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As filed with the Securities and Exchange Commission on June 4, 1998.
Registration No. 333-_______
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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>
Delaware 65-0297759
<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
6175 N.W. 153rd Street, Suite 324
Miami Lakes, Florida 33014
(305) 819-8877
(Address including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------------------------------------
MICHAEL D. ELKIN
Vice President/Chief Financial
Officer MED/WASTE, INC.
6175 N.W. 153rd Street, Suite 324
Miami Lakes, Florida 33014
(305) 819-8877
(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, Legon, Fodiman & Shannon, P.A.
2222 Ponce de Leon Boulevard, Sixth Floor
Coral Gables, Florida 33134
(305) 444-9991
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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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<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGISTRATION FEE
- ------------------------- ------------------ ------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.001 per share 509,656 $6.6875 $3,408,324.50 $1,006
</TABLE>
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(1) Pursuant to Rule 416 as promulgated under the Securities Act of 1933,
as amended, there is also being registered such additional shares of
Common Stock as may become issuable pursuant to the anti-dilution
provisions of the Warrants.
(2) Pursuant to Rule 457(c), the fee is calculated on the basis of the
average of the bid and asked prices on June 2, 1998 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
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Subject to Completion, dated June 4, 1998
PROSPECTUS
509,656 Shares
MED/WASTE, INC.
Common Stock
This Prospectus relates to the public offering of up to 509,656
shares of common stock, $0.001 par value per share (the "Common Stock") of
Med/Waste, Inc. (the "Company"). All of the shares of Common Stock 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-dealers 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 Stockholders 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, 382,039 shares of
Common Stock were issued in connection with an exchange offer to the holders of
the Company's 9% Convertible Redeemable Series A Preferred Stock (the "Series A
Preferred Stock"), 13,867 shares are issuable upon exercise of warrants (the
"Warrants") 108,750 shares are issuable upon exercise of stock options granted
under the Company's Directors Stock Option Plan (the "Directors Plan") and 5,000
shares issued upon the exercise of stock options granted under the Company's
1993 Stock Option Plan. Such Warrants were also issued in connection with the
exchange offer. Each Warrant entitles the holder to purchase one (1) share of
Common Stock at an exercise price of $3.625 per share until December 8, 2002.
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 Common
Stock, 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 $402,912 in gross
proceeds from the exercise of the Warrants and Options described above. Selling
Stockholders will bear all other expenses of this offering, including brokerage
fees, any underwriting discounts or commissions.
THE COMMON STOCK OFFERED HEREBY INVOLVES CERTAIN RISKS.
PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER THE
CAPTION "RISK FACTORS" LOCATED ON PAGE 5.
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 June 2, 1998 was $6.6875 per share. On June 2, 1998, the
Company had 5,192,965 shares of Common Stock outstanding.
The date of this Prospectus is _____________, 1998.
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AVAILABLE INFORMATION
A Registration Statement on Form S-3, relating to the Common
Stock offered hereby has been filed with the Securities and Exchange Commission,
Washington, D.C. 20549 (the "Commission"). This Prospectus does not contain all
of the information set forth in the Registration Statement and the exhibits and
schedules thereto. Statements contained in this Prospectus as to the contents of
any contract or any other document referred to are not necessarily complete and
in each instance reference is made to the copy of such contract or other
documents filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference. For further information with
respect to the Company and the Common Stock being offered hereby, reference is
made to the Registration Statement and the exhibits and schedules thereto. A
copy of the Registration Statement may be inspected by anyone without charge 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.
The Commission maintains a World Wide Website that contains filings and other
information filed electronically with the Commission. The address of the
Commission's World Wide Web is http://www.sec.gov.
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 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 reports, proxy and other information may also be
viewed through the Commission's World Wide Website.
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 also inspected at the office of the National Association of
Securities Dealers, inc., 1735 K Street, N.W., Washington, D.C. 20006.
FORWARD-LOOKING STATEMENTS
Certain statements in this Prospectus and the documents
incorporated by reference herein may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Uniform Act of 1995 (the
"Reform Act"). Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among other things; the
Company's history of operations; the Company's highly competitive industry;
consummation of pending and future acquisitions; the business abilities and
judgment of the Company's personnel; the availability of qualified personnel;
changes in, or failure to comply with, governmental regulations; general and
business conditions; and other factors referenced in this Prospectus. See "Risk
Factors."
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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, 1997;
(ii) the Company's Proxy Statement dated May 6, 1998 for the Company's Annual
Meeting of Shareholders to be held on June 18, 1998, as amended; (iii) the
Company's current report on Form 8-K for the event dated January 30, 1998; and
(iv) the Company's Quarterly Report on Forms 10-QSB and 10-QSB/1 for the quarter
ended March 31, 1998.
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, 6175 N.W. 153RD STREET, SUITE 324, MIAMI LAKES, FLORIDA 33014
(TELEPHONE: (305) 819-8877).
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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 services through its wholly owned subsidiaries, Safety Disposal
System, Inc. ("SDS"), Safety Disposal System of South Carolina, Inc. ("SDSSC"),
Safety Disposal System of Pennsylvania, Inc. ("SDSPA"), Safety Disposal System
of Georgia, inc. ("SDSGA") and Incendere, Inc. ("Incendere"). Prior to January
30, 1998, the Company also provided commercial cleaning services through a
wholly-owned subsidiary, The Kover Group, Inc. ("Kover"). On January 30, 1998,
the Company sold 100% of the stock of Kover to Kover's president and chief
executive officer, Phillip W. Kubec. See "Material Events."
SDS, SDSGA and Incendere provide collection, transportation,
treating, tracking and related services for the disposal of medical waste
throughout Delaware, Florida, Georgia, Maryland, New Jersey, North Carolina,
Pennsylvania, South Carolina, Tennessee and Virginia. SDS also sells or leases
turnkey autoclave treatment units for large quantity generators. SDSSC operates
an incineration facility in Hampton, South Carolina, which is permitted to treat
municipal, medical and special waste which the Company receives from generators
throughout the eastern United States. SDSSC mainly focuses on the treatment of
medical waste and to a lesser degree, special waste. SDSPA owns and operates a
medical waste autoclave treatment facility located in Marcus Hook, Pennsylvania.
SDS also owns an autoclave medical waste treatment facility in West Palm Beach,
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. The Company 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, the Company provides programs
to assist customers to promote safe handling of medical waste and comply with
federal and state requirements applicable to their operations. Special waste is
generally all non-residential waste which requires more stringent management
than municipal solid waste, but does not include medical or hazardous waste.
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 Company's incinerator is in compliance
with all federal and state regulations dealing with air pollution controls. The
incinerator is a waste to energy facility with a rated capacity for processing
up to 270 tons per day of special, medical and municipal waste. The facility is
currently permitted under South Carolina law to incinerate up to 200 tons per
day of waste both, liquid and solid.
The trend against incinerator facilities has encouraged the
development and commercial use of a variety of environmentally acceptable
alternative disposal techniques. The Company owns and operates a 48 ton
autoclave medical waste treatment facility located in Marcus Hook, Pennsylvania.
In addition, as part of its comprehensive medical waste services, the Company
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.
The Company is a Delaware corporation with its principal
executive offices located at 6175 N.W. 153rd Street, Suite 324, Miami Lakes,
Florida 33014. Its telephone number at such address is (305) 819-8877.
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RISK FACTORS
An investment in the Common Stock offered hereby involves a
certain degree of risk. Prospective purchasers should carefully consider the
following risk factors, as well as all of the other information set forth
elsewhere in this Prospectus or incorporated by reference to the Prospectus,
before purchasing any shares of Common Stock offered hereby.
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. The
treatment and disposal of municipal and special waste are also subject to
extensive government regulation. 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 incineration and facility and 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
operates its own medical waste treatment facilities, it is 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 and could have a material adverse effect on the Company's
business, financial condition and results of operations.
IMPORTANCE OF GOVERNMENT ENFORCEMENT OF ENVIRONMENTAL
REGULATIONS. The Company believes that its business prospects in the medical
waste disposal industry are significantly enhanced by the stringent enforcement
of handling, transportation, environmental preservation and clean-up
requirements by regulatory agencies. These laws and regulations are, and will
continue to be, a principal factor affecting demand for the Company's medical
waste management services. 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 relaxation or reduction in government
enforcement could have a material adverse effect on the Company's business,
financial condition and results of 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. Substantial continued or accelerated price
reductions would have a material adverse effect on the Company's business,
financial condition and results of operations. 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. The Company's business
strategy involves, among other things, selling its services to customers who may
have established relationships with other medical waste management companies and
who may be reluctant to use the Company's services. Several of the Company's
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-Ferris Industries, Inc. ("BFI"), WMX
Technologies, Inc., Laidlaw Waste Systems, Inc., and USA Waste
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<PAGE> 8
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.
GROWTH STRATEGY DEPENDENT UPON ACQUISITIONS. The Company's growth
strategy depends, in part, on its ability to acquire other medical waste
management businesses. There can be no assurance the Company will be able to
continue to identify suitable businesses to acquire, successfully negotiate
their acquisition, or integrate their operations into the Company. The recent
consolidation in the medical waste industry may increase competition for the
acquisition of existing businesses and result in fewer acquisition opportunities
and higher purchase prices. Some of the Company's competitors for acquisitions
are larger and have significantly greater financial resources. Even if the
Company is successful in identifying suitable acquisition candidates, there can
be no assurances that the terms to complete such acquisitions would be
acceptable, or if acceptable, that the Company would have the financial
resources to pay the purchase price. The Company anticipates that future
acquisitions of other medical waste businesses will be made through payment of
cash, issuance of debt or equity securities, or a combination of these methods.
There can be no assurances that the Company will have sufficient resources
available, or if available, on terms acceptable to the Company. The Company may
need to raise additional equity or debt financing to complete such acquisitions.
Any additional equity financings may be dilutive to the Company's existing
shareholders. Debt financings, if available, may not be on terms acceptable to
the Company, if at all. The Company's failure to continue its growth strategy
could have a material adverse effect on the Company's business, financial
condition and results of operations.
POTENTIAL LIABILITY; 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.
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. If the Company was found to be
a responsible party for a particular site, it could be required to pay the
entire cost of waste site investigation and clean up, even though other parties
may also be liable. The Company's ability to obtain contribution from other
responsible parties may be limited by the Company's inability to identify those
parties and by their financial inability to contribute to investigation and
clean up costs. 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.
ALTERNATIVE TECHNOLOGIES; 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 and commercialization of alternative treatment or
disposal technologies that are more efficient or environmentally sound treatment
and disposal methods may have a material adverse effect on the Company's
operations. The Company is aware of certain new medical waste treatment and
disposal technologies including the production of reusable or degradable medical
products, which, if successfully developed and commercialized would have a
material adverse effect on the Company's business, financial condition and
results of operations.
DEPENDENCE UPON PERSONNEL. The Company is dependent upon the
services of Daniel A. Stauber. Mr. Stauber is president of the Company and its
wholly owned subsidiaries. The Company has an employment agreement with Mr.
Stauber which expires in December 2001. However, if Mr. Stauber's services
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<PAGE> 9
were to become unavailable to the Company for any reason, it could have a
material adverse effect on the Company's business, financial results and results
of operations. 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.
ANTI-TAKEOVER PROVISIONS OF CHARTER AND BYLAWS. Certain
provisions of the Company's charter and by-laws may have the effect of making
more difficult or could delay attempts by others to obtain control of the
Company, even when these attempts may be beneficial to the interests of
stockholders. For example, the Company's charter and bylaws include advance
notice provisions, provisions that establish a classified Board of Directors,
and provisions that enable the Board of Directors without stockholder approval,
to issue up to 4,000,000 shares of preferred stock in one or more series having
terms fixed by the Board of Directors. As of the date of this Prospectus, the
Company has issued and outstanding 28,869 shares of Series A Preferred Stock
which are convertible into an aggregate of 679,270 shares 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.
"PENNY STOCK" RULES. The Company's Common Stock is presently
traded on the NASDAQ Small Cap Market. The NASDAQ Stock Market recently
increased the criteria for continued inclusion on the NASDAQ Small Cap Market.
If the Company fails to maintain such listing for its Common Stock, and no other
exclusion from the definition of "penny stock" under the Exchange Act is
available, then any broker engaging in a transaction in the Company's securities
would be required to provide any customer with a risk disclosure document and
the compensation of the broker/dealer in the transaction and monthly account
statements showing the market values of the Company's securities held in the
customer's accounts. The bid and offer quotations and compensation information
must be provided prior to effecting the transaction and must be contained on the
customer's confirmation. If brokers become subject to the "penny stock" rules
when engaging in transactions in the Company's securities, they would become
less willing to engage in such transactions, thereby making it more difficult
for purchasers to dispose of the shares of Common Stock.
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 $402,912 upon exercise of the Warrants and Options, if all such
Warrants and Options, 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
MATERIAL EVENTS
MATERIAL DISPOSITION.
On January 30, 1998, the Company, sold 100% of the capital stock
of The Kover Group, Inc. ("Kover"), to MPK Holdings, Ltd., an Ohio limited
liability company ("MPK"). The sale of Kover did not result in a material gain
or loss to the Company. MPK is wholly owned by Phillip W. Kubec and Melissa
Kubec, his wife (the "Kubecs"). Mr. Kubec was the president and chief executive
officer of Kover and a director of the Company. The Company received aggregate
consideration for the sale of Kover of $2,700,000, payable $1.2 million in cash
at closing and the balance of $1.5 million in promissory notes. The Company
received two promissory notes, one for $960,000 from MPK (the "MPK Note") and
one for $540,000 from Kover (the "Kover Note"). The MPK Note is payable interest
only monthly at the rate of 8.25% per annum, with the principal balance due at
the end of five years. The Kover note is payable interest only monthly at the
rate of 8.25% per annum with the principal due at the end of seven (7) years.
The MPK Note is guaranteed by Kover and the Kubecs and is secured by a pledge of
100% of the capital stock of Kover. The Kover Note is guaranteed by MPK. The MPK
and Kover Notes are subordinate to $1.6 million in financing received by MPK.
The Kubec guarantee is secured by a pledge of 20,000 shares of Common Stock of
the Company owned by the Kubecs.
Kover is a franchisee and franchisor of janitorial services to
commercial businesses. Kover is a master franchisee of Coverall North America,
Inc. with locations in Cleveland, Ohio, Pittsburgh, Pennsylvania, and South
Florida. Its assets including accounts receivable, supplies, inventory,
machinery and equipment and intangibles, such as contract rights remain intact.
In connection with the closing, Phillip Kubec resigned as a
member of the Board of Directors of the Company. Other than as stated there are
no material relationships between the Company, MPK and Kubec. The amount of
consideration paid by MPK for Kover was determined through arms-length
negotiations between representatives of the Company and Kubec.
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<PAGE> 11
SELLING STOCKHOLDERS
An aggregate of up to 509,656 shares may be offered by certain
Selling Stockholders. The following table sets forth as of March 31, 1998,
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, but
assumes all shares being offered are sold. The Company will not receive any of
the proceeds from the sale of these shares.
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
OWNED PRIOR TO OFFERING AFTER OFFERING
-------------------------- SHARES BEING -------------------------
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES PERCENT(1) OFFERED NUMBER PERCENT(2)
- ---------------------------------------------- -------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
A Raymond Abt 2,858(3) * 2,858 -- *
14463 Washington Boulevard
University Heights, OH 44118
Robert W. Allen 31,388(4) * 14,294 17,094 *
2400 Balleybunion Road
Center Valley, PA 18034
Ira Altman 5,000 * 5,000 -- *
P.O. Box 770553
Coral Springs, FL 33077
Applebaum Family Limited Partnership 4,287(5) * 4,287 -- *
4 Birnawoods Lane
St. Louis, MO 63132
Gary P. Arnold 5,717(6) * 5,717 -- *
4028 SW Trail Road
Tualatin, OR 97062
Jude Aririguzo 2,858(7) * 2,858 -- *
2924 Morgan Avenue
Bronx, NY 10469
John Bertsch 4,287(8) * 4,287 -- *
1655 Steele Avenue, SW
Grand Rapids, MI 49507
Joseph M. Billy 2,858(9) * 2,858 -- *
253 Lafayette Avenue
Passaic, NJ 07055
Bart Birnbaum 16,233(10) * 2,858 13,375 *
8015 SW 15 Street
Miami, FL 33144
Richard Buchakijian 2,858(11) * 2,858 -- *
85 Beaver Street
c/o Reliable Brands
Albany, NY 12207
Phillip E. Casey & Betty Casey 15,693(12) * 7,147 8,547 *
3435 Bayshore Blvd. # 601
Tampa, FL 33629
Corbert L. Clark 5,717(13) * 5,717 -- *
433 N.W. Front Street
Walnut Ridge, AR 72476
</TABLE>
- 9 -
<PAGE> 12
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
OWNED PRIOR TO OFFERING AFTER OFFERING
-------------------------- SHARES BEING -------------------------
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES PERCENT(1) OFFERED NUMBER PERCENT(2)
- ---------------------------------------------- -------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Robert L. and Tracey H. DeBruyn 2,858(14) * 2,858 -- *
2030 Pierre
Manhattan, KS 66502
Margaret & Albert Esposito 2,858(15) * 2,858 -- *
44 Thornbridge Road
Bellport, NY 11713
Harry M. Farnham III or Cynthia Farnham 7,146(16) * 7,146 -- *
7006 McKamy Boulevard
Dallas, TX 75248
Denis Fortin 31,388(17) * 14,294 17,094 *
26 Brookside Drive
Easton, CT 06612
Keith M. Ganzer 2,858(18) * 2,858 -- *
704 Colorado Avenue
Bridgeport, CT 06605
B. Kent Garlinghouse 15,693(19) * 7,146 8,547 *
2001 SW Wildwood Lane
Topeka, KS 66611
James Gerchow 15,693(20) * 7,146 8,547 *
64177 Rommell Road
Sturgis, MI 49091
David Gilbertson 8,578(21) * 8,578 -- *
2434 Como Avenue
St. Paul, MN 55108
Linda K. Goldenberg 9,233(22) * 2,858 6,375 *
177 North Village Way
Jupiter, FL 33459
John R. Graham, Trustee 2,858(23) * 2,858 -- *
1512 Country Club Place
Manhattan, KS 66502
Richard R. Green 128,915(24) 2.43 108,750 20,165 *
1868 North University Drive, Suite 106
Plantation, FL 33322
Donald Gross 2,858(25) * 2,858 -- *
23 Par Court
North Hills, NY
Grover, Ciment, Weinstein, Stauber & 117,521(26) 2.26 21,441 96,080 1.85
Friedman, P.A. Money Purchase Pension Plan
and Trust F.B.O. Robert Grover
777 Arthur Godfrey Road, 2nd Floor
Miami Beach, FL 33140
Ervin Hendricks 7,146(27) * 7,146 -- *
371 Robert P. Jeans Road
Easly, SC 29640
</TABLE>
- 10 -
<PAGE> 13
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
OWNED PRIOR TO OFFERING AFTER OFFERING
-------------------------- SHARES BEING -------------------------
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES PERCENT(1) OFFERED NUMBER PERCENT(2)
- ---------------------------------------------- -------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Billy P. Hudson 2,858(28) * 2,858 -- *
326 Quail Ridge Road
Frankling, KY 42134
Ronnie Johnson 28,589(29) * 28,589 -- *
135 Calloway Lane
Union Grove, NC 28689
Howard Kalka 7,146(30) * 7,146 -- *
2 Knolls Dr.
Old Westbury, NY 11568
Leslie Kaser 2,858(31) * 2,858 -- *
806 Appollo Avenue, Box 327
Osborne, KS 67473
Richard J. Kasten 5,717(32) * 5,717 -- *
1705 Clover Drive
Palatine, IL 60067-4637
Brian Scott Larson & Debra Lynn Larson, JT 15,693(33) * 7,146 8,547 *
3890 Davis Canyon Road
San Luis Obispo, CA 93405-8022
David F. McCartney 6,276(34) * 2,858 3,418 *
P.O. Box 1192
Paris, TN 38242
Donald B. And Jacqueline M. McCulloch 7,986(35) * 2,858 5,128 *
820 Oakmere Place
North Muskegon, MI 49445
Anthony R. Medici 2,858(36) * 2,858 -- *
37 Remington Drive
Edison, NJ 08070
Rudolph Miles 4,287(37) * 4,287 -- *
3905 Flamingo
El Paso, T X 79902
R. Mike Miller 4,287(38) * 4,287 -- *
28 Chelian Key
Bellew, WA 98006
Thomas P. Morrissey 5,717(39) * 5,717 -- *
236 W. Detweiller Dr.
Peoria, IL 61615
Douglas B. Odell 2,858(40) * 2,858 -- *
3 Imperial Landing
Westport, CT 06880
Fred Ostad 2,858(41) * 2,858 -- *
320 E. 65th Street, 619
New York, NY 10021
S.R. Penn, Jr. 31,388(42) * 14,294 17,094 *
P.O. Box 248
Columbia City, IN 46725
</TABLE>
- 11 -
<PAGE> 14
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
OWNED PRIOR TO OFFERING AFTER OFFERING
-------------------------- SHARES BEING -------------------------
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES PERCENT(1) OFFERED NUMBER PERCENT(2)
- ---------------------------------------------- -------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Louis Randle 2,858(43) * 2,858 -- *
P.O. Box 681248
Indianpolis, IN 46268
David Random 5,717(44) * 5,717 -- *
54-6 Oak Street
Beverly Farms, MA 01915
First Trust National Association Trustee, 2,858(45) * 2,858 -- *
Dorsey & Whitney Master Trust FBO Rein
2208 Totem Trail
Minnesota, Paul, MN 55305
Jeffrey l. Sador and Barbara Sador 2,858(46) * 2,858 -- *
6640 Ridgebury Boulevard
Maryfield Heights, OH 44124
Lawrence S. Smith 2,858(47) * 2,858 -- *
273 Dolly Road
Contoocook, NH 03229
Grover, Ciment, Weinstein, Stauber & 124,670(48) 2.40 28,589 75,357 1.45
Friedman, P.A. Money Purchase Pension Plan
and Trust F.B.O. Sherwin Stauber
4607 Meridian Avenue
Miami Beach, FL 33140
Arthur D. Sterling 14,294(49) * 14,294 -- *
3000 Northmoor Trail
Michigan City, IN 46360
Dr. Herbert Swerdlow 5,715(50) * 5,715 -- *
15300 SW 81 Avenue
Miami, FL 33157
Eugene Szczepanski 15,693(51) * 7,146 8,547 *
35 Highland Avenue
Worthington, OH 43085
James L. Tadych 14,294(52) * 14,294 -- *
205 N. Main Street
Brillion, WI 54110
Michael Taglich 90,719(53) 1.75 3,144 87,575 1.68
100 Wall Street
New York, NY 10005
Michael Taglich IRA 90,719(54) 1.75 8,290 82,429 1.58
100 Wall Street
New York, NY 10005
Robert F. Taglich 90,719(55) 1.75 11,435 79,284 1.52
100 Wall Street, 10th Floor
New York, NY 10005
Taglich Brothers, D'Amadeo, Wagner & 2,858(56) * 2,858 -- *
Company, Incorporated
100 Wall Street, 10th Floor
New York, NY 10005
</TABLE>
- 12 -
<PAGE> 15
<TABLE>
<CAPTION>
SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
OWNED PRIOR TO OFFERING AFTER OFFERING
-------------------------- SHARES BEING -------------------------
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES PERCENT(1) OFFERED NUMBER PERCENT(2)
- ---------------------------------------------- -------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Grover, Ciment, Weinstein, Stauber & 117,521(57) 2.26 21,441 75,737 1.45
Friedman, P.A. Money Purchase Pension Plan
and Trust F.B.O. Marvin Weinstein
777 Arthur Godfrey Road, 2nd Floor
Miami Beach, FL 33140
Ann W. Williamson 4,287(58) * 4,287 -- *
P.O. Box 86
Meridan, MS 39302-0086
Paul R. Winter 2,858(59) * 2,858 -- *
1910 E. 86th Street
Bloomington, MN 55425
John R. Worthington 11,435(60) * 11,435 -- *
1801 Pennsylvania Avenue, N.W.
Washington, D.C. 20006-3606
</TABLE>
- ----------------------------------------
* Less than one percent.
(1) Based upon 5,192,965 shares of Common Stock outstanding. Each
beneficial owner's percentage is determined by assuming that warrants
that are held by such person (but not those held by any other person)
have been converted or exercised, respectively.
(2) Based upon 5,207,082 shares of Common Stock to be outstanding assuming
that all Warrants have been converted or exercised, respectively.
(3) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(4) Includes (i) 501 shares of Common Stock issuable upon exercise of
Warrants and (ii) 17,094 shares underlying 10% convertible redeemable
debentures ("Debentures").
(5) Includes 150 shares of Common Stock issuable upon exercise of Warrants.
(6) Includes 200 shares of Common Stock issuable upon exercise of Warrants.
(7) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(8) Includes 150 shares of Common Stock issuable upon exercise of Warrants.
(9) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(10) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(11) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(12) Includes (i) 250 shares of Common Stock issuable upon exercise of
Warrants; and (ii) 8,547 shares of common stock issuable upon
conversion of Debentures.
(13) Includes 200 shares of Common Stock issuable upon exercise of Warrants.
(14) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(15) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(16) Includes 250 shares of Common Stock issuable upon exercise of Warrants.
(17) Includes (i) 501 shares of Common Stock issuable upon exercise of
Warrants; and (ii) 17,094 shares of Common Stock issuable upon
conversion of Debentures.
(18) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(19) Includes (i) 250 shares of Common Stock issuable upon exercise of
Warrants; and (ii) 8,547 shares of Common Stock issuable upon
conversion of Debentures.
(20) Includes (i) 250 shares of Common Stock issuable upon exercise of
Warrants; and (ii) 8,547 shares of Common Stock issuable upon
conversion of Debentures
(21) Includes 300 shares of Common Stock issuable upon exercise of Warrants.
(22) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(23) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(24) Includes 108,750 shares of Common Stock issuable upon exercise of
Options. Mr. Green is a Director of the Company.
(25) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(26) Includes 1,417 shares of Common Stock issuable upon exercise of
Warrants.
- 13 -
<PAGE> 16
(27) Includes 250 shares of Common Stock issuable upon exercise of Warrants.
(28) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(29) Includes 1,003 shares of Common Stock issuable upon exercise of
Warrants.
(30) Includes 250 shares of Common Stock issuable upon exercise of Warrants.
(31) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(32) Includes 200 shares of Common Stock issuable upon exercise of Warrants.
(33) Includes (i) 250 shares of Common Stock issuable upon exercise of
Warrants; and (ii) 8,547 shares of Common Stock issuable upon
conversion of Debentures.
(34) Includes (i) 100 shares of Common Stock issuable upon exercise of
Warrants; and (ii) 3,418 shares of Common Stock issuable upon
conversion of Debentures.
(35) Includes (i) 100 shares of Common Stock issuable upon exercise of
Warrants; and (ii) 5,128 shares of Common Stock issuable upon
conversion of Debentures.
(36) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(37) Includes 150 shares of Common Stock issuable upon exercise of Warrants.
(38) Includes 150 shares of Common Stock issuable upon exercise of Warrants.
(39) Includes 200 shares of Common Stock issuable upon exercise of Warrants.
(40) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(41) Includes 100 shares of Common Stock issuable upon exercise of
Warrants.
(42) Includes (i) 501 shares of Common Stock issuable upon exercise of
Warrants; and (ii) 17,094 shares of Common Stock issuable upon
conversion of Debentures.
(43) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(44) Includes 200 shares of Common Stock issuable upon exercise of Warrants.
(45) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(46) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(47) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(48) Includes 1,419 shares of Common Stock issuable upon exercise of
Warrants. Mr. Stauber is the father of Daniel A. Stauber, President and
Chief Executive Officer of the Company.
(49) Includes 501 shares of Common Stock issuable upon exercise of Warrants.
(50) Includes 150 shares of Common Stock issuable upon exercise of Warrants.
(51) Includes (i) 250 shares of Common Stock issuable upon exercise of
Warrants; and (ii) 8,547 shares of Common Stock issuable upon
conversion of Debentures.
(52) Includes 501 shares of Common Stock issuable upon exercise of Warrants.
(53) Includes (i) 110 shares of Common Stock issuable upon exercise of
Warrants; (ii) 13,675 shares of Common Stock issuable upon conversion
of Debentures; (iii) 8,290 shares of Common Stock beneficially owned by
Michael Taglich, IRA; (iv) 16,939 shares of Common Stock beneficially
owned by Taglich Brothers, D'Amedeo, Wagner & Company, Incorporated;
and (v) 48,781 shares of Common Stock issuable upon exercise of other
warrants.
(54) Includes (i) 65,490 shares of Common Stock beneficially owned by
Michael Taglich, individually; and (ii) 16,939 shares of Common Stock
beneficially owned by Taglich Brothers, D'Amedeo, Wagner & Company,
Incorporated and 290 shares issuable upon exercise of Warrants.
(55) Includes (i) 13,675 shares of Common Stock issuable upon conversion of
Debentures; (ii) 16,939 shares of Common Stock beneficially owned by
Taglich Brothers, D'Amedeo, Wagner & Company; (iii) 17,182 shares of
Common Stock issuable upon exercise of other warrants; and (iv) 401
shares of Common Stock issuable upon exercise of Warrants.
(56) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(57) Includes (i) 17,647 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 1,419 shares of Common
Stock issuable upon exercise of Warrants.
(58) Includes 150 shares of Common Stock issuable upon exercise of Warrants.
(59) Includes 100 shares of Common Stock issuable upon exercise of Warrants.
(60) Includes 401 shares of Common Stock issuable upon exercise of Warrants.
The number of shares of Common Stock 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.
- 14 -
<PAGE> 17
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
that Richard R. Green is a Director of the Company and Chairman of its
Compensation Committee.
DESCRIPTION OF SECURITIES
The Company has 26,000,000 shares of authorized Common Stock, par value
$0.001 per share, of which 5,192,965 shares of Common Stock are issued and
outstanding as of the date of this Prospectus and 4,000,000 shares of preferred
stock, of which 28,869 shares of Series A Preferred Stock are 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 4,000,000 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.
SERIES A PREFERRED STOCK
GENERAL. The Series A Preferred Stock has been authorized as a series
consisting of 60,000 shares, of which 28,869 shares are presently outstanding.
DIVIDENDS. Holders of the Series A Preferred Stock are entitled to
cumulative preferential dividends payable quarterly in cash on April 1, July 1,
October 1 and January 2 of each year at the rate of $9.00 per share per annum.
Through and including July 1, 1998 (the "Initial Period"), the Company has the
option to pay such dividends in cash or in shares of Series A Preferred Stock.
The shares of Series A Preferred Stock payable as dividends during the Initial
Period will be valued at $100.00, except that if the average closing price of
the Common Stock for the twenty (20) consecutive trading day period ending five
(5) days (the "Market Price") prior to the dividend record date is less than the
Conversion Price, as defined below, the value shall equal the Market Price times
the quotient of (i)$100.00 and (ii) the Conversion Price. Thereafter, dividends
are payable in cash, except that if the Company is unable to pay cash dividends,
it shall pay dividends in shares of Series A Preferred Stock with a value equal
to 80% of the lesser of (a) $100.00 or (b) the Market Price times the quotient
of (i) $100.00 and (ii) the Conversion Price. Whenever dividends are paid in
shares of Series A Preferred Stock, the Company shall not issue fractional
shares of Series A Preferred Stock, such fractional amount being payable in
cash. Commencing July 1, 2000, the annual dividend rate will increase by $2.50
per quarter up to a maximum dividend of $24.00 per annum (i.e., the October 1,
2000 quarterly dividend shall have a cumulative amount of $11.50 per annum.
VOTING RIGHTS. The holders of the Series A Preferred Stock are entitled
to vote, on all matters in which holders of Common Stock are entitled to vote,
voting together with the Common Stock without regard to class. The holders of
the Series A Preferred Stock have the number of votes that they would have had
assuming
- 15 -
<PAGE> 18
conversion of the Series A Preferred Stock into Common Stock as of the record
date for the meeting of the Company's shareholders. The holders of the Series A
Preferred Stock are entitled to receive all communications sent by the Company
to the holders of Common Stock. The holders of Series A Preferred Stock are
entitled to vote as a separate class on the issuance of any class of equity
securities which ranks equal to or senior to the Series A Preferred Stock, or to
change or repeal any of the express terms of the Series A Preferred Stock. When
voting as a separate class, the affirmative vote of not less than two-thirds of
the outstanding shares of Series A Preferred Stock are required for approval of
such matters.
LIQUIDATION. On any liquidation, dissolution, or winding up of the
Company, after payment of all creditors of the Company, the holders of Series A
Preferred Stock have the right to receive out of the remaining assets of the
Company, before the holders of any other equity interest in the Company are
entitled to receive anything, the sum of $100.00 per share, plus any accrued and
unpaid dividends.
VOLUNTARY CONVERSION. Each share of Series A Preferred Stock is
convertible at each holder's option into shares of Common Stock, at any time
prior to the effective date of the forced conversion or redemption at the
conversion rate of $4.25 per share, subject to adjustment (the "Conversion
Price"). The Conversion Price is protected against dilution by adjustment of the
conversion rate upon the occurrence of certain events, such as stock dividends
and distributions, stock splits, recapitalization, mergers, consolidations and
the issuance of Common Stock, or options or rights to subscribe for securities
convertible into or exchangeable for Common Stock. The Company will not issue
fractional shares of Common Stock upon conversion of the Series A Preferred
Stock but will pay a cash adjustment for any such fraction. In the event of a
merger, consolidation or sale of all or substantially all of the assets of the
Company, the holders of the Series A Preferred Stock shall have a right to
convert into shares of Common Stock immediately prior to the change of control
at a price equal to the lesser of (i) the Conversion Price or (ii) the price per
share of Common Stock in the change of control transaction.
FORCED CONVERSION. The Company has the right to force conversion of the
Series A Preferred Stock into shares of Common Stock at any time after issuance
of the Series A Preferred Stock, provided that on the day that notice of forced
conversion is given and on the Forced Conversion Date (as defined below) the
following conditions are satisfied: (i) the underlying Common Stock has been
registered pursuant to the Act and such registration is then currently
effective; and (ii) the average of the closing bid price of the Common Stock as
listed on the National Association of Security Dealers Automated Quotation
System ("NASDAQ"), the New York Stock Exchange ("NYSE"), the American Stock
Exchange ("ASE") or wherever the Company's Common Stock then trades, is at least
175% of the Conversion Price for twenty (20) trading days within a thirty (30)
consecutive trading day period. Any notice of forced conversion must be given to
all holders no less than thirty (30) days nor more than forty-five (45) days
prior to the date set forth for conversion (the "Forced Conversion Date"). On
the Forced Conversion Date, the Company shall pay to all registered holders of
Series A Preferred Stock all accrued and unpaid dividends through and including
the Forced Conversion Date.
REDEMPTION. The Company has the right to redeem all of the shares of
Series A Preferred Stock commencing thirty (30) months after the Final Closing
Date, upon thirty (30) days notice at a price of $100.00 per share, plus accrued
and unpaid cumulative dividends to the date of redemption. Holders of Series A
Preferred Stock called for redemption may exercise their right to convert any or
all such shares into Common Stock at any time prior to the close of business on
the day set for redemption of such shares. After the redemption date, such
holders' right to convert their shares of Series A Preferred Stock called for
redemption will cease and such holders will be entitled only to the redemption
price of such shares.
WARRANTS.
In connection with the Exchange Offer, the Company issued an aggregate
of 13,867 Warrants to the Series A Preferred Stockholders who exchanged their
shares in the Exchange Offer purchasers of such Common Stock. Each Warrant
entitles the holder to purchase one share of common stock at an exercise price
of $3.625 per share until December 8, 2002. The warrant exercise price is
subject to certain adjustment provisions as described below. The placement agent
distributed the warrants to various employees and agents of the placement agent.
- 16 -
<PAGE> 19
The Company is not required to issue fractional shares upon exercise of
Warrants, but may make cash payments thereof, based on the then market price of
the Common Stock. No holder of Warrants will be entitled to vote, receive
dividends, or be deemed the 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. Shares of Common Stock issued upon the exercise of the warrants
and on payment of the purchase price will be legally issued, fully paid and
non-assessable.
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 reclas sifications of Common
Stock; (iii) mergers, consolidations and similar events; (iv) the issuance of
Common Stock for a price less than the lesser of the market price of the Common
Stock or the exercise price of the Warrants. The holders of the warrants have
certain demand and piggy-back registration rights as described below.
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
- 17 -
<PAGE> 20
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.
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 AGENT. The Transfer Agent for the Common Stock is Continental
Stock Transfer and Trust Company, 2 Broadway, New York, New York.
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
- 18 -
<PAGE> 21
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
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 of
Common Stock 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 $402,912 in gross proceeds if
all Warrants and Options 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 Stockholders 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 Stockholders, 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
- 19 -
<PAGE> 22
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.
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 Regulation M, 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, Legon, Fodiman & Shannon, P.A., Coral Gables,
Florida. Milton J. Wallace a shareholder of the law firm, beneficially owns
471,132 shares of the Company's Common Stock, including 5,882 shares of Common
Stock underlying Series A Preferred Stock. Other shareholders of such law firm
beneficially own an aggregate of 27,816 shares of Common Stock.
EXPERTS
The consolidated financial statements included in the Company's Annual
Report on Form 10-KSB for the Year ended December 31, 1997 incorporated by
reference in this Prospectus have been audited by BDO
- 20 -
<PAGE> 23
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.
- 21 -
<PAGE> 24
================================================================================
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 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 is not qualified to do so or to
anyone whom it is unlawful to make such offer or solicitation.
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION........................................................2
FORWARD-LOOKING STATEMENTS...................................................2
DOCUMENTS INCORPORATED BY REFERENCE..........................................3
THE COMPANY..................................................................4
RISK FACTORS.................................................................5
USE OF PROCEEDS..............................................................7
MATERIAL EVENTS..............................................................8
SELLING STOCKHOLDERS.........................................................9
DESCRIPTION OF SECURITIES...................................................15
INDEMNIFICATION.............................................................18
PLAN OF DISTRIBUTION........................................................19
LEGAL MATTERS...............................................................20
EXPERTS.....................................................................20
MED/WASTE, INC.
--------------------------------
PROSPECTUS
---------------------------------
509,656
Shares of
COMMON STOCK
($.001 par value)
_________________, 1998
===============================================================================
<PAGE> 25
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>
<CAPTION>
<S> <C>
Securities and Exchange Commission Registration Fee.................. $ 1,006.00
Accounting Fees and Expenses......................................... 2,000.00*
Legal Fees and Expenses.............................................. 10,000.00*
Printing expenses.................................................... 2,000.00*
Miscellaneous........................................................ 2,994.00*
-----------
Total................................................................ $18,000.00*
===========
</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.
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
II-1
<PAGE> 26
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.
Certain of the following exhibits are filed herein and certain others,
designated by an asterisk (*) were previously filed in the registration
statement.
EXHIBIT NO. DESCRIPTION
4.1 Form of Warrant
5 Opinion of Wallace, Bauman, Legon, Fodiman & Shannon, P.A.,
regarding the legality of the Common Stock.
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Wallace, Bauman, Legon, 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 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.
II-2
<PAGE> 27
(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.
II-3
<PAGE> 28
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
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Miami Lakes, State of
Florida, on the 3rd day of June, 1998.
MED/WASTE, INC., a Delaware corporation
By: /S/ DANIEL A. STAUBER
----------------------------------
DANIEL A. STAUBER
President/Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following person in the capacities and
on the dates indicated.
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 of the Board June 3, 1998
- --------------------------------------------
Milton J. Wallace
/S/ DANIEL A. STAUBER Director, President and Chief Executive June 3, 1998
- -------------------------------------------- Officer
Daniel A. Stauber
/S/ MICHAEL D. ELKIN Vice President and Chief Financial Officer June 3, 1998
- --------------------------------------------
Michael D. Elkin
/S/ WILLIAM F. BONHAM Director June 3, 1998
- --------------------------------------------
William F. Bonham
/S/ RICHARD GREEN Director June 3, 1998
- --------------------------------------------
Richard R. Green
/S/ KENDRICK MEEK Director June 3, 1998
- --------------------------------------------
Kendrick Meek
/S/ ARTHUR G. SHAPIRO, M.D. Director June 3, 1998
- --------------------------------------------
Arthur G. Shapiro, M.D.
/S/ WILLIAM DOLAN, D.D.S Director June 3, 1998
- --------------------------------------------
William Dolan, D.D.S.
</TABLE>
II-3
<PAGE> 1
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT") OR ANY STATE
SECURITIES LAWS AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED,
DONATED, OR OTHERWISE TRANSFERRED, WHETHER OR NOT FOR
CONSIDERATION, BY THE HOLDER EXCEPT UPON THE ISSUANCE TO THE
COMPANY OF A FAVORABLE OPINION OF ITS COUNSEL OR THE SUBMISSION TO
THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
COUNSEL FOR THE COMPANY, IN EITHER CASE, TO THE EFFECT THAT ANY
SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE 1933 ACT AND
APPLICABLE STATE SECURITIES LAWS.
MED/WASTE, INC.
Common Stock Purchase Warrant
to
Purchase Shares
of
Common Stock
This Common Stock Purchase Warrant is issued to:
Name
by MED/WASTE, INC., a Delaware corporation (hereinafter called the "Company",
which term shall include its successors and assigns).
FOR VALUE RECEIVED and subject to the terms and conditions
hereinafter set out, the registered holder of this Warrant as set forth on the
books and records of the Company (the "Holder") is entitled upon surrender of
this Warrant to purchase from the Company Written ( Shares) fully paid
and nonassessable shares of Common Stock, $.001 par value (the "Common Stock"),
at the Exercise Price (as defined below) per share.
This Warrant shall expire at the close of business on December 8,
2002.
1. (a) The right to purchase shares of Common Stock represented
by this Warrant may be exercised by the Holder, in whole or in part, by the
surrender of this Warrant (properly endorsed if required) at the principal
office of the Company at 6175 N.W. 153rd Street, Suite 324, Miami Lakes, Florida
33054 (or such other office or agency of the Company as it may designate by
notice in writing to the Holder at the address of the Holder appearing on the
books of the Company), and upon payment to the Company, by cash or by certified
check or bank draft, of the Exercise Price for such shares. The Company agrees
that the shares of Common Stock so purchased shall be deemed to be issued to the
Holder as the record owner of such shares of Common Stock as of the close of
business Stock as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such shares of Common Stock as
aforesaid. Certificates for the shares of Common Stock so purchased (together
with a cash adjustment in lieu of any fraction of a share) shall be delivered to
the Holder within a reasonable time, not exceeding five (5) business days, after
the rights represented by this Warrant shall have been so exercised, and, unless
this Warrant has expired, a new Warrant representing the number of shares of
Common Stock, if any, with respect to which this Warrant shall not then have
been exercised, in all other respects identical with this Warrant, shall also be
issued and delivered to the Holder within such time, or, at the request of the
Holder, appropriate notation may be made on this Warrant and the same returned
to the Holder.
(b) This Warrant may be exercised to acquire, from and after
the date hereof, the number of shares of Common Stock set forth on the first
page hereof; provided, however, the right hereunder to purchase such shares of
Common Stock shall expire at the close of business on December 8, 2002.
2. This Warrant is being issued by the Company to the Holder
pursuant to Common Stock Purchase Agreement dated the date hereof between the
Company and the Holder (the "Purchase Agreement").
<PAGE> 2
3. The Company covenants and agrees that all Common Stock upon
issuance against payment in full of the Exercise Price by the Holder pursuant to
this Warrant will be validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof; and, without
limiting the generality of the foregoing, the Company covenants and agrees that
it will take from time to time all such action as may be requisite to assure
that the par value per share of the Common Stock is at all times equal to or
less than the then effective Exercise Price. The Company further covenants and
agrees that during the period within which the rights represented by this
Warrant may be exercised, the Company will have at all times authorized, and
reserved for the purpose of issue or transfer upon exercise of the rights
evidenced by this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant, and will
procure at its sole expense upon each such reservation of shares the listing
thereof (subject to issuance or notice of issuance) on all stock exchanges on
which the Common Stock is then listed or inter-dealer trading systems on which
the Common Stock is then traded. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be so issued without
violation of any applicable law or regulation, or of any requirements of any
national securities exchange upon which the Common Stock may be listed or
inter-dealer trading system on which the Common Stock is then traded. The
Company will not take any action which would result in any adjustment in the
number of shares of Common Stock purchasable hereunder if the total number of
shares of Common Stock issuable pursuant to the terms of this Warrant after such
action upon full exercise of this Warrant and, together with all shares of
Common Stock then outstanding and all shares of Common Stock then issuable upon
exercise of all options and other rights to purchase shares of Common Stock then
outstanding, would exceed the total number of shares of Common Stock then
authorized by the Company's Certificate of Incorporation, as then amended.
4. The Initial Exercise Price is $3.625 per share of Common Stock
("Initial Exercise Price"). The Initial Exercise Price shall be adjusted as
provided for below in this Section 4 (the Initial Exercise Price, and the
Initial Exercise Price, as thereafter then adjusted, shall be referred to as the
"Exercise Price") and the Exercise Price from time to time shall be further
adjusted as provided for below in this Section 4. Upon each adjustment of the
Exercise Price, the Holder shall thereafter be entitled to receive upon exercise
of this Warrant, at the Exercise Price resulting from such adjustment, the
number of shares of Common Stock obtained by (i) multiplying the Exercise Price
in effect immediately prior to such adjustment by the number of shares of Common
Stock purchasable hereunder immediately prior to such adjustment, and (ii)
dividing the product thereof by the Exercise Price resulting from such
adjustment. The Exercise Price shall be adjusted as follows:
(i) In the case of any amendment to the Certificate of
Incorporation of the Company to change the designation of the
Common Stock or the rights, privileges, restrictions or
conditions in respect to the Common Stock or division of the
Common Stock, this Warrant shall be adjusted so as to provide
that upon exercise thereof, the Holder shall receive, in lieu of
each Common Stock theretofore issuable upon such exercise, the
kind and amount of shares, other securities, money and property
receivable upon such designation, change or division by the
Holder issuable upon such exercise had the exercise occurred
immediately prior to such designation, change or division. This
Warrant shall be deemed thereafter to provide for adjustments
which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 4. The provisions of
this Subsection 4(i) shall apply in the same manner to successive
reclassifications, changes, consolidations and mergers.
(ii) If the Company shall at any time subdivide its
outstanding shares of Common Stock into a greater number of
shares of Common Stock, or declare a dividend or make any other
distribution upon the Common Stock payable in shares of Common
Stock, the Exercise Price in effect immediately prior to such
subdivision or dividend or other distribution shall be
proportionately reduced, and conversely, in case the outstanding
shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Exercise Price in effect immediately
prior to such combination shall be proportionately increased.
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<PAGE> 3
(iii) In case the Company shall issue or otherwise sell
or distribute shares of Common Stock for a consideration per
share in cash or property less than the lesser of the Exercise
Price then in effect or the Market Price (as defined below), the
Exercise Price then in effect shall be reduced by multiplying
such Exercise Price by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding immediately
prior to such issuance, sale or distribution plus the number of
shares of Common Stock which the aggregate consideration received
by the Company for such issuance, sale or distribution (such
consideration, if other than cash, as reasonably determined by
the Board of Directors of the Company including a majority of the
Directors who are not officers or employees of the Company or any
of its Subsidiaries, whose determination shall be described in a
resolution of the Board of Directors) would purchase at the
Exercise Price per share and the denominator shall be the number
of shares of Common Stock outstanding immediately after giving
effect to such issuance, sale or distribution. The term "Market
Price" shall mean the average of the closing bid price for the
Common Stock for the five (5) consecutive trading days ending two
(2) trading days prior to the relevant date that the Company
shall issue or otherwise sell or distribute shares of Common
Stock.
(iv) If any capital reorganization or reclassification of
the capital stock of the Company, or any consolidation or merger
of the Company with another corporation or entity, or the sale of
all or substantially all of the Company's assets to another
corporation or other entity shall be effected in such a way that
holders of shares of Common Stock shall be entitled to receive
stocks, securities, other evidence of equity ownership or assets
with respect to or in exchange for shares of Common Stock, then,
as a condition of such reorganization, reclassification,
consolidation, merger or sale (except as otherwise provided below
in this Section 4), lawful and adequate provisions shall be made
whereby the Holder shall thereafter have the right to receive
upon the basis and upon the terms and conditions specified
herein, such shares of stock, securities, other evidence of
equity ownership or assets as may be issued or payable with
respect to or in exchange for a number of outstanding shares of
such Common Stock equal to the number of shares of Common Stock
immediately theretofore purchasable and receivable upon the
exercise of this Warrant under this Section 4 had such
reorganization, reclassification, consolidation, merger or sale
not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the
Holder to the end that the provisions hereof (including, without
limitation, provisions for adjustments of the Exercise Price and
of the number of shares of Common Stock receivable upon the
exercise of this Warrant) shall thereafter be applicable, as
nearly as may be, in relation to any shares of stock, securities,
other evidence of equity ownership or assets thereafter
deliverable upon the exercise hereof (including an immediate
adjustment, by reason of such consolidation or merger, of the
Exercise Price to the value for the Common Stock reflected by the
terms of such consolidation or merger if the value so reflected
is less than the Exercise Price in effect immediately prior to
such consolidation or merger). Subject to the terms of this
Warrant, in the event of a merger or consolidation of the Company
with or into another corporation or other entity as a result of
which the number of shares of common stock of the surviving
corporation or other entity issuable to holders of Common Stock
of the Company, is greater or lesser than the number of shares of
Common Stock of the Company outstanding immediately prior to such
merger or consolidation, then the Exercise Price in effect
immediately prior to such merger or consolidation shall be
adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Common Stock of the
Company. The Company shall not effect any such consolidation,
merger or sale, unless, prior to the consummation thereof, the
successor corporation (if other than the Company) resulting from
such consolidation or merger or the corporation purchasing such
assets shall assume by written instrument executed and mailed or
delivered to the Holder, the obligation to deliver to the Holder
such shares of stock, securities, other evidence of equity
ownership or assets as, in accordance with the foregoing
provisions, the Holder may be entitled to receive or otherwise
acquire. If a purchase, tender or exchange offer is made to and
accepted by the holders of more than fifty (50%) percent of the
outstanding shares of Common Stock of the Company, the Company
shall not effect any consolidation, merger or sale with the
Person having made such offer or with any Affiliate of such
Person,
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<PAGE> 4
unless prior to the consummation of such consolidation, merger or
sale the Holder of this Warrant shall have been given a
reasonable opportunity to then elect to receive upon the exercise
of this Warrant the amount of stock, securities, other evidence
of equity ownership or assets then issuable with respect to the
number of shares of Common Stock of the Corporation in accordance
with such offer.
Whenever the Exercise Price shall be adjusted pursuant to this
Section 4, the Company shall issue a certificate signed by its President or Vice
President and by its Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary, setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the Board of
Directors of the Company made any determination hereunder), and the Exercise
Price after giving effect to such adjustment, and shall cause copies of such
certificates to be mailed (by first-class mail, postage prepaid) to the Holder
of this Warrant. The Company shall make such certificate and mail it to the
Holder promptly after each adjustment.
No fractional Common Stock shall be issued in connection with any
exercise of this Warrant, but in lieu of such fractional shares, the Company
shall make a cash payment therefor equal in amount to the product of the
applicable fraction multiplied by the Exercise Price then in effect.
5. In the event the Company grants rights to all shareholders to
purchase Common Stock, the Holder shall have the same rights as if this Warrant
had been exercised immediately prior to such grant.
6. The Holder shall, with respect to the shares of Common Stock
issuable upon the exercise of this Warrant, have the registration rights set
forth in the Purchase Agreement. Such registration rights are incorporated
herein by this reference as if such provisions had been set forth herein in
full.
7. This Warrant need not be changed because of any change in the
Exercise Price or in the number of shares of Common Stock purchased hereunder.
8. The terms defined in this paragraph, whenever used in this
Warrant, shall, unless the context otherwise requires, have the respective
meanings hereinafter specified. The term "Common Stock shall mean and include
the Company's Common Stock, $0.001 par value per share, authorized on the date
of the original issue of this Warrant and shall also include in case of any
reorganization, reclassification, consolidation, merger or sale of assets of the
character referred to in paragraph 4 hereof, the stock, securities or assets
provided for in such paragraph. The term "Company" shall also include any
successor corporation to MED/WASTE, INC. by merger, consolidation or otherwise.
The term "outstanding" when used with reference to Common Stock shall mean at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of the Company. The term "1933 Act" shall mean the Securities Act of
1933, or any similar Federal statute, and the rules and regulations of the
Securities and Exchange Commission, or any other Federal agency then
administering such Securities Act, thereunder, all as the same shall be in
effect at the time.
9. This Warrant is exchangeable, upon the surrender hereby by the
Holder at the office or agency of the Company, for new Warrants of like tenor
representing in the aggregate the right to subscribe for and purchase the number
of shares of Common Stock which may be subscribed for and purchased hereunder,
each of such new Warrants to represent the right to subscribe for and purchase
such number of shares of Common Stock as shall be designated by the Holder at
the time of such surrender. Upon receipt of evidence satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant or any such new
Warrants and, in the case of any such loss, theft, or destruction, upon delivery
of a bond of indemnity, reasonably satisfactory to the Company, or, in the case
of any such mutilation, upon surrender or cancellation of this Warrant or such
new Warrants, the Company will issue to the Holder a new Warrant of like tenor,
in lieu of this Warrant or such new Warrants, representing the right to
subscribe for and purchase the number of shares of Common Stock which may be
subscribed for and purchased hereunder.
10. The Company agrees to use its best efforts to file timely all
reports required to be filed by it pursuant to Section 13 or 15 of the
Securities Exchange Act of 1934, as amended, and to provide such
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<PAGE> 5
information as will permit the Holder to sell this Warrant or any shares of
Common Stock acquired upon exercise of this Warrant in accordance with Rule 144
under the 1933 Act.
11. The Company will at no time close its transfer books against
the transfer of this Warrant or of any shares of Common Stock issued or issuable
upon the exercise of this Warrant in any manner which interferes with the timely
exercise of this Warrant. This Warrant shall not entitle the Holder to any
voting rights or any rights as a stockholder of the Company. The rights and
obligations of the Company, of the Holder, and of any holder of shares of Common
Stock issuable hereunder, shall survive the exercise of this Warrant.
12. This Warrant sets forth the entire agreement of the Company
and the Holder of the Common Stock issuable upon the exercise of this Warrant
with respect to the rights of the Holder and the Common Stock issuable upon the
exercise of this Warrant, notwithstanding the knowledge of such Holder of any
other agreement or the provisions of any agreement, whether or not known to the
Holder and the Company represents that there are no agreements inconsistent with
the terms hereof or which purport in any way to bind the Holder of this Warrant
or the Common Stock.
13. The validity, interpretation and performance of this Warrant
and each of its terms and provisions shall be governed by the laws of the State
of New York.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer under its corporate seal and to be dated
February 11, 1998.
MED/WASTE, INC.
By:
----------------------------
DANIEL A. STAUBER, President
[CORPORATE SEAL]
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<PAGE> 1
[LETTERHEAD OF WALLACE, BAUMAN, FODIMAN & SHANNON, P.A.]
June 3, 1998
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 509,656 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
<PAGE> 2
to 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:
1. the shares of common stock being sold by the selling
shareholders that are presently outstanding have been duly authorized, legally
issued, fully paid and none assessable; and
2. the shares of Common Stock being sold by the selling
shareholders upon exercise of the options or warrants, as more fully described
in the Registration Statement will be duly authorized, legally issued, fully
paid and none assessable when the warrants or options are exercised and the
exercise price is 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
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 25,
1998, 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, 1997.
we also consent to the reference to us under the caption "Experts" in
the Prospectus.
/s/ BDO Seidman, LLP
BDO Seidman, LLP
Miami, Florida
June 2, 1998
