AMENDED PRELIMINARY INFORMATION STATEMENT
OP-TECH ENVIRONMENTAL SERVICES, INC.
(A DELAWARE CORPORATION)
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
December 8, 1997
To the Stockholders of
OP-TECH ENVIRONMENTAL SERVICES, INC.
A Special Meeting of Stockholders of OP-TECH Environmental Services,
Inc. (the "Corporation") will be held at the offices of the
Corporation, 6392 Deere Road, Syracuse, New York, on December 8,
1997 at 10:00 a.m., local time, to consider and vote on the
following matters described under the corresponding numbers in the
attached Information Statement:
(1) To approve an amendment to the Corporation's
Certificate of Incorporation increasing the
number of authorized shares of Common Stock from
7,500,000 to 20,000,000.
(2) To transact such other business as may properly
come before the meeting or any
adjournments thereof.
Stockholders of record at the close of business on November 5, 1997
are the only stockholders entitled to notice
of and to vote at the Special Stockholders Meeting. The list of
such stockholders will be available for inspection
by stockholders during the ten (10) days prior to the meeting in
accordance with Section 219 of the Delaware
General Corporation Law at the offices of the Corporation,
6392 Deere Road, Syracuse, New York 13206.
Stockholders may make arrangements for such inspection by contacting
the Secretary, Dennis Lerner, of OP-TECH
Environmental Services, Inc., 6392 Deere Road, Syracuse, New York
13206. The stock transfer books of the
Corporation will not be closed.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO
SEND US A PROXY.
By Order of the Board of Directors,
Dennis Lerner
Secretary
OP-TECH Environmental Services, Inc.
6392 Deere Road
Syracuse, New York 13206
INFORMATION STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
December 8, 1997
A Special Meeting of Stockholders to be held on December 8, 1997.
The Board of Directors has fixed November 5, 1997 at the close of
business, as the record date for the determination of stockholders
entitled to vote at the meeting. It is anticipated that this
Information Statement and, enclosed Notice will be mailed to
stockholders of record on or about November 26, 1997. The following
documents filed with the Securities and Exchange Commission by
the Corporation pursuant to the Exchange Act of 1934 accompany this
Information Statement:
a. Form 10-K for the fiscal year ended December 31,
1996, and
b. Forms 10-Q for the quarters ended March 31,
June 30 and, September 30, 1997.
VOTING SECURITIES
All the voting power of the Corporation is vested in its Common Stock.
As of the close of business on September 30, 1997, 4,852,983 shares
of Common Stock, par value $.01 per share, were outstanding. Each
share of Common Stock is entitled to one vote.
Set forth below is information concerning the ownership as of
September 30, 1997 of the Common Stock of the Corporation by persons
who, to the knowledge of the Board of Directors, beneficially own
more than five (5%)
percent of the outstanding shares of Common Stock of the Corporation.
Name and Address Number of Shares of Common Percentage
of Beneficial Owner Stock Beneficially Owned (1) of Class
O'Brien & Gere Limited 2,068,200 (2) 42.6%
5000 Brittonfield Parkway
E. Syracuse, NY 13507
Richard L. Elander 428,608 (3) 8.9%
3613 Melvin Drive South
Baldwinsville, NY 13027
(1) Except as set forth in (2) below, the beneficial
owners have sole voting and investment power
over the shares owned.
(2) 1,397,059 of these shares are pledged as collateral
to OnBank & Trust Company, Syracuse, New York to secure the
Corporation's commercial Mortgage Loan in the Principle of
$1,150,000. For so long as these shares are pledged to
OnBank & Trust Company and the Corporation is not in default
in the payment of principal and interest on the Commercial
Mortgage Loan and Term Loan, O'Brien & Gere Limited
("Limited") shall have the right to continue to vote the
pledged shares on all matters. The pledge will terminate
on December 31, 1997 or on any subsequent fiscal year,
provided certain revenue, income, and balance sheet
ratios are achieved, and there are not material adverse
factors in the financial condition of the Corporation
as reasonably determined by OnBank & Trust Company.
(3) Includes currently exercisable options to
purchase 100,000 shares.
As a result of the proposed issuance to OnBank & Trust Company of
approximately 5,700,000 shares of Common Stock, OnBank & Trust
Company will own approximately 49.4% of the Common Stock of the
Corporation. These shares are to be issued in exchange for
forgiveness of approximately $2,800,000 of debt plus accrued
interest (See "Approval of Amendment Increasing Authorized
Common Stock").
APPROVAL OF AMENDMENT INCREASING
AUTHORIZED COMMON STOCK
On October 10, 1997, the Board of Directors of the Corporation
unanimously voted to recommend to the stockholders that the
Corporation's Certificate of Incorporation be amended to increase
the number of authorized shares of Common Stock from 7,500,000
to 20,000,000 shares.
The Authorized Common Stock of the Corporation currently consists
of 7,500,000 shares $.01 par value per share, of which on
September 30,1997 (i) 4,852,983 shares were outstanding and (ii) 502,500
shares were issuable pursuant to options outstanding.
The authorization of additional shares of Common Stock is necessary
to provide shares for issuance in connection with restructuring of
the Corporation's indebtedness as described below.
As reflected in the accompanying financial statements, the Corporation
has suffered recurring losses from operations
since inception, has a working capital deficiency at
September 30, 1997, and a negative capital deficiency that raised
substantial doubt about its ability to continue as a going concern.
As of September 30, 1997 the Corporation was
unable to meet its current obligations as they became due. Regarding
the future of the Corporation, management
considered seeking protection under the United States Bankruptcy
Code or entering into a voluntary workout with
its two largest creditors, OnBank & Trust Co. ("OnBank") and O'Brien
& Gere Limited ("OBG Limited").
After careful consideration of the above, and believing the Company
could continue as a going concern without the
heavy debt burden, management was able to negotiate a workout with
its two largest creditors. As a result, on
October 14, 1997, the Corporation entered into an agreement with
its two largest creditors to convert all or part
of their indebtedness and accrued interest into Common Stock of
the Corporation, and to forgive the remaining
balance. OBG Limited, to which the Corporation is indebted for
$1,400,000 plus accrued interest, will forgive
$1,000,000 of debt and exchange the balance including accrued
interest into approximately 1,000,000 shares of
Common Stock. OnBank to which the Corporation is indebted for
approximately $2,800,000 plus accrued interest,
will exchange the entire amount of indebtedness for approximately
5,700,000 shares of Common Stock. The actual number of shares will
be determined on the closing date at an exchange rate of $.50 per
share. The exchange price per share was negotiated with the two
creditors based on the price of recent sales and their estimates of
future risks.
OBG Limited and OnBank have advised the Corporation that they intend
to hold their shares as investors of the
Corporation. The Corporation is not obligated to file a registration
statement providing for the sale of shares owned
by OnBank and OBG Limited. Pursuant to Rule 144 of the Securities
Act of 1933, after a holding period of one
year, OnBank and OBG Limited could commence the sale of their
shares. Other that as described above or as provided for pursuant
to the Corporation's stock option plan there are no existing
understandings or agreement for the issuance of any share of Common
Stock. If the amendment is adopted by the stockholders, the Board of
Directors will have authority to issue shares of Common Stock without
the necessity of further stockholder action.
Holders of the Common Stock have no preemptive rights with respect
to any share which may be issued in the future.
Under Delaware law, stockholders are not entitled to dissenter's
rights with respect to the proposed amendment to the Corporation's
Certificate of Incorporation.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 1, 1995, the Company entered into a lease agreement with
O'Brien & Gere Property Development (an affiliate) to occupy
approximately 17,000 square feet of office and garage space. The
terms of the lease extend
through June 30, 1998. Total rent expense incurred in 1997
amounted to $66,744.
During 1996, the Company provided approximately $1,100,000 of
remediation, sub-contract support and project services to
affiliated parties.
The Company purchases technical and consulting services from
affiliated parties. The costs for these services
amounted to $276,336 in 1997.
The Company has a $1,400,000 unsecured line of credit with O'Brien
& Gere Limited due on March 1, 1998.
Interest is payable at prime plus 2%. Interest expense amounted
to $75,390 for 1997.
Steven A. Sanders, a director of the Company, is President of The
Law Offices of Steven A. Sanders, P.C. which has provided
professional services to the Company since August of 1991, and it is
anticipated that it will continue to do so.
PRESENCE OF INDEPENDENT AUDITOR
Representatives of Coopers & Lybrand, L.L.P., the Corporation's
auditor, are expected to attend the Special Meeting of
Stockholders. The auditors will be afforded an opportunity to make a
statement if they desire to do so, and will be available to respond
to appropriate questions by shareholders.
OTHER MATTERS
The Board of Directors knows of no matters to be presented at the
meeting other than those set forth in the foregoing Notice of Special
Meeting. If other matters properly come before the meeting, the
persons named on the accompanying form of proxy intend to vote the
shares subject to such Proxies in accordance with their best
judgement.
