As filed with the Securities and Exchange Commission on August 8, 1996.
Registration No. 333-07781
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
AMENDMENT NO. 1
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
CONTINENTAL WASTE INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2909512
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
67 Walnut Avenue, Suite 103
Clark, New Jersey
(908) 396-0018
(Address including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------
CARLOS E. AGUERO
CONTINENTAL WASTE INDUSTRIES, INC.
67 Walnut Avenue, Suite 103
Clark, New Jersey 07066
(908) 396-0018
(Name and address, including zip code, and telephone number, including area
code, of agents for service)
With a Copy to:
MICHAEL J. CHOATE, ESQ.
SHEFSKY FROELICH & DEVINE LTD.
444 North Michigan Avenue, Suite 2500
Chicago, Illinois 60611
(312) 527-4000
------------------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement has become
effective.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|_________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please 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. |_|_______
CALCULATION OF REGISTRATION FEE
Title of each
class of
securities Proposed maximum Proposed maximum Amount of
to be Amount to be offering price aggregate offering registration
Registered(1) registered(1) per share(2) price(2) fee(2)
- ------------- ------------ --------------- ------------------ ------------
Common Stock,
par value $0.0006
per share 842,684 $17.62 $14,848,092 $5,120.03(3)
(1) Includes 89,999 shares of common stock which are issuable upon exercise of
warrants granted by the Company and which may be offered by the holders thereof
following exercise of the warrants. This Registration Statement also relates to
an additional indeterminate number of shares of the Company's common stock that
may be issued upon the antidilution provision contained in the warrant
agreements.
(2) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c).
(3) A registration fee of $4,182.02 was paid previously by the Registrant on
July 8, 1996.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
PROSPECTUS
842,684 Shares
CONTINENTAL WASTE INDUSTRIES, INC.
Common Stock
($0.0006 par value per share)
This Prospectus relates to the public offering of up to 842,684 shares (the
"Shares") of common stock, $0.0006 par value per share (the "Common Stock"), of
Continental Waste Industries, Inc. (the "Company")including 89,999 shares which
may be issued by the Company upon the exercise of warrants previously granted by
the Company (the "Warrant Shares"). All of the Shares offered hereby, including
the Warrant Shares, may be sold from time to time by the stockholders described
herein (each a "Selling Stockholder," collectively the "Selling Stockholders")
in transactions in which they and any broker-dealer through whom such Shares are
sold may be deemed to be underwriters within the meaning of the Securities Act
of 1933, as amended (the "Securities Act"), as more fully described herein. Any
commissions paid or concessions allowed to any broker-dealer, and, if any
broker-dealer purchases such Shares as principal, any profits received on the
resale of such Shares, may be deemed to be underwriting discounts and
commissions under the Act. The Company will not receive any of the proceeds from
the sale of the Shares but will pay the expenses incurred in registering the
Shares, including legal and accounting fees. The Selling Stockholders will bear
all other expenses of this offering, including brokerage fees, any underwriting
discounts or commissions.
On August 6, 1996, the Company had 14,833,768 shares of its Common Stock
outstanding. The Common Stock is included for quotation on the Nasdaq National
Market ("Nasdaq") under the symbol "CONT." The last reported sale price of the
Common Stock on the Nasdaq on August 6, 1996 was $18.06 per share.
Prospective purchasers should carefully consider the matters set forth
under the caption "Risk Factors" located on page 6.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is August 9, 1996.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). These reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549; New York Regional Office, Public Reference Room, Seven
World Trade Center, 13th Floor, New York, New York 10048; and Chicago Regional
Office, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661. Copies of
this material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates and may also be accessed through the World Wide Web at http://www.sec.gov.
The Common Stock is included for quotation on the Nasdaq National Market and
these reports, proxy statements and other information concerning the Company may
be inspected at the office of the Nasdaq National Market, 1735 K Street, N.W.,
Washington, D.C. 20006. This Prospectus does not contain all of 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 and any amendments thereto, including exhibits filed as a part
thereof, are available for inspection and copying as set forth above.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company with the
Commission under the Exchange Act are incorporated herein by reference: (i) the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1995;
(ii) the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1996; and (iii) the Company's Current Report Form 8-K dated May 20, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering made by this Prospectus, shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing these documents. Any statements contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document which also is incorporated by reference
herein) modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed to constitute a part hereof except as so modified
or superseded. All information appearing in this Prospectus is qualified in its
entirety by the information and financial statements (including notes thereto)
appearing in the documents incorporated herein by reference.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (OTHER THAN
EXHIBITS THERETO) ARE AVAILABLE WITHOUT CHARGE, UPON WRITTEN OR ORAL
REQUEST BY ANY PERSON TO WHOM THIS PROSPECTUS HAS BEEN DELIVERED, FROM THE
COMPANY. REQUESTS SHOULD BE DIRECTED TO JEFFREY E. LEVINE, SENIOR VICE
PRESIDENT AND GENERAL COUNSEL, 67 WALNUT AVENUE, SUITE 103, CLARK, NEW
JERSEY 07066 (TELEPHONE 908-396-0018).
-----------------------------------
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THE COMPANY
The Company provides integrated solid waste management services to
residential, commercial and industrial customers concentrated primarily in the
eastern half of the United States. These services include non-hazardous landfill
disposal, solid waste collection, transfer station operations and recycling
programs. The Company conducts its operations in ten states and in Costa Rica,
and operates ten landfills, nine waste collection operations, fourteen transfer
stations and four recycling facilities. Since its founding in 1988, the Company
has experienced significant growth in revenue and operating income, due
primarily to the acquisition of 31 solid waste service businesses.
The Company has grown through acquisitions and internal expansion. Recent
acquisitions have taken the Company into selected new markets in the eastern
United States where it believes attractive opportunities for growth and
integration exist. In addition to its base of operations in the Midwest and
Mid-South, the Company is now serving markets in South Carolina and central
Florida. In particular, the Company has targeted the New Jersey market for
substantial future growth through acquisitions. Since January 1, 1995, the
Company has completed eleven acquisitions representing approximately $29 million
in estimated annual revenue. In addition, as of July 1, 1996, the Company had
seven acquisitions under definitive contract or non-binding letters of intent,
representing approximately $42 million in combined annual revenue. Although the
Company intends to aggressively pursue these and other transactions, there can
be no assurance that these transactions will be consummated or that the
estimated revenue will be achieved. The number and size of transactions under
consideration fluctuate continually as new letters of intent are signed and
acquisitions are completed or abandoned.
On June 27, 1996, the Company executed a definitive agreement to merge with
Republic Industries, Inc. ("Republic"). Based in Ft. Lauderdale, Florida,
Republic is a diversified services company, which, through its subsidiaries,
operates businesses providing, among other services, integrated solid waste
disposal, collection and recycling services to public and private sector
customers. Under the terms of the proposed merger, each share of the Company's
common stock outstanding on the effective date of the merger would be converted
into 4/5ths of a share of common stock of Republic. In addition, warrants to
acquire shares of the Company's common stock would be converted into warrants to
acquire shares of Republic's common stock. The proposed merger is subject to a
number of important conditions including: (i) approval by the stockholders and
the boards of each of the Company and Republic; (ii) regulatory approvals; and
(iii) due diligence by both the Company and Republic. The Company expects that
the merger will be voted upon at a special meeting to be held sometime later in
the year. If the merger is approved, the Company will be merged with and into a
newly-formed subsidiary of Republic and will become a wholly-owned subsidiary of
Republic.
The Company's current strategy is focused on an integrated operational
model over a geographically diverse base of operations. In general, the Company
seeks to own or control both waste collection and disposal operations in each of
the local markets in which it competes. For the year ended December 31, 1995,
approximately 56% of the waste accepted by the Company's landfills was derived
from Company collection operations or delivered under contracts of more than one
year in duration. The Company's waste hauling and transfer operations currently
dispose at Company landfills approximately 93% of the waste which they collect.
This integration strategy is intended to improve cost competitiveness and
mitigate operating risk by reducing the dependence of the Company's landfills on
waste streams from unaffiliated haulers, and by reducing the exposure of the
Company's collection operations to disposal cost fluctuations at facilities
owned by third parties.
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The Company targets landfill and collection business acquisitions
primarily within midsized regional markets in the United States, as well as
selected urban markets in Latin America. The Company generally pursues a "hub
and spoke" acquisition strategy involving the acquisition of landfills in its
target markets, as well as collection businesses and transfer stations which
control waste volumes that can be channeled into Company landfills. The Company
considers both profitable and underperforming landfills and collection
businesses for acquisition. The Company also expects to achieve internal growth
by providing acquired businesses with access to capital; internal landfill
remediation and construction capabilities; enhanced marketing resources and
credibility; expertise in regulatory and permitting matters; and professional
operating systems and financial controls. The Company seeks to improve operating
efficiencies and profitability at acquired businesses through increasing the
density of collection routes, rationalizing operating and administrative costs,
and selectively increasing prices. The Company's internal growth objectives are
augmented by a continuing landfill expansion program. The Company has
in excess of 50 million total cubic yards of remaining disposal capacity
permitted, or in various stages of permitting, at its landfills.
The Company believes that a substantial number of potential acquisition
candidates in North America exist. Despite the consolidation that has occurred
to date and the existence of several large publicly-traded solid waste
management companies, an estimated 66% of the industry revenue remains under the
control of approximately 6,000 private, predominantly small, collection and
disposal businesses and several hundred municipalities.
The Company is a Delaware corporation with its principal executive
offices located at 67 Walnut Avenue, Suite 103, Clark, New Jersey 07066; (908)
396-0018.
RECENT DEVELOPMENTS
New Jersey
The Company has identified New Jersey as a market where it believes
significant opportunities for growth and consolidation exist. The Company
recently purchased its first operation in New Jersey, and has recently entered
into definitive agreements to acquire four additional solid waste businesses
within the state: Raritan Valley Disposal ($13.5 million in approximate annual
revenues); Linden Disposal ($5.0 million in approximate annual revenues); United
Services Disposal, Inc. ($4.5 million in approximate annual revenues); and
Somerset Carting ($850,000 in approximate annual revenues). The Company also has
executed non-binding letters of intent to acquire two additional New Jersey
solid waste businesses. All pending acquisitions are primarily collection
businesses, although one also operates a recycling and transfer facility. The
closing of each of these acquisitions is subject to among other things, approval
by Republic. The Company believes that the New Jersey market is distinguished by
several characteristics, including a high price structure for waste disposal; a
relatively small competitive presence by the national waste management firms;
dense collection routes; a mature recycling industry; proximity to New York
City, the nation's single largest solid waste services market; and highly
fragmented competition. An estimated 1,500 separate businesses perform waste
collection, disposal, transfer/transport, and recycling services in New Jersey.
The Company's headquarters have been located in New Jersey since its founding,
and its acquisition initiatives in the state are being personally conducted by
the Company's senior executives, some of whom have longstanding relationships
within the state's solid waste industry. Besides the four businesses identified
above, the Company is actively pursuing discussions with several additional
acquisition candidates in New Jersey. Closings of the above acquisitions are
also all subject to approval by New Jersey authorities, and there can be no
assurance that any of these prospective transactions will be completed.
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<PAGE>
Central Florida
In March 1996, the Company entered the central Florida market through the
separate acquisition of two construction and demolition debris landfills which
serve the greater Orlando/Daytona Beach metropolitan area. The acquired
businesses also included small collection and waste processing operations. The
combined annual revenues of the above businesses are approximately $1.2 million.
The Company believes opportunities for growth in this market exist through the
acquisition or development of additional collection operations with the ability
to channel waste to the Company's landfills, as well as through the relatively
high rate of population growth and residential and commercial development in
central Florida.
South Carolina
The Company has formed an 85% owned subsidiary, NationsWaste, Inc., to
pursue opportunities in the North and South Carolina markets together with a
locally-based management team. In October 1995, NationsWaste purchased a
landfill in Richland County, South Carolina and concurrently signed a long term
put-or-pay contract with a major customer. This operation has estimated annual
revenues of $4 million, and NationsWaste is actively pursuing additional
acquisitions of independent waste management businesses, as well as
opportunities to privatize the solid waste operations of various municipal
governments.
Latin America
Since 1994, the Company has operated the only private landfill in Costa
Rica. The Company was selected through competitive bidding in March 1996 to
develop a modern landfill in the Central Valley area of the country and to
negotiate disposal contracts with 12 separate municipalities that would be the
principal customers of the new landfill. Approximately 1.5 million persons live
in the Central Valley area and generate an estimated 1,000 tons per day of
commercial and residential waste, which are expected to yield $2 million to $3
million of annual disposal revenues. The Company expects to receive the required
permits and to commence construction of the landfill during the summer of 1996.
During the first quarter of 1996, the Company sold its operations in Mexico at a
gain due to the unfavorable economic outlook in that market.
Other
The Company recently executed a contract to purchase a collection and
transfer station operation in western Michigan with annual revenues of
approximately $6 million. The Company has also executed a non-binding letter of
intent to purchase a facility in eastern Missouri that has been permitted for,
but has not yet constructed, a landfill. In March 1996, the Company ceased
operations at its Prichard landfill in West Virginia due to the unfavorable tax
climate in that state. In 1995, Prichard represented less than 3.5% of the
Company's total revenues.
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RISK FACTORS
This Prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Actual results could differ materially from those projected in the
forward-looking statements based, among other things, upon the risk factors set
forth below and elsewhere in this Prospectus. In addition to the other
information contained and incorporated by reference in this Prospectus, the
following risk factors should be considered carefully in evaluating the Company
and its business before purchasing the Shares offered hereby:
Extensive Environmental and Land Use Laws and Regulations. The Company is
subject to extensive and evolving environmental and land use laws and
regulations which have become increasingly stringent in recent years as a result
of greater public interest in protecting the environment. These laws and
regulations affect the Company's business in many ways, including as set forth
below, and will continue to impose substantial costs on the Company.
Additionally, any reduction in enforcement or relaxation of environmental
regulations could have a material adverse effect on the Company's business and
financial condition.
Extensive Permitting Requirements. In order to develop, operate and
expand solid waste management facilities, it is generally necessary to obtain
and maintain in effect one or more permits as well as zoning, environmental
and/or other land use approvals. These permits and approvals are difficult and
time consuming to obtain and are frequently subject to opposition by various
elected officials or citizens. In addition, facility operating permits may be
subject to modification or revocation, and it may be necessary to periodically
renew a permit, which may reopen opportunities for opposition to the permit.
There can be no assurance that the Company will be successful in obtaining and
maintaining in effect the permits and approvals required for the successful
operation and growth of its business, and the failure by the Company to obtain
or maintain in effect a permit significant to its business could have a material
adverse effect on the Company's business and financial condition.
Design, Operation and Closure Requirements. The design, operation and
closure of landfills is extensively regulated. These regulations include, among
others, the regulations (the "Subtitle D Regulations") establishing minimum
federal requirements adopted by the United States Environmental Protection
Agency (the "EPA") under Subtitle D of the Resource Conservation and Recovery
Act of 1976 ("RCRA"). The Subtitle D Regulations require all states to adopt
regulations regarding landfill design, operation and closure requirements that
are no less stringent than the Subtitle D Regulations. Most states, including
those states in which the Company's landfills are located, have extensive
landfill regulations which have been updated or replaced with new regulations
consistent with the Subtitle D Regulations. These federal and state regulations
require the Company to monitor groundwater, provide financial assurance, and
fulfill closure and post-closure obligations. These regulations could also
require the Company to undertake investigatory or remedial activities, to
curtail operations or to close a landfill temporarily or permanently. Future
changes in these regulations may require the Company to modify, supplement, or
replace equipment or facilities at costs which may be substantial. The failure
of the states or other regulatory agencies to enforce these regulations
vigorously or consistently may give an unfair advantage to competitors of the
Company whose facilities do not comply with the Subtitle D Regulations. Although
the Company maintains reserves for the payment of obligations related to the
closure and post-closure monitoring of landfill sites and the remediation of its
facilities, the financial obligations related to these responsibilities may
exceed the Company's reserves, and could have a material adverse effect on the
Company's business and financial condition.
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Legal and Administrative Proceedings. In the ordinary course of its
business, the Company may become involved in a variety of legal and
administrative proceedings relating to land use and environmental laws and
regulations. These may include proceedings by federal, state or local agencies
seeking to impose civil or criminal penalties on the Company for violations of
those laws and regulations, or to impose liability on the Company under federal
or comparable state statutes, or to revoke or deny renewal of a permit; actions
brought by citizens groups, adjacent landowners or governmental entities
opposing the issuance of a permit or approval to the Company or alleging
violations of the permits pursuant to which the Company operates or laws or
regulations to which the Company is subject; or actions seeking to impose
liability on the Company for any environmental damage at its landfill sites or
that its landfills or other properties may have caused to adjacent landowners or
others, including air, groundwater or soil contamination. A local citizens group
has filed objections to issuance of a renewed permit at the Company's United
Refuse landfill near Fort Wayne, Indiana. The Company could incur substantial
legal expenses during the course of this or other proceedings, and these
expenses or the adverse outcome of one or more of these proceedings could have a
material adverse effect on the Company's business and financial condition.
During the ordinary course of its operations, the Company has from time to
time received, and expects that it may in the future from time to time receive,
notices from governmental authorities that its operations are not in compliance
with its permits or certain applicable environmental or land use laws and
regulations. The Company generally seeks to work with the authorities to resolve
the issues raised by such citations or notices. There can be no assurance,
however, that the Company will always be successful in this regard, and the
failure to resolve a significant issue could have a material adverse effect on
the Company's business and financial condition.
Potential Liabilities. There may be various adverse consequences to the
Company if a facility owned or operated by the Company causes environmental
damage, or if waste transported by the Company causes environmental damage at
another site, or if the Company fails to comply with applicable environmental
and land use laws and regulations or the terms of a permit or outstanding
consent order. These may include the imposition of substantial monetary
penalties on the Company; the issuance of an order requiring the curtailment or
termination of the operations involved or affected; the revocation or denial of
permits or other approvals necessary for continued operation or landfill
expansion; the imposition of liability on the Company in respect of any
environmental damage (including air, groundwater or soil contamination) both at
its landfill sites as well as those of adjacent properties or others which may
have been caused by the Company's landfills or by waste transported by the
Company; the imposition of liability on the Company under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA" or
"Superfund") or under comparable state laws; and criminal liability for the
Company or its officers. Any of the foregoing could have a material adverse
effect on the Company's business and financial condition. The Company has not
been able to obtain, at a reasonable premium, significant environmental
impairment liability insurance. As a result, liability for environmental damage
could have a material adverse effect on the Company's business and financial
condition.
Type, Quantity and Source Limitations. Certain permits and approvals may
limit the types or quantity of waste that may be accepted at a landfill during a
given time period. In addition, certain permits and approvals, as well as
certain state and local regulations, may limit a landfill to accepting waste
that originates from specified geographic areas or seek to restrict the import
of out-of-state waste or otherwise discriminate against out-of-state waste. Some
of the waste accepted at the Company's landfills is transferred across state
borders. Generally, restrictions on the import of out-of-state waste have not
withstood judicial challenge. However, federal legislation has been proposed
from time to time that would allow individual states to prohibit the disposal of
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out-of-state waste or to limit the amount of out-of-state waste that could be
imported for disposal and would require states, under certain circumstances, to
reduce the amounts of waste exported to other states. If this or similar
legislation is enacted, states in which the Company operates landfills could act
to limit or prohibit the import of out-of-state waste. Such state actions could
adversely affect landfills within those states that receive a significant
portion of waste originating from out-of-state and could have a material adverse
effect on the Company's business and financial condition.
In addition, certain states and localities may, for economic or other
reasons, restrict the export of waste from their jurisdiction or require that a
specified amount of waste be disposed of at facilities within their
jurisdiction. The United States Supreme Court invalidated as unconstitutional a
local ordinance that sought to impose such flow controls. However, certain state
and local jurisdictions continue to seek to enforce these restrictions, and some
lower federal courts have upheld local enforcement of restrictions similar to
those invalidated by the most recent Supreme Court decision. In addition,
Federal legislation that would allow states greater authority to control the
flow of waste has again been introduced in Congress. These restrictions could
result in reduced waste volume in certain areas, may adversely affect the
Company's ability to operate its landfills at their full capacity or may affect
the prices that can be charged for landfill disposal services. These
restrictions may also result in higher disposal costs for the Company's
collection operations. An inability to pass along these higher operating or
disposal costs to customers could have a material adverse effect on the
Company's business and financial condition.
Availability and Integration of Potential Future Acquisitions. The
Company's strategy envisions that a substantial part of its future growth will
come from acquiring and integrating independent solid waste collection, transfer
and disposal operations. There can be no assurance that the Company will be able
to identify suitable acquisition candidates or, if identified, negotiate
successfully their acquisition. If the Company is successful in identifying and
negotiating suitable acquisitions, there can be no assurance that any debt or
equity financing necessary to complete the acquisition can be arranged on terms
satisfactory to the Company or that any such financing will not significantly
increase the Company's level of indebtedness or result in additional dilution to
existing stockholders. Moreover, there can be no assurance that the Company will
be able to integrate successfully any acquired business, or manage to improve
the operating or administrative efficiencies or productivity of any acquired
business. Failure by the Company to implement successfully its acquisition
strategy will limit the Company's growth potential.
Competition. The solid waste collection and disposal business is highly
competitive and requires substantial amounts of capital. The Company competes
both for customers and acquisition candidates with numerous waste management
companies, many of which have significantly larger operations and greater
resources. The Company also competes for customers with counties and
municipalities which maintain their own waste collection and disposal
operations. These counties and municipalities may be better positioned to
finance these operations due to the availability of tax revenue and tax exempt
financing and may enjoy other strategic advantages due to their ability to
regulate the market. In addition, competitors may reduce the price of their
services in an effort to expand market share or to win competitively bid
municipal contracts.
The Company provides a portion of its residential collection services
under county and municipal contracts that are subject to periodic competitive
bidding. There is no assurance that the Company will be the successful bidder in
the future and will be able to retain these contracts. The Company's inability
to compete with these larger and better capitalized companies, or to replace any
contract lost through the competitive bidding process with a comparable contract
within a reasonable time period could have a material adverse effect on the
Company's business and financial condition.
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Financial Assurance Obligations. The Company is required, from time to
time, to provide financial assurance in connection with municipal residential
collection contracts and to a lesser extent private sector customers, and in
connection with the operation or closure of landfills and post-closure
monitoring and corrective activities. If the Company were to be unable to obtain
surety bonds or letters of credit in sufficient amounts or at reasonable rates,
or to provide other required forms of financial assurance, it might be precluded
from entering into additional municipal collection contracts or obtaining or
retaining required landfill permits and approvals. The inability to provide
financial assurance could have a material adverse effect on the Company's
business and financial condition.
Alternatives to Landfill Disposal. Alternatives to landfill disposal,
such as recycling, incineration and composting, are increasingly being utilized
in the waste management industry. In addition, there has been a growing trend at
the state and local levels to mandate recycling and waste reduction at the
source and to prohibit the disposal of certain types of wastes at landfills. For
example, many states, including states in which the Company owns landfills, have
adopted bans on the disposal of yard waste or leaves in landfills and many
states have adopted rules restricting or limiting disposal of tires at
landfills. This may reduce the volume of waste going to landfills in certain
areas, which may affect the Company's ability to operate its landfills at their
full capacity and/or affect the prices that can be charged for landfill disposal
services.
Dependence on Senior Management. The Company is highly dependent upon its
senior management team. The loss of the services of any member of senior
management could have a material adverse effect on the Company's business and
financial condition.
Economic Cycles and Seasonality. The Company's business is affected by
general economic conditions. There can be no assurance that an economic downturn
will not result in a reduction in the volume of waste disposed at the Company's
operations and/or the price that the Company can charge for its services. The
Company's revenue may also be affected by seasonal weather conditions. This is
primarily because construction and demolition activities, remediation of
contaminated soils, and the volume of industrial and residential waste in the
regions where the Company operates tend to decrease during the winter months.
Particularly harsh weather conditions may result in the temporary suspension of
certain of the Company's operations, which could have a material adverse effect
on the Company's business and financial condition.
Prohibitions Under the Delaware General Corporation Law Restricting
Certain Business Combinations. Section 203 of the Delaware General Corporation
Law (the "Delaware Antitakeover Law") prohibits, under certain circumstances,
"business combinations" between a Delaware corporation whose stock is
publicly-traded and an "interested stockholder" of such corporation. The
provisions prohibiting "business combinations" could delay or frustrate the
removal of incumbent directors or a change in control of the Company. The
provisions also could discourage, impede, or prevent a merger, tender offer or
proxy contest, even if such event would be favorable to the interests of
stockholders. See "Description of Capital Stock - Delaware Antitakeover Law."
Potential Insurance of Preferred Shares. The Company's Certificate of
Incorporation authorizes the issuance of: (i) 425,200 shares of preferred stock
without designation, par value of $5.64 per share; (ii) 119,000 shares of
preferred stock without designation, par value of $20.00 per share (the
preferred shares described in items (i) and (ii) are collectively referred to as
the "Non-designated Preferred Shares"); and (iii) 100,000 shares of blank check
preferred stock, par value $0.001 per share (the "Blank Check Preferred
Shares"); none of which shares of preferred stock were issued and outstanding as
of the date of this Prospectus. Although the issuance of Non-designated
Preferred Shares would require stockholder approval, the Company's certificate
9
<PAGE>
of incorporation grants the Board of Directors the right to cause the Company to
issue the Blank Check Preferred Shares in one or more series. The Board of
Directors has the authority to issue the Blank Check Preferred Shares and
determine or alter for each such series, the voting powers, full or limited, or
new voting powers, and such designations, preferences, and relative
participating, optional or other special rights and such qualifications,
limitations, or restrictions. If the Company should ever issue preferred shares,
such preferred shares could contain voting or other rights which could
discourage, impede, or prevent a merger, tender offer or proxy contest which
could be favorable to the interests of stockholders.
Merger with Republic. The trading price of the Company's common stock may
be affected, among other things, by the recent announcement of the proposed
merger with Republic (the "Merger"). If the conditions to closing of the Merger
are not satisfied or waived, and the Merger is not consummated, then the trading
price of the Company's common stock may be adversely affected. As part of the
Merger with Republic, each share of the Company's outstanding common stock will
be converted into 4/5ths of one share of Republic's common stock. An investment
in Republic is, however, subject to risks different from an investment in the
Company. In connection with the Merger, a Proxy Statement/Prospectus will be
distributed to holders of the Company's common stock eligible to vote on the
Merger. The Proxy Statement/Prospectus will include, among other things, a
description of Republic's businesses and potential risks associated with an
investment in the securities of Republic and with the Merger.
10
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
The following table sets forth selected consolidated financial information
derived from the consolidated financial statements of the Company and selected
consolidated operating data for the periods indicated. Balance sheet data as of
December 31, 1991, 1992, 1993, 1994 and 1995 and income statement data for the
years then ended have been derived from audited consolidated financial
statements. Balance sheet data as of March 31, 1996 and income statement data
for the three months ended March 31, 1995 and 1996 have been derived from
unaudited consolidated financial statements which, in the opinion of management,
include all adjustments necessary for a fair statement of the results of
operations and financial position for such periods and as of such dates. Results
for the three months ended March 31, 1996 are not necessarily indicative of
results for the full year. The data should be read in conjunction with the
Company's Consolidated Financial Statements and related notes filed in the
Company's 1995 Form 10- KSB and incorporated by reference herein.
<TABLE>
<CAPTION>
Year Ended December 31, Three Months Ended
March 31,
-----------
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
(thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data: (a)
Revenue................. $8,488 $13,348 $16,204 $28,728 $47,815 $9,708 $13,934
Operating expenses...... 6,428 7,988 8,603 13,422 22,182 4,672 7,439
General and administrative
expenses........... 861 1,860 2,067 4,485 6,882 1,272 1,497
Depreciation and
amortization........... 434 1,805 2,606 3,802 6,863 1,360 2,288
Office closing charge... - - - - 1,500(b) - -
------ ------ ------- ------ ---------- ------ -------
Income from operations.. 765 1,695 2,928 7,019 10,388 2,404 2,710
Interest expense........ 180 891 1,303 1,881 2,659 579 456
Other income (expense).. 26 107 49 (126) 205 (29) (8)
------ ------ ------- ------ ---------- ------ -------
Income before income taxes 611
and extraordinary gain 911 1,674 5,012 7,934 1,796 2,246
Provision for income taxes 159 222 721 2,245 3,297 773 929
------ ------ ------- ------ ---------- ------ -------
Income before extraordinary
gain............... 452 689 953 2,767 4,637 1,023 1,317
Extraordinary gain from
pre-payment of debt
at a discount...... - - - 357 - - -
------ ------ ------- ------ ---------- ------ -------
Net income.............. 452 689 953 3,124 4,637 1,023 1,317
Preferred stock dividends
earned (c)......... 211 411 130 - - - -
------ ------ ------- ------ ---------- ------ -------
Income available to
common stockholders $ 241 $ 278 $ 823 $ 3,124 $4,637 $1,023 $ 1,317
------- ------ ------- ------- ---------- ----- --------
------- ------ ------- ------- ---------- ----- --------
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Earnings Per Share Data:
<S> <C> <C> <C> <C> <C> <C> <C>
Primary earnings per share
begore extraordinary
gain............... $0.17 $0.10 $0.21 $0.40 $0.38(b) $0.09 $0.09
Fully diluted earnings per
share before
extraordinary gain $0.17 $0.10 $0.19 $0.36 $0.38(b) $0.09 $0.09
Primary weighted average
shares............... 1,402 2,795 3,950 6,930 12,025 11,350 14,577
Fully diluted weighted
average shares....... 1,402 2,795 4,739 7,685 12,160 11,548 14,683
Other Operating Data:
EBITDA (d).............. $1,199 $3,500 $5,534 $10,821 $18,751 $3,765 $4,998
Capital expenditures.... $1,094 $4,185 $3,485 $12,827 $19,681 $3,923 $3,848
</TABLE>
As of
As of December 31, March 31,
------------------
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
Balance Sheet Data: (a)
Cash and cash equivalents.... $ 711 $ 1,153 $ 1,062 $ 4,677 $ 3,483 $ 1,924
Total assets................. 9,456 32,277 35,257 88,148 126,289 133,932
Total debt................... 3,853 16,057 15,404 25,348 25,421 30,069
Total stockholders' equity(e) 3,503 6,549 9,060 37,164 72,045 75,412
- -----------
(a) The Company's revenue, expenses, assets and liabilities have been
significantly affected by the number and timing of several acquisitions made by
the Company during the periods presented. See Note 3 of the Consolidated
Financial Statements and the notes related thereto filed in the Company's 1995
Form 10-KSB.
(b) The $1.5 million office-closing charge related to the closure of the
Company's office in Indianapolis, Indiana and the buyout of certain related
employment contracts.
(c) Dividends on the Company's preferred stock were suspended in April 1993 by
agreement with the holders thereof. In connection with the Company's public
offering in November 1994, all outstanding shares of preferred stock were
redeemed or exchanged for shares of Common Stock and warrants to purchase shares
of Common Stock. No preferred stock is currently outstanding.
(d) EBITDA reflects income from operations, adjusted to add back the
office-closing charge, depreciation and amortization. This measurement is not
intended to represent net income, cash flow or any other measure of performance
in accordance with generally accepted accounting principles, but it is included
herein because the Company believes analysts and investors generally find it to
be useful for measuring and identifying trends with respect to the Company's
operating performance and creditworthiness.
(e) Public offerings of Common Stock in November 1994 and October 1995
significantly increased the Company's total stockholders' equity. See Note 9 of
the Notes to Consolidated Financial Statements filed in the Company's 1995 Form
10-KSB.
12
<PAGE>
SELLING STOCKHOLDERS
An aggregate of up to 842,684 Shares may be offered by certain Selling
Stockholders. The following table sets forth certain information with respect to
the Selling Stockholders. The Company will not receive any of the proceeds from
the sale of these Shares. Based on information provided by the Selling
Stockholders, no Selling Stockholder owns 1% of more of the Company's
outstanding Common Stock prior to this Offering. Beneficial ownership after the
Offering will depend on the number of Shares sold by each Selling Stockholder.
Shares Beneficially Shares to be
Owned Prior Shares Beneficially
to Offering Being Owned After
Offered Offering
Selling Stockholder Number Percent Number Percent
Robert T. Roth 194,927 1.31* 194,927 - -
Raymond James &
Associates, Inc. 83,333(1) * 83,333 - -
John E. Lawlor 6,666(2) * 6,666 - -
Maurice Kirchofer 111,103 * 111,103 - -
Norman and Patricia Klein 114 * 114 - -
Mary Lemmo 166,653 1.12* 166,653 - -
Nicholas Lemmo 55,551 * 55,551 - -
Arline M. Lotano 74,068 * 74,068 - -
Don J. Lotano 74,069 * 74,069 - -
Frank J. Lotano 74,068 * 74,068 - -
Mark Cosgrove 937 * 937 - -
Dallas Schnitzius 483 * 483 - -
G. Michael Shannon 483 * 483 - -
Thomas I. Wood 229 * 229 - -
_________ _____ ________ ___ ___
Total 842,684 5.68% 842,684
(1) Represents Shares which are issuable by the Company upon the exercise of
warrants granted to Raymond James.
(2) Represents Shares which are issuable upon the exercise of warrants granted
to Mr. Lawlor.
The number of Shares which may actually be sold by the Selling Stockholders
will be determined from time to time by them and will depend upon a number of
factors, including the price of the Shares from time to time. Because the
Selling Stockholders may offer all or none of the Shares that they hold and
because the offering contemplated by this Prospectus is not being underwritten,
no estimate can be given as to the number of Shares that will be held by the
Selling Stockholders.
There are no material relationships between any of the Selling Stockholders
and the Company or any of its predecessors or affiliates, nor have any such
material relationships existed within the past three years, except as follows:
Dallas Schnitzius and G. Michael Shannon were employees of the Company and
served as executive officers of the Company from July, 1994 until on or about
January 18, 1996. Messrs. Roth and Cosgrove obtained their Shares in connection
with the acquisition of Schofield Corporation of Orlando by the Company in March
1996. Mr. Roth was the sole shareholder of Schofield Corporation of Orlando. In
connection with its role as lead manager of the Company's public offering in
November, 1994, Raymond James & Associates, Inc. ("Raymond James") received a
warrant exercisable for five years to purchase 50,000 shares (on a pre-split
basis) of the Company's common stock at $13.30 per share (pre-split). This
warrant has not been exercised or transferred. The shares offered hereby by
Raymond James represent the Shares which are issuable by the Company upon the
exercise of the warrant granted to Raymond James.
13
<PAGE>
DESCRIPTION OF CAPITAL STOCK
General
The authorized capital stock of the Company consists of: (i) 40,000,000
shares of Common Stock, par value $0.0006 per share, 14,833,768 of which shares
were outstanding as of the date of this Prospectus; (ii) 425,200 shares of
preferred stock without designation, par value of $5.64 per share, none of which
were issued and outstanding as of the date of this Prospectus; (iii) 119,000
shares of preferred stock without designation, par value of $20.00 per share,
none of which were issued and outstanding as of the date of this Prospectus; and
(iv) 100,000 Blank Check Preferred Shares, par value $0.001 per share, none of
which were issued and outstanding as of the date of this Prospectus.
Common Stock
Each share of Common Stock is entitled to one vote. There are no
pre-emptive, subscription, conversion or redemption rights pertaining to the
shares of Common Stock. Stockholders are entitled to receive such dividends as
declared by the board of directors out of assets legally available therefor and
to share ratably in the assets of the Company available upon liquidation.
The Certificate of Incorporation does not provide for cumulative voting.
Therefore, stockholders do not have the right to aggregate their votes for the
election of directors and, accordingly, stockholders holding more than 50% of
the shares of Common Stock outstanding can elect all of the directors.
Preferred Stock
The Company's certificate of incorporation grants the board of directors
the right to cause the Company to issue, from time to time, all or part of the
preferred stock remaining undesignated in one or more series, and to fix the
number of shares of preferred stock remaining undesignated and determine or
alter for each series, the voting powers, full, limited, or none, and other
designations, preferences, or relative, participating, optional or other special
rights and such qualifications, limitations, or restrictions thereof.
14
<PAGE>
Transfer Agent
The Company's transfer agent is LaSalle National Trust, N.A., 135 South
LaSalle Street, Room 360, Chicago, Illinois 60603-4105.
Delaware Antitakeover Law
The Delaware Antitakeover Law prohibits certain "business combinations"
between a Delaware corporation whose stock is generally publicly-traded and an
"interested stockholder" of the corporation for a three-year period following
the date that such stockholder became an interested stockholder, unless: (i) the
corporation has elected, in its certificate of incorporation, not to be governed
by the Delaware Antitakeover Law; (ii) the business combination was approved by
the board of directors of the corporation before the other party to the business
combination became an interested stockholder; (iii) upon consummation of the
transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the commencement of the transaction (excluding
voting stock owned by directors who are also officers or held in employee
benefit plans in which the employees do not have a confidential right to tender
or vote stock held by the plan); or (iv) the business combination was approved
by the board of directors of the corporation and ratified by 66 2/3% of the
voting stock which the interested stockholder did not own. The Company has not
opted out of the Delaware Antitakeover Law.
The three-year prohibition described in the preceding paragraph also does
not apply to certain business combinations proposed by an interested stockholder
following the announcement or notification of certain extraordinary transactions
involving the corporation and a person who had not been an interested
stockholder during the previous three years or who became an interested
stockholder with the approval of a majority of the corporation's directors or
who became an interested stockholder prior to the amendment to the corporation's
certificate of incorporation to subject the corporation to the Delaware
Antitakeover Law. The term "business combination" is defined generally to
include mergers or consolidations between a Delaware corporation and an
interested stockholder, transactions with an interested stockholder involving
the assets or stock of the corporation or its majority-owned subsidiaries, and
transactions which increase an interested stockholder's percentage ownership of
stock. The term "interested stockholder" is defined, generally, as those
stockholders who become beneficial owners of 15% or more of a Delaware
corporation's voting stock. See "Risk Factors - Prohibitions Under the Delaware
General Corporation Law Restricting Certain Business Combinations."
These provisions could delay or frustrate the removal of incumbent
directors or a change in control of the Company. These provisions also could
discourage, impede, or prevent a merger, tender offer or proxy contest, even if
such an event would be favorable to the interests of the stockholders.
Indemnification of Directors and Officers
Section 2 of Article Eighth of the Company's Certificate of Incorporation
provides for indemnification of the Company's officers and directors to the
fullest extent permitted by Section 145 of the Delaware General Corporation Law
(the "DGCL"). Section 145 of the DGCL provides for indemnification of directors
and officers from and against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement reasonably incurred by them in connection
with any civil, criminal, administrative or investigative claim or proceeding
15
<PAGE>
(including civil actions brought as derivative actions by or in the right of
the corporation but only to the extent of expenses reasonably incurred in
defending or settling such action) in which they may become involved by reason
of being a director or officer of the corporation if the director or officer
acted in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the corporation and, in addition, in criminal
actions, if he had no reasonable cause to believe his conduct to be unlawful.
If, in an action brought by or in the right of the corporation, the director or
officer is adjudged to be liable for negligence or misconduct in the performance
of his duty, he will only be entitled to this indemnity as the court finds to be
proper. Persons who are successful in defense of any claim against them are
entitled to indemnification as of right against expenses actually and reasonably
incurred in connection therewith. In all other cases, indemnification shall be
made (unless otherwise ordered by a court) only if the board of directors,
acting by a majority vote of a quorum of disinterested directors, independent
legal counsel or holders of a majority of the shares entitled to vote,
determines that the applicable standard of conduct has been met. Section 145
also provides this indemnity for directors and officers of a corporation who, at
the request of the corporation, act as directors, officers, employees or agents
of other corporations, partnerships or other enterprises.
Section 1 of Article Eighth of the Company's Certificate of Incorporation
limits the liability of the Company's directors to the Company or its
stockholders to the fullest extent permitted by the DGCL. Section 102(b)(7) of
the DGCL provides that personal monetary liabilities of a director for breaches
of his fiduciary duties as a director may not be eliminated with regard to any
breach of the duty of loyalty, failing to act in good faith, intentional
misconduct or knowing violation of law, payment of an unlawful dividend,
approval of an illegal stock repurchase, or obtainment of an improper personal
benefit. Such a provision has no affect on the availability of equitable
remedies, such as an injunction or recision, for breach of fiduciary duty.
The employment agreements of certain directors and officers contain a
provision similar to the provisions of the Certificate of Incorporation. The
Company maintains directors and officers liability insurance that will insure
against liabilities that directors and officers of the Company may incur in such
capacities.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted for directors, officers and controlling persons of the
Company pursuant to the foregoing, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director, officer
or controlling person of the Company in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
PLAN OF DISTRIBUTION
This Prospectus, as appropriately amended or supplemented, may be used from
time to time by the Selling Stockholder, or his transferees, to offer and sell
the Shares in transactions in which the Selling Stockholder and any
broker-dealer through whom any of the Shares are sold may be deemed to be
underwriters within the meaning of the Securities Act. The Company will receive
none of the proceeds from any such sales. There presently are no arrangements or
understandings, formal or informal, pertaining to the distribution of the
Shares.
16
<PAGE>
The Company anticipates that resales of the Shares by the Selling
Stockholders will be effected from time to time on the open market in ordinary
brokerage transactions on the Nasdaq National Market ("Nasdaq"), on which the
Common Stock is included for quotation, in the over-the-counter market, or in
private transactions (which may involve crosses and block transactions). The
Shares will be offered for sale at market prices prevailing at the time of sale
or at negotiated prices and on terms to be determined when the agreement to sell
is made or at the time of sale, as the case may be. The Shares may be offered
directly, through agents designated from time to time, or through brokers or
dealers. A member firm of the Nasdaq may be engaged to act as a Selling
Stockholder's agent in the sale of the Shares by the Selling Stockholder and/or
may acquire Shares as principal. Member firms participating in such transactions
as agent may receive commissions from the Selling Stockholder (and, if they act
as agent for the purchaser of such Shares, from such purchaser), such
commissions computed in appropriate cases in accordance with the applicable
rates of the Nasdaq, which commissions may be at negotiated rates where
permissible. Sales of the Shares by the member firm may be made on the Nasdaq
from time to time at prices related to prices then prevailing.
Any such sales may be by block trade.
Participating broker-dealers may agree with the Selling Stockholder to
sell a specified number of shares at a stipulated price per share and, to the
extent such broker dealer is unable to do so acting as agent for the Selling
Stockholder to purchase as principal any unsold shares at the price required to
fulfill the broker-dealer's commitment to the Selling Stockholder. In addition
or alternatively, shares may be sold by the Selling Stockholder, and/or by or
through the broker-dealers in special offerings, exchange distributions, or
secondary distributions pursuant to and in compliance with the governing rules
of the Nasdaq, and in connection therewith commissions in excess of the
customary commission prescribed by the rules of such securities exchange may be
paid to participating broker-dealers, or, in the case of certain secondary
distributions, a discount or concession from the offering price may be allowed
to participating broker-dealers in excess of such customary commission.
Broker-dealers who acquire shares as principal may thereafter resell such Shares
from time to time in transactions (which may involve cross and block
transactions and which may involve sales to and through other broker-dealers,
including transactions of the nature described in the preceding two sentences)
on the Nasdaq, in negotiated transactions, or otherwise, at market prices
prevailing at the time of sale or at negotiated prices, and in connection with
such resales may pay to or receive commissions from the purchasers of such
shares.
Upon the Company's being notified by a Selling Stockholder that a
particular offer to sell the Shares is made, a material arrangement has been
entered into with a broker-dealer for the sale of shares through a block trade,
special offering, exchange distribution, or secondary distribution, or any block
trade has taken place, to the extent required, a supplement to this Prospectus
will be delivered together with this Prospectus and filed pursuant to Rule
424(b) under the Securities Act setting forth with respect to such offer or
trade the terms of the offer or trade; including (i) the number of Shares
involved, (ii) the price at which the Shares were sold, (iii) any participating
brokers, dealers, agents or member firm involved, (iv) any discounts,
commissions and other items paid as compensation from, and the resulting net
proceeds to, the Selling Stockholder, (v) that such broker-dealers did not
conduct any investigation to verify the information set out in this Prospectus,
and (vi) other facts material to the transaction.
17
<PAGE>
Shares may be sold directly by the Selling Stockholder or through agents
designated by the Selling Stockholder from time to time. Unless otherwise
indicated in the supplement to this Prospectus, any such agent will be acting on
a best efforts basis for the period of its appointment.
The Selling Stockholders and any brokers, dealers, agents, member firm or
others that participate with a Selling Stockholder in the distribution of the
Shares may be deemed to be "underwriters" within the meaning of the Securities
Act, and any commissions or fees received by such persons and any profit on the
resale of the Shares purchased by such person may be deemed to be underwriting
commissions or discounts under the Securities Act.
The Company may agree to indemnify the Selling Stockholders as an
underwriter under the Securities Act against certain liabilities, including
liabilities arising under the Securities Act. Agents may be entitled under
agreements entered into with the Selling Stockholders to indemnification against
certain civil liabilities, including liabilities under the Securities Act.
The Selling Stockholders will be subject to the applicable provisions of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, including without limitation Rules 10b-2, 10b-6, and 10b-7, which
provisions may limit the timing of purchases and sales of any of the Shares by
the Selling Stockholders. All of the foregoing may affect the marketability of
the Shares.
The Company will pay substantially all the expenses incident to this
offering of the Shares by the Selling Stockholders to the public other than
brokerage fees, commissions and discounts of underwriters, dealers or agents.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licenses
brokers or dealers. In addition, in certain states the Shares may not be sold
unless the Shares have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and the Company or
Selling Stockholders comply with the applicable requirements.
LEGAL MATTERS
The validity of the Shares offered by this Prospectus has been passed upon
by Shefsky Froelich & Devine Ltd., Chicago, Illinois.
EXPERTS
The consolidated financial statements of Continental Waste Industries, Inc.
as of December 31, 1994 and 1995 and for the years ended December 31, 1993, 1994
and 1995 incorporated by reference in this Prospectus have been audited by
Arthur Andersen, LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said report.
18
<PAGE>
No dealer, salesman or other person
has been authorized to give any
information or to make any
representations other than those
contained or incorporated by
reference in this Prospectus, and
if given or made, such information
or representations must not be
relied upon as having been authorized
by the Company. Neither the delivery
of this Prospectus nor any sale made
hereunder shall under any circumstances
create any implication that there has CONTINENTAL WASTE
been no change in the affairs of the
Company since the date hereof. This INDUSTRIES, INC.
Prospectus does not constitute an
offer or solicitation by anyone in
any jurisdiction in which he person
making such offer or solicitation is
not qualified to do so or to anyone
whom it is unlawful to make such offer
or solicitation.
---------------
Prospectus
---------------
842,684
Shares of
Common Stock
($0.0006 Par Value)
-------------------------
TABLE OF CONTENTS
Page
Available Information.............. 2
Documents Incorporated by Reference 2
The Company........................ 3
Recent Developments................ 4
Risk Factors....................... 6
Selected Consolidated Financial
and Operating Data................. 11
Selling Stockholders............... 13
Description of Capital Stock....... 14 August 8, 1996
Plan of Distribution............... 16
Legal Matters...................... 18
Experts............................ 18
<PAGE>
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Insurance and Distribution
The following sets forth the estimated expenses and costs in connection with the
issuance and distribution of securities being registered hereby. All such
expenses will be borne by the Company.
Securities and Exchange Commission Registration Fee $ 5,120.
Accounting Fees and Expenses.................... 1,000*
Legal Fees and Expenses......................... 2,500*
Blue Sky Fees and Expenses...................... 1,000*
Miscellaneous................................... 1,330*
-----------
Total...................................... $ 10,950.*
- ---------------------
(*) Estimated
Item 15. Indemnification of Directors and Officers.
Section 2 of Article Eighth of the Company's Certificate of Incorporation
provides for indemnification of the Company's officers and directors to the
fullest extent permitted by Section 145 of the Delaware General Corporation Law
(the "DGCL"). Section 145 of the DGCL provides for indemnification of directors
and officers from and against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement reasonably incurred by them in connection
with any civil, criminal, administrative or investigative claim or proceeding
(including civil actions brought as derivative actions by or in the right of the
corporation but only to the extent of expenses reasonably incurred in defending
or settling such action) in which they may become involved by reason of being a
director or officer of the corporation if the director or officer acted in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interest of the corporation and, in addition, in criminal actions, if
he had no reasonable cause to believe his conduct to be unlawful. If, in an
action brought by or in the right of the corporation, the director or officer is
adjudged to be liable for negligence or misconduct in the performance of his
duty, he will only be entitled to this indemnity as the court finds to be
proper. Persons who are successful in defense of any claim against them are
entitled to indemnification as of right against expenses actually and reasonably
incurred in connection therewith. In all other cases, indemnification shall be
made (unless otherwise ordered by a court) only if the board of directors,
acting by a majority vote of a quorum of disinterested directors, independent
legal counsel or holders of a majority of the shares entitled to vote,
determines that the applicable standard of conduct has been met. Section 145
also provides this indemnity for directors and officers of a corporation who, at
the request of the corporation, act as directors, officers, employees or agents
of other corporations, partnerships or other enterprises.
Section 1 of Article Eighth of the Company's Certificate of Incorporation
limits the liability of the Company's directors to the Company or its
stockholders to the fullest extent permitted by the DGCL. Section 102(b)(7) of
the DGCL provides that personal monetary liabilities of a director for breaches
of his fiduciary duties as a director may not be eliminated with regard to any
breach of the duty of loyalty, failing to act in good faith, intentional
misconduct or knowing violation of law, payment of an unlawful dividend,
approval of an illegal stock repurchase, or obtainment of an improper personal
benefit. Such a provision has no affect on the availability of equitable
remedies, such as an injunction or recision, for breach of fiduciary duty.
II-1
<PAGE>
The employment agreements of certain directors and officers contain a
provision similar to the provisions of the Certificate of Incorporation.
The Company maintains directors and officers liability insurance that
will insure against liabilities that directors and officers of the Company may
incur in such capacities.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted for directors, officers and controlling persons of the
Company pursuant to the foregoing, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director, officer
or controlling person of the Company in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
Item 16. Exhibits and Financial Statement Schedules
Exhibit
No. Description
5 Opinion of Shefsky Froelich & Devine Ltd. regarding the legality of
the Shares.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Shefsky Froelich & Devine Ltd. (included in Exhibit 5
above).
*24 Power of Attorney (included on signature page of the Registrant's
filing on July 8, 1996).
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<PAGE>
Item 17. Undertakings
(a)The Registrant hereby undertakes:
(1)To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement;
(2)That, for the purpose of determining any liability under the 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 thereof; and
(3)To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(b)The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where 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 Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 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 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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<PAGE>
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
of the requirements for filing this Amendment No 1 to the Registration Statement
on Form S-3 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Clark,
State of New Jersey on the ___th day of August, 1996.
CONTINENTAL WASTE INDUSTRIES, INC.
By: /s/ Carlos E. Aguero
Carlos E. Aguero,
President, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to the Registration Statement has been signed by the
following persons in their respective capacities with the Registrant on the date
indicated.
Signature Title Date
/s/ *_____________________ Chairman of the Board and August 7, 1996
Thomas A. Volini Chief Operating Officer
(Principal Executive Officer)
/s/ *_____________________ President, Chief Executive August 7, 1996
Carlos E. Aguero Officer and Director
(Principal Executive Officer)
/s/ *_____________________ Senior Vice President and August 7, 1996
Michael J. Drury (Chief Financial Officer and
Chief Accounting Officer)
/s/ *_____________________ Director August 7, 1996
Bret R. Maxwell
/s/ *_____________________ Director August 7, 1996
Donald H. Haider
/s/ *_____________________ Director August 7, 1996
Richard J. Carlson
*By: _____________________ August 7, 1996
Carlos E. Aguero
Attorney-in-Fact
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<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Description of Documents Page
5 Opinion of Shefsky Froelich & Devine Ltd. regarding the legality
of the Shares...................................................
23.1 Consent of Arthur Andersen LLP..................................
23.2 Consent of Shefsky Froelich & Devine Ltd. (included in Exhibit 5
above)..........................................................
*24 Power of Attorney (included on signature page of the Registrant's
filing on July 8, 1996..........................................
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<PAGE>
[Letterhead of Shefksy Froelich & Devine Ltd.]
August 7, 1996
Continental Waste Industries, Inc.
67 Walnut Avenue
Suite 103
Clark, New Jersey 07066
Re: Continental Waste Industries, Inc.
Registration Statement on Form S-3
Gentlemen:
We have acted as special securities counsel to Continental Waste
Industries, Inc., a Delaware corporation (the "Company"), in connection with the
preparation and filing of this Registration Statement, as may be amended from
time to time on Form S-3 filed on July 8, 1996 (the "Registration Statement"),
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act") and the prospectus contained
therein with respect to the public offering of up to 842,684 shares of the
Company's common stock, par value $0.0006 which were previously issued by the
Company to the individuals set forth under the heading "Selling Stockholders" in
the Registration Statement (the "Existing Shares"), and 89,999 shares of the
Company's common stock which are issuable upon exercise of warrants by the
holders thereof (the "Warrant Shares" collectively with the Existing Shares, the
"Shares") . All of the Shares are being offered on behalf of certain selling
stockholders as set forth in the Registration Statement (the "Selling
Stockholders"). In connection with the registration of the Shares, you have
requested our opinion with respect to the matters set forth below.
For purposes of this opinion, we have reviewed the Registration Statement.
In addition, we have examined the originals or copies certified or otherwise
identified to our satisfaction of: (i) the Company's Certificate of
Incorporation, as amended to date; (ii) the By-laws of the Company, as amended
to date; (iii) records of the corporate proceedings of the Company as we deemed
necessary or appropriate as a basis for the opinions set forth herein; (iv) the
warrant agreements evidencing the Warrant Shares (the "Warrant Agreements"); and
(v) those matters of law as we have deemed necessary or appropriate as a basis
for the opinions set forth herein. We have not made any independent review or
investigation of the organization, existence, good standing, assets, business or
affairs of the Company, or of any matters. In rendering our opinion, we have
assumed without inquiry the legal capacity of all natural persons, the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies and the authenticity of the originals of
these documents submitted to us as copies.
We have not undertaken any independent investigation to determine facts
bearing on this opinion, and no inference as to the best of our knowledge of
facts based on an independent investigation should be drawn from this
representation. Further, our opinions, as hereinafter expressed, are subject to
the following exceptions, limitations and qualifications: (i) the effect of
bankruptcy, insolvency, fraudulent conveyance, reorganization, arrangement,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights and remedies of creditors; and (ii) the effect of general
principles of equity whether enforcement is considered in a proceeding in equity
or at law and the discretion of the court before which any proceeding therefore
may be brought.
We are admitted to the practice of law only in the State of Illinois and,
accordingly, we do not purport to be experts on the laws of any other
jurisdiction nor do we express an opinion as to the laws of jurisdictions other
than the laws of the State of Illinois and the General Corporation Law of the
State of Delaware, as currently in effect.
On the basis of, and in reliance upon, the foregoing, and subject to the
qualifications contained herein, we are of the opinion that the Existing Shares
are validly issued, fully-paid, and nonassessable and the Warrant Shares, when
issued in accordance with the terms of the Warrant Agreements for the
consideration set forth therein will be validly issued, fully-paid and
nonassessable..
We hereby consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm contained under the
heading "Legal Matters."
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose or furnished, or quote to, or relied upon by
any other person, firm or corporation for any purpose without our prior express
written consent.
Respectfully submitted,
SHEFSKY FROELICH & DEVINE LTD.
LETTERHEAD OF ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 20, 1996
included in Continental Waste Industries, Inc.'s Form 10-KSB for the year ended
December 31, 1995 and to all references to our firm included in or made a part
of this registration statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
August 8, 1996
