Filed Pursuant to Rule 424(b)(3)
Registration No. 333-14513
PROSPECTUS
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
7,450,000 Shares of Common Stock, par value $.001
This prospectus ("Prospectus") covers 7,450,000 shares of the
common stock, par value $.001 per share ("Common Stock") of Perma-
Fix Environmental Services, Inc., a Delaware corporation (which
together with its subsidiaries is referred to herein as the
"Company") for reoffer or resale from time to time by the Selling
Shareholders. See "Summary Of Securities Being Offered and
"Selling Security Holders." Of such shares of Common Stock, (i)
3,700,000 shares are issuable by the Company upon the conversion of
5,500 shares of Series 3 Class C Convertible Preferred Stock, par
value $.001 per share ("Series 3 Preferred Stock"), issued by the
Company in July, 1996, in connection with a private placement to
RBB Bank Aktiengesellschaft ("RBB Bank"), an Austrian bank (the
"Private Placement"); (ii) 330,000 shares may be issued by the
Company to RBB Bank in payment of dividends accrued on the Series
3 Preferred Stock during the twenty-four (24) month period from the
date of issuance of the Series 3 Preferred Stock pursuant to the
terms of the Series 3 Preferred Stock, assuming the price of the
Common Stock is $2.00 per share at the time of such dividends;
(iii) 2,000,000 shares of Common Stock are issuable upon the
exercise of two (2) warrants issued to RBB Bank by the Company in
connection with the Private Placement, 1,000,000 of which are
exercisable at $2.00 per share for a period of five (5) years and
1,000,000 of which are exercisable at $3.50 per share for a period
of five (5) years (collectively, the "RBB Warrants"); (iv) 295,000
shares of Common Stock are issuable by the Company upon the
exercise of two (2) warrants previously issued by the Company to J.
P. Carey Enterprises, Inc. ("Carey"), one of which was issued in
connection with a previous offshore transaction made to RBB Bank
for 195,000 shares at an exercise price of $0.73 per share and one
of which was issued in connection with the Private Placement for
100,000 shares at an exercise price of $1.75 per share; (v) 450,000
shares of Common Stock are issuable by the Company upon the
exercise of a warrant previously issued by the Company to J W
Charles Financial Services, Inc. ("Charles") in connection with the
Private Placement and an agreement entered into between the Company
and Charles, all of which are exercisable at $1.50 per share; (vi)
175,000 shares of Common Stock are issuable by the Company upon the
exercise of three (3) warrants previously issued by the Company to
Search Group Capital, Inc. ("Search") in connection with services
rendered to the Company, 125,000 of which are exercisable at $1.06
per share and 50,000 of which are exercisable at $1.50 per share;
(vii) 100,000 shares of Common Stock are issuable by the Company
upon the exercise of a warrant previously issued by the Company to
Marvin S. Rosen ("Rosen") in connection with services rendered to
the Company, all of which are exercisable at $1.75 per share;
(viii) 200,000 shares of Common Stock are issuable by the Company
upon the exercise of a warrant previously issued by the Company to
D.H. Blair Investment Banking Corporation ("Blair") in connection
with investment banking services rendered to the Company, all of
which are exercisable at $1.75 per share, and; (ix) 200,000 shares
of Common Stock are issuable by the Company upon the exercise of a
warrant previously issued by the Company to Steve Gorlin
("Gorlin"), a director of the Company and a beneficial owner of
more than five percent (5%) of the Company's outstanding shares of
Common Stock as of the date of this Prospectus, all of which are
exercisable at $1.75 per share.
<PAGE>
Although the conversion of all of the Series 3 Preferred Stock
could result in the issuance of up to approximately 7,300,000
shares of Common Stock of the Company, depending upon the closing
bid price of the Company's Common Stock over the five (5) trading
days immediately preceding the conversion date or dates, or more
under certain limited circumstances, the terms of the Private
Placement require the Company to use reasonable efforts to register
only approximately 3,700,000 shares to be issued upon such
conversion, which 3,700,000 shares would be the approximate number
of shares of Common Stock issued by the Company upon such
conversion assuming the average of the closing bid prices of the
Company's Common Stock over the five (5) trading days immediately
preceding the conversion date or dates equals or exceeds $2.00 per
share. See "The Company--Private Placement" and "Summary of
Securities Being Offered."
The Company's Common Stock is traded on the Boston Stock
Exchange ("BSE") and the National Association of Securities Dealers
Automated Quotation System Small Cap Market ("NASDAQ") under the
symbol "PES" on the BSE and "PESI" on the NASDAQ, and the shares of
Common Stock to be offered for sale by the Selling Shareholders
pursuant to this Prospectus may be offered for sale on the BSE and
the NASDAQ or in privately negotiated transactions. On October 15,
1996, the closing bid price of the Company's Common Stock on the
NASDAQ was $1.9375 per share.
The Company will receive no part of the proceeds of any sale
of Common Stock by the Selling Shareholders. The Company will
receive the exercise price upon the exercise of the various
warrants described above, resulting in the acquisition by the
Selling Shareholders of a certain amount of the Common Stock
covered by this Prospectus, which Common Stock the Selling
Shareholders may reoffer or resell from time to time under this
Prospectus. See "Use of Proceeds."
The Company has agreed to pay all of the costs and fees
relating to the registration of the shares of Common Stock covered
by this Prospectus, except the Company will not pay any discounts,
concessions or commissions payable to underwriters, dealers or
agents incident to the offering of the shares of Common Stock
covered by this Prospectus or fees and expenses incurred by counsel
for the Selling Shareholders.
The mailing address, including zip code, and the telephone
number of the principal executive office of the Company is: 1940
Northwest 67th Place, Gainesville, Florida 32606-1649, and the
telephone number is (352) 373-4200.
INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN
FACTORS THAT PROSPECTIVE INVESTORS SHOULD CONSIDER PRIOR
TO AN INVESTMENT IN THESE SECURITIES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is November 13, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended ("Exchange Act"),
and, in accordance therewith, files reports, proxy statements and
other information with the Commission. Such reports, proxy
statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D. C.
20549, as well as at its Regional Offices located at
7 World Trade Center, Suite 1300, New York, New York 10048, and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such material can be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Such materials can also be accessed
through the World Wide Web site of the Commission, which contains
reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission
(http://www.sec.gov). The Company's Common Stock is listed on the
(i) BSE, and reports, proxy statements and other information
concerning the Company may also be inspected at the offices of the
BSE at One Boston Place, Boston, Massachusetts 02108, and (ii) with
NASDAQ, and reports, proxy statements and other information
concerning the Company may also be inspected at the NASDAQ offices
at 1735 K Street, N.W., Washington, D. C. 20006-1506.
The Company has filed a registration statement on Form S-3
(together with any amendments thereto, the "Registration
Statement") under the Act, with respect to the Common Stock. This
Prospectus, which constitutes a part of the Registration Statement,
omits certain information contained in the Registration Statement
and reference is made to the Registration Statement and the
exhibits and schedules thereto for further information with respect
to the Company and the securities offered hereby. For further
information with respect to the Company and the securities offered
hereby, reference is made to the Registration Statement and
Exhibits thereto, copies of which may be obtained at prescribed
rates upon request to the Commission in Washington, D. C. Any
statements contained herein concerning the provisions of any
documents are not necessarily complete, and, in each instance, such
statements are qualified in their entirety by reference to such
document filed as an Exhibit to the Registration Statement or
otherwise filed with the Commission.
INCORPORATION BY REFERENCE
The following documents, which have been filed by the Company
with the Commission under the Exchange Act are incorporated by
reference in this Prospectus:
(1) Annual Report on Form 10-K for the year ended
December 31, 1995;
(2) Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
(3) Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996;
(4) Current Report on Form 8-K dated February 9, 1996;
(5) Current Report on Form 8-K dated February 22, 1996.
<PAGE>
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering
described herein shall be deemed to be incorporated by reference
into this Prospectus from the respective dates those documents are
filed. If any statement in this Prospectus or any document
incorporated by reference in this Prospectus is modified or
superseded by a statement in this Prospectus, the earlier statement
will be deemed, for the purposes of this Prospectus to have been
modified or superseded by the subsequent statement, and the earlier
statement is incorporated by reference only as modified or to the
extent it is not superseded.
The Company will provide, without charge, to each person to
whom this Prospectus is delivered, upon written or oral request of
such person, a copy of any or all of the documents which have been
or may be incorporated by reference in this Prospectus (other than
certain exhibits to those documents). Requests should be directed
to Richard T. Kelecy, Chief Financial Officer, Perma-Fix
Environmental Services, Inc., 1940 Northwest 67th Place, Suite A,
Gainesville, Florida 32653 (telephone (352) 373-4200).
RISK FACTORS
Prospective purchasers of the Common Stock offered pursuant to
this Prospectus should carefully consider the factors set forth
below, as well as the other information contained in this
Prospectus and incorporated herein by reference, in evaluating an
investment in the Securities.
Accumulated Deficits; Net Losses; Future Losses:
The Company's historical consolidated balance sheet at
December 31, 1995, reflected an accumulated deficit of
approximately $13,885,000, and the Company's consolidated statement
of operations for the year ended December 31, 1995, reflected a net
loss of approximately $9,052,000, or a net loss of approximately
$1.15 per share. For the six (6) month period ended June 30, 1996,
the Company had an unaudited consolidated net loss of approximately
$410,000 on unaudited consolidated revenues of approximately
$15,750,000, as compared to an unaudited consolidated net loss of
approximately $2,074,000 on unaudited consolidated revenues of
approximately $18,004,000 for the six (6) months ended June 30,
1995. As of June 30, 1996, the Company's unaudited accumulated
deficit was approximately $14,295,000. The Company did report an
unaudited consolidated net income for the quarter ended June 30,
1996 of $182,000, or net income of approximately $.02 per share, on
unaudited consolidated revenues of approximately $8,178,000, as
compared to an unaudited net loss of $1,697,000 or net loss of
approximately $.25 per share, on unaudited consolidated revenues of
$9,381,000 for the quarter ended June 30, 1995. The Company was
formed in 1990 and began operations in 1991. The second quarter of
1996 was the first quarter for which the Company reported a net
income since the third quarter of 1994, which net income was due,
in part, to steps taken by the Company to improve operations and
reduce costs during the later part of 1995 and the first half of
1996. See "The Company--Business Strategy." The unaudited net
income for the second quarter of 1996 may not be indicative of the
results for the balance of 1996, and, based on past results
reported by the Company, there is no assurance that the Company
will report a net profit in the future. If the Company is unable
to continue to improve its operations and to sustain profitability
in the foreseeable future, such would have a material adverse
effect on the Company and the Company's liquidity position and may
result in the Company's inability to operate as a going concern.
This is a forward looking statement and is subject to certain
factors that could cause actual results to differ materially from
those in the forward-looking statement, including, but not limited
to, whether the Company is able to raise additional liquidity in
the form of equity or debt if the Company is not able to maintain
profitability.
<PAGE>
Governmental Regulation:
The Company's business is subject to extensive, evolving and
increasingly stringent federal, state and local environmental laws
and regulations. Such federal, state and local environmental laws
and regulations govern the Company's activities regarding the
treatment, storage, recycling, disposal and transportation of
hazardous and non-hazardous waste and low level radioactive waste
and require the Company to obtain and maintain permits, licenses
and/or approvals in order to conduct its activities regarding
hazardous and non-hazardous waste and low level radioactive waste.
Failure to obtain and maintain such permits, licenses and/or
approvals would have a material adverse effect on the Company, its
operations and financial condition. Moreover, as the Company
expands its operations it may be required to obtain additional
permits, licenses and/or approvals, and there can be no assurance
that the Company will be able to do so.
Because the field of environmental protection is rapidly
developing, the Company cannot predict the extent to which its
operations may be affected by future enforcement policies as
applied to existing laws or by changes to current environmental
laws and regulations or enactment of new environmental laws and
regulations. Moreover, any predictions regarding possible
liability are further complicated by the fact that under current
environmental laws the Company could be jointly and severally
liable for certain activities of third parties over whom the
Company has little or no control. See "--Potential Environmental
Liability." The nature of the Company's business is such that
certain levels of capital expenditures are materially necessary to
maintain compliance with federal, state or local permit standards.
See "The Company--Certain Environmental Expenditures." Although
the Company believes that it is currently in substantial compliance
with applicable environmental laws and regulations, the Company
could be subject to fines, penalties or other liabilities that
could have a material adverse effect as a result of existing or
subsequently enacted laws and regulations. See "The Company--
Certain Environmental Expenditures."
The Company's lack of liquidity prior to the Private Placement
had a negative impact on the Company's ability to operate its
business and on the Company's ability to remain in compliance with
various federal, state and local environmental regulations.
Violation of such federal, state and local regulations could result
in the loss of one or more of the Company's permits or subject the
Company to substantial fines, penalties or other liabilities that
could have a material adverse impact on the Company's business.
Potential Environmental Liability:
The Company's business involves rendering services in
connection with management of waste, including hazardous waste and
low level radioactive waste, and the nature of this business is
such that the Company cannot avoid exposure to significant risk of
liability for damages. Such liability could involve, for example:
claims for clean-up costs, personal injury or damage to the
environment in cases in which the Company is held responsible for
the release of hazardous or radioactive materials; claims of
employees, customers or third parties for personal injury or
property damage occurring in the course of the Company's
operations; and claims alleging negligence or professional errors
or omissions in the planning or performance of its services or in
the providing of its products. In addition, the Company could be
deemed a responsible party for the cost of clean-up of any property
which may be contaminated by hazardous substances generated by the
Company or transported by the Company to a site selected by the
Company, including properties owned or leased by the Company. The
Company could also be subject to fines and civil penalties in
connection with violations of regulatory requirements.
Various federal, state and local laws and regulations have
been enacted regarding the handling and management of waste and
creating liability for environmental contamination caused by it.
The Company is likely to be subject to extensive compliance review
by federal, state and local environmental regulatory authorities.
The Company has implemented or will implement procedures at each of
its facilities designed to help assure compliance with applicable
environmental laws and regulations. This is a forward looking
statement, and is subject to certain factors which could cause the
<PAGE>
actual implementation of procedures to be performed inadequately or
not incompliance with applicable environmental laws and
regulations, if at all. Such factors include, but are not limited
to, the inability of the Company to internally finance
implementation of environmental procedures due to net losses, a
lack of liquidity or the potentially high cost of such
implementation, an inability to secure external financing for such
implementation, the inability of the Company to retain or maintain
appropriate personnel to implement environmental procedures, or the
modification or revision of environmental laws and regulations such
that the Company is not reasonably able to implement procedures
which would comply with such laws and regulations. Noncompliance
with environmental laws and regulations, including failure to
implement required procedures regarding such laws and regulations,
could result in civil or criminal enforcement actions or private
actions, mandatory cleanup requirements, revocation of required
permits or licenses, denial of applications for future permits, or
significant fines, penalties or damages, any of which could have a
material adverse effect on the Company, its operations and
financial condition.
In connection with the Company's waste management services,
the Company may, from time to time, generate both hazardous and
non-hazardous waste which it transports to other facilities for
destruction or disposal. The Company also acts as a broker for
customers in connection with the transportation, treatment and/or
disposal of hazardous and non-hazardous waste. As a generator or
broker of hazardous substances delivered to a disposal facility,
the Company potentially could be a responsible party (as defined
under applicable laws) notwithstanding any absence of fault on the
part of the Company. If the Company were deemed a responsible
party, it could be subject to substantial clean-up costs, fines and
penalties. Specifically, liability under the Comprehensive
Environmental Response Compensation and Liability Act of 1980
("CERCLA"), which authorizes the United States Environmental
Protection Agency ("EPA") or a private party to require companies
to remediate contaminated or polluted sites, is joint and several.
Therefore, under CERCLA, the Company could be held responsible for
all clean-up costs at a site as to which it was deemed a
responsible party regardless of its proportionate responsibility
for the site pollution. While the Company believes that, as a
practical matter, the EPA and the courts attempt to allocate clean-
up costs among the various potentially responsible parties for a
site, no assurance can be made that such allocation would occur
should the Company be deemed a responsible party for a clean-up
site. If the Company were deemed a responsible party regarding one
or more sites, it could have a material adverse effect on the
Company's operations and financial condition. Further, the Company
will be liable to remediate sites on which it operates its
hazardous waste treatment, storage and disposal facilities under
the Resource Conservation and Recovery Act of 1976, as amended
("RCRA"), if such sites become contaminated. The Company is, as of
the date of this Prospectus, remediating one (1) site on which it
operates such a RCRA permitted treatment and storage facility that
became contaminated prior to being acquired by the Company in 1993,
and one (1) site that was leased by a company acquired by the
Company in 1994. It is possible that remediation of these sites
under RCRA could have a material adverse effect on the Company.
See "The Company--Certain Environmental Expenditures" for a
discussion of the Company's remediation of these sites.
Potential Increase in Litigation:
The Company's operations are regulated by numerous laws
regarding procedures for waste treatment, storage, recycling,
transportation and disposal activities. The waste treatment
industry has, in recent years, experienced a significant increase
in so-called "toxic-tort" litigation as those injured by
contamination seek to recover for personal injuries or property
damage. The Company believes that as the Company's operations and
activities expand, the potential for litigation alleging that the
Company is responsible for contamination or pollution caused by its
normal operations, negligence or other misconduct or for accidents
which occur in the course of the Company's business activities will
similarly increase. Such litigation, if significant and not
adequately insured against, could have a material adverse effect
upon the Company's operations and financial condition. In
addition, involvement in protracted litigation would likely result
in expenditure of significant amounts of the Company's time, effort
and money, and could prevent the management of the Company from
focusing on the operation and expansion of the Company and thereby
<PAGE>
result in a material adverse effect upon the Company. See "--
Potential Environmental Liability" and "The Company--Recent
Developments."
Insurance:
The business of the Company exposes it to various risks,
including claims for causing damage to property, injuries to
persons or alleging negligence, or professional errors or omissions
in the performance of its services, which claims could be
substantial. The Company currently has in place general liability
insurance coverage of $1 million per occurrence, with $2 million in
the aggregate plus an additional $6 million excess umbrella
coverage. In addition, the Company carries contractors' operations
and professional liability coverage of $1 million per occurrence
and $2 million in the aggregate subject to a $50,000 deductible.
The Company is required by EPA regulations to carry environmental
impairment liability insurance providing coverage for damages on a
"claims made" basis in amounts of at least $1 million per
occurrence and $2 million per year in the aggregate. To meet the
requirements of customers, the Company has doubled these coverage
amounts to $2 million per occurrence and $4 million per year in the
aggregate. In addition, the deep well operated by Perma-Fix
Treatment Services, Inc. ("PFTS"), a wholly-owned subsidiary of the
Company located in Tulsa, Oklahoma, carries environmental
impairment liability insurance of $4 million per occurrence and $8
million per year in the aggregate. The cost of the Company's
insurance is substantial and is expected to increase. Although the
Company believes that its insurance coverage is presently adequate
and similar to or greater than the coverage maintained by other
companies of its size in the industry, there can be no assurance
that liabilities which may be incurred by the Company will be
covered by its insurance or that the dollar amount of such
liabilities which are covered will not exceed the Company's policy
limits. Furthermore, there can be no assurance that the Company
will be able to obtain adequate or required insurance coverage in
the future or, if obtainable, that such insurance be available at
affordable rates. If the Company cannot obtain or maintain such
coverage, it would be a violation of its permit conditions and
other requirements of the environmental law, rules and regulations
under which the Company operates and the Company would be unable to
continue certain of its operations. If such events occur, such
would have a resulting material adverse effect on the Company's
operations and financial condition.
Reliance on Key Employees; Attraction and Retention of Qualified
Professionals:
The Company is substantially dependent upon the services of
Dr. Louis F. Centofanti, its Chairman, President and Chief
Executive Officer. The loss of Dr. Centofanti could have a
material adverse effect on the Company, its operations and
financial condition. The Company's future success depends on its
ability to retain and expand its staff of qualified personnel,
including environmental specialists and technicians, sales
personnel and engineers. There can be no assurance that the
Company will be successful in its efforts to attract and retain
such personnel as their availability is limited due to the rapid
increase in the demand for hazardous waste management services and
the highly competitive nature of the hazardous waste management
industry.
Dependence on Environmental Regulation and Future Legislation:
Demand for the Company's services is substantially dependent
upon the public's concern with, and the continuation and
proliferation of the laws and regulations governing, the treatment,
storage, recycling and disposal of hazardous, non-hazardous and low
level radioactive waste. A decrease in the level of such concern,
the repeal or modification of such laws, or any significant
relaxation of related regulations or their requirements relating to
the treatment, storage, recycling and disposal of hazardous waste
and low level radioactive waste would significantly reduce the
demand for the services offered by the Company and could have a
material adverse effect on the Company, its operations and
financial condition.
<PAGE>
Competition:
The Company competes with numerous companies which are able to
provide one or more of the environmental services offered by the
Company and many of which may have greater financial, human and
other resources than the Company. The increased competition in the
waste management industry has resulted in reduced gross margin
levels, which are likely to become further reduced due to several
factors: (i) as the industry continues to mature, more companies
will enter the market; (ii) the current and future competitors of
the Company will most likely expand the range of services which
they offer; (iii) the current efforts of companies and governmental
authorities to encourage waste minimization; and (iv) as the
Company and its competitors move into new geographic markets, there
will be fewer unserved markets available for Company expansion.
The increased competition and reduced gross margin levels could
have a material adverse effect on the business and financial
condition of the Company. See "The Company--Competitive
Conditions."
Voting Control; Ability to Direct Management:
Prior to the conversion of the Series 3 Preferred Stock or the
exercise of any outstanding warrants and options, approximately
eleven percent (11%) of the outstanding shares of Common Stock is
held by the Company's management, officers and directors. In
addition, such persons have options or similar other rights to
acquire approximately four percent (4%) of additional shares of the
Company's Common Stock. Assuming the options and warrants held by
the Company's management, officers and directors which are
exercisable within sixty (60) days of the date hereof have been
exercised and the Series 3 Preferred Stock held by RBB Bank is not
converted and no other outstanding options or warrants are
exercised, the Company's management, officers and directors could
beneficially own, as a group, approximately fifteen percent (15%)
of the outstanding shares of Common Stock.
Currently, prior to RBB Bank's conversion of the outstanding
Series 3 Preferred Stock and the exercise of the RBB Warrants, RBB
Bank holds 830,728 shares of Common Stock, or approximately nine
percent (9%) of the outstanding shares of Common Stock as of the
date of this Prospectus. RBB Bank holds the RBB Warrants to
purchase up to 2,000,000 additional shares of Common Stock and has
the right to convert its Series 3 Preferred Stock into a number of
shares of Common Stock of the Company ranging, generally, from
approximately 3,700,000 to approximately 7,300,000 shares of Common
Stock, which number could increase under certain limited
circumstances. The conversion price is based on the product of the
average of the closing bid quotations for the five (5) trading days
immediately preceding the conversion date multiplied by seventy-
five percent (75%), with the conversion price to be a minimum of
$0.75 per share and a maximum of $1.50 per share. The minimum
conversion price is reduced by $0.25 per share each time, if any,
after July 1, 1996, the Company sustains a net loss, on a
consolidated basis, in each of two (2) consecutive quarters. See
"The Company--Private Placement" and "Summary of Securities Being
Offered." If RBB Bank were to acquire approximately 3,700,000
shares of Common Stock upon conversion of the Series 3 Preferred
Stock and exercised all of the RBB Warrants, RBB Bank would own
approximately 6,860,728 shares of Common Stock, or approximately
forty-two percent (42%) of the outstanding shares of Common Stock
of the Company, assuming no other shares of Common Stock are issued
by the Company, no other warrants or options are exercised, the
Company does not acquire additional shares of Common Stock as
treasury stock, and RBB Bank does not dispose of any such shares.
If RBB Bank were to acquire 7,300,000 shares of Common Stock upon
conversion of the Series 3 Preferred Stock and exercised all of the
RBB Warrants, RBB Bank would own approximately 10,460,728 shares of
Common Stock, or approximately fifty-three percent (53%) of the
outstanding shares of Common Stock of the Company, assuming no
other shares of Common Stock are issued by the Company, no other
warrants or options are exercised, the Company does not acquire
additional shares of Common Stock as treasury stock, and RBB Bank
does not dispose of any such shares. In such case, RBB Bank would
be the largest single stockholder of the Company and the Company
could have insufficient remedies to avoid an actual change in
<PAGE>
control of the Company, should RBB Bank seek such a change in
control. See "The Company--Private Placement."
Additionally, under the Loan and Security Agreement ("Heller
Agreement") between the Company and Heller Financial, Inc.
("Heller"), the ownership of more than fifty percent (50%) of a
class of voting securities of the Company entitled to elect the
Board of Directors by any one party or a group acting in concert is
a "change of control" and is an "event of default" under the Heller
Agreement. Upon such an "event of default," Heller has the right
to declare a default and immediately accelerate the debt incurred
pursuant to such agreement as well as exercise other remedies
described in the Heller Agreement. If the number of shares of
Common Stock owned by RBB Bank or hereafter acquired by RBB Bank as
a result of conversion of the Series 3 Preferred Stock or exercise
of the RBB Warrants results in RBB Bank acquiring over fifty
percent (50%) of Common Stock of the Company, such could be an
"event of default" under the Heller Agreement. If the debt which
the Company has incurred pursuant to the Heller Agreement were
accelerated, the Company may not be able to repay such debt on an
accelerated basis or replace such debt with alternative financing.
Although Heller has consented to the issuance by the Company of the
shares of Common Stock to RBB Bank upon conversion of the Series 3
Preferred Stock and exercise of the RBB Warrants, Heller has not
specifically consented to the ownership by RBB Bank of more than
fifty percent (50%) of the Company's Common Stock. See "--
Potential Adverse Effect to Company and Possible Adverse Impact on
Earnings Per Share Upon Exercise of Outstanding Warrants and
Options; --Barriers to Takeover."
Potential Adverse Effect to Company and Possible Adverse Impact on
Earnings Per Share Upon Exercise of Outstanding Warrants and
Options:
The Company has outstanding warrants, other than the RBB
Warrants, to purchase up to approximately 6,512,060 shares of
Common Stock, options to purchase up to approximately 1,118,838
shares of Common Stock and will be obligated to issue to RBB Bank,
up to approximately an additional 3,700,000 to 7,300,000 shares of
Common Stock (depending upon the price of the Common Stock at the
time of conversion) upon conversion of the Series 3 Preferred
Stock, which amount could exceed 7,300,000 under certain limited
conditions, and 2,000,000 shares of Common Stock upon exercise of
the RBB Warrants. The issuance of Common Stock pursuant to such
warrants, options, or conversion of the Series 3 Preferred Stock,
could adversely affect the ability of the Company to, and the terms
on which it can, raise additional equity capital. In addition, if
all or a substantial portion of the warrants and options are
exercised and such additional shares of Common Stock are issued to
RBB Bank, such would have a substantial adverse impact on an
existing stockholder's ownership percentage of the outstanding
shares of Common Stock and could result in a "change of control"
regarding the Company. Also, in the event the Company generates
net income, there could be a substantial adverse impact on earnings
per share if such additional shares are issued or to the extent the
options and warrants are required to be included in the weighted
average shares outstanding calculation. See "--Voting Control;
Ability to Direct Management; --Financial Covenant Violations in
Recent Quarters."
No Dividends Paid:
Since its inception, the Company has not paid any cash
dividends on its Common Stock. The Company intends to retain
future earnings, if any, to provide funds for the operation and/or
expansion of its business and, accordingly, does not anticipate
paying any cash dividends on its Common Stock in the reasonably
foreseeable future. Additionally, pursuant to the Heller
Agreement, no dividends may be paid on the Common Stock without
Heller's approval.
<PAGE>
Barriers to Takeover:
The Company is a Delaware corporation and is governed, in
part, by the provisions of Section 203 of the General Corporation
Law of Delaware, an anti-takeover law enacted in 1988. In general,
the law prohibits a Delaware public corporation from engaging in a
"business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which
the person became an interested stockholder, unless it is approved
in a prescribed manner. As a result of Section 203, potential
acquirers of the Company may be discouraged from attempting to
effect acquisition transactions with the Company, thereby possibly
depriving holders of the Company's securities of certain
opportunities to sell or otherwise dispose of such securities at
above-market prices pursuant to such transactions. Further, the
Company's Performance Equity Plan, Outside Directors Stock Option
Plan and Nonqualified Stock Option Plan provide for the immediate
acceleration of, and removal of restrictions from, options and
other awards under the Plan upon a "change of control" (as
defined). Such provisions may also have the result of discouraging
acquisitions of the Company. See "-- Voting Control; Ability to
Direct Management."
RBB Bank holds the RBB Warrants, which entitle RBB Bank to
purchase up to 2,000,000 additional shares of Common Stock. In
addition, RBB Bank has the right to convert its Series 3 Preferred
Stock into a number of shares of Common Stock of the Company
ranging from approximately 3,700,000 to approximately 7,300,000, or
potentially more under certain limited circumstances. See "The
Company--Private Placement" and "Summary of Securities Being
Offered." If RBB Bank were to acquire approximately 7,300,000
shares of Common Stock upon conversion of the Series 3 Preferred
Stock and it exercised all of the RBB Warrants, RBB Bank would own
approximately 10,460,728 shares of Common Stock, or approximately
fifty-three percent (53%) of the outstanding shares of Common Stock
of the Company, assuming no other shares of Common Stock are issued
by the Company, no other warrants or options issued by the Company
are exercised, the Company does not acquire additional shares of
Common Stock as treasury shares, and RBB Bank does not dispose of
any such shares. In such event, RBB Bank would be the largest
single stockholder of the Company and could have such a significant
number of shares of Common Stock within its control that the
Company would have insufficient remedies to avoid an actual change
in control of the Company in favor of RBB Bank. If RBB Bank
obtains ownership of a high percentage of Common Stock of the
Company, it could prevent or discourage other persons from
attempting to acquire the Company even if RBB Bank does not obtain
control of the Company. See "--Voting Control; Ability to Direct
Management."
Need to Authorize Additional Common Stock:
In the event all of the Series 3 Preferred Stock is converted
into the maximum number of shares of Common Stock possible
(approximately 7,300,000 shares, assuming that the minimum
conversion price is not adjusted, see, "The Company--Private
Placement") and all of the warrants granted by the Company that are
outstanding as of the date of this Prospectus are exercised, and
such conversion and exercise occurs prior to the amendment of the
certificate of incorporation of the Company ("Certificate of
Incorporation"), such would require the issuance of more shares of
Common Stock than are currently authorized and unissued under the
Certificate of Incorporation and shares of Common Stock held by the
Company as treasury shares. Therefore, and for other reasons, the
Company intends to request that the stockholders of the Company
approve, at the next annual meeting of the Company currently
scheduled for December 3, 1996, the amendment of the Certificate of
Incorporation to authorize an additional number of shares of Common
Stock so that the Company will have sufficient shares of Common
Stock available for issuance upon conversion of the Series 3
Preferred Stock and exercise of all warrants and options previously
granted by the Company. If the stockholders of the Company do not
approve an amendment to the Certificate of Incorporation
authorizing additional shares of Common Stock, the Company would be
able to fulfill some, but not all, of its obligations to issue
shares of Common Stock if all of the Series 3 Preferred Stock is
converted and all warrants and options granted by the Company and
outstanding as of the date of this Prospectus are exercised. The
<PAGE>
Company's inability to fulfill such obligations could result in
actions being taken against the Company, including, but not limited
to, the filing of lawsuits against the Company, which actions could
have a material adverse effect on the Company.
THE COMPANY
Company Overview
Perma-Fix Environmental Services, Inc., organized in 1990, is
a Delaware corporation engaged, through its subsidiaries, in the
(i) treatment, storage, recycling, blending and disposal of
hazardous and non-hazardous industrial and commercial wastes, and
the storage, treatment and disposal of certain low-level
radioactive waste; and (ii) consulting engineering services to
industry and government for broad-scope environmental problems. In
recent years, the Company has grown through acquisitions and
internal development. The Company's executive offices are located
at 1940 N.W. 67th Place, Gainesville, Florida 32653.
Principal Products and Services
The Company is in the following two (2) lines of business:
(i) waste management, including off-site and on-site services for
the treatment, storage, recycling, blending and disposal of
hazardous and non-hazardous wastes and certain low-level
radioactive waste; and (ii) environmental engineering and
consulting services specializing in waste management, regulatory
compliance, environmental permitting, field testing and
characterization. The Company presently services industrial and
commercial companies primarily located in the Southeast, Midwest
and Southwest. Distribution channels for services are primarily
direct sales to customers by the Company's sales force or via
intermediaries.
Business Strategy
During 1995, the Company initiated a major restructuring
program that included: (i) the closure of several poorly-performing
"service centers," which service centers provide on-site waste
treatment services to convert certain types of characteristic
hazardous wastes into non-hazardous waste by removing those
characteristics which categorize such waste as "hazardous" and
which treat non-hazardous waste as an alternative to off-site waste
treatment and disposal methods; (ii) the consolidation of certain
facilities and related personnel into regional profit centers; and
(iii) a reduced cost structure throughout the Company. In
conjunction with this restructuring program, the Company recorded
during 1995 nonrecurring charges of approximately $987,000 and the
write down of the intangible permit of approximately $4,712,000, as
related to the acquisition of Perma-Fix of Memphis, Inc. ("PFM"),
located in Memphis, Tennessee, in December 1993. In addition to
the above, the Company has made various management and personnel
changes, including the resignation of its president during the
first quarter of 1996, and significant reduction in its corporate
overhead. The Company is also implementing a program to upgrade
several of these facilities to reduce the cost of waste processing
and handling, expand the range of wastes that can be accepted for
treatment and blending, and to maintain RCRA permit compliance.
See " -- Certain Environmental Expenditures."
Permits and Licenses
The Company's business is subject to extensive evolving and
increasingly stringent federal, state and local environmental laws
and regulations. Such federal, state and local environmental laws
and regulations govern the Company's activities regarding the
treatment, storage, recycling, blending, disposal and
transportation of hazardous, non-hazardous and low level
radioactive waste and require the Company to obtain and maintain
permits, licenses and/or approvals in order to conduct their
hazardous, non-hazardous and low level radioactive waste
<PAGE>
activities. Failure to obtain and maintain such permits or
approvals would have a material adverse effect on the Company, its
operations and financial condition. Moreover, as the Company
expands its operations it may be required to obtain additional
approvals or permits, and there can be no assurance that the
Company will be able to do so.
PFTS provides transportation, treatment, storage and disposal
of liquid hazardous and non-hazardous wastes, stabilization of
liquid and solid drum residues and deep well injection services to
manufacturing companies in the region. Prior to disposal, all
hazardous liquids are processed in a manner designed to destroy or
eliminate the hazardous characteristics of the liquids, except
those hazardous wastes for which no treatment has been prescribed
by the EPA. These liquids, along with non-hazardous liquids, can
be injected into the deep well that has been specifically designed
and constructed for this purpose. PFTS has a final RCRA permit to
store and treat hazardous waste at its facility and operate its
hazardous waste deepwell under interim status. PFTS has proposed
that its deep injection well be converted to a non-hazardous waste
injection well, and, if this proposal is approved and a non-
hazardous waste Underground Injection Control ("UIC") permit is
issued to the facility, PFTS will no longer be able to inject into
the deep well hazardous liquids for which no treatment standards
have been prescribed by the EPA, which the Company does not
believe will have a material adverse effect on the Company.
PFM is a permitted facility that provides transportation,
storage and treatment services to hazardous and non-hazardous waste
generators throughout the United States. PFM operates a hazardous
waste storage facility that primarily blends and processes
hazardous and non-hazardous waste liquids, solids and sludges into
substitute fuel or as a raw material substitute in cement kilns
that have been specially permitted for the processing of hazardous
and non-hazardous wastes as fuels. PFM operates under a final RCRA
permit relating to its hazardous waste drum storage activities and
interim status RCRA permits to store in tanks the hazardous waste
which PFM blends and processes into substitute fuels.
Perma-Fix of Florida, Inc. ("PFF"), located in Gainesville,
Florida, handles hazardous waste and treatment of waste liquid
scintillation vials ("LSV"), a mixed low-level
radioactive/hazardous (flammable) waste, used primarily by the
medical research and treatment industry. PFF operates under a
final RCRA permit and a low level radioactive permit issued by the
appropriate authorities of the State of Florida. PFF's low-level
radioactive license was issued on August 18, 1995, which was
amended on March 13, 1996 for expanded low level radioactive waste
management activities.
Perma-Fix of Dayton, Inc. ("PFD"), located in Dayton, Ohio,
operates a permitted hazardous waste treatment and storage facility
to collect and treat oily waste waters and used oil from both small
and large quantity generators and provides hazardous waste
treatment services for collecting and processing organic solvents,
sludges, and solids for use as secondary fuels in cement kilns.
PFD operates under a RCRA Part B permit which was granted
January 3, 1996.
The Company also believes that its treatment, storage and
disposal ("TSD") facilities presently have obtained all approvals,
licenses and permits necessary to enable it to conduct its business
as it is presently conducted. The failure of the Company's TSD
facilities to renew any of their present approvals, licenses and
permits, or the termination of any such approvals, licenses or
permits, could have a material adverse effect on the Company, its
operations and financial condition.
The Company also provides on-site waste treatment services
through its subsidiary, Perma-Fix, Inc. ("PFI"), which provides
waste treatment services at the site of the waste generator to
convert certain types of characteristic hazardous wastes into non-
hazardous waste and treat non-hazardous waste as an alternative to
off-site waste treatment and disposal methods. The Company
believes that such on-site waste treatment services do not require
federal environmental permits provided certain conditions are met,
and PFI has received written verification from each state in which
it is presently operating that no such permit is required provided
<PAGE>
certain conditions are met. There can be no assurance that states
in which PFI presently does business or the federal government will
not change policies or regulations requiring PFI to obtain permits
to carry on its on-site activities.
Competitive Conditions
The Company competes with numerous companies which are able to
provide one or more of the environmental services offered by the
Company and many of which may have greater financial, human and
other resources than the Company. The increased competition in the
waste management industry has resulted in reduced gross margin
levels which are likely to become further reduced due to several
factors: (i) as the industry continues to mature more companies
will enter the market; (ii) the current and future competitors of
the Company will most likely expand the range of services which
they offer; (iii) the waste minimization policies being advocated
or instituted by the federal or state governmental authorities and
private industry, and (iv) as the Company and its competitors move
into new geographic markets, there will be fewer underserved
markets available for Company expansion. The increased competition
and reduced gross margin levels could have a material adverse
effect on the business and financial condition of the Company. See
"Risk Factors -- Competition."
The Company believes that it is a significant participant in
the delivery of off-site waste treatment services in the Southeast,
Midwest and Southwest. The Company competes with TSD facilities
operated by national, regional and independent environmental
services firms located within a several hundred mile radius of the
Company's facilities.
The Company's competitors for remediation services include
national and regional environmental services firms that may have
larger environmental remediation staffs and greater resources than
the Company. The Company recognizes its lack of technical and
financial resources necessary to compete for larger remediation
contracts and therefore, presently concentrates on remediation
services projects within its existing customer base or projects in
its service area which are too small for companies without a
presence in the market to perform competitively.
Environmental engineering and consulting services provided by
the Company through its engineering companies involve competition
with larger engineering and consulting firms. The Company believes
that it is able to compete with these firms based on its
established reputation in its market areas and its expertise in
several specific elements of environmental engineering and
consulting such as cement kiln waste recycling programs.
The Company believes that the barriers of entry for companies
seeking to compete with the Company in the waste management
industry are dependent upon the specific service to be offered.
Consequently, the Company believes that its operations which
provide certain services are more likely to encounter increased
competition in the future. The Company believes that there are no
formidable barriers to entry into the on-site treatment business
within which the Company operates. Similarly, certain of the
Company's non-hazardous waste operations engage in businesses which
do not present any formidable barriers of entry. The Company,
however, believes that the permitting requirements, and the cost to
obtain such permits, may be barriers of entry into the business of
providing hazardous and low-level radioactive waste storage,
treatment and disposal facilities as presently operated by the
Company. The Company believes that its business of providing low
level radioactive and hazardous waste recycling of scintillation
vials, which requires both a radioactive permit and a hazardous
waste permit, has a substantial barrier to entry due to its dual
permitting requirements. Currently, there is only one other
facility in the United States that provides low level radioactive
and hazardous waste recycling of scintillation vials. If,
however, the permit requirements for hazardous waste storage,
treatment and disposal activities and/or the handling of low level
radioactive materials were eliminated or if such permits became
easier to obtain, the Company believes that more companies would
enter these markets and provide greater competition to the Company,
which could have a material adverse effect on the Company, its
operations and financial condition.
<PAGE>
The Company believes that, to date, competition has been based
primarily on the quality and timeliness of service. The Company
believes, however, that as the industry matures, price will become
an increasingly important competitive factor. As a result, the
revenues generated from, and the profitability of, certain of the
Company's services may be reduced as price competition intensifies,
and such reduction could have a material adverse effect on the
business and financial condition of the Company. Many of the
Company's competitors are larger and more established, with greater
marketing, financial, human and other resources than the Company
and, as a result, may provide significant long-term competition.
The Company also expects competition to intensify as technological
and other advances are made in the waste treatment fields and as
public awareness of the hazardous waste disposal problem increases.
Certain Environmental Expenditures
For 1996 and due, in part, to the raising of additional equity
as a result of the Private Placement, the Company has budgeted
capital expenditures of $1,820,000 for improving operations and
maintaining RCRA permit compliance at its various TSD facilities.
The Company believes that all of these expenditures are materially
necessary to remain competitive or to maintain compliance with
federal, state or local environmental requirements. As of June 30,
1996, the Company's net purchases of new capital equipment totalled
approximately $1,025,000, which was principally funded by the
proceeds from the Private Placement, as discussed below. At this
time, the Company anticipates financing the remainder of these
expenditures by a combination of lease financing and/or utilization
of the equity raised in July 1996 through the Private Placement.
During 1996, the Company has incurred environmental
expenditures to comply with federal, state and local regulations at
its TSD facilities. Two of the facilities where these expenditures
have been made are PFD, which was acquired by the Company in June
1994, and PFM, which was acquired by the Company in December 1993.
PFD is required to remediate a parcel of leased property
("Leased Property") which was formerly used as a RCRA storage
facility that was operated as a storage and solvent recycling
facility by a company that was merged with PFD prior to the
Company's acquisition of PFD. The Leased Property contains certain
contaminated waste in the soils and groundwater. The Company was
indemnified by the seller of PFD for costs associated with
remediating the Leased Property, which entails remediation of soil
and/or groundwater restoration. However, during 1995 the seller
filed for bankruptcy. Prior to the acquisition of PFD by the
Company, the seller had established a trust fund ("Remediation
Trust Fund"), which it funded with the seller's stock, to support
the remedial activity on the Leased Property pursuant to the
agreement with the Ohio Environmental Protection Agency ("Ohio
EPA"). After the Company purchased PFD, it was required to advance
$250,000 into the Remediation Trust Fund due to the reduction in
the value of the seller's stock that comprised the Remediation
Trust Fund, which stock had been sold by the Trustee prior to the
seller's filing bankruptcy. The current balance in the trust is
approximately $325,000. While the Company believes that its
expenditures towards remediation of the Leased Property will not
have a material adverse effect upon the Company, no assurance can
be made that the remediation process will not prove to be more
difficult or costly than anticipated or that the Company's
remediation expenditures will not have a material adverse effect on
the Company's operations and financial condition. This is a
forward looking statement and is subject to certain factors that
could cause significant deviations from what is described,
including, but not limited to, changes in environmental law and
regulations, changes in remediation processes or technologies or
costs thereof, unanticipated difficulty in remediation, or
liquidity problems within the Company. Currently, the Ohio
Attorney General has advised PFD that it is considering filing a
complaint against PFD regarding the Leased Property. See "Recent
Developments."
The PFM facility is situated in the vicinity of the Memphis
Military Defense Depot (the "Defense Facility"), which Defense
Facility is listed as a Superfund Site and is adjacent to the Allen
Well Field utilized by Memphis Light, Gas & Water to provide public
<PAGE>
water to Memphis, Tennessee. Prior to the Company's December 1993
acquisition of PFM, gasoline had been detected in the groundwater
at the PFM facility and in the acquisition process, the Company
assumed certain liabilities to remediate gasoline contaminated
groundwater and investigate potential areas of soil contamination
on its property, and such remediation is currently underway. See
"The Company --Certain Environmental Expenditures." The previous
owners of PFM installed monitoring and treatment equipment to
restore the groundwater to acceptable standards in accordance with
federal, state and local authorities. The Company is continuing
the aforementioned restoration and anticipates expenditures of
approximately $1,050,000 over the next five to ten years to
ultimately cure the prior contamination.
Chlorinated compounds have previously been detected in the
groundwater beneath the Defense Facility, as well as in certain
production wells in the Allen Well Field. Very low concentrations
of certain chlorinated compounds have also been detected in the
groundwater beneath the PFM facility and the possible presence of
these compounds is currently being investigated. Based upon a
study performed by the Company's environmental engineering group,
the Company does not believe the PFM facility is the source of the
chlorinated compounds in a limited number of production wells in
the Allen Well Field and, as a result, does not believe that the
presence of the low concentrations of chlorinated compounds at the
PFM facility will have a material adverse effect upon the Company.
If, however, the Company is determined to be the source of such
contamination, any liabilities, obligations to remediate, or
penalties associated with such contamination, could have a material
adverse effect upon the Company.
Private Placement
The Series 3 Preferred Stock and the RBB Warrants were issued
pursuant to the terms of a Subscription and Purchase Agreement,
dated July 17, 1996, between the Company and RBB Bank (the
"Subscription Agreement") in the Private Placement. The 5,500
shares of Series 3 Preferred Stock were issued at a price of $1,000
per share and, in connection therewith, the Company granted to RBB
Bank the RBB Warrants to purchase up to 2,000,000 shares of the
Company's Common Stock, with 1,000,000 shares of Common Stock
exercisable at $2.00 per share and 1,000,000 shares of Common Stock
exercisable at $3.50 per share. The RBB Warrants are for a term of
five (5) years. The Series 3 Preferred Stock is not entitled to
any voting rights, except as required by law. Dividends on the
Series 3 Preferred Stock accrue at a rate of six percent (6%) per
annum, payable semi-annually as and when declared by the Board of
Directors, and such dividends are cumulative. Dividends shall be
paid, at the option of the Company, in the form of cash or Common
Stock of the Company. If the Dividends are paid in Common Stock,
each share of outstanding Series 3 Preferred Stock shall receive
shares of Common Stock equal to the quotient of (i) six percent
(6%) of $1,000 divided by (ii) the average closing bid quotation of
the Common Stock as reported on the over-the-counter market, or the
closing sale price if listed on a national securities exchange, for
the five (5) trading days immediately prior to the applicable
dividend declaration date.
The holder of the Series 3 Preferred Stock may convert into
Common Stock of the Company up to (i) 1,833 shares on or after
October 1, 1996, (ii) 1,833 shares on or after November 1, 1996,
and (iii) the balance on or after December 1, 1996. The conversion
price shall be the product of (i) the average closing bid quotation
for the five (5) trading days immediately preceding the conversion
date multiplied by (ii) seventy-five percent (75%). The conversion
price shall be a minimum of $.75 per share or a maximum of $1.50
per share, with the minimum conversion price to be reduced by $.25
per share each time, if any, after July 1, 1996, the Company
sustains a net loss, on a consolidated basis, in each of two (2)
consecutive quarters ("Minimum Conversion Price Reduction"). For
the purpose of determining whether the Company has had a net loss
in each of two (2) consecutive quarters, at no time shall a quarter
that has already been considered in such determination be
considered in any subsequent determination. Subject to the closing
bid price of the Company's Common Stock at the time of conversion
and the other conditions which could increase the number of shares
to be issued upon conversion, the Series 3 Preferred Stock, if all
were converted, could be converted into between approximately
3,700,000 and approximately 7,300,000 shares of Common Stock, or
more pursuant to the Minimum Conversion Price Reduction. See
<PAGE>
"Summary of Securities Being Offered." The Common Stock issuable
on the conversion of the Series 3 Preferred Stock is subject to
certain registration rights pursuant to the Subscription Agreement.
If the Company at any time or from time to time while shares
of Series 3 Class C Preferred Stock are issued and outstanding
shall declare or pay, without consideration, any dividend on the
Common Stock payable in Common Stock, or shall effect a subdivision
of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by stock split, reclassification or
otherwise than by payment of a dividend in Common Stock or in any
right to acquire Common Stock), or if the outstanding shares of
Common Stock shall be combined or consolidated, by reclassification
or otherwise, into a lesser number of shares of Common Stock, then
the conversion price in effect immediately before such event shall,
concurrently with the effectiveness of such event, be
proportionately decreased or increased, as appropriate. If the
Company shall declare or pay, without consideration, any dividend
on the Common Stock payable in any right to acquire Common stock
for no consideration, then the Company shall be deemed to have made
a dividend payable in Common Stock in an amount of shares equal to
the maximum number of shares issuable upon exercise of such rights
to acquire Common Stock.
Under the terms of the RBB Warrants, if the Company at any
time while the warrant is outstanding shall declare or pay, without
consideration, any dividend on the Common Stock payable in Common
Stock, or shall effect a subdivision of the outstanding shares of
Common Stock into a greater number of shares of Common Stock (by
stock split, reclassification or otherwise than by payment of a
dividend in Common Stock or in any right to acquire Common Stock),
or if the outstanding shares of Common Stock shall be combined or
consolidated, by reclassification or otherwise, into a lesser
number of shares of Common Stock, then the number of shares of
Common Stock issuable upon the exercise of such warrant or the
exercise price of such warrant shall be appropriately adjusted such
that immediately after the happening of any such event, the
proportionate number of shares of Common Stock issuable immediately
prior to the happening of such event shall be the number of shares
of Common Stock issuable subsequent to the happening of such event.
The terms of the RBB Warrants also direct that in case of any
consolidation or merger of the Company in which the Company is not
the surviving entity, or in case of any sale or conveyance by the
Company to another entity of all or substantially all of the
property of the Company as an entirety or substantially as an
entirety, the holder shall have the right thereafter, upon exercise
of such warrant, to receive the kind and amount of securities, cash
or other property which the holder of the RBB Warrants would have
owned or been entitled to receive immediately after such
consolidation, merger, sale or conveyance had such warrant been
exercised in full immediately prior to the effective date of such
consolidation, merger, sale or conveyance.
Under the terms of the Subscription Agreement, from the net
proceeds from the Private Placement (approximately $5,100,000)
received by the Company after payment of placement fees to brokers,
legal fees and other expenses, the Company purchased from RBB Bank
920,000 shares of Common Stock of the Company acquired by RBB Bank
upon conversion of the Company's Series 1 Class A Preferred Stock
and Series 2 Class B Convertible Preferred Stock for $1,770,000.
The Company has or intends to use approximately $1,650,000 of the
net proceeds from the Private Placement for capital improvements at
its various facilities and the balance of the net proceeds to
reduce outstanding trade payables and for general working capital.
If RBB Bank were to acquire approximately 3,700,000 shares of
Common Stock upon conversion of the Series 3 Preferred Stock and
exercised all of the RBB Warrants, RBB Bank would own approximately
6,860,728 shares of Common Stock, or approximately forty-two
percent (42%) of the outstanding shares of Common Stock of the
Company, assuming no other shares of Common Stock are issued by the
Company, no other warrants or options to purchase Common Stock from
the Company are exercised, the Company does not acquire additional
shares of Common Stock as treasury stock, and RBB Bank does not
dispose of any such shares. If RBB Bank were to acquire 7,300,000
shares of Common Stock upon conversion of the Series 3 Preferred
Stock and exercised all of the RBB Warrants, RBB Bank would own
approximately 10,460,728 shares of Common Stock, or approximately
<PAGE>
fifty-three percent (53%) of the outstanding shares of Common Stock
of the Company, assuming no other shares of Common Stock are issued
by the Company, no other warrants or options are exercised, the
Company does not acquire additional shares of Common Stock as
treasury shares and RBB Bank does not dispose of any such shares.
See "Risk Factors--Voting Control; Ability to Direct Management."
Availability of Company's Loss Carryovers
The Company anticipates that its cash flow in future years
will benefit to some extent from its ability to utilize net
operating loss ("NOL") carryovers from prior periods to reduce the
federal income tax payments which it would otherwise be required to
make with respect to income generated in future years. As of
December 31, 1995, the Company estimates that it had on a
consolidated basis available NOL carryovers of approximately
$8,100,000 for federal income tax purposes. These NOL carryovers
will expire in the years 2006 through 2010 if not used by then.
The amount of these carryovers has not been audited or
approved by the Internal Revenue Service ("IRS") and, accordingly,
no assurance can be given that such carryovers will not be reduced
as a result of audits in the future. In addition, the ability of
the Company to utilize these carryovers in the future will be
subject to a variety of limitations applicable to corporate
taxpayers generally under both the Internal Revenue Code of 1986,
as amended (the "Code"), and the Treasury Regulations. These
include, in particular, limitations imposed by Code Section 382
("382 Limitations").
Section 382 of the Code provides certain limitations on the
utilization of NOL carryovers following a more than 50% change (by
value) in the stock ownership of a loss company. In general, the
limitations imposed by Section 382 apply when, within a three year
"testing period", there is a more than 50 percentage point increase
in the stock of a company that has an NOL held by one or more
persons who own (directly or constructively) at least 5% of such
Company's stock (with persons who separately are less than 5%
shareholders generally being treated in the aggregate as a single
shareholder) over the lowest percentage of stock of such company
owned by such person(s) at any time during the testing period. The
amount of the percentage point increase in stock ownership is
calculated for each 5% shareholder, and the increase of each 5%
shareholder is aggregated with the increases of other 5%
shareholders to determine the total percentage point increase in
stock ownership. For purposes of these tests, stock issuable upon
the exercise of certain options and warrants or upon the conversion
of preferred stock may be treated as outstanding.
The use of approximately $4,500,000 of the approximate
$8,100,000 in NOL carryovers as of December 31, 1995, is limited to
a certain extent in future years by reason of certain transactions
effected during 1996. The 1996 transactions that resulted in the
382 Limitations were the issuance of various series of preferred
stock of the Company, including, but not limited to, the Series 3
Preferred Stock, to RBB Bank. See "--Private Placement." Each
year after 1996, approximately $1,500,000 of the approximate
$4,500,000 in 382 Limitations is no longer limited, and after 1999,
all of the approximate $8,100,000 in NOL carryovers will be
available for use by the Company for federal income tax purposes,
except to the extent such has been previously used to reduce the
Company's federal income tax payments or such has been reduced by
the IRS in connection with audits conducted by the IRS.
<PAGE>
RECENT DEVELOPMENTS
The following are all material changes in the Company's
affairs which have occurred since the end of December 31, 1995, and
which have not been described in a report on Form 10-Q or Form 8-K
filed under the Exchange Act or as otherwise discussed in other
sections of this Prospectus:
Ohio Attorney General Negotiations:
The Ohio Attorney General has advised PFD that it is
considering filing a complaint (the "Complaint") against PFD
alleging that PFD had violated certain of Ohio's hazardous waste
laws regarding ordered compliance with an EPA approved "Closure
Plan" for the Leased Property. The Ohio Attorney General alleges
that PFD has not met either timetables or financial assurance
requirements which were part of the Closure Plan. The Company is
currently negotiating a consent order with the Attorney General of
Ohio under which the Company believes it will agree to undertake
closure of the Leased Property in an EPA approved manner. The
Company believes that the consent order will also require PFD to
pay a civil penalty to the State of Ohio in an amount which has not
yet been determined ("Civil Penalty"), and to supply financial
assurance, in the form of a bond or similar trust agreement, of
approximately $350,000 to ensure adequate funding for completing
the Closure Plan. The Company currently maintains such a trust
fund, which trust fund presently has approximately $325,000 in
funds therein. See "The Company--Certain Environmental
Expenditures." The Company believes that the Civil Penalty
assessed pursuant to the consent order will not be of sufficient
size that payment thereof by the Company will have a material
adverse effect upon the Company. This is a forward looking
statement and is subject to certain factors that could cause
variation from what is described in such forward looking statement,
including, but not limited to, the Company's inability to come to
a suitable agreement with the Attorney General of Ohio or the Ohio
EPA, the Company's inability to provide adequate financial
assurance due to lack of liquidity, credit difficulties or lack of
available external financing, or the applicable court's refusal to
accept the consent order as drafted.
Anti-Dilution Adjustments to Certain Previous Outstanding Warrants:
In addition to the Common Stock issuable upon conversion of
the Series 3 Preferred Stock and upon exercise of the warrants for
Common Stock covered by this Prospectus, there are other
outstanding warrants for the purchase of Common Stock which have
been previously issued by the Company ("Previous Warrants"). The
terms of certain of the Previous Warrants contain certain anti-
dilution provisions ("Anti-Dilution Provisions") which are
triggered upon the Company's issuance of additional Common Stock
for less than the exercise price per share of such Previous
Warrants or upon the Company's issuance of warrants or convertible
securities which are exercisable or convertible into Common Stock
of the Company for a price per share less than the exercise price
per share of such Previous Warrants. The Anti-Dilution Provisions
of certain of the Previous Warrants have been triggered by the
Company's issuance, subsequent to the issuance of such Previous
Warrants, of Common Stock, warrants, and convertible preferred
stock, including, but not limited to, the Series 3 Preferred Stock
and the warrants exercisable for Common Stock covered by this
Prospectus. The exercise of the Previous Warrants, as originally
issued, would have resulted in the issuance of approximately
5,092,060 shares of Common Stock at exercise prices ranging from
approximately $2.375 to approximately $6.025 per share. As a
result of the application of the Anti-Dilution Provisions, the
exercise of the Previous Warrants would now result in the issuance
of approximately 6,893,697 shares of Common Stock at prices ranging
from approximately $1.98 to approximately $4.12 per share as of the
date of this Prospectus. Further adjustments to the Previous
Warrants may be necessary under the Anti-Dilution Provisions of the
Previous Warrants. As of October 15, 1996 the closing bid price of
the Company's Common Stock on the NASDAQ was $1.9375 per share.
<PAGE>
USE OF PROCEEDS
The Company will not receive any part of the proceeds of the
sale or transactions (other than the exercise price of the
outstanding warrants discussed in this Prospectus) made by the
Selling Shareholders. The Company would receive approximately
$7,575,000 if all outstanding warrants held by all of the Selling
Shareholders covering that portion of the shares of Common Stock
included in this Prospectus were exercised. See "Plan Of
Distribution." Any proceeds received by the Company from the
exercise of such warrants, less the Company's share of the
estimated expenses of the cost of this Offering, will be used by
the Company for general corporate purposes.
The Company has agreed to pay all costs and fees relating to
the registration of the Common Stock covered by this Prospectus,
except for any discounts, concessions or commissions payable to
underwriters, dealers or agents incident to the offering of the
securities covered by this Prospectus and any legal fees incurred
by any Selling Shareholders relating to this offering.
SUMMARY OF SECURITIES BEING OFFERED
This Prospectus covers approximately 3,700,000 shares of
Common Stock which may be issued upon conversion of the 5,500
shares of Series 3 Preferred Stock issued by the Company to RBB
Bank in connection with the Private Placement ("Conversion
Shares"), 2,000,000 shares of Common Stock issuable upon the
exercise of the RBB Warrants, each for 1,000,000 shares of Common
Stock, which were also previously issued by the Company to RBB Bank
in connection with the Private Placement ("Warrant Shares"), and
330,000 shares that the Company may issue in payment of dividends
that accrue on the Series 3 Preferred Stock pursuant to the
Subscription Agreement ("Dividend Shares") for a twenty-four (24)
month period from the date of issuance of the Series 3 Preferred
Stock pursuant to the terms of the Series 3 Preferred Stock,
assuming the price of the Common Stock is $2.00 per share at the
time of such dividends. This Prospectus also covers the 1,420,000
shares issuable upon the exercise of nine warrants which were
previously issued to Carey, Charles, Search, Rosen, Blair, and
Gorlin ("Additional Warrant Shares").
Under the terms of the Private Placement, the Company agreed
to use reasonable efforts to register the Conversion Shares and the
Warrant Shares under the Act. The Series 3 Preferred Stock and the
RBB Warrants were issued pursuant to the terms of the Subscription
Agreement. The 5,500 shares of Series 3 Preferred Stock were issued
at a price of $1,000 per share, and, in connection therewith, the
Company granted to RBB Bank the RBB Warrants to purchase up to
2,000,000 shares of the Company's Common Stock, with 1,000,000
shares of Common Stock exercisable at $2.00 per share and 1,000,000
shares of Common Stock exercisable at $3.50 per share. The number
of shares of Common Stock that may be acquired upon conversion of
the Series 3 Preferred Stock or upon exercise of the RBB Warrants
and the exercise price thereof are subject to adjustment under the
anti-dilution provisions of the Series 3 Preferred Stock and the
RBB Warrants. See "The Company--Private Placement." The RBB
Warrants are for a term of five (5) years. The Series 3 Preferred
Stock is not entitled to any voting rights, except as required by
law. Dividends on the Series 3 Preferred Stock accrue at a rate of
six percent (6%) per annum, payable semi-annually as and when
declared by the Board of Directors, and such dividends are
cumulative. Dividends shall be paid, at the option of the Company,
in the form of cash or Common Stock of the Company, and, as a
result, this Prospectus also covers the Dividend Shares. See "The
Company--Private Placement." While the conversion of the Series 3
Preferred Stock could result in the issuance of up to approximately
7,300,000 shares of Common Stock, or more under certain limited
circumstances, the terms of the Private Placement require the
Company to use reasonable efforts to register only approximately
3,700,000 shares to be issued upon such conversion, which 3,700,000
shares would be the approximate amount issued upon such conversion,
<PAGE>
assuming the average of the closing bid prices of the Company's
Common Stock over the five (5) trading days immediately preceding
the conversion date or dates equals or exceeds $2.00 per share.
Also covered by this Prospectus are the Additional Warrant
Shares, all issuable upon the exercise of the various warrants
described hereafter and at the various prices indicated and subject
to the described terms of these warrants, including: (i) 295,000
shares of Common Stock issuable upon the exercise of two (2)
warrants previously issued by the Company to Carey, one for 195,000
shares issued in connection with a previous offshore transaction to
RBB Bank and exercisable at $0.73 per share and one for 100,000
shares issued in connection with the Private Placement and
exercisable at $1.75 per share; (ii) 450,000 shares of Common Stock
issuable upon the exercise of one (1) warrant previously issued by
the Company to Charles in connection with the Private Placement and
exercisable at $1.50 per share; (iii) 175,000 shares of Common
Stock issuable upon the exercise of three (3) warrants previously
issued by the Company to Search in connection with services
rendered by Search for the Company, of which 125,000 are
exercisable at $1.06 per share, and 50,000 are exercisable at $1.50
per share; (iv) 100,000 shares of Common Stock issuable upon the
exercise of one (1) warrant previously issued by the Company to
Rosen in connection with services rendered by Rosen to the Company
and exercisable at $1.75 per share; (v) 200,000 shares of Common
Stock issuable upon the exercise of one (1) warrant previously
issued by the Company to Blair in connection with the Private
Placement and exercisable at $1.75 per share; and (vi) 200,000
shares of Common Stock issuable upon the exercise of one (1)
warrant previously issued by the Company to Gorlin, a director of
the Company, exercisable at $1.75 per share.
Under the terms of the warrants covering the Additional
Warrant Shares, if, at any time or from time to time after the date
of each warrant, the Company shall (a) pay a dividend on its Common
Stock in shares of Common Stock, (b) subdivide its outstanding
shares of Common Stock into a greater number of shares, (c) combine
its outstanding shares of Common Stock into a smaller number of
shares, or (d) issue by reclassification of its Common Stock any
shares of any other class of capital stock of the Company, the
number of shares to issue pursuant to the warrant and the exercise
price of the warrant in effect immediately prior to such event
shall be adjusted so that, upon exercise of such warrant, the
holder shall be entitled to purchase under such warrant, without
additional consideration therefor, the number of shares of Common
Stock or other capital stock of the Company which he would have
owned or been entitled to purchase immediately following the
happening of any of the events described in this paragraph as (a),
(b) or (c) had such warrant been exercised and the holder become
the holder of record of the shares purchased pursuant to the
warrant immediately prior to the record date fixed for the
determination of stockholders entitled to receive such dividend or
distribution or the effective date of such subdivision, combination
or reclassification at a exercise price equal to the aggregate
consideration which the holder would have had to pay for such
shares issued pursuant to the warrant immediately prior to such
event divided by the number of shares issued pursuant to the
warrant the holder is entitled to receive immediately after such
event. If, as a result of an adjustment made as described in this
paragraph, the holder of this warrant thereafter surrendered for
exercise shall become entitled to receive shares of two or more
classes of capital stock or shares of Common Stock and any other
class of capital stock of the company, the Board of Directors
(whose determination shall be conclusive and shall be described in
a written notice to all holders of the warrants promptly after such
adjustment) shall determine the allocation of the adjusted exercise
price of the warrant between or among shares of such classes of
capital stock or shares of Common Stock and such other class of
capital stock.
The terms of the warrants covering the Additional Warrant
Shares also direct that in case of any consolidation or merger to
which the Company is a party, other than a merger or consolidation
in which the Company is the continuing or surviving corporation, or
in case of any sale or conveyance to another entity of all or
substantially all of the property of the Company as an entirety or
substantially as an entirety, the holder of the warrant shall have
the right thereafter, upon exercise of this warrant, to receive the
kind and amount of securities, cash or other property which he
would have owned or been entitled to receive immediately after such
consolidation, merger, sale or conveyance had this warrant been
exercised immediately prior to the effective date of such
<PAGE>
consolidation, merger, sale or conveyance and in any such case, if
necessary, appropriate adjustment shall be made in the application
thereafter with respect to the rights and interests of the holder
of this warrant to the end that the provisions of this paragraph
and the preceding paragraph thereafter shall be correspondingly
applicable, as nearly as may reasonably be, to such securities and
other property.
Additionally, under the terms of the warrants covering the
Additional Warrant Shares, if the Company shall distribute pro rata
to all of the holders of its then outstanding shares of Common
Stock (a) securities, other than shares of Common Stock or stock
options, or (b) property, other than cash, without payment
therefor, then, and in each such case, the holder of this warrant,
upon its exercise, shall be entitled to receive the securities and
property which such holder would hold on the date of such exercise
if, on the date of this warrant, the holder had been the holder of
record of the number of shares of the Common Stock subscribed for
upon such exercise and, during the period from the date of this
warrant to and including the date of such exercise, had retained
such shares and the securities and properties receivable by the
holder during such period.
<TABLE>
<CAPTION>
SELLING SECURITY HOLDERS
The following table sets forth, as of September 30, 1996, the
name of each Selling Shareholder, the amount of shares beneficially
owned prior to the Offering, the number of shares of Common Stock
offered hereby, and the amount of shares beneficially owned after
the Offering (assuming that all shares of Common Stock being
offered hereby are sold and that such are outstanding) and the
percentage of Common Stock beneficially owned after completion of
the Offering (assuming that all shares of Common Stock being
offered hereby are sold and that such are outstanding).
Percent-
age of
Common Common
Stock Stock
Common Benefic- Benefic-
Stock ially ially
Benefic- Owned Owned
ially Common After After
Owned Stock Completion Completion
Prior to Being of of
Selling Stockholder Offering(1) Offered Offering(8) Offering(8)
______________________________ _________ _________ __________ ___________
<S> <C> <C> <C> <C>
RBB Bank Aktiengesellschaft(2) 6,861,728 6,030,000 830,728 4.9%
J. P. Carey Enterprises, Inc.(3) 295,000 295,000 - -
J W Charles Financial
Services, Inc.(4) 450,000 450,000 - -
Search Group Capital, Inc.(5) 175,000 175,000 - -
Marvin S. Rosen 100,000 100,000 - -
D. H. Blair Investment
Banking Corp.(6) 698,117 200,000 498,117 3.0%
Steve Gorlin(7) 808,024 200,000 608,024 3.6%
___________________________
<PAGE>
<FN>
(1) Includes shares to be acquired upon the exercise of outstanding warrants,
whether or not such may be acquired during the next sixty (60) days.
(2) The shares of Common Stock included as beneficially owned by RBB Bank in
this table are shares that RBB Bank would be entitled to receive upon
exercise of all of the RBB Warrants and conversion of all of the Series 3
Preferred Stock held by RBB Bank (assuming that the average of the closing
bid prices of the Common Stock for the five (5) trading days prior to
conversion equals or exceeds $2.00 per share), and the number of shares of
Common Stock noted is based on the assumption that RBB Bank converted such
shares of Series 3 Preferred Stock into the maximum number possible. Does
not include shares of Common Stock that RBB Bank may receive in payment of
the accrued dividends on the Series 3 Preferred Stock.
(3) J. P. Carey Enterprises, Inc. currently provides investment banking
services to the Company.
(4) J W Charles Financial Services, Inc. ("Charles") currently provides invest-
ment banking services to the Company. In August, 1996, the Company and
Charles entered into a Financial Consulting Agreement, whereby Charles
agreed to provide certain financial consulting services for the Company.
The Company agreed, pursuant to the Financial Consulting Agreement, to pay
to Charles $12,000 per month and to grant to Charles the warrant to
purchase up to 450,000 shares of Common Stock, which Common Stock covered
by such warrant is included with the coverage of this Prospectus. The
Financial Consulting Agreement is for a term of one (1) year, subject to
earlier termination by either party upon thirty (30) days written notice.
(5) Search Group Capital, Inc. currently provides consulting services to the
Company.
(6) D. H. Blair Investment Banking Corp. currently provides investment banking
services to the Company.
(7) Mr. Gorlin is a director of the Company and beneficially owns more than
five percent (5%) of the Company's outstanding shares of Common Stock as
of the date of this Prospectus.
(8) Assumes (i) all shares of Common Stock covered by this Offering are sold,
including, but not limited to, the approximate 3,700,000 shares of Common
Stock to be acquired upon the conversion of the Series 3 Preferred Stock
and Common Stock to be acquired upon the exercise of warrants outstanding
as of the date of this Prospectus, (ii) that such Selling Shareholders do
not acquire beneficial ownership of any additional shares of Common Stock
after the date of this Prospectus, and (iii) that the Company does not
issue any additional shares of Common Stock after the date of this
Prospectus other than in connection with the conversion of the Series 3
Preferred Stock and the exercise of the warrants covering the shares of
Common Stock included within this Prospectus. Based on outstanding
Common Stock of 16,816,035 shares.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
Shares of Common Stock covered hereby may be offered and sold from time to
time by the Selling Shareholders. The Selling Shareholders will act
independently of the Company in making decisions with respect to the timing,
market, or otherwise at prices related to the then current market price or in
negotiated transactions. The Common Stock covered by this Prospectus may be
sold by the Selling Shareholders in one or more transactions on the NASDAQ
and the BSE or otherwise at market prices then prevailing or in privately
negotiated transactions. The shares may be sold by one or more of the
following: (i) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; (ii) purchases and resale by a broker-dealer for
<PAGE>
its account pursuant to this Prospectus, and (iii) a block trade in which the
broker-dealer so engaged will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction. The Company has not been advised by the Selling Shareholders
that they have, as of the date hereof, made any arrangements relating to the
distribution of the Securities covered by this Prospectus, except that
certain of the Selling Shareholders are broker-dealers. See "Selling
Security Holders." In effecting sales, broker-dealers engaged by the Selling
Shareholders may arrange for other broker-dealers to participate, and, in
such case, broker-dealers will receive commissions or discounts from the
Selling Shareholders in amounts to be negotiated immediately prior to sale.
In offering the Securities, the Selling Shareholders and any broker-
dealers and any other participating broker-dealers who execute sales for the
Selling Shareholders may be deemed to be "underwriters" within the meaning of
the Securities Act of 1933, as amended (the "Act") in connection with such
sales, and any profits realized by the Selling Shareholders and the
compensation of such broker-dealer may be deemed to be underwriting discounts
and commissions. In addition, any shares covered by this Prospectus which
qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus.
During such time as the Selling Shareholders may be engaged in a
distribution of Common Stock included herein such Shareholder is required to
comply with Rules 10b-6 and 10b-7 under the Exchange Act (as those Rules are
described in more detail below) and, in connection therewith, that they may not
engage in any stabilization activity, except as permitted under the Exchange
Act, are required to furnish each broker-dealer through which Common Stock
included herein may be offered copies of this Prospectus, and may not bid for
or purchase any securities of the Company or attempt to induce any person to
purchase any securities except as permitted under the Exchange Act.
Rule 10b-6 under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for or purchasing, for an account
in which the participant has a beneficial interest, any of the securities that
are subject of the distribution. Rule 10b-7 governs bids and purchases made in
order to stabilize the price of a security in connection with a distribution of
the security.
The Company will pay only that portion of the expenses incident to this
offering as described in the "Use of Proceeds."
LEGAL OPINION
Certain legal matters in connection with the Common Stock offered hereby
will be passed upon for the Company by Conner & Winters, a Professional
Corporation, Oklahoma City, Oklahoma.
EXPERTS
The financial statements and schedules incorporated by reference in this
Prospectus and elsewhere in the Registration Statement, to the extent and for
the periods indicated in their reports, have been audited by Arthur Andersen
LLP and Coopers & Lybrand, independent public accountants, and are included
herein in reliance upon the authority of said firms as experts in giving such
reports. Reference is made to the report for the year ended December 31, 1995,
issued by Arthur Andersen LLP, which contains a going concern modification.
<PAGE>
No dealer, salesman or other
person has been authorized to
give any information not con-
tained in this Prospectus and,
if given or made, such infor-
mation or representations must
not be relied upon as having
been authorized by the Company.
This Prospectus does not con-
stitute an offer to sell or a 7,450,000 Shares
solicitation of an offer to of Common Stock
buy any of the securities
offered hereby in any juris-
diction to any person to whom Perma-Fix Environmental
it is unlawful to make such Services, Inc.
offer in such jurisdiction.
Neither the delivery of this
Prospectus nor any sale here-
under shall under any circum-
stances create any implication
that there has been no change
in the affairs of the Company
since the date hereof.
_______________________
Table of Contents Common Stock
Page
____
Available Information . . . . . 3
Incorporation by
Reference . . . . . . . . . . 3
Risk Factors. . . . . . . . .4-11 ______________
The Company . . . . . . . . 11-17 Prospectus
______________
Recent Developments . . . . . .18
Use of Proceeds . . . . . . . .19
Summary of Securities
Being Offered . . . . . . 19-21
Selling Security Holders. . 21-22
Plan of Distribution. . . . 22-23
Legal Opinion . . . . . . . . .23 November 13, 1996
Experts . . . . . . . . . . . .23
