MED WASTE INC, S-3/A, 1998-01-26

MED WASTE INC
S-3/A, 1998-01-26
HAZARDOUS WASTE MANAGEMENT

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<PAGE> 1

As filed with the Securities and Exchange Commission on January 26, 1998.

Registration No. 333-42761

===============================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1 TO

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, Fodiman & Shannon, P.A.
2222 Ponce de Leon Boulevard, Sixth Floor
Coral Gables, Florida 33134
(305) 444-9991

--------------------------------------------

Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement has become effective.

--------------------------------------------

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /

<PAGE> 2

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 January 26, 1998

PROSPECTUS

2,872,013 Shares
MED/WASTE, INC.
Common Stock

This Prospectus relates to the public offering of up to 2,872,013
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, 1,010,960 shares
are issuable upon conversion of 9% Convertible Redeemable Series A Preferred
Stock (the "Series A Preferred Stock") 1,600,002 shares of Common Stock issued
in connection with a private placement by the Company and 261,051 shares are
issuable upon exercise of warrants. Of such shares issuable upon exercise of
warrants, 101,104 shares are issuable upon exercise of common stock purchase
warrants (the "Series A Warrants"), 58,185 shares are issuable upon exercise of
common stock purchase warrants ("Common Warrants") and 101,762 shares are
issuable upon exercise of common stock purchase warrants (the "Placement
Warrants"). The Company will not receive any of the proceeds from the sale of
the Common Stock, but will pay the expenses incurred in registering the 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 $1,133,631 in gross
proceeds from the exercise of the various classes of warrants described above.
Selling Stockholders will bear all other expenses of this offering, including
brokerage fees, any underwriting discounts or commissions.

Each share of Series A Preferred Stock is presently convertible
at any time at the option of the holders at the current conversion of $4.25
assuming the value of each share of Series A Preferred Stock at $100. See
"Description of Securities--Series A Preferred Stock" Each Series A Warrant
entitles the holder to purchase one (1) share of Common Stock at an exercise
price of $4.25 per share until October 31, 2002. Each Common 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. Of the Placement Warrants, 70,180
Placement Warrants each entitle the holder to purchase one (1) share of Common
Stock at an exercise price of $5.00 per share until November 6, 2002 and 31,582
Placement Warrants each entitle the holder to purchase one (1) share of Common
Stock at $4.50 per share until December 8, 2002.

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 4.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

The Common Stock is included for quotation on the NASDAQ Small Cap Market
("NASDAQ") under the symbol "MWDS." The last reported sale price of the Common
Stock on NASDAQ on January 16, 1998 was $5.25 per share. As of January 16,
1998, the Company had 4,628,747 shares of Common Stock outstanding.

The date of this Prospectus is _____________, 1998.

<PAGE> 4

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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<PAGE> 5

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, 1996;
(ii) the Company's Quarterly Report on Form 10-QSB for the quarter ended March
31, 1997; (iii) the Company's Proxy Statement dated April 22, 1997 for the
Company's annual meeting of Shareholders held on June 10, 1997; (iv) the
Company's Quarterly Report on Form 10-QSBA for the quarter ended June 30, 1997;
(v) the Company Quarterly Report on Form 10-QSB for the quarter ended September
30, 1997; (vi) the Company's Current Report on Form 8-K for the event dated
September 25, 1997; (vii) the Company's Current Report on Form 8-KA for the
event dated September 25, 1997; (viii) the Company's Current Report on Form 8-K
for the event dated November 6, 1997; (ix) the Company's Current Report on Form
8-KA for the event dated November 6, 1997; (x) the Company's Current Report
on Form 8-K for the event dated November 7, 1997; and (xi) the Company's Current
Report on Form 8-KA for the event dated November 6, 1997.

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) 819-8874).

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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") and commercial
cleaning services through its wholly owned subsidiary, The Kover Group, Inc.
("Kover"). On November 25, 1997, the Company entered into a letter of intent to
sell 80% of Kover to Kover's president and chief executive officer, Phillip W.
Kubec. The closing is contingent upon Mr. Kubec obtaining bank financing for the
cash portion of the purchase price, as well as debenture holder and the Company
bank lender consent. 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.

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.

Kover is engaged in the business of offering, selling and
servicing franchises for commercial building cleaning services through the trade
name "Coverall Cleaning Concepts". Kover is a service franchisor of Coverall
North America, Inc. ("CNA") in the metropolitan area of Cleveland, Ohio and
South Florida.

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<PAGE> 7

Kover is a service franchisee of CNA. CNA operates a business
engaged in the offer and sale of three types of franchises, each of which is
related to commercial building cleaning services using the trade name
"Coverall". The three types of franchises are janitorial franchises, limited
area franchises and services franchises. Kover is a service franchisee of CNA in
the metropolitan areas of Cleveland, Ohio and South Florida. Kover has the
exclusive right to sell janitorial franchises using the Coverall Cleaning
Concept in these metropolitan areas. Kover is required to pay CNA royalty fees
of three to four and one-half percent of monthly revenues. Kover uses the
Coverall name, design and business plan to conduct and promote its independent
business of offering, selling and servicing janitorial franchises pursuant to
written agreements between Kover and its janitorial franchisees. Kover maintains
a small staff to perform emergency cleaning services and temporary cleaning
services for accounts being transferred from one franchisee to another. Most
cleaning services are provided to commercial customers through independent
franchisees.

Kover sells franchises for janitorial services in the
metropolitan territories of South Florida and Cleveland, Ohio. As of September
30, 1997, Kover had in operation approximately 245 janitorial franchises. As of
that date, CNA and its other service franchisees had an additional approximately
4,250 janitorial franchises in operation located in 15 states, as well as in
Canada, United Kingdom, South Africa, Spain and Thailand.

The Company is a Delaware corporation with its principal
executive offices located at 6175 N.W. 153rd Street, Suite 324, Miami Lakes,
Florida 33014. Its telephone number at such address is (305) 819-8877.

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.

ACCUMULATED DEFICIT; NET LOSSES. The Company has incurred an
accumulated deficit of $(1,145,593) as of September 30, 1997. For the years
ended December 31, 1994, 1995 and 1996, the Company had net income (losses) of
($422,061), ($1,748,926) and $215,326, respectively. The net loss for the year
ended December 31, 1995 was primarily a result of a non-recurring charge for an
impairment loss of goodwill of $1,622,872. For the nine months ended September
30, 1997, the Company had consolidated net income of $724,139. The can be no
assurance that the Company's activities will generate sufficient cash flow to
sustain ongoing operations or that its operations will continue to be
profitable.

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 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

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<PAGE> 8

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 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.

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<PAGE> 9

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.

SERVICE FRANCHISE AGREEMENTS. Kover operates as franchisee of
Coverall of North America, Inc. ("CNA") pursuant to Service Franchise Agreements
in each location. The Service Franchise Agreements contain a number of
restrictions and obligations on the part of Kover. The failure of Kover to
strictly comply with these requirements could result in the termination of such
franchises and have a material adverse effect on the Company's business,
financial condition and results of operations.

DEPENDENCE ON FRANCHISOR. CNA contributes to the development of
Kover and its operating systems, clinics, products and formulation of
strategies. The loss of the relationship with the CNA could have a material
adverse effect on Kover's operations and new product development efforts.
Further, the long term success of Kover is in part dependent upon the overall
success of the CNA janitorial system. Accordingly, to a certain extent, the
success of Kover is dependent on part upon the successful operations of CNA's
other franchisees, as well as upon the financial condition, management,
marketing and innovative abilities of CNA. Any event that creates adverse
publicity involving CNA operations may have an adverse impact on the Company,
regardless of whether the event involved Kover.

DEPENDENCE UPON PERSONNEL. The Company is dependent upon the
services of Daniel A. Stauber and Phillip W. Kubec. Mr. Stauber is president of
the Company and its wholly owned subsidiaries, SDS, SDSSC, SDSGA, Incendere and
SDSPA. Mr. Kubec is the president of the Company's wholly owned subsidiary,
Kover. The company has an employment agreement with Mr. Stauber which expires in
December 2001. Kover has an employment agreement with Mr. Kubec which expires in
June 1999. However, if either officer's services were to become unavailable to
the Company for any reason, 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.

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<PAGE> 10

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 42,969 shares of Series A Preferred 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.

NOTES RECEIVABLES FROM FRANCHISEES. Notes receivables from
Franchisees aggregated $2,142,775 and $2,426,992 as at December 31, 1996 and
September 30, 1997, respectively. In connection therewith, $82,441 and $56,853
are reflected as current liabilities (deferred revenue on franchise sales) as at
December 31, 1996 and September 30, 1997, respectively. Although the notes
receivables from franchisees are personally guaranteed by the individuals who
are franchisees, the ability of the franchisees to pay the notes may be
dependent upon the commercial cleaning services provided by the franchisees.

USE OF PROCEEDS

The Company will not receive any proceeds from the sale of Common
Stock by the Selling Stockholders. The Company would receive net proceeds
aggregating $1,133,631 upon exercise of the various classes of warrants, if all
such warrants, are exercised. Such proceeds will be added to the Company's
working capital and used for general corporate purposes.

- 8 -

<PAGE> 11

MATERIAL EVENTS

Material Acquisitions.

On November 6, 1997, the Company purchased a 2.9 acre industrial
site located in Marcus Hook, Pennsylvania, together with related autoclave
equipment used at such site, from K.S. Processing Company, Inc. (the "KS
Facility"). The KS Facility is a medical waste autoclave treatment center
operated by Bonham Management Group, Inc. ("BMG"), a Virginia corporation. On
November 10, 1997, the Company purchased certain of the assets of BMG, including
the right to manage the KS Facility.

The KS Facility consists of two (2) 25 ton per day autoclaves, a
10,000 square foot processing center and a 2,400 square foot administrative
building. The KS Facility receives medical waste from generators located
throughout New York, New Jersey, Connecticut, Pennsylvania, Maryland and
Virginia. The KS Facility currently operates at full capacity. The KS Facility
is currently the only medical waste autoclave facility in Pennsylvania. The
current permitting process for medical waste treatment facilities in
Pennsylvania is a costly, time consuming and politically difficult procedure.
The Company does not anticipate that any additional autoclave or incinerator
permits will be issued by the Pennsylvania Department of Environmental
Protection in the near future.

On November 7, 1997, the Company purchased 100% of the capital
stock of Incendere, Inc., a Virginia corporation ("Incendere"). At the time of
the acquisition, Incendere was a wholly owned indirect subsidiary of Republic
Industries, Inc., a Delaware corporation ("Republic").

Incendere is in the medical waste management services business
and collects medical waste from generators located in the states of Delaware,
Georgia, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina and
Virginia. Incendere's assets include accounts receivables, inventory and
supplies, equipment, vehicles, machinery, furniture, fixtures, leasehold
improvements, leases of real property and intangible assets used in connection
with the collection of medical waste. Such assets remain intact following the
acquisition, except that the Company assigned 50% of the accounts receivable to
Republic as part of the Agreement. The Company is paid a fee from Republic for
the collection of such assigned receivables. Republic agreed to assume and
satisfy all liabilities of Incendere incurred prior to the closing other than
accounts payables and certain designated obligations. As a result of the
transaction, Incendere became a wholly owned subsidiary of the Company.

Pending Disposition.

On November 25, 1997, the Company entered into a letter of intent
to sell its wholly owned janitorial subsidiary, Kover, to Kover's
president and chief executive officer, Phillip W. Kubec. The Company had
purchased Kover from Mr. Kubec in July 1994. In connection with such sale, the
Company would receive $2,700,000, payable $1,200,000 in cash at closing and the
balance in promissory notes (the "Notes"). The Notes would be secured by the
capital stock of Kover and would be payable over five years. the Note would be
subordinate to Kover's bank financing. The closing is contingent upon Mr. Kubec
obtaining bank financing for the cash portion of the purchase price, as well as
debenture holder and Company bank lender consent. In addition, Kover is a
primary obligor on the Debentures. Mr. Kubec and his lender require the release
of Kover from the obligations of all of the debentures issued by the Company
and its subsidiaries, including Kover as a condition of the closing.

- 9 -

<PAGE> 12

SELLING STOCKHOLDERS

An aggregate of up to 2,872,013 shares may be offered by certain
Selling Stockholders. The following table sets forth as of December 8, 1997,
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.

SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
75 West Phase 1 Partnership 38,737(3) * 5,882 32,855 *
3578 NW 97th Blvd.
Gainesville, FL 32606

75 West Phase II, Inc. 38,737(4) * 5,882 32,855 *
3578 NW 97th Blvd.
Gainesville, FL 32606

A. Raymond Abt 2,352(5) * 2,352 -- *
14463 Washington Boulevard
University Heights, OH 44118

Robert W. Allen 28,858(6) * 11,764 17,094 *
2400 Balleybunion Road
Center Valley, PA 18034

Applebaum Family Limited Partnership 3,529(7) * 3,529 -- *
4 Birnawoods Lane
St. Louis, MO 63132

Gary P. Arnold 4,705(8) * 4,705 -- *
4028 SW Trail Road
Tualatin, OR 97062

Jude Aririguzo 2,352(9) * 2,352 -- *
2924 Morgan Avenue
Bronx, NY 10469

Baker-Hazel 4,705(10) * 4,705 -- *
Funeral Home Corporate Investment Fund
5555 Philadelphia Dr.
Dayton, OH 45415

Baker-Hazel 4,705(11) * 4,705 -- *
Funeral Home Employee Pension Plan
5555 Philadelphia Dr.
Dayton, OH 45415

John Bertsch 3,529(12) * 3,529 -- *
1655 Steele Avenue, SW
Grand Rapids, MI 49507

Joseph M. Billy 2,352(13) * 2,352 -- *
253 Lafayette Avenue
Passaic, NJ 07055

Bart Birnbaum 15,727(14) * 2,352 13,375 *
8015 SW 15 Street
Miami, FL 33144
</TABLE>

- 10 -

<PAGE> 13

SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Francis A. Bonanno 5,882(15) * 5,882 -- *
1797 Kylemore Court
Dayton, OH 45459

John Bradley 5,211(16) * 5,211 -- *
One Citizens Federal Centre, Suite 1600
Dayton, Ohio 45402

Richard Buchakijian 2,352(17) * 2,352 -- *
85 Beaver Street
c/o Reliable Brands
Albany, NY 12207

Peter Burns 28,149(18) * 18,918 9,231 *
100 Wall Street, 10th Floor
New York, N.Y. 10005

John F. and Pamela S. Carroll 5,718(19) * 5,718 -- *
3691 Fawn Run Dr.
Cincinnati, OH 45241

Phillip E. Casey & Betty Casey 14,429(20) * 5,882 8,547 *
3435 Bayshore Blvd. # 601
Tampa, FL 33629

Corbert L. Clark 4,705(21) * 4,705 -- *
433 N.W. Front Street
Walnut Ridge, AR 72476

Charles Schwab, Custodian FBO: 4,705(22) * 4,705 -- *
Robert Colaizzi IRA
1958 Summit Park Drive, Suite 500
Orlando, FL 32810

Conner & Murphy 57,178(23) 1.23 57,178 -- *
7777 Washington Village Dr., Suite 290
Centerville, OH 45459

Tim Cornell, IRA 5,718(24) * 5,718 -- *
One Citzens Federal Centre, Suite 1600
Dayton, OH 45402

Joseph D'Amadeo 53,013(25) 1.14 31,489 21,524 *
100 Wall Street, 10th Floor
New York, N.Y.

Robert L. and Tracey H. DeBruyn 2,352(26) * 2,352 -- *
2030 Pierre
Manhattan, KS 66502

Dolphin Offshore Partners, L.P. 690,590(27) 14.49 571,787 118,803 2.01
c/o Dolphin Management
129 East 17th Street
New York, N.Y. 10007

James P. Ebersole, Sr. 2,352(28) * 2,352 -- *
3635 Green Acres Place Drive
Garden District No. 334
Bossier City, LA 71111
</TABLE>

- 11 -

<PAGE> 14

SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
EBS Microcap Partners, LP 41,100(29) * 41,100 -- *
7777 Washington Village Dr., Suite 210
Dayton, OH 45459-3976

EBS Partners, L.P. 115,737(30) 2.46 115,737 -- *
7777 Washington Village Drive, Suite 210
Dayton, OH 45459

The Equity Group Inc. Profit Sharing Plan & 23,529(31) * 23,529 -- *
Trust
800 Third Avenue, 36th Floor
New York, NY 10022

John C. Ernst Revocable Trust 17,647(32) * 17,647 -- *
875 Copperfield Lane
Tipp City, OH 45371

Michael E. Ervin MD 9,411(33) * 9,411 -- *
626 West David Road
Dayton, OH 45429

Margaret & Albert J. Esposito 2,352(34) * 2,352 -- *
44 Thornhedge Rd.
Bellport, NY 11713

John Eubel - Mutual Fund/Keogh PS Voluntary 7,058(35) * 7,058 -- *
3821 St. Andrews Drive
Fairborn, OH 45324-9718

Harry M. Farnham III or Cynthia Farnham 5,882(36) * 5,882 -- *
7006 McKamy Boulevard
Dallas, TX 75248

Denis Fortin 28,858(37) * 11,764 17,094 *
26 Brookside Drive
Easton, CT 06612

Keith M. Ganzer 2,352(38) * 2,352 -- *
704 Colorado Avenue
Bridgeport, CT 06605

B. Kent Garlinghouse 14,429(39) * 5,882 8,547 *
2001 SW Wildwood Lane
Topeka, KS 66611

Gem City 10,588(40) * 10,588 -- *
Emergency Associates, Inc. Pension Trust FBO
Richard Coalson, M.D.
171 Walnut Grove Dr.
Centerville, OH 45458

Gem City 5,882(41) * 5,882 -- *
Emergency Associates, Inc. Pension Trust FBO
Robert A. Uptmor, M.D.
1223 Waterwyck Trail
Centerville, OH 45458

Ben Genet 10,882(42) * 5,882 5,000 *
3870 N. 40th Avenue
Hollywood, FL 33021

</TABLE>

- 12 -

<PAGE> 15

SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
James Gerchow 14,429(43) * 5,882 8,547 *
64177 Rommell Road
Sturgis, MI 49091

David Gilbertson 7,058(44) * 7,058 -- *
2434 Como Avenue
St. Paul, MN 55108

Linda K. Goldenberg 8,727(45) * 2,352 6,375 *
177 North Village Way
Jupiter, FL 33459

Jack C. Goldstein and Leslie S. Goldstein, 2,352(46) * 2,352 -- *
Joint Tenants WROS
16 Sugarberry Circle
Houston, TX 77024

Jean B. Gordon 7,148(47) * 7,148 -- *
6676 Egg Court, Apt. D
Dublin, OH 43017

John R. Graham, Trustee 2,352(48) * 2,352 -- *
1512 Country Club Place
Manhattan, KS 66502

Donald Gross 2,352(49) * 2,352 -- *
23 Par Court
North Hills, NY

Grover, Ciment, Weinstein, Stauber & 113,727(50) 2.44 38,370 75,357 1.28
Friedman, P.A. Money Purchase Pension Plan
and Trust F.B.O. Robert Grover
777 Arthur Godfrey Road, 2nd Floor
Miami Beach, FL 33140

Kettering Anesthesia 5,882(51) * 5,882 -- *
Assoc. P & P/S Retirement Plan FBO Augustus
A. Gullett
2085 S. Linda Drive
Bellbrook, OH 45305

David Gutridge 14,295(52) * 14,295 -- *
1611 Runnymeade Road
Dayton, OH 45419

Douglas E. Hailey 55,524(53) 1.17 46,293 9,231 *
100 Wall Street, 10th Floor
New York, N.Y. 10005

Bradley Hausfeld 7,148(54) * 7,148 -- *
400 Cherokee Drive
Dayton, OH 45427

Tom Hausfeld 7,148(55) * 7,148 -- *
400 Cherokee Drive
Dayton, OH 45427

Ervin Hendricks 5,882(56) * 5,882 -- *
371 Robert P. Jeans Road
Easly, SC 29640
</TABLE>

- 13 -

<PAGE> 16

SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Hilltop Offshore Limited 12,229(57) * 12,229 -- *
45 W. 45th Street, Suite 905
New York, NY 10036

Hilltop Partners, L.P. 54,409(58) 1.16 54,409 -- *
45 W. 45th Street, Suite 905
New York, NY 10036

Robert J. Holtgreive Individual Retirement 7,058(59) * 7,058 -- *
Account
3925 36th Street NW
Canton, OH 44718

Billy P. Hudson 2,352(60) * 2,352 -- *
326 Quail Ridge Road
Franklin, KY 42134

Paine Webber as IRA Custodian for Frank D. 9,474(61) * 5,882 3,592 *
Hutchinson, III
63 Covington Lane
Palm Coast, FL 32137

Industrial Grinding 4,705(62) * 4,705 -- *
Profit Sharing Plan U/A 10/01/84
2306 Ontario Ave.
Dayton, OH 45414

Lawrence K. Jackson & 4,705(63) * 4,705 -- *
Eileen M. Jackson
10650 Robert Drive
Chagrin Falls, OH 44022-4140

Ronnie Johnson 23,529(64) * 23,529 -- *
135 Calloway Lane
Union Grove, NC 28689

Howard Kalka 5,882(65) * 5,882 -- *
2 Knolls Dr.
Old Westbury, NY 11568

Felice M. Kantor 5,882(66) * 5,882 -- *
740 Oakwood Ave.
Dayton, OH 45419

Dr. Neil Kantor IRA R/O 5,882(67) * 5,882 -- *
740 Oakwood Avenue
Dayton, OH 45419

Dale Kaplan-Stein 38,737(68) * 11,764 26,973 *
Robert Kaplan-Stein
13429 NW 32 Place
Gainesville, FL 32606

Dale Sue Kaplan-Stein, IRA 38,737(69) * 6,329 32,408 *
13429 NW 32 Place
Gainesville, FL 32606
</TABLE>

- 14 -

Richard N. Kappel/Alicia L. Kappel 11,764(70) * 11,764 -- *
328 Narrows Trace
Xenia, OH 45385

Leslie Kaser 2,352(71) * 2,352 -- *
806 Appollo Avenue, Box 327
Osborne, KS 67473

Richard J. Kasten 4,705(72) * 4,705 -- *
1705 Clover Drive
Palatine, IL 60067-4637

The Key Group Inc. 28,589(73) * 28,589 -- *
19 Durham Drive
Dix Hills, NY 11746-5310

Lawrence Klein Revocable Living Trust 5,718(74) * 5,718 -- *
1973 West Alex-Bell Road
Dayton, OH 45459

Thomas & Paula Kreusch 14,295(75) * 14,295 -- *
525 Windsor Park Drive
Dayton, OH 45459

Lancer Offshore, Inc. 581,212(76) 12.61 414,546 166,666 2.82
Kaya, Flamboyan 9
P.O. Box 812
Willmstad Curacao
Netherlands Antilles

Lancer Voyager Fund 157,243(77) 3.41 157,243 -- *
Charlotte House
Charlotte Street
Nassau, Bahamas

Brian Scott Larson & Debra Lynn Larson, JT 14,429(78) * 5,882 8,547 *
3890 Davis Canyon Road
San Luis Obispo, CA 93405-8022

Ken Lawson 200(79) * 200 -- *
100 Wall Street, 10th Floor
New York, N.Y. 10005

Gustave L. Levinson 11,764(80) * 11,764 -- *
1200 Merriman Road
Akron, OH 44313

Ronald N. Magruder 23,529(81) * 23,529 -- *
203 Kensington Park
Nashville, TN 37215

James D. Matlock IRA 8,235(82) * 8,235 -- *
6888 Oakwood Grove
Houston, TX 77040

David F. McCartney 5,770(83) * 2,352 3,418 *
P.O. Box 1192
Paris, TN 38242
</TABLE>

- 15 -

SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Martin McCarty, Richman & Wright Co. LPA 7,058(84) * 7,058 -- *
26 North Wright Avenue
Fairborn, OH 45324

Donald B. And Jacqueline M. McCulloch 7,480(85) * 2,352 5,128 *
820 Oakmere Place
North Muskegon, MI 49445

Anthony R. Medici 2,352(86) * 2,352 -- *
37 Remington Drive
Edison, NJ 08070

Norman V. Meintel, IRA 5,718(87) * 5,718 -- *
5184 Pondoray Place
Dayton, OH 45440-2419

John E. Meyer 28,235(88) * 28,235 -- *
2520 Elam Road
Xenia, OH 45385

Patricia L. Meyer 4,705(89) * 4,705 -- *
616 Autumn Creek Drive
Fairborn, OH 45324

MH Capital Partners 21,442(90) * 21,442 -- *
237 Park Avenue, Suite 801
New York, NY 10017

Miami Valley 4,705(91) * 4,705 -- *
Worldwide Inc. 401(k) Pension Plan
P.O. Box 2408
Dayton, OH 45401

Mark Mickley 5,718(92) * 5,718 -- *
812 Country Club Drive
Howard, OH 43028

Rudolph Miles 3,529(93) * 3,529 -- *
3905 Flamingo
El Paso, TX 79902

R. Mike Miller 3,529(94) * 3,529 -- *
28 Chelian Key
Bellew, WA 98006

Steven A. Miller, 4,705(95) * 4,705 -- *
C.E. Liesner TTEE Steven A. Miller &
Cathy E. Liesner Rev. Tr. U/A 3/30/94
5990 Munger Road
Dayton, OH 45459

Thomas P. Morrissey 4,705(96) * 4,705 -- *
236 W. Detweiller Dr.
Peoria, IL 61615

James R. Murphy 5,718(97) * 5,718 -- *
7777 Washington Village Dr., Suite 290
Centerville, OH 45459
</TABLE>

- 16 -

<PAGE> 19

SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Douglas B. Odell 2,352(98) * 2,352 -- *
3 Imperial Landing
Westport, CT 06880

Richard Oh 4,712(99) * 2,712 2,000 *
100 Wall Street, 10th Floor
New York, N.Y. 10005

M. Orlandini 7,148(100) * 7,148 -- *
124 Gregg Parkway
Columbia, SC 29206

Fred Ostad 2,352(101) * 2,352 -- *
320 E. 65th Street, 619
New York, NY 10021

P-G Line, Inc. Corporate Investment 5,882(102) * 5,882 -- *
5154 Wesley Way
Columbus, OH 43214-7502

Vincent Palmieri 5,000(103) * 2,500 2,500 *
100 Wall Street, 10th Floor
New York, N.Y. 10005

Robert G. Paul 9,411(104) * 9,411 -- *
1965 Mornington Lane # 14
Cleveland Heights, OH 44106

Dubuque Bank & Trust Co., TTEE Dubuque 11,058(105) * 11,058 -- *
Orthopaedic Surgeons PC PS FBO James A.
Pearson
15002 West Station Road
East DuBuque, IL 61025

Thomas J. Pedrick Pension Plan 4,705(106) * 4,705 -- *
784 Northbridge Lane
Worthington, OH 43235

S.R. Penn, Jr. 28,858(107) * 11,764 17,094 *
P.O. Box 248
Columbia City, IN 46725

Donald L. Phlipot 10,588(108) * 10,588 -- *
2520 Deep Hollow Lane
Dayton, OH 45419-1305

R & D Investment Partnership, L.P. 115,737(109) 2.46 115,737 -- *
3821 St. Andrews Drive
Fairborn, OH 45324-9718

The R Trust 4,767(110) * 4,767 -- *
45 W. 45th Street, Suite 905
New York, NY 10036

Louis Randle 2,352(111) * 2,352 -- *
P.O. Box 681248
Indianpolis, IN 46268
</TABLE>

- 17 -

<PAGE> 20

SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
David Random 4,705(112) * 4,705 -- *
54-6 Oak Street
Beverly Farms, MA 01915

The Rebecca Trust 2,280(113) * 2,280 -- *
45 W. 45th Street, Suite 905
New York, NY 10036

Michael E. Recca 50,945(114) 1.12 36,176 14,769 *
100 Wall Street, 10th Floor
New York, N.Y. 10005

Karl Reeves 775(115) * 350 425 *
100 Wall Street, 10th Floor
New York, N.Y. 10005

First Trust National Association Trustee 2,352(116) * 2,352 -- *
Dorsey & Whitney Master Trust FBO Rein
P.O. Box 64488
St. Paul, MN 55164

Ronald Reshefsky 4,705(117) * 4,705 -- *
7842 Afton Villa Court
Boca Raton, FL 33433

Aubrey L. Roberts IRA 5,647(118) * 5,647 -- *
P.O. Box 1521
Abilene, TX 79604

Thomas L. Ross 4,941(119) * 4,941 -- *
& Verna A. Ross TTEE FBO The Ross Family
Trust
Route 1, Box 170
Pelkie, MI 49958-9743

Edwin L. Ryan, Jr. Individual Retirement 11,763(120) * 7,058 4,705 *
Account
1974 Woodson Ct.
Dayton, OH 45459

Edwin L. Ryan, Jr. 11,763(121) * 4,705 7,058 *
1974 Woodson Ct.
Dayton, OH 45459

Jeffrey L. Sadar and 2,352(122) * 2,352 -- *
Barbara A. Sadar
6640 Ridgebury Boulevard
Mayfield Heights, OH 44124

Robert Schroeder 6,250(123) * 1,250 5,000 *
100 Wall Street, 10th Floor
New York, N.Y. 10005

Lawrence S. Smith 2,352(124) * 2,352 -- *
273 Dolly Road
Contoocook, NH 03229

William C. Smith Jr. 2,352(125) * 2,352 -- *
17650 A.L. Philpott Highway
Martinsville, VA 24112
</TABLE>

- 18 -

<PAGE> 21

SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
George Souaid 11,064(126) * 11,064 -- *
1111 Crandon Boulevard B 1201
Key Biscayne, FL 33149

Gordon Souaid 5,182(127) * 5,182 -- *
406 Holiday Drive
Hallandale, FL 33009

Robert G. Souaid 21,427(128) * 21,427 -- *
6440 North Bay Road
Miami Beach, FL 33141-4516

MidAm/Investment & Trust Services, Custodian 18,823(129) * 18,823 -- *
For: Spangler Candy & Related Companies
Retirement Plan
400 N. Portland Street
Bryan, OH 43506

Sharon Feldman Stauber 31,583(130) * 19,036 12,547 *
4080 N. 41st Street
Hollywood, FL 33021

Grover, Ciment, Weinstein, Stauber & 119,610(131) 2.47 44,253 75,357 1.28
Friedman, P.A. Money Purchase Pension Plan
and Trust F.B.O. Sherwin Stauber
4607 Meridian Avenue
Miami Beach, FL 33140

Arthur D. Sterling 11,764(132) * 11,764 -- *
3000 Northmoor Trail
Michigan City, IN 46360

MLPF & S Cust. 7,058(133) * 7,058 -- *
FBO Robert R. Strempel IRA
2 Marsh Winds Island
Hilton Head Island, SC 29926

Alice V. Suttman 7,148(134) * 7,148 -- *
6665 Tifton Green Trail
Centerville, OH 45459

Alice V. Suttman IRA 4,705(135) * 4,705 -- *
6665 Tifton Green Trail
Centerville, OH 45459

Dr. Herbert Swerdlow 4,705(136) * 4,705 -- *
15300 SW 81 Avenue
Miami, FL 33157

Eugene Szczepanski 14,429(137) * 5,882 8,547 *
35 Highland Avenue
Worthington, OH 43085

James L. Tadych 11,764(138) * 11,764 -- *
T & C Market
205 N. Main Street
Brillion, WI 54110

Taglich Brothers, D'Amadeo, Wagner & 196,527(139) 4.22 16,939 179,588 3.04
Company, Incorporated
100 Wall Street, 10th Floor
New York, NY 10005
</TABLE>

- 19 -

SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Michael Taglich 88,696(140) 1.91 47,752 40,944 *
100 Wall Street
New York, NY 10005

Michael Taglich IRA 88,696(141) 1.91 6,823 81,873 1.39
100 Wall Street
New York, NY 10005

Robert F. Taglich 88,696(142) 1.91 54,575 34,121 *
100 Wall Street, 10th Floor
New York, NY 10005

Raybourne Thompson, Jr. Personal Portfolio 29,176(143) * 29,176 -- *
1001 Fannin, Suite 3227
Houston, TX 77002-6760

William R. Thompson 6,823(144) * 6,823 -- *
3573 Springdale Drive
Dayton, OH 45419

EMJAY Co. F.B.O. Thuemling Industrial 5,882(145) * 5,882 -- *
Products
P.O. Box 17909
Milwaukee, WI 53217

Arthur M. Toback 5,182(146) * 5,182 -- *
Lakeway Drive
Brewster, NY 10509

Lois A. Vickers 9,176(147) * 9,176 -- *
539 East Washington Street
Chagrin Falls, OH 44022

Milton J. Wallace and 418,007(148) 8.53 5,882 412,125 6.65
Regina T. Wallace, Joint Tenants
2222 Ponce De Leon Blvd, # 600
Coral Gables, FL 33134

Grover, Ciment, Weinstein, Stauber & 113,728(149) 2.44 37,991 75,737 1.28
Friedman, P.A. Money Purchase Pension Plan
and Trust F.B.O. Marvin Weinstein
777 Arthur Godfrey Road, 2nd Floor
Miami Beach, FL 33140

George H. Welsh 8,235(150) * 8,235 -- *
Revocable Living Trust Dtd. 8/1/90 - Trust B
6717 Tifton Green Trail
Centerville, OH 45459-6225

Billy A. West 8,235(151) * 8,235 -- *
Trust Billy A. West Trustee
3841 St. Andrews Drive
Fairborn, OH 45324

Wheat First Butcher Singer, Inc. 12,000(152) * 12,000 -- *
7777 Washington Village Drive, Suite 210
Dayton, OH 45459
</TABLE>

- 20 -

<PAGE> 23

SHARES TO BE
SHARES BENEFICIALLY BENEFICIALLY OWNED
NAME AND ADDRESS OF SELLING STOCKHOLDER OWNED PRIOR TO OFFERING AFTER OFFERING
- ---------------------------------------------- -------------------------- SHARES BEING -------------------------
SHARES PERCENT OFFERED(2) NUMBER PERCENT(2)
-------------- ---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Richard Wick 7,148(153) * 7,148 -- *
2306 Ontario Avenue
Dayton, OH 45414

Gem City 7,058(154) * 7,058 -- *
Emergency Associates, Inc. Pension Trust FBO
Craig F. Williams, M.D.
6649 Stamford Place
Centerville, OH 45459

Ann W. Williamson 3,529(155) * 3,529 -- *
P.O. Box 86
Meridan, MS 39302-0086

Retirement Accounts & Co. FBO Stuart H. 11,727(156) * 11,727 -- *
Winston
P.O. Box 173785
Denver, CO 80217-3785

Paul R. Winter 2,352(157) * 2,352 -- *
1910 E. 86th Street
Bloomington, MN 55425

Wolfson Equities 7,930(158) * 7,930 -- *
45 W. 45th Street, Suite 905
New York, NY 10036

Wolfson Family Trust 6,011(159) * 6,011 -- *
45 W. 45th Street, Suite 905
New York, New York 10036

Wolfson Grandchildren Trust 1,658(160) * 1,658 -- *
45 W. 45th Street, Suite 905
New York, NY 10036

Zev W. Wolfson IRA Rollover 10,778(161) * 10,778 -- *
One State Street Plaza
New York, NY 10004

John R. Worthington 9,411(162) * 9,411 -- *
1801 Pennsylvania Avenue, N.W.
Washington, D.C. 20006-3606

Ronald L. Eubel 778,367(163) 16.59 778,367 -- *
7777 Washington Village Drive, Suite 210
Dayton, OH 45459

Mark E. Brady 778,367(163) 16.59 778,367 -- *
7777 Washington Village Drive, Suite 210
Dayton, OH 45459

Robert J. Suttman, II 778,367(163) 16.59 778,367 -- *
7777 Washington Village Drive, Suite 210
Dayton, OH 45459

Eubel, Brady & Suttman Asset 777,367(163) 16.59 778,367 -- *
Management, Inc.
7777 Washington Village Drive, Suite 210
Dayton, OH 45459

Laifer Capital Management, Inc. 100,062(164) 2.25 100,062 -- *
45 W. 45th Street, 9th Floor
New York, N.Y. 10036
</TABLE>

- ----------------------------------------

* Less than one percent.

(1) Based upon 4,628,747 shares of Common Stock outstanding. Each
beneficial owner's percentage is determined by assuming that Series A
Preferred Stock and warrants that are held by such person (but not
those held by any other person) have been converted or exercised,
respectively.
(2) Based upon 5,900,758 shares of Common Stock to be outstanding
assuming that all Series A Preferred Stock and warrants have been
converted or exercised, respectively.
(3) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; (ii) 5,882 shares of Common Stock
owned by 75 West Phase II, Inc.; (iii) 20,644 shares of Common Stock
owned by Dale and Robert Kaplan Stein and (iv) 6,329 shares of Common
Stock owned by the Dale-Sue Kaplan-Stein IRA.

- 21 -

<PAGE> 24

(4) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; (ii) 5,882 shares of common stock
owned by 75 West Phase I Partnership; (iii) 20,644 shares of common
stock owned by Dale and Robert Kaplan Stein and (iv) 6,329 shares of
common stock owned by the Dale-Sue Kaplan-Stein IRA.
(5) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(6) Includes (i) 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock and (ii) 17094 shares underlying 10%
convertible redeemable debentures ("Debentures").
(7) Includes 3,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(8) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(9) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(10) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(11) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(12) Includes 3,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(13) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(14) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(15) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(16) Includes (i) 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 101 shares of Common Stock
issuable upon exercise of Common Warrants.
(17) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(18) Includes (i) 8,078 shares of Common Stock underlying Series A Warrants;
(ii) 10,840 shares of Common Stock issuable upon exercise of Placement
Warrants; and (iii) 9,231 shares of Common Stock issuable upon exercise
of other warrants.
(19) Includes 201 shares of Common Stock issuable upon exercise of Common
Warrants.
(20) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and 8,547 shares of common stock
issuable upon conversion of Debentures.
(21) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(22) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(23) Includes 2,006 shares of Common Stock issuable upon exercise of Common
Warrants
(24) Includes 201 shares of Common Stock issuable upon exercise of Common
Warrants
(25) Includes (i) 16,962 shares of Common Stock issuable upon exercise of
Series A Warrants; (ii) 14,527 shares of Common Stock issuable upon
exercise of Placement Warrants; (iii) 4,585 shares of Common Stock
issuable upon exercise of other warrants; and (iv) 16,939 shares of
Common Stock beneficially owned by Taglich Brothers, D'Amadeo and
Company, Incorporated, of which Mr. D'Amadeo is a principal.
(26) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(27) Includes (i) 20,063 shares of Common Stock issuable upon exercise of
Common Warrants; and (ii) 118,803 shares issuable upon conversion of
Debentures.
(28) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(29) Includes (i) 28,235 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 451 shares of Common Stock
issuable upon exercise of Common Warrants.
(30) Includes (i) 80,000 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 1,254 shares of Common
Stock issuable upon exercise of Common Warrants.

- 22 -

<PAGE> 25

(31) Includes 23,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(32) Includes 17,647 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(33) Includes 9,411 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(34) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(35) Includes 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(36) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(37) Includes (i) 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 17,094 shares of Common
Stock issuable upon conversion of Debentures.
(38) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(39) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 8,547 shares of Common
Stock issuable upon conversion of Debentures.
(40) Includes 10,588 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(41) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(42) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(43) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 8,547 shares of Common
Stock issuable upon conversion of Debentures.
(44) Includes 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(45) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(46) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(47) Includes 251 shares of Common Stock issuable upon exercise of Common
Warrants.
(48) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(49) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(50) Includes (i) 17,646 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 727 shares of Common Stock
issuable upon exercise of Common Warrants.
(51) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(52) Includes 502 shares of Common Stock issuable upon exercise of Common
Warrants.
(53) Includes (i) 23,300 shares of Common Stock issuable upon exercise of
Series A Warrants; (ii) 22,993 shares of Common Stock issuable upon
exercise of Placement Warrants; and (iii) 9,231 shares of Common Stock
issuable upon exercise of other Warrants.
(54) Includes 251 shares of Common Stock issuable upon exercise of Common
Warrants.
(55) Includes 251 shares of Common Stock issuable upon exercise of Common
Warrants.
(56) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(57) Includes 429 shares of Common Stock issuable upon exercise of Common
Warrants.
(58) Includes 1,909 shares of Common Stock issuable upon exercise of Common
Warrants.
(59) Includes 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(60) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(61) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.

- 23 -

<PAGE> 26

(62) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(63) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(64) Includes 23,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(65) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(66) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(67) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(68) Includes (i) 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; (ii) 5,882 shares of Common Stock
owned by 75 West Phase I Partnership; (iii) 5,882 shares of Common
Stock owned by 75 West Phase II, Inc.; and (iv) 6,329 shares of Common
Stock owned by the Dale-Sue Kaplan-Stein IRA.
(69) Includes (i) 6,329 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; (ii) 5,882 shares of Common Stock
owned by 75 West Phase I Partnership; (iii) 5,882 shares of Common
Stock owned by 75 West Phase II, Inc.; and (iv) 20,644 shares of Common
Stock owned by Dale and Robert Kaplan Stein.
(70) Includes 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(71) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(72) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(73) Includes 1,003 shares of Common Stock issuable upon exercise of Common
Warrants.
(74) Includes 201 shares of Common Stock issuable upon exercise of Common
Warrants.
(75) Includes 502 shares of Common Stock issuable upon exercise of Common
Warrants.
(76) Includes 14,546 shares of Common Stock issuable upon exercise of
Common Warrants.
(77) Includes 5,518 shares of Common Stock issuable upon exercise of Common
Warrants.
(78) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 8,547 shares of Common
Stock issuable upon conversion of Debentures.
(79) Includes 200 shares of Common Stock issuable upon exercise of Series A
Warrants.
(80) Includes 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(81) Includes 23,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(82) Includes 8,235 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(83) Includes (i) 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 3,418 shares of Common
Stock issuable upon conversion of Debentures.
(84) Includes 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(85) Includes (i) 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 5,128 shares of Common
Stock issuable upon conversion of Debentures.
(86) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(87) Includes 201 shares of Common Stock issuable upon exercise of Common
Warrants.
(88) Includes 28,235 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(89) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(90) Includes 752 shares of Common Stock issuable upon exercise of Common
Warrants.
(91) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.

- 24 -

<PAGE> 27

(92) Includes 201 shares of Common Stock issuable upon exercise of Common
Warrants.
(93) Includes 3,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(94) Includes 3,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(95) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(96) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(97) Includes 201 shares of Common Stock issuable upon exercise of Common
Warrants.
(98) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(99) Includes (i) 1,212 shares of Common Stock issuable upon exercise of
Series A Warrants; (ii) 1,500 shares of Common Stock issuable upon
exercise of Placement Warrants; and (iii) 2,000 shares of Common Stock
issuable upon exercise of other warrants.
(100) Includes 251 shares of Common Stock issuable upon exercise of Common
Warrants.
(101) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(102) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(103) Includes (i) 1,000 shares of Common Stock issuable upon exercise of
Series A Warrants; (ii) 1,500 shares of Common Stock issuable upon
exercise of Placement Warrants; and (iii) 2,500 shares of Common Stock
issuable upon exercise of other warrants.
(104) Includes 9,411 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(105) Includes 11,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(106) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(107) Includes (i) 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 17,094 shares of Common
Stock issuable upon conversion of Debentures.
(108) Includes 10,588 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(109) Includes (i) 80,000 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 1,254 shares of Common
Stock issuable upon exercise of Common Warrants.
(110) Includes 167 shares of Common Stock issuable upon conversion of
Debentures.
(111) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(112) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(113) Includes 80 shares of Common Stock issuable upon exercise of
Debentures.
(114) Includes (i) 16,078 shares of Common Stock issuable upon exercise of
Series A Warrants; (ii) 20,098 shares of Common Stock issuable upon
exercise of Placement Warrants; and (iii) 14,769 shares of Common Stock
issuable upon exercise of other warrants.
(115) Includes (i) 350 shares of Common Stock issuable upon exercise of
Series A Warrants; and (ii) 4,253 shares of Common Stock issuable upon
exercise of other warrants.
(116) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(117) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(118) Includes 5,647 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(119) Includes 4,941 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(120) Includes (i) 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 4,705 shares of Common
Stock beneficially by Edwin L. Ryan, Jr.

- 25 -

<PAGE> 28

(121) Includes (i) 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and 7,058 shares of Common Stock
beneficially by Edwin L. Ryan, Jr. Individual Retirement Account.
(122) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(123) Includes (i) 1,250 shares of Common Stock issuable upon exercise of
Placement Warrants; and (ii) 5,000 shares of Common Stock issuable upon
exercise of other warrants.
(124) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(125) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(126) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 182 shares of Common Stock
issuable upon exercise of Common Warrants.
(127) Includes 182 shares of Common Stock issuable upon exercise of Common
Warrants.
(128) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 545 shares of Common Stock
issuable upon exercise of Common Warrants.
(129) Includes 18,823 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(130) Includes (i) 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; (ii) 145 shares of Common Stock
issuable upon exercise of Common Warrants; and (iii) 8,547 shares of
Common Stock issuable upon conversion of Debentures. Ms. Stauber is the
sister-in-law of Daniel A. Stauber, President and Chief Executive
Officer of the Company.
(131) Includes (i) 23,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 727 shares of Common Stock
issauble upon exercise of Common Warrants. Mr. Stauber is the father of
Daniel A. Stauber, President and Chief Executive Officer of the
Company.
(132) Includes 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(133) Includes 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(134) Includes 251 shares of Common Stock issuable upon exercise of Common
Warrants.
(135) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(136) Includes 4,705 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(137) Includes (i) 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 8,547 shares of Common
Stock issuable upon conversion of Debentures.
(138) Includes 11,764 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(139) Includes (i) 594 shares of Common Stock issuable upon exercise of
Common Warrants; (ii) 71,757 shares of Common Stock beneficially owned
by Michael Taglich, a principal of such company; (iii) 71,757 shares of
Common Stock beneficially owned by Robert Taglich, a principal of such
company; and (iv) 36,074 shares of Common Stock beneficially owned by
Joseph D'Amadeo, a principal of such company.
(140) Includes (i) 2,588 shares of Common Stock issuable upon conversion of
Shares of Series A Preferred Stock; (ii) 16,962 shares of Common Stock
issuable upon exercise of Series A Warrants; (iii) 14,527 shares of
Common Stock issuable upon exercise of Placement Warrants; (iv) 13,675
shares of Common Stock issuable upon conversion of Debentures; (v)
6,823 shares of Common Stock beneficially owned by Michael Taglich,
IRA; (vi) 16,939 shares of Common Stock beneficially owned by Taglich
Brothers, D'Amedeo, Wagner & Company, Incorporated; and (vii) 17,182
shares of Common Stock issuable upon exercise of other warrants.
(141) Includes (i) 6,823 shares of Common Stock issuable upon conversion of
Series A Preferred Stock; (ii) 64,934 shares of Common Stock
beneficially owned by Michael Taglich, individually; and (iii) 16,939
shares of Common Stock beneficially owned by Taglich Brothers,
D'Amedeo, Wagner & Company, Incorporated.
(142) Includes (i) 9,411 shares of Common Stock issuable upon conversion of
Series A Preferred Stock (ii) 16,962 shares of Common Stock issuable
upon exercise of Series A Warrants; (iii) 14,527 shares of Common Stock
issuable upon exercise of Placement Warrants; (iv) 13,675 shares of
Common Stock

- 26 -

<PAGE> 29

issuable upon conversion of Debentures; (v) 16,939 shares of Common
Stock beneficially owned by Taglich Brothers, D'Amedeo, Wagner &
Company; (vi) 17,182 shares of Common Stock issuable upon exercise of
other warrants.
(143) Includes 29,176 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(144) Includes 6,823 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(145) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(146) Includes 182 shares of Common Stock issuable upon exercise of Common
Warrants.
(147) Includes 9,176 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(148) Includes 5,882 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; (ii) 9,375 shares of Common Stock
beneficially owned by a corporation of which Mr. Wallace is president,
director and a controlling shareholder; (iii) 2,500 shares owned by his
wife as custodian for a minor child; and (iv) 297,250 shares of Common
Stock issuable upon exercise of options. Mr. Wallace is Chairman of the
Board of the Company.
(149) Includes (i) 17,647 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock; and (ii) 727 shares of Common Stock
issuable upon exercise of Common Warrants.
(150) Includes 8,235 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(151) Includes 8,235 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(152) Includes 12,000 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(153) Includes 251 shares of Common Stock issuable upon exercise of Common
Warrants.
(154) Includes 7,058 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(155) Includes 3,529 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(156) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(157) Includes 2,352 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.
(158) Includes 278 shares of Common Stock issuable upon exercise of Common
Warrants.
(159) Includes 211 shares of Common Stock issuable upon exercise of Common
Warrants.
(160) Includes 58 shares of Common Stock issuable upon exercise of Common
Warrants.
(161) Includes 378 shares of Common Stock issuable upon exercise of Common
Warrants.
(162) Includes 9,411 shares of Common Stock issuable upon conversion of
shares of Series A Preferred Stock.

(163) Such individuals are investment advisers and principals of Eubel, Brady
& Suttman Asset Management, Inc., a registered investment advisor.
Includes (i) 7,058 shares of Common Stock beneficially owned by Robert
J. Holtgreive; (ii) 115,737 shares of Common Stock beneficially owned
by R&D Investment Partners, LP; (iii) 4,705 shares of Common Stock
beneficially owned by Baker-Hazel Funeral Home; (iv) 4,705 shares of
Common Stock beneficially owned by Baker-Hazel Funeral Home Employee
Pension Plan; (v) 8,235 shares of Common Stock beneficially owned by
Billy A. West Trust; (vi) 115,737 shares of Common Stock beneficially
owned by EBS Partners, LP; (vii) 4,705 shares of Common Stock
beneficially owned by Hilliard Lyons Custodian for Thomas J. Pedrick;
(viii) 8,235 shares of Common Stock beneficially owned by James D.
Matlock IRA; (ix) 29,176 shares of Common Stock beneficially owned by
Raybourne Thompson, Jr.; (x) 5,882 shares of Common Stock beneficially
owned by Gem City Emergency Associates, Inc. Pension Trust FBO Robert
A. Uptmor, M.D.; (xi) 10,588 shares of Common Stock beneficially owned
by Gem City Emergency Associates, Inc. Pension Trust FBO Richard
Coalson, M.D.; (xii) 5,647 shares of Common Stock beneficially owned by
Aubrey L. Roberts IRA; (xiii) 7,058 shares of Common Stock beneficially
owned by Gem City Emergency Associates, Inc. Pension Trust FBO Craig F.
Williams, M.D.; (xiv) 11,764 shares

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<PAGE> 30

of Common Stock beneficially owned by Richard N. Kappel / Alicia L.
Kappel; (xv) 10,588 shares of Common Stock beneficially owned by
Donald L. Phlipot; (xvi) 7,058 shares of Common Stock beneficially
owned by MLPF & S Cust. FBO Robert R. Strempel IRA; (xvii) 5,882
shares of Common Stock beneficially owned by P-G Line Inc. Corporate
Investment; (xviii) 5,882 shares of Common Stock beneficially owned by
Kettering Anesthesia Assoc. P & P/S Retirement Plan FBO Augustus A.
Gullett; (xix) 4,705 shares of Common Stock beneficially owned by
Industrial Grinding Profit Sharing Plan U/A 10/01/84; (xx) 4,705
shares of Common Stock beneficially owned by Edwin L. Ryan, Jr.; (xxi)
12,000 shares of Common Stock beneficially owned by EBS Asset
Management P/S Plan; (xxii) 17,647 shares of Common Stock beneficially
owned by Custodian for John C. Ernst Revocable Trust; (xxiii) 11,058
shares of Common Stock beneficially owned by Dubuque Bank & Trust Co.,
TTEE Dubuque Orthopaedic Surgeons PC PS FBO James A. Pearson; (xxiv)
6,823 shares of Common Stock beneficially owned by William R.
Thompson; (xxv) 9,176 shares of Common Stock beneficially owned by
Custodian for Lois A. Vickers Personal Portfolio; (xxvi) 4,705 shares
of Common Stock beneficially owned by Miami Valley Worldwide Inc.
401(K) Pension Plan; (xxvii) 18,823 shares of Common Stock
beneficially owned by MidAm / Investment & Trust Services Custodian
for Spangler Candy & Related Companies Retirement Plan; (xxviii) 5,882
shares of Common Stock beneficially owned by Francis A. Bonanno;
(xxix) 7,058 shares of Common Stock beneficially owned by John Eubel -
Mutual Fund/Keogh PS Voluntary; (xxx) 4,705 shares of Common Stock
beneficially owned by Alice V. Suttman IRA; (xxxi) 5,882 shares of
Common Stock beneficially owned by Felice M. Kantor; (xxxi) 4,705
shares of Common Stock beneficially owned by Lawrence K. Jackson &
Eileen M. Jackson Personal Joint Portfolio; (xxxii) 7,058 shares of
Common Stock beneficially owned by Martin, McCarty, Richman & Wright
Co. LPA; (xxxiii) 7,058 shares of Common Stock beneficially owned by
Edwin L. Ryan, Jr.; (xxxiv) 9,411 shares of Common Stock beneficially
owned by Michael E. Ervin, MD; (xxxv) 4,941 shares of Common Stock
beneficially owned by Thomas L. Ross & Verna A. Ross TTEE; (xxxvi)
8,235 shares of Common Stock beneficially owned by George H. Welsh
Revocable Living Trust Dtd. 8/1/90 - Trust B; (xxxvii) 5,882 shares of
Common Stock beneficially owned by Dr. Neil Kanto IRA Rollover;
(xxxviii) 28,235 shares of Common Stock beneficially owned by John E.
Meyer; (xxxix) 4,705 shares of Common Stock beneficially owned by
Steven A. Miller, C.E. Liesner TTEE Steven A. Miller & Cathy E.
Liesner Rev. Tr. U/A 3/30/94; (xl) 4,705 shares of Common Stock
beneficially owned by Patricia L. Meyer; (xli) 41,100 shares of Common
Stock beneficially owned by EBS Microcap Partners, L.P.; (xlii) 4,705
shares of Common Stock beneficially owned by Robert Colaizzi; (xliii)
7,148 shares of Common Stock beneficially owned by Alice V. Suttman;
(xliv) 14,295 shares of Common Stock beneficially owned by Thomas &
Paula Kreusch; (xlv) 5,718 shares of Common Stock beneficially owned
by Norman V. Meintal, IRA; (xlvi) 5,718 shares of Common Stock
beneficially owned by Mark Mickley; (xlvii) 5,718 shares of Common
Stock beneficially owned by James R. Murphy; (xlviii) 7,148 shares of
Common Stock beneficially owned by M. Orlandini; (xlix) 7,148 shares
of Common Stock beneficially owned by Richard Wick; (xlx) 2,859 shares
of Common Stock beneficially owned by John Bradley 401k; (xlxi) 5,718
shares of Common Stock beneficially owned by John F. and Pamela S.
Carroll; (xlxii) 57,178 shares of Common Stock beneficially owned by
Conner & Murphy; (xlxiii) 5,718 shares of Common Stock beneficially
owned by Tim Cornell, IRA; (xlxiv) 7,148 shares of Common Stock
beneficially owned by Jean B. Gordon; (xlxv) 14,295 shares of Common
Stock beneficially owned by David Gutridge; (xlxvi) 7,148 shares of
Common Stock beneficially owned by Bradley Hausfeld; (xlxvii) 7,148
shares of Common Stock beneficially owned by Tim Hausfeld; and
(xlxviii) 5,718 shares of Common Stock beneficially owned by Lawrence
Klein Revocable Living Trust.

(164) Includes (i) 12,229 shares of Common Stock beneficially owned by
Hilltop Offshore Limited; (ii) 54,409 shares of Common Stock
beneficially owned by Hilltop Partners, L.P.; (iii) 4,767 shares of
Common Stock beneficially owned by The R Trust; (iv) 2,280 shares of
Common Stock beneficially owned by the Rebecca Trust; (v) 7,930 shares
of Common Stock beneficially owned by Wolfson Equities; (vi) 6,011
shares of Common Stock beneficially owned by the Wolfson Family Trust;
(vii) 1,658 shares of Common Stock beneficially owned by the Wolfson
Grandchildren Trust and (viii) 10,778 shares of Common Stock
beneficially owned by Zev W. Wolfson, IRA Rollover.

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.

There are no material relationships between any of the Selling
Stockholders and the Company or any of its predecessors or affiliates, nor have
any such material relationships existed within the past three (3) years, except
as indicated in the footnotes above.

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<PAGE> 31
DESCRIPTION OF SECURITIES

The Company has 26,000,000 shares of authorized Common Stock, par value
$0.001 per share, of which 4,628,747 shares of Common Stock are issued and
outstanding, and 4,000,000 shares of preferred stock, of which 42,969 shares of
Series A Preferred Stock are outstanding. Assuming the conversion of all shares
of Series A Preferred Stock and exercise of the warrants, the Company would have
5,900,758 shares of Common Stock outstanding.

COMMON STOCK. Each share of Common Stock is entitled to one vote either
in person or by proxy in all matters that can be voted upon by the holders
thereof at any and all meetings of the stockholders. The holders of Common Stock
(i) have equal ratable rights to dividends from funds legally available
therefore when, as and if declared by the Board of Directors of the Company;
(ii) are entitled to share ratably in all of the assets of the Company available
for distribution to holders of Common Stock upon liquidation, dissolution or
winding up of the affairs of the Company, after the satisfaction of all
liabilities of the Company any liquidation preference granted to the holders of
any class of Preferred Stock then outstanding, if any; (iii) do not have any
preemptive, subscriptive or conversion rights; and (iv) do not have any
redemption or sinking fund provisions applicable thereto.

The Certificate of Incorporation does not provide for cumulative
voting. Therefore, stockholders do not have the right to aggregate their votes
for the election of directors and, accordingly, stockholders holding more than
50% of the shares of Common Stock outstanding can elect all of the directors.

PREFERRED STOCK. The Company is authorized to issue 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.

SERIES A PREFERRED STOCK

GENERAL. The Series A Preferred Stock has been authorized as a series
consisting of 60,000 shares, of which 42,969 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 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

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<PAGE> 32
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.

EXCHANGE RIGHTS. The Company is required to offer to all holders of
Series A Preferred Stock the right to exchange their shares of Series A
Preferred Stock for any securities to which the Company may sell in any private
placement through March 31, 1998. The Company is required to provide notice of
any such sale to the holders of Series A Preferred Stock, and the holders of
Series A Preferred Stock shall have 15 days within which to elect to exchange
such shares. The exchange shall be based upon the original purchase price of the
Series A Preferred Stock and the value of the securities issued in the private
placement. Upon such exchange, if any, such shares of Series A Preferred Stock
would be cancelled of record.

WARRANTS.

In connection with the private placement of the Series A Preferred
Stock, the Company issued Series A Warrants to purchase 101,104 shares of Common
Stock exercisable until October 31, 2002 at an initial exercise price of $4.25
per share to the placement agent of the private placement conducted in October
1997. The Series A Warrant exercise price is subject to certain adjustment
provisions as described below. The placement agent distributed the Series A
Warrants to various employees and agents of the placement agent.

In connection with a private placement of Common Stock, the Company
issued an aggregate of 58,185 Common Warrants to the purchasers of such Common
Stock. Each Common Warrant entitles the holder to purchase one share of common
stock at an exercise price of $3.625 per share until December 8, 2002. In
connection with the private placement of Common Stock, the Company issued
Placement Warrants to purchase 101,762 shares of Common Stock. Of the Placement
Warrants, 70,180 Placement Warrants each

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<PAGE> 33

entitle the holder to purchase one (1) share of Common Stock at an exercise
price of $5.00 per share until November 6, 2002 and 31,582 Placement Warrants
each entitle the holder to purchase one (1) share of Common Stock at $4.50 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.

The Company is not required to issue fractional shares upon exercise of
any warrants, but may make cash payments thereof, based on the then market price
of the Common Stock. No holder of any 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 reclassifications 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.

REGISTRATION RIGHTS. The Company has agreed to prepare and file with
the SEC a registration statement (the "Registration Statement") on the
appropriate form under the Act, with respect to the shares of Common Stock
issued or issuable upon conversion of the Series A Preferred Stock, as well as
the shares of Common Stock issuable upon the exercise of the Series A Warrants
by December 31, 1997. The Company will use its best efforts to have the
Registration Statement become effective and to keep such Registration Statement
effective for a period of three (3) years following December 31, 1997. If the
Registration Statement is not filed within sixty (60) days or is not declared
effective by February 28. 1998, the Conversion Price shall be reduced (and
concomitantly the number of shares of Common Stock issuable upon conversion or
exercise of the Series A Preferred Stock and Series A Warrants, respectively
shall increase) by two (2%) percent for each month, or any part thereof, beyond
the respective periods, as applicable, until the Registration Statement is filed
or declared effective. Holders of Series A Preferred Stock also have certain
"piggy-back" registration rights regarding the underlying Common Stock, subject
to certain restrictions.

The Company agreed to register the shares of Common Stock issued in the
private placement completed on December 8, 1997, as well as the shares of Common
Stock issuable upon the exercise of the Common Warrants and Placement Warrants
pursuant to the Act by December 21, 1997. If such Registration Statement was not
declared effective by March 21, 1998, the holders of such Common Stock shall be
entitled to receive an additional five (5%) shares for each month, or any part
thereof, beyond the respective periods. The Company agreed to pay all costs of
registration.

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

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("Business Combinations") between the corporation and the Interested Stockholder
(unless certain conditions, described below, are met): (a) mergers or
consolidations, (b) sales, leases, exchanges or other transfers of ten percent
(10%) or more of the aggregate assets of the corporation, (c) issuance or
transfers by the corporation of any stock of the corporation which would have
the effect of increasing the Interested Stockholder's proportionate share of the
stock of any class or series of the corporation, (d) any other transaction which
has the effect of increasing the proportionate share of the stock of any class
or series of the corporation which is owned by the Interested Stockholder, and
(e) receipt by the Interested Stockholder of the benefit (except proportionately
as a stockholder) of loans, advances, guarantees, pledges or other financial
benefits provided by the corporation.

The three-year ban does not apply if either the proposed transaction or
the transaction by which the Interested Stockholder became an Interested
Stockholder is approved by the Board of Directors of the corporation prior to
the date such stockholder became an Interested Stockholder. Additionally, an
Interested Stockholder may avoid the statutory restriction if, upon the
consummation of the transaction whereby such stockholder became an Interested
Stockholder, the stockholder owns at least 855 of the outstanding voting stock
of the corporation without regard to those shares owned by the corporation's
officers and directors or certain employee stock plans. In addition, any
transaction is exempt from the statutory ban if it is proposed at a time when
the corporation has proposed, and a majority of certain continuing directors of
the corporation have approved, a transaction with a party who is not an
Interested Stockholder of the corporation (or who becomes such with board
approval) if the proposed transaction involves (a) certain merger or
consolidations involving the corporation, (b) a sale or other transfer of over
fifty percent (50%) of the aggregate assets of the corporation, or (c) a tender
or exchange offer for fifty percent (50%) or more of the outstanding voting
stock of the corporation.

A corporation may, at its option, exclude itself from the coverage of
Section 203 by amending its charter or by-laws by action of its stockholders to
exempt itself from coverage, provided that such by-law or charter amendment
shall not become effective until twelve (12) months after the date it is
adopted. The Company has not adopted such a charter or by-law amendment.

Included in the rights of any series of preferred stock which may be
set by the Board of Directors may be voting rights, if any. It is possible that
the Board of Directors could authorized and issue to persons, including existing
management, a series of preferred stock with class voting rights which might
have the effect of discouraging a takeover attempt or a tender offer. Any such
issuance would have to be made for a valid business purpose and for adequate
consideration from the recipient of the preferred stock.

The Company's by-laws contain provisions relating to notice of
stockholder meetings which would prohibit a stockholder from nominating a person
for the Board of Directors or proposing certain actions relating to the
Company's business without advance written notice to the Company. Such written
notice must be a minimum of thirty (30) days prior to a stockholders' meeting
and must contain specific information about the nominee and the stockholder who
makes such nomination or proposal.

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

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<PAGE> 35

of the corporation or is, or was, serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise (including an employee benefit plan),
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlements actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.

No indemnification may be made in respect to any claim, issue, or
matter brought by or in the right of the corporation as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such action
or suit was brought shall determine that, despite the adjudication of liability
but in view of all of the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper.

The indemnification provided in Section 145 is not exclusive of any
other right of indemnification. A corporation is empowered to purchase and
maintain insurance on behalf of such persons against any liability asserted
against them in such capacities, whether or not the corporation would have the
right to indemnification against such liabilities under Section 145.

Subsection (b)(7) of Section 102 of the GCL empowers a corporation to
eliminate or limit the personal liability of a director to such corporation or
its stockholders for monetary damages for breach of fiduciary duty as a director
other than (i) for any breach of a director's duty of loyalty to the corporation
or its stockholders; (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law;(iii) under Section
174 of the GCL (which provides that under certain circumstances directors shall
be jointly and severally liable for willful or negligent violations of
provisions regarding the unlawful payment of dividends or unlawful stock
repurchases or redemptions; or (iv) for any transaction from which the director
derived an improper personal benefit.

CHARTER. Article NINTH of the Company's Charter has adopted the
provisions of GCL Section 102(b)(7). Article TENTH of the Company's Charter
provides that the Company shall indemnify all persons entitled to be indemnified
by GCL 145, including officers and directors, to the fullest extent permitted by
such statute.

SECURITIES AND EXCHANGE COMMISSION POLICY. Insofar as indemnification
for liabilities arising under the Securities Act of 1933, as amended, may be
permitted to directors, officers and controlling persons of the Company, the
Company has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
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 $1,133,631 in gross proceeds if
all warrants are exercised. There presently are no arrangements or
understandings, formal or informal, pertaining to the distribution of the Common
Stock.

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<PAGE> 36

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 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.

- 34 -

<PAGE> 37

The Company will pay substantially all the expenses incident to this
offering of the Common Stock by the Selling Stockholder to the public other than
brokerage fees, commissions and discounts of underwriters, dealers or agents.

In order to comply with certain states' securities laws, if applicable,
the Common Stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Stock may
not be sold unless the Common Stock has been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
the Company or Selling Stockholders comply with the applicable requirements.

LEGAL MATTERS

The validity of the Common Stock offered by this Prospectus has been
passed upon by Wallace, Bauman, Fodiman & Shannon, P.A., Coral Gables, Florida.
Milton J. Wallace a shareholder of the law firm, beneficially owns 418,007
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 22,816 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, 1996 incorporated by
reference in this Prospectus have been audited by BDO Seidman, LLP, independent
certified public accountants to the extent and for the periods set forth in
their report incorporated herein by reference, and are incorporated herein in
reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.

- 35 -

<PAGE> 38

<TABLE>
<CAPTION>
<S> <C>
- -------------------------------------------------- -------------------------------------------

No dealer, salesman or other person has been
authorized to give any information or to make any
representations other than those contained or
incorporated by reference in this Prospectus, and
if given or made, such information or
representations must not be relied upon as having
been authorized by the Company. Neither the MED/WASTE, INC.
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 PROSPECTUS
qualified to do so or to anyone whom it is
unlawful to make such offer or solicitation. ---------------------

2,872,013

Shares of

COMMON STOCK
($.001 par value)

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.................................8
MATERIAL EVENTS.................................9
SELLING STOCKHOLDERS...........................10
DESCRIPTION OF SECURITIES......................29 __________, 1998
INDEMNIFICATION................................32
PLAN OF DISTRIBUTION...........................33
LEGAL MATTERS..................................35
EXPERTS........................................35

- -------------------------------------------------- -------------------------------------------
</TABLE>

<PAGE> 39

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.

<S> <C>
Securities and Exchange Commission Registration Fee................... $ 4,298.00
Accounting Fees and Expenses.......................................... 2,000.00*
Legal Fees and Expenses............................................... 10,000.00*
Printing expenses..................................................... 2,000.00
Miscellaneous......................................................... 1,702.00*
----------
Total................................................................. $20,000.00
==========
</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 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

(i)

<PAGE> 40

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 9% Convertible Redeemable Series A Preferred Stock

*4.2 Form of Series A Warrant

*4.3 Forms of Common Warrant

*4.4 Form of Placement Warrant

*5 Opinion of Wallace, Bauman, Fodiman & Shannon, P.A., regarding
the legality of the Common Stock.

23.1 Consent of BDO Seidman, LLP

*23.2 Consent of Wallace, Bauman, Fodiman & Shannon, P.A.(included in
Exhibit 5 above).

*24 Power of Attorney (included on signature page of registration
statement).

ITEM 17. UNDERTAKINGS.

(a) The Registrant hereby undertakes:

(1) To file, during any period in which offers
or sales are being made, a post-effective
amendment to this registration statement:

(i) To include any prospectus required
by Section 10(a)(3) of the Act;

(ii) To reflect in the prospectus any
facts or events arising after the
effective date of the registration
statement (or the most recent
post-effective amendment thereof)
which, individually or in the
aggregate, represent a fundamental
change in the information set forth
in the registration statement; and

(iii) To include any material information
with respect to the plan of
distribution not previously disclosed
in the registration statement or any
material change to such information in
the registration statement;

Provided, however, that Paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the information required to the included in a post-effective amendment by
those Paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities and Exchange Act of
1934, as amended (the "Exchange Act"), that are incorporated by reference in the
registration statement.

(2) That, for the purpose of determining any
liability under the Act, each such post-effective
amendment shall be deemed to be a new
registration statement

(ii)

<PAGE> 41

relating to the securities offered therein, and
the offering of such securities at that time
shall be deemed to be the initial bona fide
offering thereof.

(3) To remove from registration by means of a
post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.

(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Act, each
filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.

(c) Insofar as indemnification for liabilities arising
under the Act may be permitted to directors, officers
and controlling persons of the registrant has been
advised that in the opinion of the Securities and
Exchange Commission such indemnification is against
public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other
than the payment by the registrant of expenses
incurred or paid by a director, officer or
controlling person of the registrant in the
successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling
person in connection with the securities being
registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as
expressed in the Act and will be governed by the
final adjudication of such issue.

(iii)

<PAGE> 42

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 26 day of January, 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.

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ Milton J. Wallace* Chairman January 26, 1998
- ------------------------------------
Milton J. Wallace

/s/ Daniel A. Stauber Director, President and Chief Executive January 26, 1998
- ------------------------------------ Officer
Daniel A. Stauber

/s/ Michael D. Elkin Vice President and Chief Financial Officer January 26, 1998
- ------------------------------------
Michael D. Elkin

/s/ William F. Bonham* Director January 26, 1998
- ------------------------------------
William F. Bonham

/s/ Richard R. Green* Director January 26, 1998
- ------------------------------------
Richard R. Green

/s/ Phillip W. Kubec* Director January 26, 1998
- ------------------------------------
Phillip W. Kubec

/s/ Kendrick Meek* Director January 26, 1998
- ------------------------------------
Kendrick Meek

/s/ Arthur Shapiro* Director January 26, 1998
- ------------------------------------
Arthur G. Shapiro, M.D.

Director January __, 1998
- ------------------------------------
William Dolan, D.D.S.

</TABLE>

*By: /s/ Michael D. Elkin
-------------------------
Michael D. Elkin
Attorney-in-Fact

(iv)

<PAGE> 1

Exhibit 23.1

CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

Med/Waste, Inc. and Subsidiaries
Miami, Florida

We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated March 7,
1997, 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, 1996.

We also consent to the reference to us under the caption "Experts" in the
Prospectus.

Miami, Florida
January 23, 1998 BDO Seidman, LLP