<PAGE> 1
As filed with the Securities and Exchange Commission on July 10, 1996.
Registration No. 333-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
MED/WASTE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Delaware 65-0297759
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
3890 N.W. 132nd Street, Suite K
Opa Locka, Florida 33054
(305) 688-3931
(Address including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-------------------------
MICHAEL D. ELKIN
MED/WASTE, INC.
3890 N.W. 132nd Street, Suite K
Opa Locka, Florida 33054
(305) 688-3931
(Name and address, including zip code, and telephone number, including area
code, of agents for service)
With a Copy to:
BRYAN W. BAUMAN, ESQ.
Wallace, Bauman, Fodiman & Shannon, P.A.
2222 Ponce de Leon Boulevard, Sixth Floor
Coral Gables, Florida 33134
(305) 444-9991
--------------------------
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. [ ]
<PAGE> 2
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) REGISTRATION FEE
--------------------------- ------------ ------------------ ------------------- -----------------
<S> <C> <C> <C> <C>
Common Stock, par value 479,139 $4.375 $2,096,233.13 $722.84
$0.001 per share
</TABLE>
(1) Pursuant to Rule 457(c), the fee is calculated on the basis of the
average of the bid and asked prices on July 8, 1996 on the NASDAQ
Small Cap Market for the Common Stock.
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.
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<PAGE> 3
CROSS REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K
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Item
No. Form S-3 Caption Prospectus Caption
- ----- ------------------------------------------- ----------------------------------------
<S> <C> <C>
1 Forepart of the Registration Statement and Cover of Registration Statement,
Outside Front Cover Page of Prospectus . . Outside Front Cover Page of Prospectus
2 Inside Front and Outside Back Cover Page of Available Information; Document
Prospectus . . . . . . . . . . . . . . . . Incorporated By Reference; Table of
Contents
3 Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges . . . . . . . The Company; Risk Factors
4 Use of Proceeds . . . . . . . . . . . . . . Use of Proceeds
5 Determination of Offering . . . . . . . . . Cover Page of Prospectus; Plan of
Distribution
6 Dilution . . . . . . . . . . . . . . . . . Not Applicable
7 Selling Security Holders . . . . . . . . . Selling Stockholders
8 Plan of Distribution . . . . . . . . . . . Plan of Distribution
9 Description of Securities to be Registered Description of Securities
10 Interests of Named Experts and Counsel . . Legal Matters; Experts
11 Material Changes . . . . . . . . . . . . . Not Applicable
12 Incorporation of Certain Information by
Reference . . . . . . . . . . . . . . . . . Documents Incorporated by Reference
13 Disclosure of Commission Position on
Indemnification for Securities Act Indemnification
Liabilities . . . . . . . . . . . . . . . .
</TABLE>
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<PAGE> 4
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BY ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
Subject to Completion -- July 10, 1996
479,139 Shares
MED/WASTE, INC.
Common Stock
($0.001 par value per share)
This Prospectus relates to the public offering of up to 479,139
shares of common stock, $0.001 par value per share (the "Common Stock"), of
Med/Waste, Inc. (the "Company"). All of the Shares offered hereby 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 Common Stock 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. The Selling Shareholders
are not restricted in the price or prices at which they may sell the Common
Stock. Any commissions paid or concessions allowed to any broker-dealer, and,
if any broker-dealer purchases such Common Stock as principal, any profits
received on the resale of such Shares, may be deemed to be underwriting
discounts and commissions under the Securities Act.
Of the Common Stock being registered hereby, 308,139 shares are
issuable upon exercise of common stock purchase warrants (the "Warrants")
originally issued by the Company in a private offering completed in March 1992,
106,000 shares are issuable upon exercise of options granted to certain
individuals and 65,000 shares are issuable upon exercise of other warrants. The
Company will not receive any of the proceeds from the sale of the Common Stock,
but will pay the expenses incurred in registering the Shares, including legal
and accounting fees. All selling and other expenses incurred by individual
Selling Stockholders will be borne by such Selling Stockholder. The Company
would receive an aggregate of $1,170,158 in gross proceeds from the exercise of
the warrants and options and other warrants. Selling Stockholders will bear all
other expenses of this offering, including brokerage fees, any underwriting
discounts or commissions.
Each Warrant entitled the holder to purchase one (1) share of
Common Stock at an exercise price of $2.40 per share until August 31, 1996. The
outstanding Options and other warrants entitle the respective holders to
purchase one share of Common Stock and have exercise prices ranging from $2.125
to $2.625 per share. On July 8, 1996, the Company had 1,892,826 shares of its
Common Stock outstanding.
Prospective purchasers should carefully consider the matters set
forth under the caption "Risk Factors" located on page 4.
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 Common Stock is included for quotation on the NASDAQ Small Cap Market
("NASDAQ") under the symbol "MWDS." The last reported sale price of the Common
Stock on NASDAQ on July 8, 1996 was $4.375 per share.
The date of this Prospectus is _____________, 1996.
<PAGE> 5
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. The Common Stock is included for quotation on the NASDAQ Small Cap
Market and these reports, proxy statements and other information concerning the
Company may be inspected at the office of the National Association of
Securities Dealers, inc., 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-QSB for the quarter ended March
31, 1996; and (iii) the Company's Proxy Statement dated March 22, 1996 for the
Company's annual meeting of Shareholders held on May 14, 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 MICHAEL D. ELKIN, VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER, 3890 N.W. 132ND STREET, SUITE K, OPA LOCKA, FLORIDA 33054 (TELEPHONE:
(305) 688-3931).
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<PAGE> 6
THE COMPANY
Med/Waste, Inc. (the "Company") was incorporated in November 1991
under the laws of the State of Delaware. The Company provides medical waste
management and commercial cleaning services through its wholly owned
subsidiaries, Safety Disposal System, Inc. ("SDS") and The Kover Group, Inc.
("Kover").
SDS provides collection, transportation, treating, tracking and
related services for the disposal of medical waste throughout Florida. Medical
waste is generally any waste which may cause an infectious disease or can
reasonably be suspected of harboring pathogenic organisms. Medical waste
includes predominantly all material that comes in contact with human and animal
body fluids.
Nationally, most medical waste is disposed of by incineration.
However, more stringent government regulation and a generally negative public
attitude toward nearby incineration facilities have resulted in a declining
number of incineration disposal facilities. Relatively few newly permitted
incineration facilities have opened due to the significant cost of compliance
with new environmental legislation. The trend against incinerator facilities
has encouraged the development and commercial use of a variety of
environmentally acceptable alternative disposal techniques.
SDS collects medical waste from medical waste generators,
including hospitals, clinics, medical and dental offices, veterinarians,
laboratories, funeral homes, home health agencies and others. In addition to
medical waste collection, SDS provides programs to assist customers to promote
safe handling of medical waste and comply with federal and state requirements
applicable to their operations.
SDS supplies, installs and oversees the operations of on-site
autoclaves at large quantity generators, typically hospitals. The autoclaves
treat the medical waste through sterilization, allowing most of such waste to
be handled and disposed of as solid waste. Management believes that autoclaves
can reduce each hospital's medical waste by up to 90%, thus significantly
reducing the expense of disposal both due to decreased volume and the
significant cost savings of disposing of solid, versus medical waste. Hospitals
either purchase or lease the autoclave and related equipment. During the term
of the lease the Company provides maintenance and support of the autoclave
on-site and collects the treated waste and transports it for ultimate disposal
at a local landfill.
Kover is engaged in the business of offering, selling and
servicing franchises for commercial building cleaning services through the
trade name "Coverall Cleaning Concepts". Kover is a service franchisor of
Coverall North America, Inc. ("CNA") in the metropolitan area of Cleveland,
Ohio and South Florida.
As of 1995, the annual sales related to commercial cleaning
services in the United States amounted to approximately $38 billion. There are
over 45,000 and 65,000 locations within the Cleveland, Ohio and South Florida
markets, respectively, which require building cleaning services. It is
estimated that the market for commercial cleaning services increases
approximately five percent (5%) per year. Kover's franchisees currently
service over 1,600 accounts in the two regions.
Kover is a service franchisee of CNA. CNA operates a business
engaged in the offer and sale of three types of franchises, each of which is
related to commercial building cleaning services using the trade name
"Coverall". The three types of franchises are janitorial franchises, limited
area franchises and services franchises. Kover is a service franchisee of CNA
in the metropolitan areas of Cleveland, Ohio and South Florida. Kover has the
exclusive right to sell janitorial franchises using the Coverall Cleaning
Concept in these metropolitan areas. Kover is required to pay CNA royalty fees
and three to four and one-half percent of monthly revenues. Kover uses the
Coverall name, design and business plan to conduct and promote its independent
business of offering, selling and servicing janitorial franchises pursuant to
written agreements between Kover and its janitorial franchisees. Kover
maintains a small staff to perform emergency cleaning services and temporary
cleaning services for accounts being transferred from one franchisee to
another. Most cleaning services are provided to commercial customers through
independent franchisees.
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<PAGE> 7
Kover sells franchises for janitorial services in the
metropolitan territories of South Florida and Cleveland, Ohio. As of March 31,
1996, Kover had in operation approximately 350 janitorial franchises. As of
that date, CNA and its other service franchisees had an additional
approximately 900 janitorial franchises in operation located in 15 states, as
well as in Canada, United Kingdom, South Africa, Spain and Thailand.
The Company is a Delaware corporation with its principal
executive offices located at 3890 N.W. 132nd Street, Suite K, Opa Locka,
Florida 33054, (305) 688-3931.
RISK FACTORS
An investment in the Common Stock offered hereby involve a
certain degree of risk. Prospective investors should carefully consider the
following, as well as all of the other information set forth elsewhere in this
Prospectus, before making a decision to purchase any shares of Common Stock
offered by this Prospectus.
IMPACT OF GOVERNMENT REGULATION. The Company operates within the
medical waste disposal industry, which is subject to extensive and frequently
changing local, state and federal laws. This statutory and regulatory
framework imposes compliance burdens and risks on the Company, including
requirements to obtain and maintain government permits. The transport,
treatment and disposal of medical waste is subject to packaging, labeling,
handling, notice and reporting requirements, as well as requirements pertaining
to transporter registration, transportation handling procedures and the
preparation of shipping papers. State and local regulations vary from location
to location and constantly change. State and local regulations may pose
insurmountable barriers, financial or otherwise, to the opening and operation
of facilities in states where the Company intends to operate its business. The
Company believes that it is currently in compliance in all material respects
with all applicable laws and regulations governing its business and has all
appropriate government permits to operate its existing business, including
those required for the operation of its transfer stations. However, the
addition of new, or amendments to existing, statutes and regulations could
require the Company to continually modify its methods of operations at costs
that could be substantial. Further, since the Company intends to operate its
own medical waste treatment facilities, it will be subject to additional
permitting requirements at each such location. The permitting process is
complex and time consuming and is generally opposed by local residents. Even
after permits are issued, opposition groups may attempt to compel regulators
through court proceedings to modify permit conditions or reverse decisions with
respect to the initial granting of permits. There can be no assurance that the
Company will be able, for financial reasons or otherwise, to comply with future
environmental and permitting laws either in its present market or in those
markets in which it intends to expand. Delays in the permitting process could
add significantly to the cost of developing a medical waste treatment facility
or transfer station. See "Business -- Government Regulation."
IMPORTANCE OF GOVERNMENT ENFORCEMENT OF ENVIRONMENTAL
REGULATIONS. The business prospects of the medical waste disposal industry are
significantly enhanced by the stringent enforcement of handling,
transportation, environmental preservation and clean-up requirements by
regulatory agencies. Any significant relaxation of regulatory requirements
governing medical waste could materially adversely affect the Company's
operations. The intensity and breadth of present and future regulation and
supervision of medical waste disposal procedures and the impact of
technological changes on government regulation cannot be predicted. The level
of government enforcement is subject to constantly changing political and
budgetary pressures. A significant reduction in government enforcement could
have a material adverse effect on the Company's operations.
INTENSE COMPETITION WITHIN INDUSTRY. The Company operates within
the intensely competitive medical waste disposal industry. Competition in the
industry has resulted in substantial price reductions in virtually all
geographic areas in which the Company operates. There can be no assurance that
competitive pressures within the industry will not result in continued or
accelerated price reductions. The Company faces competition from several
national waste disposal companies and numerous regional and local entities in
its present locations and will in the future be confronted with such
competition in each location where it intends to expand. Several of these
competitors are larger and have substantially greater financial and other
resources than the Company and are well entrenched in their respective markets.
Among these competitors are Browning-
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<PAGE> 8
Ferris Industries, Inc. ("BFI"), WMX Technologies, Inc., Laidlaw Waste Systems,
Inc., and USA Waste Services, Inc. The Company's primary competitor is BFI.
There can be no assurance that the Company will be able to profitably compete
with such other entities.
POTENTIAL LIABILITY AND INSURANCE. The medical waste disposal
industry involves potentially significant risks of statutory, contractual, tort
and common law liability. The failure of the Company to comply with applicable
laws or to manage medical waste in an environmentally sound manner could result
in environmental contamination, personal injury and property damage. The
Company maintains insurance which it considers sufficient to meet regulatory
and customer requirements and to protect the Company's operations. However, a
partially or completely uninsured claim against the Company of sufficient
magnitude could have a material adverse impact on the Company's operations. A
successful claim against the Company for which it does not have adequate
insurance. Certain federal and statutory laws impose strict, joint and several
liability on current and former owners and operators of facilities regarding
the release of hazardous substances and on generators and transporters of the
hazardous substances that are brought to such facilities. Responsible parties
may be liable for substantial waste site investigation and clean up costs as a
result of the occurrence of environmental contamination. It is possible that
in the future the Company may experience difficulty in obtaining appropriate
insurance at reasonable prices with reasonable coverage, which could place the
Company at a competitive disadvantage. The inability to obtain necessary
insurance coverage, or a successful claim against the Company for which it does
not have adequate insurance, could have a material adverse impact on the
Company's operations and financial condition.
TECHNOLOGICAL OBSOLESCENCE. The medical waste industry presents
continuing opportunities for the development of alternate treatment and
disposal methods. Such methods may emphasize cost efficiencies, reduction in
the volume of waste generated, environmental factors or both. The Company
sells autoclave units to hospitals and other large generators. The development
of significantly more efficient or environmentally sound treatment and disposal
methods may have a material adverse effect on the Company's operations.
SERVICE FRANCHISE AGREEMENTS. Kover operates as franchisee of
Coverall of North America, Inc. ("CNA") pursuant to Service Franchise
Agreements in each location. The Service Franchise Agreements contain a number
of restrictions and obligations on the part of Kover. The failure of Kover to
strictly comply with these requirements could result in the termination of such
franchises.
DEPENDENCE ON FRANCHISOR. CNA contributes to the development of
Kover and its operating systems, clinics, products and formulation of
strategies. The loss of the relationship with the CNA could have a material
adverse effect on Kover's operations and new product development efforts.
Further, the long term success of Kover is in part dependent upon the overall
success of the CNA janitorial system. Accordingly, to a certain extent, the
success of Kover is dependent on part upon the successful operations of CNA's
other franchisees, as well as upon the financial condition, management,
marketing and innovative abilities of CNA. Any event that creates adverse
publicity involving CNA operations may have an adverse impact on the Company,
regardless of whether the event involved Kover.
DEPENDENCE UPON PERSONNEL. The Company is dependent upon the
services of Daniel Stauber and Phillip W. Kubec. Mr. Stauber is president of
the Company and its wholly owned subsidiary, Safety Disposal System, Inc.
("SDS"). Mr. Kubec is the president of the Company's wholly owned subsidiary,
The Kover Group, Inc. ("Kover"). SDS has an employment agreement with Mr.
Stauber which expires in December 2001. Kover has an employment agreement with
Mr. Kubec which expires in June 1999. However, if either officer's services
were to become unavailable to the Company for any reason, the Company's success
could be materially adversely affected. The Company does not carry key man life
insurance.
NO DIVIDENDS. The Company has never paid any cash dividends on
its Common Stock and does not anticipate paying cash in dividends in the
foreseeable future. The payment of dividends by the Company will depend on its
earnings, financial condition and other business and economic factors affecting
the Company at that time as the Board of Directors may consider relevant. The
Company currently intends to retain any earnings to provide for the development
and growth of the Company.
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ANTI-TAKEOVER PROVISIONS. Certain provisions of the Company's
charter and by-laws could delay or frustrate the removal of incumbent directors
and could prevent or delay a merger, tender offer or proxy contest involving
the Company that is not approved by the Board of Directors, even if such events
may be beneficial to the interests of stockholders. For example, the Company's
charter authorizes the Board of Directors, without stockholder approval, to
issue preferred stock with voting or conversion rights which could adversely
affect the voting power of the holders of Common Stock. In addition, the
Delaware General Corporation Law contains provisions that may have the effect
of making it more difficult or delaying attempts by others to obtain control of
the Company.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common
Stock by the Selling Stockholders. The Company would receive net proceeds
aggregating $1,170,158 upon exercise of the Warrants, stock options and other
warrants if all such Warrants, stock options and other warrants are exercised.
Such proceeds will be added to the Company's working capital and used for
general corporate purposes.
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<PAGE> 10
SELLING STOCKHOLDERS
An aggregate of up to 479,139 Shares may be offered by certain
Selling Stockholders. The following table sets forth certain information with
respect to the Selling Stockholders, based on information provided by the
Selling Stockholders. No Selling Stockholder owns one percent (1%) or more of
the Company's outstanding Common Stock prior to this Offering, except as
indicated below. Beneficial ownership after the Offering will depend on the
number of Shares sold by each Selling Stockholder. The Company will not
receive any of the proceeds from the sale of these Shares.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED PRIOR SHARES TO BE BENEFICIALLY
TO OFFERING(1) OWNED AFTER OFFERING
-------------------------------- SHARES BEING -------------------------
SELLING STOCKHOLDER SHARES PERCENT(2) OFFERED(1) NUMBER PERCENT(2)
-------------------------------- -------------- ------------- ------------ --------- -----------
<S> <C> <C> <C> <C> <C>
Richard L. Allen 2,779 * 2,779 -- *
Merton Allen and Barbara Allen 9,375 * 3,125 6,250 *
Ernest M. Ash 9,375 * 3,125 6,250 *
Anthony J. Barkett 9,375 * 3,125 6,250 *
Kenneth D. Barkett 9,375 * 3,125 6,250 *
Bryan W. Bauman(4) 16,043(4) * 16,043 -- *
Allen Baumel 9,375 * 3,125 6,250 *
Joshua L. Becker and Patricia 9,375 * 3,125 6,250 *
Becker
Joel Birnbaum 4,002 * 1,334 2,668 *
Bart S. Birnbaum 13,875 * 3,125 10,750 *
Howard Blankman(5) 10,000(5) * 10,000 -- *
Biscayne National Corp.(6) 9,375 * 3,125 6,250 *
Stephen R. Bloch 3,125 * 3,125 -- *
Burt R. Bloom and Jackie Bloom 3,125 * 3,125 -- *
Carol Lee Boyett 9,375 * 3,125 6,250 *
Estate of James B. Burgin 9,375 * 3,125 6,250 *
James P. Cefaratti 1,355 * 1,355 -- *
Norman Ciment 9,375 * 3,125 6,250 *
Carolyn J. Davis 3,125 * 3,125 -- *
Phyllis Delaney and Colleen Dempsey 9,375 * 3,125 6,250 *
Robert Delaney 9,375 * 3,125 6,250 *
Frank Dempsey 9,375 * 3,125 6,250 *
John DeNigris 40,000 1.69 40,000 -- *
Michael M. Dickson and Margaret C. 9,375 * 3,125 6,250 *
Dickson
William W. Dolan(7) 46,875(7) 1.98 3,125 43,750(7) 1.84
Shirley Einhorn 3,125 * 3,125 -- *
Michael Elfenbein 1,355 * 1,355 -- *
Martin Engels, Trustee 6,252 * 2,084 4,168 *
Burton Engels and Sylvia Engels 9,375 * 3,125 6,250 *
David F. Ennis 9,375 * 3,125 6,250 *
A.G. Edwards and Sons, as 6,252 * 2,084 4,168 *
custodian for Todd Fodiman, Rollover IRA
Todd Fodiman(8) 6,773(8) * 521 4,168 *
Allan S. Friedman 9,375 * 3,125 6,250 *
Lawrence Gettis 9,375 * 3,125 6,250 *
Frances Goldberg 9,375 * 3,125 6,250 *
Mark Goldberg(9) 20,000(9) * 20,000 -- *
Linda K. Goldenberg 9,375 * 3,125 6,250 *
</TABLE>
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<PAGE> 11
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED PRIOR SHARES TO BE BENEFICIALLY
TO OFFERING(1) OWNED AFTER OFFERING
-------------------------------- SHARES BEING --------------------------
SELLING STOCKHOLDER SHARES PERCENT(2) OFFERED(1) NUMBER PERCENT(2)
--------------------------------- -------------- ------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Robert Goldstein(10) 60,000(10) 2.53 60,000 -- *
William Gompers and Ronni 4,064 * 1,355 2,709 *
Gompers
Richard Green(11) 82,290(11) 3.47 3,125 79,165(11) 3.34
Lawrence Grobman 4,687 * 1,562 3,125 *
Linda Grobman 4,688 * 1,563 3,125 *
Robert Grover, Trustee(2) 52,436 2.21 16,667 35,769 1.51
John C. Hansen and Josefina M. 10,375 * 3,125 7,250 *
Hansen
Catherine Hawkins 3,125 * 3,125 -- *
Retirement Accounts, Inc., 9,375 * 3,125 6,250 *
Custodian IRA
f/b/o Robert J. Hunter, Jr.
Arthur Jacowitz and Joan 3,125 * 3,125 -- *
Jacowitz
Phil Kaplan and Rosalyn Kaplan 9,375 * 3,125 6,250 *
David Kenny and Mary Kenny 9,375 * 3,125 6,250 *
Jack Knap, Trustee 9,375 * 3,125 6,250 *
Marc Kovens 9,375 * 3,125 6,250 *
Michael T. Kram 4,668 * 1,563 3,125 *
Laffer, Warren & Co. 5,000 * 5,000 -- *
Mark Lamet 9,375 * 3,125 6,250 *
Jack Levine and Susan Levine 18,750 * 6,250 12,500 *
Orestes Lugo 4,002 * 1,334 2,668 *
Malcolm G. MacNeill 9,375 * 3,125 6,250 *
David Markowitz and Sharon Markowitz 3,127 * 1,043 2,084 *
Louis D. May 4,668 * 1,563 3,125 *
John B. McDermott 12,875 * 3,125 9,750 *
Leonard Merkow 9,375 * 3,125 -- *
Jerome S. Michell, Trustee 9,375 * 3,125 6,250 *
Michael Millard 3,125 * 3,125 -- *
Sanford B. Miot 9,375 * 3,125 -- *
Robert L. Moore, Trustee 9,375 * 3,125 -- *
Patrick V. O'Connor and Denise 19,375 * 3,125 16,250 *
A. O'Connor
Betty J. O'Connor 4,626 * 1,042 3,084 *
Michael E. O'Connor 6,626 * 1,042 5,084 *
James Pekarek(12) 6,250 * 6,250 -- *
Sidney M. Pertnoy and Nadine Pertnoy 8,336 * 2,779 5,557 *
John Piotrowski 9,375 * 3,125 6,250 *
Philip K. Piper(13) 20,000(13) * 20,000 -- *
Stanley Pollack 9,375 * 3,125 6,250 *
Howard J. Ralbag and Anny Ralbag 18,750 * 6,250 12,500 *
Billy R. Riggs 10,375 * 3,125 7,250 *
Irme J. Rosenthal 9,375 * 3,125 6,250 *
Bernard Rothman 9,375 * 3,125 6,250 *
Joann Rushing 1,313 * 1,313 -- *
J. Jerry Schechter 3,125 * 3,125 -- *
Richard Schechter and Susan L. Schechter 9,375 * 3,125 -- *
Laura Schrank 1,067 * 522 545 *
Charles D. Scurr(14) 43,750(14) 1.84 3,125 37,500(14) 1.58
</TABLE>
- 8 -
<PAGE> 12
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED PRIOR SHARES TO BE BENEFICIALLY
TO OFFERING(1) OWNED AFTER OFFERING
-------------------------------- SHARES BEING --------------------------
SELLING STOCKHOLDER SHARES PERCENT(2) OFFERED(1) NUMBER PERCENT(2)
--------------------------------- -------------- ------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Charles D. Scurr, UTA Charles 43,750(14) 1.84 3,125 37,500(14) 1.58
Schwab & Company, Inc., IRA
Contributory DTD 4/15/91(14)
Scott J. Silver 3,125 * 3,125 -- *
Charles J. Simons, Jr. 3,127 * 1,043 2,084 *
James P. Simons 3,127 * 1,043 2,084 *
Susan Slovich 3,127 * 1,043 2,084 *
Jay Solowsky 8,335 * 2,778 5,557 *
Aaron Stauber and Avivah Stauber(15) 3,127 * 1,043 2,084 *
Marshall Stauber and Sharon Stauber(16) 3,127 * 1,043 2,084 *
Sherwin Stauber, Trustee(17) 52,436 2.21 16,667 35,769 1.51
Dale Sue Kaplan-Stein 39,995 1.68 3,125 36,865 1.55
David Stone 9,375 * 3,125 6,250 *
Richard Suarez 9,375 * 3,125 6,250 *
Herbert Swerdlow and Millicent 10,875 * 3,125 7,750 *
Swerdlow
Jacquelyn Tachiera 4,126 * 1,042 3,084 *
Stephen Taglianetti 4,002 * 1,334 2,668 *
Robert I. Targ, P.A. 9,375 * 3,125 6,250 *
Max Teninbaum 9,125 * 3,125 5,000 *
Samuel Tischler(18) 1,000(18)
Richard W. Tobin and Karen H. Tobin 6,125 * 3,125 3,000 *
Mark D. Wallace(19) 2,500 * 2,500 -- *
Patricia Wallace as custodian 2,500 * 2,500 -- *
for Hardy S.
Wallace(20)
Marvin Weinstein, Trustee 52,436 2.21 16,667 35,769 1.51
Stuart H. Winston 9,875 * 3,125 6,750 *
Maria T. Zucker 1,043 * 1,043 -- *
</TABLE>
- ----------------------------------------
* Less than one percent.
(1) Except as otherwise indicated, the shares being offered hereby are
issuable upon exercise of Warrants and are included in the beneficial
ownership tables.
(2) Based upon 1,892,826 shares of Common Stock outstanding, plus 479,139
shares issuable upon exercise of Warrants, stock options and other
warrants.
(3) Mr. Bauman is a shareholder of the law firm of Wallace, Bauman,
Fodiman & Shannon, P.A., general counsel to the Company. The Shares
set forth above include 15,000 shares issuable upon exercise of stock
options.
(4) Mr. Blankman was a partner of the Company's financial public relations
firm. Such shares are issuable upon exercise of options.
(5) Milton J. Wallace, Chairman of the Board of the Company is president,
director and controlling shareholder of Biscayne National Corp.
(6) Mr. DeNigris was formerly the Company's financial public relations
advisor. Such shares are issuable upon exercise of options.
(7) Mr. Dolan is a director of the Company. Include 37,500 shares issuable
upon exercise of stock options.
(8) Mr. Fodiman is a shareholder of Wallace, Bauman, Fodiman & Shannon,
P.A., general counsel to the Company. Such shares include 6,252 owned
by Mr. Fodiman's 401(k) Plan.
(9) Such shares are issuable upon exercise of options granted to Mr.
Goldberg, for consulting services.
(10) Mr. Goldstein is president of the Company's financial public relations
firm. Such shares are issuable upon exercise of a warrant.
(11) Mr. Green is a director and secretary of the Company. The shares set
forth above include 62,500 shares of Common Stock issuable upon
exercise of Stock Options.
(12) Mr. Pekarek is the former Vice President/Chief Financial Officer of
the Company.
(13) Such shares are issuable upon exercise of options granted to Mr. Piper
for consulting services.
- 9 -
<PAGE> 13
(14) Mr. Scurr is a director of the Company. Includes 25,000 shares of
Common Stock issuable upon exercise of Stock Options and 9,375 shares
owned by Mr. Scurr's individual retirement account. Includes 34,375
owned individually by Mr. Scurr.
(15) Aaron Stauber is the brother of Daniel A. Stauber, President of the
Company.
(16) Marshall Stauber is the brother of Daniel A. Stauber, President of the
Company.
(17) Sherwin Stauber is the father of Daniel A. Stauber, President of the
Company.
(18) Such shares are issuable upon exercise of options.
(19) Mark D. Wallace is the son of Milton J. Wallace, Chairman of the Board
of the Company.
(20) Patricia Wallace and Hardy S. Wallace are the spouse and son,
respectively of Milton J. Wallace, Chairman of the Board.
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 (3) years, except
as indicated in the footnotes above.
DESCRIPTION OF SECURITIES
The Company has 10,000,000 shares of authorized Common Stock, par
value $0.001 per share of which 1,892,826 shares of Common Stock are issued and
outstanding, and 1,000,000 shares of preferred stock, none of which are
outstanding. Assuming all Warrants, stock options and other warrants are
exercised, the Company would have 2,371,965 shares of Common Stock outstanding.
COMMON STOCK. Each share of Common Stock is entitled to one vote
either in person or by proxy in all matters that can be voted upon by the
holders thereof at any and all meetings of the stockholders. The holders of
Common Stock (i) have equal ratable rights to dividends from funds legally
available therefore when, as and if declared by the Board of Directors of the
Company; (ii) are entitled to share ratably in all of the assets of the Company
available for distribution to holders of Common Stock upon liquidation,
dissolution or winding up of the affairs of the Company, after the satisfaction
of all liabilities of the Company any liquidation preference granted to the
holders of any class of Preferred Stock then outstanding, if any; (iii) do not
have any preemptive, subscriptive or conversion rights; and (iv) do not have
any redemption or sinking fund provisions applicable thereto.
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 is authorized to issue 1,000,000 shares
of preferred stock, without designation, par value $.01 per share. The
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 shares
remaining undesignated in one or more series, and to fix the number of shares
of preferred stock 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. As of the date of this Prospectus, there
were no preferred stock outstanding.
WARRANTS.
Outstanding Warrants. The Company has an aggregate of 428,143
Warrants presently outstanding. Each warrant entitles the holder thereof to
purchase one share of Common Stock at an exercise price of $2.40
- 10 -
<PAGE> 14
per share until August 31, 1996. Of the shares of Common Stock offered pursuant
to this prospectus, 308,139 shares of Common Stock are issuable upon exercise
of Warrants. Shares of Common stock underlying 120,004 Warrants are not being
offered pursuant to this Prospectus. Such Warrants are owned by Arthur G.
Shapiro, M.D., 41,668 shares, Daniel A. Stauber, 41,668 shares and Milton J.
Wallace, 36,668 shares.
No adjustment as to cash dividends will be made upon the exercise of
the Warrants. The Warrants are subject to equitable adjustment upon certain
events which include (i) the issuance of Common Stock as a dividend on the
outstanding Common Stock; (ii) subdivisions, combinations, and reclassification
of Common Stock; and (iii) mergers, consolidations and similar events. The
warrants are redeemable at the option of the Company in whole at any time or in
part from time to time upon thirty (30) days' written notice to the holders of
the Warrants at the redemption price of $.24 per Warrant.
The Company is not required to issue fractional shares upon exercise
of the Warrants, but may make cash payments thereof, based on the then market
price of the Common Stock. No holder of any Warrants is entitled to vote,
receive dividends, or be deemed a holder of the Common Stock until such time as
the Warrants shall have been duly exercised and payment of the purchase price
shall have been made.
An additional 60,000 shares are being offered herein which are
issuable upon exercise of warrants issued to the Company's financial public
relations firm. Such warrants are exercisable until August 3, 1998 at an
exercise price of $2.375. Further, 5,000 shares of Common Stock offered herein
are issuable upon exercise of warrants expiring March 10, 1997 at $2.625 per
share.
Class A Warrants. The Company has an aggregate of 523,500 Class A
Warrants, issued and outstanding. The Class A Warrants are governed by a
Warrant Agreement (the "Class A Warrant Agreement") between the Company and The
Trust Company of New Jersey (the "Warrant Agent"). The Class A Warrants were
issued in the Company's initial public offering completed in December 1993.
Each Class A Warrant entitles the holder to purchase one share of Common Stock
at an exercise price of $7.50, through December 9, 1996.
The Common Stock underlying the Class A Warrants and the exercise
price thereof are subject to equitable adjustment upon certain events all as
set forth in the Warrant Agreement, including (i) the issuance of Common Stock
as a dividend on the Common Stock; (ii) subdivisions, combinations and
reclassifications of Common Stock; (iii) stock splits of the Common Stock; and
(iv) mergers, consolidators and similar events. No adjustment will be made for
the payment of any cash dividends by the Company on its Common Stock.
The Class A Warrants are redeemable in whole but not in part, at the
option of the Company at any time, on not less than thirty (30) days' prior
written notice, at a redemption price of $.01 per Class A Warrant, provided
that the closing bid price of the Common Stock as reported by NASDAQ for twenty
(20) trading days during any thirty (30) consecutive trading day period, ending
within ten (10) days prior to the date on which notice of redemption is given
equals or exceeds $8.50 per share. A holder may exercise his or her Class A
Warrants up to the date of redemption.
For the term of the Class A Warrants, the holders thereof are given,
at nominal cost, the opportunity to profit from a rise in the market price of
the Common Stock of the Company, with a resulting dilution of the interest of
other security holders. While the Class A Warrants are outstanding, the terms
on which the Company can obtain additional capital may be adversely affected
and the Class A Warrantholders may be expected to exercise the Class A Warrants
at a time when the Company could obtain needed capital by offering securities
on terms more favorable than those provided by the Class A Warrants. Prior to
their exercise, the Class A Warrants do not entitle holders to any rights of a
stockholder of the Company.
The Warrant Agreement provides that the Company and the Warrant Agent
may, without the consent or concurrence of the holders of the Class A Warrants,
make changes in the Warrant Agreement which, in summary, are changes required
by reason of any ambiguity, manifest error or other mistake in the Warrant
Agreement, or that do not adversely effect, alter or change the interests of
the registered holders of the Warrants.
- 11 -
<PAGE> 15
CERTAIN ANTI-TAKEOVER PROVISION. Certain provisions of the Company's
charter and by-laws, as well as certain provisions of Delaware law, could have
the effect of deterring takeovers. The Board of Directors believes that the
provisions of the Company's charter and by-laws described below are prudent and
in the best interests of the Company and its stockholders. Although these
provisions may discourage a future takeover attempt in which stockholders might
receive a premium for their shares over the then current market price and may
make removal of incumbent management more difficult, the Board of Directors
believes that the benefits of these provisions outweigh their possible
disadvantages. Management is not aware of any current effort to effect a
change in control of the Company.
Section 203 of the Delaware General Corporation Law ("Section 203")
restricts certain transactions between a corporation organized under Delaware
law (or its majority-owned subsidiaries) and any person holding fifteen percent
(15%) or more of the corporation's outstanding voting stock, together with the
affiliates or associates of such person (an "Interested Stockholder"). Section
203 prevents, for a period of three (3) years following the date that a person
becomes an Interested Stockholder, the following types of transaction
("Business Combinations") between the corporation and the Interested
Stockholder (unless certain conditions, described below, are met): (a) mergers
or consolidations, (b) sales, leases, exchanges or other transfers of ten
percent (10%) or more of the aggregate assets of the corporation, (c) issuance
or transfers by the corporation of any stock of the corporation which would
have the effect of increasing the Interested Stockholder's proportionate share
of the stock of any class or series of the corporation, (d) any other
transaction which has the effect of increasing the proportionate share of the
stock of any class or series of the corporation which is owned by the
Interested Stockholder, and (e) receipt by the Interested Stockholder of the
benefit (except proportionately as a stockholder) of loans, advances,
guarantees, pledges or other financial benefits provided by the corporation.
The three-year ban does not apply if either the proposed transaction
or the transaction by which the Interested Stockholder became an Interested
Stockholder is approved by the Board of Directors of the corporation prior to
the date such stockholder became an Interested Stockholder. Additionally, an
Interested Stockholder may avoid the statutory restriction if, upon the
consummation of the transaction whereby such stockholder became an Interested
Stockholder, the stockholder owns at least 855 of the outstanding voting stock
of the corporation without regard to those shares owned by the corporation's
officers and directors or certain employee stock plans. In addition, any
transaction is exempt from the statutory ban if it is proposed at a time when
the corporation has proposed, and a majority of certain continuing directors of
the corporation have approved, a transaction with a party who is not an
Interested Stockholder of the corporation (or who becomes such with board
approval) if the proposed transaction involves (a) certain merger or
consolidations involving the corporation, (b) a sale or other transfer of over
fifty percent (50%) of the aggregate assets of the corporation, or (c) a tender
or exchange offer for fifty percent (50%) or more of the outstanding voting
stock of the corporation.
A corporation may, at its option, exclude itself from the coverage of
Section 203 by amending its charter or by-laws by action of its stockholders to
exempt itself from coverage, provided that such by-law or charter amendment
shall not become effective until twelve (12) months after the date it is
adopted. The Company has not adopted such a charter or by-law amendment.
Included in the rights of any series of preferred stock which may be
set by the Board of Directors may be voting rights, if any. It is possible
that the Board of Directors could authorized and issue to persons, including
existing management, a series of preferred stock with class voting rights which
might have the effect of discouraging a takeover attempt or a tender offer.
Any such issuance would have to be made for a valid business purpose and for
adequate consideration from the recipient of the preferred stock.
The Company's by-laws contain provisions relating to notice of
stockholder meetings which would prohibit a stockholder from nominating a
person for the Board of Directors or proposing certain actions relating to the
Company's business without advance written notice to the Company. Such written
notice must be a minimum of thirty (30) days prior to a stockholders' meeting
and must contain specific information about the nominee and the stockholder who
makes such nomination or proposal.
- 12 -
<PAGE> 16
DIVIDEND POLICY. The Company has never paid any cash dividends on its
Common Stock and does not anticipate paying cash dividends in the foreseeable
future. The payment of dividends by the Company will depend on its earnings,
financial condition, and other business and economic factors affecting the
Company at that time as the Board of Directors may consider relevant. The
Company currently intends to retain any earnings to provide for the development
and growth of the Company.
TRANSFER AND WARRANT AGENT. The Transfer and Warrant Agent for the
Common Stock and Class A Warrants is The Trust Company of New Jersey, 35
Journal Square, Jersey City, New Jersey 07306.
INDEMNIFICATION
DELAWARE GENERAL CORPORATION LAW. Section 145 of the Delaware General
Corporation Law ("GCL") empowers a corporation to indemnify a director,
officer, employee, or agent who is, or is threatened to be, made a party to any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative by reason of the fact that he is or
was a director, officer, employee, or agent of the corporation or is, or was,
serving at the request of the corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise (including an employee benefit plan), against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlements actually and
reasonably incurred by him in connection with such action, suit, or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
No indemnification may be made in respect to any claim, issue, or
matter brought by or in the right of the corporation as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such
action or suit was brought shall determine that, despite the adjudication of
liability but in view of all of the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper.
The indemnification provided in Section 145 is not exclusive of any
other right of indemnification. A corporation is empowered to purchase and
maintain insurance on behalf of such persons against any liability asserted
against them in such capacities, whether or not the corporation would have the
right to indemnification against such liabilities under Section 145.
Subsection (b)(7) of Section 102 of the GCL empowers a corporation to
eliminate or limit the personal liability of a director to such corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director other than (i) for any breach of a director's duty of loyalty to the
corporation or its stockholders; (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law;(iii)
under Section 174 of the GCL (which provides that under certain circumstances
directors shall be jointly and severally liable for willful or negligent
violations of provisions regarding the unlawful payment of dividends or
unlawful stock repurchases or redemptions; or (iv) for any transaction from
which the director derived an improper personal benefit.
CHARTER. Article NINTH of the Company's Charter has adopted the
provisions of GCL Section 102(b)(7). Article TENTH of the Company's Charter
provides that the Company shall indemnify all persons entitled to be
indemnified by GCL 145, including officers and directors, to the fullest extent
permitted by such statute.
SECURITIES AND EXCHANGE COMMISSION POLICY. Insofar as indemnification
for liabilities arising under the Securities Act of 1933, as amended, may be
permitted to directors, officers and controlling persons of the Company, the
Company has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
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
- 13 -
<PAGE> 17
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 from time to
time may be used from time to time by the Selling Stockholders, or their
transferees, to offer and sell the Common Stock in transactions in which the
Selling Stockholders 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. The Company
would receive an aggregate of $1,170,158 in gross proceeds if all Warrants,
Stock Options and other warrants are exercised. There presently are no
arrangements or understandings, formal or informal, pertaining to the
distribution of the Common Stock.
The Company anticipates that resales of the Common Stock by the
Selling Stockholders will be effected from time to time on the open market in
ordinary brokerage transactions on the NASDAQ-Small Cap Market ("NASDAQ"), on
which the Common Stock is included for quotation, in the over-the-counter
market, or in private transactions (which may involve block transactions). The
Common Stock 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
Common Stock may be offered directly, through agents designated from time to
time, or through brokers or dealers. A member firm of the NASD may be engaged
to act as a Selling Stockholder's agent in the sale of the Common Stock by a
Selling Stockholder and/or may acquire Common Stock as principal. Member firms
participating in such transactions as agent may receive commissions from
Selling Stockholders (and, if they act as agent for the purchaser of such
Common Stock, 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 Common Stock 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 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, Common Stock 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 Common Stock as principal may thereafter resell such
Common Stock 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 Common Stock 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 Common Stock involved, (ii) the price at which the
Common Stock 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.
- 14 -
<PAGE> 18
Shares of Common Stock may be sold directly by the Selling
Stockholders or through agents designated by the Selling Stockholders 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 the Selling Stockholders in the distribution of
the Common Stock 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 Common Stock purchased by such person may be deemed
to be underwriting commissions or discounts 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-6 and 10b-7,
which provisions may limit the timing of purchases and sales of any of the
Common Stock by the Selling Stockholders. All of the foregoing may affect the
marketability of the Common Stock.
The Company will pay substantially all the expenses incident to this
offering of the Common Stock by the Selling Stockholder 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 Common Stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Common Stock may not be sold unless the Common Stock has 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 Common Stock offered by this Prospectus has been
passed upon by Wallace, Bauman, Fodiman & Shannon, P.A., Coral Gables, Florida.
Milton J. Wallace a shareholder of the law firm, beneficially owns 357,461
shares of the Company's Common Stock. Bryan W. Bauman and Todd A. Fodiman,
shareholders of the firm are Selling Shareholders and beneficially own an
aggregate 22,816 shares of Common Stock.
EXPERTS
The financial statements incorporated by reference in this Prospectus
have been audited by BDO Seidman, LLP, independent certified public accountants
to the extent and for the periods set forth in their report incorporated herein
by reference, and are incorporated herein in reliance upon such report given
upon the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of the Company at December 31,
1994 and for the year then ended appearing in its Annual Report (Form 10-K) for
the year ended December 31, 1994, have been audited by Ernst & Young LLP,
certified public accountants, as set forth in their report thereon and
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
- 15 -
<PAGE> 19
<TABLE>
<CAPTION>
- ------------------------------------------------------ -------------------------------------
<S> <C>
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 MED/WASTE, INC.
hereunder shall under any circumstances create any
implication that there has been no change in the
affairs of the Company since the date hereof. -----------------------------
This Prospectus does not constitute an offer or
solicitation by anyone in any jurisdiction in
which the person making such offer or solicitation PROSPECTUS
is not qualified to do so or to anyone whom it is
unlawful to make such offer or solicitation. -----------------------------
479,139
Shares of
COMMON STOCK
($.001 par value)
TABLE OF CONTENTS
Page
----
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . 2
DOCUMENTS INCORPORATED BY REFERENCE . . . . . 2
THE COMPANY . . . . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . 4
USE OF PROCEEDS . . . . . . . . . . . . . . . 6
SELLING STOCKHOLDERS . . . . . . . . . . . . 7
DESCRIPTION OF SECURITIES . . . . . . . . . . 10
INDEMNIFICATION . . . . . . . . . . . . . . . 12
PLAN OF DISTRIBUTION . . . . . . . . . . . . 13
LEGAL MATTERS . . . . . . . . . . . . . . . . 15
EXPERTS . . . . . . . . . . . . . . . . . . . 15
July __, 1996
- ------------------------------------------------------ --------------------------------------
</TABLE>
- 16 -
<PAGE> 20
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.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee . . . . . . . . . $ 722.84
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . . . 2,000.00*
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . 10,000.00*
Printing expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000.00
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,277.16*
----------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,000.00
==========
</TABLE>
- ---------------------
* Estimated
ITEM 15.INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article TENTH 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.
Article NINTH 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 officers contain a provision
requiring indemnification of such officer to the fullest extent permitted by
law.
- 17 -
<PAGE> 21
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 Wallace, Bauman, Fodiman & Shannon, P.A., regarding
the legality of the Common Stock.
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Ernst & Young LLP
23.2 Consent of Wallace, Bauman, Fodiman & Shannon, P.A.(included in
Exhibit 5 above).
24 Power of Attorney (included on signature page of registration
statement).
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:
(i) To include any prospectus required by
Section 10(a)(3) of the Act;
(ii) To reflect in the prospectus any facts
or events arising after the effective
date of the registration statement (or
the most recent post-effective amendment
thereof) which, individually or in the
aggregate, represent a fundamental
change in the information set forth in
the registration statement; and
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration
statement;
Provided, however, that Paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the information required to the included in a post-effective amendment by
those Paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities and Exchange Act of
1934, as amended (the "Exchange Act'), that are incorporated by reference 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
- 18 -
<PAGE> 22
relating to the securities offered therein, and
the offering of such securities at that time
shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.
(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 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.
- 19 -
<PAGE> 23
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 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 Opa Locka, State of
Florida, on the 8th day of July, 1996.
MED/WASTE, INC., a Delaware corporation
By: /s/ Daniel A. Stauber
----------------------------------------
DANIEL A. STAUBER
President/Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned, do hereby severally constitute and appoint
DANIEL A. STAUBER and MICHAEL D. ELKIN, and each or either of time, our true
and lawful attorneys and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments or post-effective amendments to this
Registration Statement (including post-effective amendments or any abbreviated
registration statement, and any amendments thereto, filed pursuant to Rule
462(b) increasing the amount of securities for which registration is being
sought), and to file the same with all exhibits thereto, and all other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys and agents, and each of either of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys and
agents, and each of them, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ Milton J. Wallace Chairman July 8, 1996
- -------------------------------------------
Milton J. Wallace
/s/ Daniel A. Stauber Director, President and Chief Executive July 8, 1996
- ------------------------------------------- Officer
Daniel A. Stauber
/s/ Michael D. Elkin Vice President and Chief Financial Officer July 8, 1996
- -------------------------------------------
Michael D. Elkin
/s/ Richard R. Green Director July 8, 1996
- -------------------------------------------
Richard R. Green
/s/ Phillip W. Kubec Director July 8, 1996
- -------------------------------------------
Phillip W. Kubec
/s/ Charles D. Scurr Director July 8, 1996
- -------------------------------------------
Charles D. Scurr
/s/ Arthur G. Shapiro, M.D. Director July 8, 1996
- -------------------------------------------
Arthur G. Shapiro, M.D.
/s/ William Dolan, D.D.S. Director July 8, 1996
- -------------------------------------------
William Dolan, D.D.S.
</TABLE>
- 20 -
<PAGE> 1
Exhibit 5
[LETTERHEAD OF WALLACE, BAUMAN, FODIMAN & SHANNON, P.A.]
July 9, 1996
Med/Waste, Inc.
3890 N.W. 132nd Street, Suite K
Opa Locka, Florida 33053
Re: Med/Waste, Inc.
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Med/Waste, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing of
the registration statement on Form S-3 (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 479,139 shares of the Company's common
stock, par value $0.001 (the "Shares"). All of the Shares are being offered on
behalf of certain selling stockholders (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; and (iv)
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 other 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
Florida and, accordingly, we do not purport to be experts on the laws of any
other jurisdiction nor do we express an opinion as to
<PAGE> 2
Med/Waste, Inc.
July 9, 1996
Page 2
the laws of jurisdictions other than the laws of the State of Florida 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 shares
of common stock being sold by the selling shareholders upon exercise of the
Warrants, stock options or other warrants, as more fully described in the
Registration Statement will be duly authorized, legally issued, fully paid and
none assessable when the Warrants, stock options or other warrants are
exercised and the exercise prices are paid to the Company.
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 quoted to, or
relied upon by any other person, firm or corporation for any purpose without
our prior express written consent.
Respectfully submitted,
WALLACE, BAUMAN,
FODIMAN & SHANNON, P.A.
BRYAN W. BAUMAN
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Med/Waste, Inc. and Subsidiaries
Miami, Florida
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated March 8,
1996, relating to the consolidated financial statements of Med/Waste, Inc. and
Subsidiaries appearing in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1995.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
/s/ BDO Seidman, LLP
-----------------------
BDO Seidman, LLP
Miami, Florida
July 8, 1996
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related to Prospectus of Med/Waste, Inc.
for the registration of 479,139 shares of its common stock and to the
incorporation by reference therein of our report dated March 10, 1995, with
respect to the consolidated financial statements of Med/Waste, Inc. included in
its Annual Report (Form 10-K) for the year ended December 31, 1994, filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Miami, Florida
July 3, 1996
