Company, any of which
could have a material adverse effect on the Company's business,
financial condition and results of operations.
Competition
The environmental engineering and information technology
consulting industries in which the Company operates are subject
to intense competition. In addition to the thousands of small
environmental consulting and testing firms operating nationally,
ATC competes with several national environmental engineering and
consulting firms including Law Engineering, Inc., The Earth
Technology Corporation (a subsidiary of Tyco International,
Inc.), Dames & Moore, Inc. and Professional Service Industries,
Inc. In the information technology consulting market, ATC
competes with many small and medium-sized information technology
firms as well as large temporary staffing companies, including
The Olsten Corporation, Corestaff, Inc. and Accustaff
Incorporated among others and large systems consulting firms.
Many of ATC's present and future competitors may have greater
financial, technical and personnel resources than ATC. It is not
possible to predict the extent of competition which ATC will
encounter in the near future as the environmental engineering and
information technology consulting services industries continue to
mature and consolidate.
Variability of Quarterly Operating Results; Seasonality
The Company's revenue and operating results may fluctuate
from quarter to quarter based on a number of factors, including
the number, size and scope of projects in which the Company is
engaged, the contractual terms and degree of completion of such
projects, any delays incurred in connection with a project,
employee hiring and utilization rates, the adequacy of provisions
for losses, the accuracy of estimates of resources required to
complete ongoing projects and general economic conditions. In
addition, the timing of revenue is difficult to forecast because
the Company's sales cycle is relatively long. A high percentage
of the Company's operating expenses, particularly personnel and
rent, are relatively fixed in advance of any particular quarter.
For example, while the number of professional staff the Company
employees may be adjusted to reflect active projects, such
adjustments take time and the Company must maintain a sufficient
number of senior professionals to oversee existing clients and to
focus on securing new client engagements. As a result,
unanticipated variations in the number or progress toward
completion of the Company's projects or in employee utilization
rates may cause significant variations in operating results in
any particular quarter and could result in adverse changes to the
Company's business, financial condition and results of operation.
Seasonal factors such as weather-related shutdowns in major
markets, vacation days, total business days in a quarter, or the
business practices of clients such as deferring commitments on
new projects until after the end of the calendar or the client's
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fiscal year could require the Company to maintain under-utilized
employees and could therefore have a material adverse effect on
the Company's business, financial condition and results of
operations. Any shortfall in revenue or earnings from expected
levels or other failure to meet expectations of securities
analysts or the market in general regarding results of operations
could have an immediate and significant adverse effect on the
market price of the Company's Common Stock. Given the
possibility of such fluctuations, the Company believes that
comparisons of its results of operations for preceding quarters
are not necessarily meaningful and that such results for one
quarter should not be relied upon as an indication of future
performance.
USE OF PROCEEDS
The net proceeds to the Company from the exercise of all
570,620 Class C Warrants, of which no assurances can be given in
this regard, are estimated to be approximately $5,670,000 after
deducting estimated offering expenses payable by the Company of
approximately $36,000.
The Company may utilize all or any portion of the net
proceeds of this offering to reduce its debt outstanding under
its credit facilities. At June 30, 1996, $20,000,000 was
outstanding under such facilities. It is anticipated that any
remaining net proceeds of this offering will be utilized to
expand the Company's operations through strategic acquisitions of
companies with complementary services, products or technologies,
as well as through internal expansion. In addition, the net
proceeds of this offering will be available for general working
capital purposes.
The Company is actively exploring acquisition opportunities,
has identified a number of companies which it might wish to
acquire and has engaged in certain preliminary due diligence
activities. These activities have not resulted in any contract,
understanding or arrangement for an acquisition as of the date of
this Prospectus. Because all of the net proceeds will be
available for acquisitions, internal expansion and general
working capital purposes, the Company's Board of Directors will
have broad discretion with respect to the application of such
proceeds. The Company may not be able to consummate acquisitions
or identify and obtain projects that meet the Company's
requirements.
Pending the application of such proceeds, the Company
intends to invest the net proceeds of this offering in bank
deposits and short-term, investment grade securities, including
government obligations and money market instruments.
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RECENT DEVELOPMENTS
American Testing and Engineering Corporation - Effective May
24, 1996, ATC purchased certain assets and assumed certain
liabilities of American Testing and Engineering Corporation
("ATEC"), a national environmental consulting firm. ATEC
provides environmental consulting and engineering services
including risk assessments, compliance audits, environmental
remediation consulting, geotechnical, materials testing,
industrial hygiene and analytical services through a large
network of branch and regional offices. For its year ended
December 31, 1995, ATEC had revenues of $85,020,000 and a net
loss of ($1,820,000). The acquisition was accounted for as a
purchase. ATC executed an agreement to lease substantially all
of the sellers equipment and executed several sublease agreements
for premises leased by ATEC. ATC also obtained non-competition
agreements with ATEC, a non-acquired subsidiary, and the majority
shareholder of ATEC. The purchase price consideration consisted
of $9,000,000 of cash paid at closing and property and facility
lease payments and non-compete obligations of $6,001,000 payable
during the first year following the purchase. The Company also
assumed liability for ATEC's bank debt, approximately
$10,750,000, its accounts payable, and certain other recorded
liabilities. The Company has the right to offset a portion of
the purchase price to the extent that accounts receivable are not
collected or other specified conditions are not met. The Company
is contingently liable to ATEC for additional purchase
consideration up to $10,750,000 if certain net revenue levels are
achieved and certain other conditions are met. This contingent
consideration, if fully earned, would be paid as follows;
$3,883,333 in fiscal 1998, $3,873,333 in fiscal 1999, $1,293,334
in fiscal 2000 and $1,700,000 in fiscal 2002.
The Company paid ATEC's bank debt and a portion of the cash
paid at closing from proceeds from a $20,000,000 bridge credit
facility with Chemical Bank and Atlantic Bank of New York. Under
the terms of the credit agreement, the Company may borrow up to
the amount of the facility, with interest payable monthly at
1.75% above the adjusted Eurodollar rate (7.18% at May 24, 1996).
Amounts borrowed under this facility are due September 20, 1996.
The Company is in the process of negotiating a longer term
agreement with the banks prior to the maturity date of the credit
agreement.
3D Information Services, Inc. - Effective May 28, 1996, ATC
purchased certain assets and assumed certain specified
liabilities of 3D Information Services, Inc. ("3D"), a New Jersey
based information services company providing technical
information system consulting services in all phases of
information system design, development, maintenance and
management in client server and mainframe based environments. Its
clients include major companies in the telecommunications,
financial services and pharmaceutical industries. 3D reported
revenues and net income of approximately $10,360,000 and $85,000,
respectively, for its year ended December 31, 1995. The
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acquisition was accounted for as a purchase. Consideration paid
consisted of $3,000,000 of cash at closing and a note payable for
$2,500,000 payable in three annual payments plus interest. In
addition, ATC assumed certain liabilities of approximately
$190,000. A three year non-compete agreement with the majority
stockholder was part of this transaction.
Hill International Inc. Environmental Subsidiaries - On
November 10, 1995, ATC purchased certain assets and assumed
certain liabilities of the subsidiary companies at Hill
International, Inc. that provided environmental consulting and
engineering services (collectively the "Hill Businesses"). These
services include asbestos management, industrial hygiene and
indoor air quality consulting, environmental auditing and
permitting, environmental regulatory compliance, water and
wastewater engineering, solid waste and landfill management,
hazardous waste management and analytical laboratory services.
The Hill Businesses operated from facilities located in New York
City, Boston and Willingboro, New Jersey. The Boston and New York
offices have been integrated with ATC's existing operations, and
ATC will benefit from other cost-saving measures taken, including
the elimination of certain employees previously with the Hill
Businesses.
Applied Geosciences, Inc. - Effective February 29, 1996, ATC
purchased certain assets and assumed certain liabilities of
Applied Geosciences, Inc. ("AGI"). AGI services included
environmental and hazardous waste site assessments, remediation
design, air quality management, asbestos services, litigation
support and engineering geology through its offices located in
San Diego, Tustin, and San Jose, California.
Common Stock Offering
Effective October 1995, the Company sold 1,970,000 shares of
common stock at an offering price of $12.00 per share and
received $21,554,461 net of underwriting and other related
expenses. The Company used $5,500,000 to repay bank debt and used
the remainder to expand the Company's operations through
acquisitions and internal growth and for general working capital
purposes.
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Merger of Aurora into ATC
Effective June 29, 1995, ATC and its then parent, Aurora
were merged pursuant to an agreement approved by the majority of
shareholders of each company, with ATC as the surviving
corporation (the "Aurora Merger"). Prior to the Aurora Merger,
Aurora was a holding company which owned approximately 57% of
ATC's outstanding Common Stock and had substantially no other
assets. Under the terms of the merger, each outstanding share of
Aurora Common stock was exchanged for .545 shares of ATC Common
Stock. ATC issued 3,341,356 shares of ATC Common Stock in
exchange for 6,131,104 shares of Aurora's common stock, and
issued options and warrants entitling the holders thereof to
purchase up to 604,950 shares of ATC Common Stock upon exercise
in replacement of previously outstanding options and warrants to
purchase Aurora's common stock. ATC common shares held by Aurora
of 3,258,000 were canceled. Actual common shares outstanding
increased by 83,356 shares. As a result of the Aurora Merger, ATC
utilized Aurora's net operating loss carryforward to reduce its
taxable income and accordingly recorded a one-time reduction in
income tax expense of approximately $350,000 ($.05 per share) in
fiscal 1996.
Continuing Litigation
With ATC's significant growth, the Company is now exposed to
additional involvement in litigation of a routine nature arising
from the Company's performance of services and its contractual
and business relationships entered into in the ordinary course of
business. With the exception of the First Fidelity Bank v. Hill
International, INC. litigation described in greater detail in the
Company's Forms 10(Q) and 10(K) which are incorporated herein by
reference, no currently pending or threatened litigation is
expected by management to have a material effect on the Company's
operations or financial conditions
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MANAGEMENT
The following table sets forth certain information regarding
the Company's directors, executive officers and a key employee.
Name Age Position
Officers and Directors:
George Rubin 68 Chairman of the Board and
Secretary; Director
Morry F. Rubin 36 President, Chief Executive
Officer, Treasurer; Director
Nicholas J. Malino 45 Senior Vice President,
Financial
and General Operations
Christopher P. Vincze 34 Senior Vice President,
Financial
and General Operations
Donald W. Beck 37 Senior Vice President
John J. (Jeff) Goodwin 47 Vice President of
Information Services
Wayne A. Crosby 42 Chief Financial Officer
Richard L. Pruitt 55 Vice President, Principal
Accounting Officer; Director
Richard S. Greenberg,
Esq. 46 Director
Julia S. Heckman 46 Director
Key Employee:
John J. Smith, Esq. 45 General Counsel
The business experience, principal occupations and
employment, as well as the periods of service, of each of the
directors, executive officers and a key employee of the Company
during at least the last five years are set forth below.
George Rubin has been Chairman of the Board of ATC since
1988. From 1961 to 1987, Mr. Rubin served as President,
Treasurer and a director of Staff Builders, Inc. Staff Builders
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Inc., was a publicly held corporation engaged in the business of
providing temporary personnel primarily in the health care field
operating through approximately 100 offices and with revenues
over $100 million. Since December 1986, Mr. Rubin has been a
principal stockholder, executive officer and a director of
National Diversified services, Inc., a publicly held corporation
which completed a public offering in December 1986 and currently
has no business operations. George Rubin is the father of Morry
F. Rubin.
Morry F. Rubin has been President, Chief Executive Officer,
Treasurer and a director of ATC since 1988. Mr. Rubin was also
President, Chief Executive Officer and Treasurer of Aurora from
May 1985 to June 1995, and was a director of Aurora from
September 1983 to June 1995. Since 1986, Mr. Rubin has been a
principal stockholder and from 1986 to July 1995, Mr. Rubin was
President and a director of National Diversified services, Inc.,
a publicly held corporation, which completed a public offering in
December 1986 and currently has no business operations. From
1981 to 1987, Mr. Rubin was employed in sales and as a director
of acquisitions for Staff Builders, Inc., a publicly held company
engaged in providing temporary personnel primarily in the health
care field. Morry F. Rubin is the son of George Rubin.
Nicholas J. Malino has been Senior Vice President, Financial
and General Operations of ATC, since July 1993 and an employee of
ATC, since October 1992, and is in charge of ATC's acquisition
strategy. Mr. Malino has over fourteen years of experience in
managing professional service organizations. From February 1991
to September 1993, Mr. Malino was the New York Regional Manager
for Kemron Inc., a hazardous waste consulting company
headquartered in McLean, Virginia. From August 1989 to January
1991, he was the Operations Manager for the New York City branch
of Professional Service Industries, Inc.
Christopher P. Vincze has been Senior Vice President,
Financial and General Operations of ATC since July 1993, a
regional manager of ATC since July 1991 and Vice President of a
subsidiary of ATC since 1992. Mr. Vincze is in charge of ATC's
sales and marketing. Mr. Vincze joined Dennison Environmental,
Inc. in 1984 as an industrial hygienist and served as Vice
President of Marketing and Operations from 1987 to July 1991.
Donald W. Beck has been Senior Vice President of ATC since
April 1990 and Vice President since January 1988. Mr. Beck is
responsible for managing the operations of certain ATC offices.
Mr. Beck also served as a director of ATC Laboratories, Inc., a
predecessor company of ATC, from November 1985 until January
1988, President of ATC Laboratories, Inc. from May 1986 until
January 1988 and as Vice President of ATC Laboratories, Inc. from
November 1985 until May 1986. Mr. Beck has been a full-time
employee of ATC (and formerly ATC Laboratories, Inc.) since May
1982.
John J. (Jeff) Goodwin has been President and a director of
ATC InSys Technology Inc., a subsidiary of ATC Environmental
Inc., established to provide Information Technology consulting
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services, since the company was formed in May 1996. From
September 1994 until May 1996, Mr. Goodwin served as President of
the Contest Systems Division of ATC, which was established to
assist clients in using state-of-the-art client/server
technologies for risk management and decision support. His
responsibilities in this position included development and
marketing of specialized software, the Contest Environmental
Management System, to assist clients in managing facility-based
environmental hazards, design and implementation of an Intranet
system to improve communications among ATC's offices, and
direction of ATC's strategies to establish an information
technology consulting practice. Prior to joining ATC, he
directed a national data processing consulting practice for
Datronics Inc. from December 1991 until August 1994. From April
1980 until October 1991, Mr. Goodwin was employed by Ernst &
Young LLP, an international professional services firm, where he
was admitted as a partner in 1984. In this capacity, Mr. Goodwin
directed a public sector and environmental services consulting
practice, a specialized practice providing services related to
the design and implementation of decision support systems, and as
a partner in Ernst & Young's general Information Technology
consulting practice.
Wayne A. Crosby has been Chief Financial Officer of ATC
since July 1995. Prior to joining ATC, Mr. Crosby was the Chief
Financial Officer of BSE Management, Inc. from 1991 to 1993 and
Chief Financial Officer of Compex systems, Inc. from 1986 through
1990. Mr. Crosby is a certified public accountant and was
employed by Deloitte Haskins & Sells for eight years.
Richard L. Pruitt is a Vice President, the Principal
Accounting Officer and a director of ATC. Mr. Pruitt has served
as Vice President of ATC since September 1990, as Principal
Accounting Officer of ATC since April 1988 and as a director of
ATC since January 1988. Mr. Pruitt served as Principal Financial
Officer of ATC from September 1989 to April 1992 and from May
1993 to July 1995. Mr. Pruitt served as the Principal Financial
Officer and a director of Aurora from May 1985 to June 1995 and
served as Financial Manager of Aurora from February 1982.
Richard S. Greenberg, Esq. has been a director of ATC since
July 1995. Mr. Greenberg has been a director of the
Environmental Management Consulting Services Croup at Coopers &
Lybrand since October 1989. Mr. Greenberg has over 20 years of
experience in the areas of environmental management consulting,
environmental litigation support and legislative policy analysis.
Julia S. Heckman has been a director of ATC since August
1995. Mrs. Heckman has been a Managing director with Rodman &
Renshaw, Inc.'s Investment Banking Group since April 1995 and had
been a Managing Director with Mabon securities Corp.'s Investment
Banking Group since 1991. Prior to joining Mabon Securities
Corp., Mrs. Heckman was a Managing Director with Paine Webber
Group Inc's Corporate Finance Group. Mrs. Heckman serves as a
member of the Company's Board of Directors pursuant to an
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Underwriting Agreement dated as of October 10, 1995 between
Rodman & Renshaw, Inc. and the Company.
John J. Smith, Esq. has been General Counsel since August
1989 and served as a Vice President of ATC from September 1990
through December 1993. Prior to joining ATC, from 1986 to 1989,
Mr. Smith was the Secretary of the South Dakota Department of
Water and Natural Resources, a cabinet level position responsible
for managing all of the State's environmental and natural
resources development programs.
The Board of Directors has recently appointed an Audit
Committee and a Compensation Committee consisting of three
directors including Morry F. Rubin and Richard S. Greenberg and
Julia S. Heckman. The Audit Committee is responsible, among
other things, for approving and transactions between the Company
and any of its directors, officers or affiliates. Since August
1995, the Compensation Committee is responsible for setting
compensation of the executive officers of the Company and for
granting any further options to purchase Common Stock.
All directors of ATC will hold offices until the next annual
stockholders' meeting and until the election and qualification of
their successors. Officers hold their respective positions until
their successors are duly qualified or until they resign or are
removed by the Board of Directors.
PLAN OF DISTRIBUTION
Security holders who desire to exercise their Warrants
should execute the Subscription Form contained in the security
and submit same together with any appropriate check made payable
to "ATC Environmental Inc." to the transfer agent, American Stock
Transfer & Trust Co., 40 Wall Street, New York, New York 10005.
ATC does not intend to pay broker-dealers solicitation fees for
the exercise of its Warrants.
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DESCRIPTION OF CAPITAL STOCK
Common Stock
The authorized capital stock of ATC consists of 20,000,000
shares of Common Stock, $.01 par value each. The shares of
Common Stock: (i) have equal ratable rights to dividends from
funds legally available therefore, when, as and if declared by
the Board of Directors of ATC; (ii) are entitled to share ratably
in all of the assets of ATC available for distribution to holders
of Common Stock upon liquidation, dissolution or winding up of
the affairs of ATC; (iii) do not have pre-emptive, subscription
or conversion rights and there are no redemption or sinking fund
provisions applicable thereto; and (iv) are entitled to one non-
cumulative vote per share on all matters upon which Stockholders
may vote at all meetings of Stockholders. All shares of Common
Stock now outstanding are fully paid and non-assessable and all
shares of Common Stock which are the subject of this offering,
when issued, will be fully paid and non-assessable.
Class C Warrants
Each Class C Warrant entitles the holder to purchase one
share of Common Stock at an exercise price of $10.00 per share
until April 30, 1997. ATC has the right to redeem the Class C
Warrants at a price of $.001 per Class C Warrant upon 30 days
prior written notice. The holders of the Class C Warrants do not
have any of the rights or privileges of stockholders of ATC prior
to the exercise of warrants. The exercise price of the Class C
Warrants and the number of shares issuable upon exercise of the
Class C Warrants are subject to anti-dilution adjustment to
protect against stock dividends, stock splits, mergers and
recapitalizations. In accordance with the terms of the Class C
Warrants, ATC is required to maintain a current and effective
registration of the securities issuable upon exercise of the
Class C Warrants.
Although the foregoing brief description of the Warrants
contains the information ATC deems necessary to make an informed
decision, it is qualified in its entirety by reference to the
terms of the Warrant Agreement and Warrant Certificates, the
forms of which have been filed as exhibits to the Registration
Statement of which this Prospectus is a part.
ATC must have a current and effective registration statement
on file with the Securities and Exchange Commission in order for
a Warrant holder to be able to exercise the Warrants. In
accordance with the terms of the Warrants, ATC will be required
to file for, and endeavor to secure, such current and effective
registration of the securities issuable upon exercise of the
Warrants. Various state securities laws relating to
qualification of securities (or an exemption thereof) for sale in
such states may also be applicable. Necessarily there can be no
assurance that ATC will, at all times during the life of the
Warrants, be able to secure or maintain such registration or
qualification; and in the event it is unable to do so, the
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Warrants will not be exercisable and may be valueless. If ATC is
unable to qualify the securities underlying the Warrants for sale
in particular states, Warrant holders in those states will have
no choice but to sell their Warrants or let them expire.
Delaware Law
Section 203 of the Delaware General Corporation Law
prohibits a publicly-held Delaware corporation from engaging in
"business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which
the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. A "business
combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the stockholder. An
"interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years, did own)
15% or more of the corporation's voting stock.
Indemnification
As permitted by the Delaware General Corporation Law, ATC's
Certificate of Incorporation provides that a director of ATC will
not be personally liable to ATC or its Stockholders for monetary
damages for breach of the fiduciary duty of care as a director,
except under certain circumstances including breach of the
director's duty of loyalty to ATC or its Stockholders or any
transaction from which the director derived an improper personal
benefit.
ATC's by-laws provide for the indemnification of ATC's
officers and directors to the fullest extent permitted by
Delaware law. In this respect, ATC entered into indemnification
agreements with its officers and directors to hold them harmless
and to indemnify each person from and against all fines, amounts
paid in settlements and expenses, including attorneys' fees
incurred as a result of or in connection with any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal or administrative or investigative, by reason of the
fact that the person was a director and/or officer of ATC or
served any other corporation in any capacity at the request of
ATC, in the manner and to the extent permitted by law.
ATC has been advised that it is the position of the
Securities and Exchange Commission that insofar as the foregoing
provisions may be invoked to disclaim liability for damages
arising under the Securities Laws, that such provisions are
against public policy as expressed in the Securities Laws and are
therefore unenforceable.
Transfer Agent and Exchange Agent
American Stock Transfer & Trust Co., New York, NY is acting
as transfer agent and warrant agent for ATC's securities.
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Security holders who desire to exercise their Warrants
should execute the Subscription Form contained in the security
and submit same together with any appropriate check made payable
to "ATC Environmental Inc." to the transfer agent, American Stock
Transfer & Trust Co., 40 Wall Street, New York, New York 10005.
ATC does not intend to pay broker-dealers solicitation fees for
the exercise of its Warrants. See "Plan of Distribution."
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock
offered by this Prospectus will be passed upon for the Company by
Lester Morse, P.C., Great Neck, New York. Prior to this
offering, Lester Morse P.C. and members of the firm own of record
and beneficially less than 2% of ATC's outstanding shares of
Common Stock.
EXPERTS
The financial statements of ATC as of February 29, 1996 and
February 28, 1995 and for each of the three years in the period
ended February 29, 1996, which have been incorporated by
reference, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report which is
incorporated herein by reference, and has been so incorporated in
reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
The financial statements of 3D Information Services, Inc. as
of December 31, 1995 and for the year ended December 31, 1995,
which have been incorporated by reference, have been audited by
Deloitte Touche LLP, independent auditors, as stated in their
report which is incorporated herein by reference, and has been so
incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
The financial statements of American Testing and Engineering
Corporation as of December 31, 1995 and for each of the two years
in the period ended December 31, 1995 and 1994 and for the three
months ended December 31, 1993 and year ended September 30, 1993,
which have been incorporated herein by reference, have been
audited by Coopers & Lybrand L.L.P., independent auditors, as
stated in their report which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and
auditing.
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PART II
Information Not Required in Prospectus
Item 14: Other Expenses of Issuance and Distribution
The estimated expenses in connection with this offering are
as follows:
AMOUNT TO BE PAID
SEC Registration Fee $ 2,607.14
Legal Fees 10,000.00
Accounting Fees 10,000.00
Miscellaneous 13,392.86
----------
Total $36,000.00
==========
Item 15: INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation contains a
provision which, in substance, eliminates the personal liability
of the directors to the Company and its stockholders for monetary
damages for breaches of their fiduciary duties as directors to
the fullest extent permitted by Delaware law. By virtue of this
provision, under current Delaware law a director of the Company
will not be personally liable for monetary damages for breach of
his fiduciary duty, except for liability for (a) breach of his
duty of loyalty to the Company or to its stockholders, (b) acts
or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law, (c) dividends or stock
repurchases or redemptions that are unlawful under Delaware laws
and (d) any transaction from which he receives an improper
personal benefit. This provision pertains only to breaches of
duty by directors as directors and not in any other corporate
capacity, such as officers, and limits liability only for
breaches of fiduciary duties under Delaware corporate law and not
for violations of other laws such as the federal securities laws.
As a result of the inclusion of such provision, stockholders may
be unable to recover monetary damages against directors for
actions taken by them that constitute negligence or gross
negligence or that are in violation of their fiduciary duties,
although it may be possible to obtain injunctive or other
equitable relief with respect to such actions. The inclusion of
this provision in the Company's Certificate of Incorporation may
have the effect of reducing the likelihood of derivative
litigation against directors, and may discourage or deter
stockholders or Management from bringing a lawsuit against
directors for breach of their duty of care, even though such an
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action, if successful, might otherwise have benefitted the
Company and its stockholders.
The General Corporation Law of Delaware provides generally
that a corporation may indemnify any person who was or is a party
to or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative in nature to procure a judgment
in its favor, by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees) and, in a proceeding not by or in the right of
the corporation, judgments, fines and amounts paid in settlement,
actually and reasonably incurred by him in connection with such
suit or proceeding, if he acted in good faith and in a manner
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or
proceeding, had no reason to believe his conduct was unlawful.
Delaware law further provides that a corporation will not
indemnify any person against expenses incurred in connection with
an action by or in the right of the corporation if such person
shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation
unless and only to the extent that the court in which such action
or suit was brought shall determine that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for the expenses which such court shall deem proper.
The indemnification and advancement of expenses provided by,
or granted pursuant to Delaware Corporation Law is not be deemed
exclusive of any other rights to which those seeking
indemnification or advance of expenses may be entitled under any
bylaw, agreement, vote of stockholders of disinterested directors
or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office.
Article IX of the Company's By-Laws provides that the
officers and directors of the Company shall be entitled to
indemnification to the maximum extent permitted by Delaware law.
The Company has entered into indemnification agreements with
officers and directors of the Company and its subsidiaries (the
"Indemnitee") wherein the Company has agreed to hold such officer
and director harmless and to indemnify each person from and
against any and all judgments, fines, amounts paid in settlements
and expenses, including attorneys' fees, incurred as a result of
or in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative or as a result of or in
connection with any appeal therein, whether or not such action,
suit proceeding is by or in the right of any other corporation of
any type or kind, domestic or foreign, or any partnership, joint
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venture, trust, employee benefit plan or other enterprise which
the Indemnitee serves in any capacity at the request of the
Company, to which Indemnitee is, was or at any time becomes a
party, or is threatened to be made a party or as a result of or
by reason of the fact that Indemnitee is, was or at any time
becomes a director or officer of the Company, or is or was
serving or at any time services such other corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, in any capacity, whether arising out of any breach of
Indemnitee's fiduciary duty, under any state or federal law or
otherwise as a director or officer of the Company or as a
director, officer, employee or agent of such other corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise; provided, however, that no indemnity pursuant to the
indemnification agreements shall be paid by the Company (1)
except to the extent the aggregate of losses to be indemnified
exceeds the amount of such losses for which Indemnitee is
actually paid pursuant to any insurance purchased and maintained
by the Company for the benefit of Indemnitee; (2) if judgment or
other final adjudication established that the Indemnitee's acts
were committed in bad faith or were the result of dishonesty so
adjudicated, or that Indemnitee personally gained in fact a
financial profit or other advantage to which Indemnitee was not
legally entitled; or (3) if a final judgment by a court having
jurisdiction in the matter or the Court of Chancery shall
determine that Indemnitee is not entitled to such
indemnification. Insofar as indemnification for liabilities
arising under the 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 Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933,
as amended, (the "Act") and is therefore unenforceable.
ITEM 16: Exhibits
2 Agreement and Plan of Merger to reincorporate in
Delaware(contained in Exhibits 3(b) and 3(c)(1)
2(a) Agreement and Plan of Merger between ATC
Environmental Inc. and Aurora Environmental Inc. (6)
3(a) Certificate of Incorporation of Registrant(1)
3(b) Certificate of Ownership and Merger of
Registrant(Delaware)(1)
3(c) By-Laws(1)
3(d) Certificate of Merger(Aurora Environmental Inc.
Merging with and into ATC Environmental Inc.)(9)
4 Warrant Agreement relating to Class C Warrants (13)
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4(a) Specimen of Class C Warrant (13)
5 Opinion re: Legality - Lester Morse *
10 Employee Savings(401(k))Plan(2)
10(a) New York City Lease(3)
10(b) Form of Indemnity Agreement(10)
10(c) Asset Purchase Agreement between ATC Environmental
Inc., a Delaware corporation, and Hill International
Inc., a Delaware corporation, executed on November 10,
1995(5)
10(d) Six-Month Promissory Note executed and delivered by ATC
Environmental Inc. on November 10, 1995, payable to
Hill International, Inc. in the amount of $300,000(5)
10(e) Irrevocable Letter of Credit executed by Atlantic Bank
of New York on November 8, 1995, and delivered by ATC
Environmental Inc. on November 10, 1995, payable on or
after May 1, 1996, to Hill International, Inc. in the
amount of $730,625.00(5)
10(f) Bill of Sale delivered on November 10, 1995, conveying
assets referenced in assets purchase agreement from
Hill International, Inc. to ATC environmental Inc.(5)
10(g) Non-Competition Agreement of Irvin E. Richter to ATC
Environmental Inc. Delivered on November 10, 1995(5)
10(h) Non-Competition Agreement of David L. Richter to ATC
Environmental Inc. Delivered on November 10, 1995(5)
10(i) Agreement for Sale and Purchase of Business Assets on
May 24, 1996, among ATC Environmental, American Testing
and Engineering Corporation d/b/a ATEC Associates, Inc.
and Gerald D. Mann.(11)
10(j) Assumption of Liabilities Agreement on May 24, 1996,
among ATC Environmental Inc., American Testing and
Engineering Corporation and Gerald D. Mann.(11)
10(k) Master Equipment Lease Agreement on May 24, 1996,
between ATC Environmental Inc. and American Testing and
Engineering Corporation.(11)
10(l) Master Sublease Agreement on May 24, 1996, between ATC
Environmental Inc. and American Testing and Engineering
Corporation covering premises leases at Indianapolis,
IN, Atlanta, GA and Dallas, TX.(11)
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10(m) Non-Competition Agreement on May 24, 1996, between ATC
Environmental Inc. and American Testing and Engineering
Corporation.(11)
10(n) Mann Non-Competition Agreement on May 24, 1996, between
ATC Environmental Inc. and Gerald D. Mann.(11)
10(o) WATEC Non-Competition Agreement on May 24, 1996,
between ATC Environmental Inc. and Waste Abatement
Technology, LLP.(11)
10(p) Security Agreement on May 24, 1996, among ATC
Environmental Inc., American Testing and Engineering
Corporation and Gerald D. Mann.(11)
10(q) $500,000 Letter of Credit on May 24, 1996, from
Chemical Bank, N.A. against the account of ATC
Environmental Inc. in favor of American Testing and
Engineering Corporation.(11)
10(r) Agreement for Sale and Purchase of Business Assets on
May 28, 1996, among ATC In Sys Technology Inc., 3D
Information Services Inc. and Ciro De Saro.(11)
10(s) Assumption of Liabilities Agreements on May 28, 1996,
between ATC In Sys Technology Inc., 3D Information
Services Inc. and Ciro De Saro.(11)
10(t) Stockholders Non-Competition Agreement on May 28, 1996,
between ATC In Sys Technology Inc. and the stockholders
of 3D Information Services Inc.(11)
10(u) Three-year, $2,500,000 Promissory Note on May 29, 1996,
from ATC Environmental Inc. to 3D Information Services
Inc.(11)
11 Statements re: Computation of per share
earnings(11)(12)
21 Subsidiaries of Registrant(4)
23 Independent Auditors' Consent-Deloitte & Touche LLP(*)
23(a) Consent of Counsel (contained in Exhibit 5)(*)
23(b) Consent of Coopers & Lybrand L.L.P.(*)
99 1988 Stock Option Plan(7)
99(a) 1993 Stock Option Plan(8)
___________________________
* Filed herewith.
(1) Reference is made to the Registrant's Registration Statement
File No. 33-19889 on Form S-1, which is incorporated by
reference and contains exhibits 2, 3(a), 3(b) and 3(c).
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(2) Reference is made to the Registrant's Form 10-K for the
fiscal year ended February 28, 1990 which is incorporated by
reference and contains Exhibit 10.
(3) Reference is made to the Registrant's Form 10-K for the
fiscal year ended February 29, 1992 which is incorporated by
reference and contains exhibit 10(a).
(4) During the fiscal year ended February 29, 1996, ATC had four
wholly-owned subsidiaries, namely, Hygeia ProScience
Laboratories Inc. ("Hygeia"), ATC Management Inc.
("Management Co."), ATC New England Corp. ("ATC New
England") and ATC Blattert Inc. ("Blattert"). Hygeia,
Management Co., ATC New England and Blattert are formed
under the laws of the States of Delaware, South Dakota,
Delaware and South Dakota, respectively. Hygeia does
business under the name Hygeia ProScience, Inc. Management
Co. Does business under the name ATC Management Inc. ATC New
England does business under its own name and Con-Test.
Blattert does business under ATC Blattert Inc., Blattert &
Associates Inc. And Microbial Environmental Services, Inc.
(5) Reference is made to the Registrant's Form 8-K dated
November 10, 1995, which is incorporated by reference and
contains Exhibits 10(c), 10(d), 10(e), 10(f), 10(g) and
10(h).
(6) Reference is made to the Registrant's Form S-4 Registration
Statement, file No. 33-88380 which is incorporated by
reference and contains Exhibit 2(a).
(7) Reference is made to the Registrant's Form S-8 Registration
Statement, file No. 33-55592 which is incorporated by
reference and contains Exhibit 99.
(8) Reference is made to the Registrant's Form S-8 Registration
Statement, File No. 33-77578 which is incorporated by
reference and contains Exhibit 99.1.
(9) Reference is made to the Registrant's Form 10-Q for the
quarter ended May 31, 1995, which is incorporated by
reference and contains Exhibit 3(d).
(10) Reference is made to the Registrant's Form 10-K for its
fiscal year ended February 28, 1995, which is incorporated
by reference and contains Exhibit 10(b).
(11) Reference is made to the Registrant's Form 10-K, as amended
for its fiscal year ended February 29, 1996, which is
incorporated by reference and contains Exhibits 10(i),
10(j), 10(k), 10(l), 10(m), 10(n), 10(o), 10(p), 10(q),
10(r), 10(s), 10(t), 10(u) and 11.
(12) Reference is made to the Registrant's Form 10-Q for the
quarter ended May 31, 1996, which is incorporated by
reference and contains Exhibit 11.
(13) Reference is made to the Registrant's Form S-1 Registration
Statement, File No. 33-3902, which is incorporated by
reference and contains Exhibits 4 and 4(a).
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ITEM 17: UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) (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.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) of the Securities Act
of 1933, as amended (the "Securities Act") if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) of this section do not apply if the registration
statement is on Form S-3 of the Securities Act, and the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act") that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering period.
(3) To remove from registration by means of a post-
effective amendment any securities which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Exchange Act (and, where
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<PAGE>
applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers or persons controlling the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
informed that in the opinion of the Securities and Exchange such
indemnification is against public policy as expressed in the Act
and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the registrant certifies that it has reasonable
grounds to believe that it meets all the requirements for filing
on Form S-3 and has duly caused this Form S-3 Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New
York on the 16th day of August, 1996.
ATC ENVIRONMENTAL INC.
By: /s/ Morry F. Rubin
---------------------------
Morry F. Rubin, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Morry F. Rubin
his true and lawful attorney-in-fact and agent, 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
future amendments to the 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 attorney-in-fact and agents all
authority to do and perform each and every act and thing and
purpose as he might or could do in person, hereby ratifying and
confirming all that said attorney-in- fact and agent 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 Form S-3 Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Signatures Titles Date
---------- ------ ----
/s/ George Rubin Chairman of the Board, August 16,
--------------- Secretary and Director 1996
George Rubin
/s/ Morry F. Rubin August 16,
------------------ President, Chief Executive 1996
Morry F. Rubin Officer, Treasurer and Director
/s/ Richard L. Pruitt Vice President, Principal August 16,
--------------------- Accounting Officer and 1996
Richard L. Pruitt Director
/s/ Wayne Crosby Chief Financial Officer August 16,
---------------- 1996
Wayne Crosby
/s/ Richard S. Greenberg Director August 16,
------------------------ 1996
Richard S. Greenberg
/s/ Julia S. Heckman Director August 16,
-------------------- 1996
Julia S. Heckman
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EXHIBIT 5
Legal Opinion
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<PAGE>
LESTER MORSE P.C.
111 Great Neck Road, Suite 420
Great Neck, NY 11021
Telephone (516) 487-1446
Telecopier (516) 487-1452
ATC Environmental Inc. August 13, 1996
104 East 25th Street, 10th Floor
New York, NY 10010
Re: Registration Statement on Form S-3
of ATC Environmental Inc.
----------------------------------
Gentlemen:
We have reviewed the Certificate of Incorporation and
amendments thereto, By-Laws (as amended), corporate proceedings
and other documents of ATC Environmental, Inc. (the "Company")
and based upon the foregoing, it is our opinion that the
securities being registered with the Securities and Exchange
Commission pursuant to this Registration Statement, will when
issued upon exercise of the Class C common stock purchase
warrants, be legally issued, fully paid and non-assessable.
No consents, approvals, authorizations or orders of
agencies, officers or other regulatory authorities are necessary
for the valid authorization, issuance or sale of the shares
hereunder, except as such may be required under the Securities
Act of 1933, as amended, or state securities, or Blue Sky laws.
We consent to the filing of this opinion as an exhibit to
the aforesaid Registration Statement and further consent to the
reference made to us under the caption "Counsel" in the
Prospectus constituting a part of such Registration Statement.
Nothing contained herein shall be considered an omission that we
are deemed an expert within the meaning of the Securities Act of
1933, as amended.
Very truly yours,
LESTER MORSE P.C.
Steven Morse
SM:gm
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EXHIBIT 23
CONSENT OF DELOITTE & TOUCHE LLP
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Registration Statement ATC Environmental Inc. on Form S-3
of our report dated May 6, 1996 (May 28, 1996 as to Note M)
appearing in the Annual Report on Form 10-K, as amended,
of ATC Environmental Inc. for the year ended February 29,
1996, and our report dated April 26, 1996 on financial
statements of 3D Information Services appearing on Form
8-K dated May 24, 1996, as amended, incorporated by
reference herein, and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this
Registration.
Deloitte & Touche LLP
Omaha, Nebraska
August 16, 1996
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EXHIBIT 23(b)
CONSENT OF COOPERS & LYBRAND L.L.P.
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Consent of Independent Accountants
We consent to the incorporation by reference in this
Registration Statement of ATC Environmental, Inc. (ATC)
on Form S-3 (File No. 333-0000) of our report dated March
15, 1996 (May 23, 1996 as to Notes 1 and 5) on our audits
of the consolidated financial statements of American
Testing and Engineering Corporation as of December 31,
1995 and 1994, and for the years then ended, and of our
report dated March 31, 1995 (May 4, 1995 as to Note 4),
on our audits of the consolidated financial statements of
American Testing and Engineering Corporation as of
December 31, 1994 and 1993 and September 30, 1993 and for
the year ended December 31, 1994, the three months ended
December 31, 1993, and the year ended September 30, 1993,
incorporated by reference herein to ATC's report on Form
8-K dated May 24, 1996, as amended. We also consent to the
reference to our firm under the caption as "Experts"
Coopers & Lybrand L.L.P.
Indianapolis, Indiana
August 16, 1996
II-15
