<PAGE> 1
As filed with the Securities and Exchange Commission on January 31, 1997.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SYNAGRO TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0511324
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16000 STUEBNER AIRLINE, SUITE 420
SPRING, TEXAS 77379
(713) 370-6700
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Donald L. Thone, Chief Executive Officer With Copies To:
16000 Stuebner Airline, Suite 420 T. William Porter
Spring, Texas 77379 Porter & Hedges, L.L.P.
(713) 370-6700 700 Louisiana, 35th Floor
(Name, address, including zip code, Houston, Texas 77002
and telephone number, including (713) 226-0600
area code, of agent for service)
Approximate date of commencement of proposed sale to public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box.[ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box.[X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.[ ]_____________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.[ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
Proposed Maximum Proposed Maximum
Offering Price Aggregate
Title of Each Class of Securities to be Amount to be Per Offering Amount of
Registered Registered Share Price Registration Fee
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.002 per share(2) . . 421,296 $2.78125 (1) $1,171,729.50 $355.07 (1)
========================================================================================================================
</TABLE>
(1) Pursuant to Rule 457(c), the registration fee is calculated basis of the
average of the high and low sale prices for the Common Stock on the Nasdaq
SmallCap Market on January 27, 1997, $2.78125 per share.
(2) Includes preferred share purchase rights associated with the Common Stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
SUBJECT TO COMPLETION DATED JANUARY 31, 1997
PROSPECTUS
421,296 SHARES
SYNAGRO TECHNOLOGIES, INC.
COMMON STOCK
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The shares offered hereby are shares of common stock, par value $.002 per
share (the "Common Stock"), of Synagro Technologies, Inc., a Delaware
corporation ("Synagro" or the "Company"), are owned by, or subject to options
held by, certain shareholders of the Company ("Selling Stockholders"). The
Company will not receive any part of the proceeds of the sale of the Common
Stock offered hereby.
The Common Stock is traded on the Nasdaq SmallCap Market under the symbol
"SYGR." On January 27, 1997, the closing sale price of the Common Stock on the
Nasdaq SmallCap Market was $2.875 per share.
The Common Stock may be offered and sold from time to time by Selling
Stockholders through brokers or dealers or directly to one or more purchasers
in negotiated transactions, at market prices prevailing at the time of sale or
at prices related to such market prices. The Selling Stockholders and brokers
executing selling orders on behalf of the Selling Stockholders may be deemed to
be "underwriters" within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"), in which event commissions received by such brokers may
be deemed to be underwriting commissions under the Securities Act. Although
each Selling Stockholder may sell all or a portion of the shares of Common
Stock offered hereby, no Selling Stockholder is required to make any such sale.
For further information concerning the plan of distribution of the Common
Stock, see "Plan of Distribution."
The expenses of this offering, estimated at $13,355.07, will be paid by the
Company.
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PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY SHOULD CONSIDER
CAREFULLY THE MATTERS SET FORTH UNDER THE CAPTION "RISK FACTORS" BEGINNING ON
PAGE 3.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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The date of this Prospectus is February ___, 1997.
<PAGE> 3
This Prospectus contains or incorporates by reference "Forward-looking
statements" within the meaning of Section 27A of the Securities Act, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). All statements other than statements of historical facts so included in
this Prospectus including, without limitation, statements regarding the
Company's business strategy, plans, objectives and beliefs of management for
future operations are forward-looking statements. Although the Company
believes the expectations and beliefs reflected in such forward- looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results
to differ materially from the Company's expectations ("Cautionary Statements")
are discussed herein under the captions "Risk Factors."
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Exchange Act,
and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
The Registration Statement (defined below), as well as such reports, proxy
statements and other information filed by the Company with the Commission can
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
its Regional Offices at Seven World Trade Center, New York, New York 10048 and
at Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained at prescribed
rates from the Public Reference Section of the Commission at 450 Fifth Street,
N.W. Washington, D.C. 20549. The Common Stock is listed and traded on the
Nasdaq SmallCap Market and certain of the Company's reports, proxy statements
and other information can be inspected at the offices of the Nasdaq Stock
Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006-1506. The Commission
maintains a site on the World Wide Web that contains certain documents filed
with the Commission electronically. The address of such site is
http://www.sec.gov and the Registration Statement may be inspected at such
site.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with any amendments or supplements thereto, the "Registration
Statement") under the Securities Act with respect to the shares offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits thereto, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement and the
exhibits thereto. Statements contained in this Prospectus (or in any document
incorporated into this Prospectus by reference) as to the contents of any
contract or other document referred to herein (or therein) are not necessarily
complete, and in each instance reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed with the Commission pursuant
to the Exchange Act, are incorporated herein by reference and made a part of
this Prospectus:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996.
3. The Company's Definitive Proxy Statement for the 1996 Annual Meeting
of Shareholders dated May 9, 1996.
4. The Company's Current Reports on Form 8-K dated August 2, 1996,
December 17, 1996, December 19, 1996 and December 27, 1996.
5. The description of the Company's preferred share purchase rights
contained in the Company's Registration Statement on Form 8-A (No.
21054), filed with the Commission on December 27, 1996; and
All documents filed by the Company pursuant to Section 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 of the Common Stock covered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the respective dates of filing of such documents. Any statement
contained in a document or information incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document that also is, or is deemed to be,
incorporated herein by reference, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, expect as so
modified or superseded, to constitute a part of this Prospectus.
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<PAGE> 4
The Company undertakes to provide, without charge, to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon the written or oral request of such person, a copy of any and all of the
documents or information referred to above that has been or may be incorporated
by reference in this prospectus (excluding exhibits to such documents unless
such exhibits are specifically incorporated by reference). Requests should be
directed to Synagro Technologies, Inc., 16000 Stuebner Airline, Spring, Texas
77379, Attn: Daniel L. Shook, Secretary, telephone (713) 370-6700.
THE COMPANY
Synagro Technologies, Inc. is engaged primarily in the business of the
management of biosolids through beneficial reuse of organic materials. The
Company offers a variety of services with respect to this business, including
the transportation, treatment and monitoring of biosolids, and the marketing of
end products from the treatment of such materials. The principal office of the
Company is located at 16000 Stuebner Airline, Suite 420, Spring, Texas 77379,
and its telephone number is (713) 370-6700.
RISK FACTORS
Prospective investors should consider the following Risk Factors,
together with the other information contained elsewhere in this Prospectus,
prior to purchasing the securities offered hereby.
LACK OF PROFITABILITY
Although the Company has achieved net income of $689,059 for the nine
(9) months ended September 30, 1996, the Company incurred net losses of
$4,553,169 and $4,164,795 for the years ended December 31, 1995 and 1994,
respectively. Further, as of September 30, 1996, the Company had an
accumulated deficit of approximately $10,511,978. The Company has historically
financed its operations principally through the sale of equity and debt
securities and through funds provided by operating activities. On October 18,
1995, the Company completed a public offering of 500,000 units of the Company's
securities (the "Public Offering"), resulting in net proceeds to the Company of
$4,920,000. There can be no assurances that the Company will operate
profitably in the future or generate positive cash flow from operations, or
that capital in excess of the net proceeds of the Public Offering or from the
proceeds of the exercise of the warrants in connection with this Public
Offering, if any, will not be required in order to meet the Company's debt
service obligations or to accomplish the Company's current growth strategy.
There can be no assurances that capital needed for the future will be available
on terms favorable to the Company or at all.
HIGHLY LEVERAGED BUSINESS OPERATIONS
As of September 30, 1996, the Company had short-term borrowings of
$803,724 and long-term borrowings of $8,206,291, the current portion of which
was $3,798,244. The Company also had short-term borrowings to affiliates as of
September 30, 1996 of approximately $125,000, which are secured by certain
assets of the Company. Accordingly, the Company will require substantial cash
flow to meet its debt service requirements. Payment of principal and interest
on these obligations will depend on the Company's future performance, which is
subject to general economic and business factors beyond the Company's control.
Further debt may be needed to finance any future acquisitions. It is likely
therefore, that the Company's exposure to the risks associated with leverage
will increase as its growth strategy is implemented.
POTENTIAL ENVIRONMENTAL LIABILITY
The Comprehensive Environmental Response, Compensation and Liability
Act of 1980, amended ("CERCLA"), and comparable state enactments, impose strict
liability (liability without fault) for the releases of hazardous substances at
a particular site. Liable parties include owners and operators of the site,
parties who created the hazardous substances released at the site and parties
who arranged for the transportation of hazardous substances to such site.
Biosolids, by-products and end products have the potential to contain hazardous
substances. The Company could face claims by governmental authorities, private
individuals and other person alleging that hazardous substances were released
during the treatment process or from the use of end products. The Company also
may be exposed to certain environmental claims resulting from the actions of
its end product customers. The Company currently maintains environmental
impairment liability insurance in the amount of $6,000,000. The Company 's
financial condition and results of operations could be materially adversely
affected by a claim that is only partially covered by liability insurance.
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RELIANCE ON ENVIRONMENTAL REGULATION
Federal and state environmental legislation and regulations require
substantial expenditures by wastewater sludge generators and impose liabilities
on such entities for noncompliance. Environmental laws and regulations are, and
will continue to be, a principal factor affecting the marketability of the
Company's services and products. Any changes in these laws or regulations may
adversely affect the operations of the Company by imposing additional
regulatory compliance costs on the Company, and/or on wastewater sludge
generators who may be potential customers of the Company. Such additional
costs may prevent customers from using the Company's treatment methods for the
Company's services or products. To the extent that demand for the Company's
services and products is created by the need to comply with environmental laws
and regulations, any relaxation in the standards created by, or strict
enforcement of such laws and regulations may reduce the demand for the
Company's services and products, thereby adversely affecting the Company's
financial condition and results of operations .
REGULATORY REQUIREMENTS OF OPERATIONS
The Company operates in a highly regulated environment and the
wastewater treatment and other plants at which the Company's treatment
processes may be implemented are required to have permits and approvals from
federal, state and local governments for the operation of such facilities. In
addition, the construction of biosolid treatment facilities may require a
number of permits and approvals, and may in certain instances require an
environmental impact study. Any of such permits or approvals or applications
therefor, may be subject to denial, revocation or modification under various
circumstances. Also, if new environmental legislation or regulations are
enacted or existing legislation or regulations are amended or are enforced
differently, the Company may be required to obtain additional permits or
approvals. The process of obtaining a required permit or approval may be
lengthy and expensive and the issuance of such permits or the obtaining of such
approval may be subject to public opposition. There can be no assurances that
the Company will be able to meet applicable regulatory requirements or that
further attempts by state or local authorities to prohibit the land application
or agricultural use of biosolids will not be successful, which could result in
a material adverse impact on the Company's financial condition and results of
operations.
ACQUISITION STRATEGY; ADDITIONAL FINANCINGS
The Company's current strategy is to expand as a provider of
biosolids management and beneficial reuse of organic materials and related
services through an on-going acquisition program of businesses in the biosolids
management industry in selected markets. Inherent in such strategy are certain
risks, such as increasing demand for liquidity and capital resources and
increasing debt service requirements. The market for such acquisition
prospects is highly competitive and management expects that certain potential
acquirors will have significantly greater capital than the Company. The
success of the Company's strategy and its ability to repay increased debt
service will depend in part on the Company's ability to continue to contract
for, finance and integrate into its business future acquisitions. There can be
no assurance the current strategy will result in the desired effect of
improving the Company's competitive position and its financial condition.
POTENTIAL ACQUISITION LIABILITIES
The Company has expanded its business operations significantly since
1992 through the acquisition of existing business. Liabilities may exist with
respect to future acquisition candidates or completed acquisitions that the
Company fails or is unable or has failed or been unable to discover, including
liabilities arising from non-compliance with environmental laws by prior
owners, and for which the Company, as a successor owner, may be responsible.
Warranties and indemnity provisions in such related acquisition agreements, if
obtained, may not fully cover any actually determined liabilities due to their
limited scope, amount or duration, or other reasons or the indemnitor or
warrantor may not be sufficiently solvent or have sufficient assets to satisfy
any resulting claim by the Company. In which case, the Company's financial
condition and results of operations could be materially adversely affected.
LARGER AND MORE ESTABLISHED COMPETITION
The Company competes with other businesses, including businesses in
the solid waste collection and disposal business. In many cases, these
competitors are larger and more firmly established than the Company. In
addition, many of such competitors have greater marketing and development
budgets and greater capital resources than the Company. Accordingly, there can
be no assurance that the Company will be able to achieve and maintain a
competitive position in the Company's industry.
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RISK OF MARKET ACCEPTANCE OF THE COMPANY'S PRODUCTS AND SERVICES
There can be no assurances that wastewater sludge generators who may
be potential customers of the Company will view any of the Company's biosolids
treatment methods as an economically and environmentally acceptable technology
for the treatment and recycling of wastewater sludges, that the Company will be
successful in marketing the Company's products or services, or that the
economic terms under which wastewater sludge generators may be willing to use
the Company's services will be profitable to the Company. Moreover, there can
be no assurances that producers of the by-products used in the Company's
treatment methods will supply such by-products to the Company at economically
acceptable prices.
BUSINESS SUBJECT TO WEATHER CONDITIONS
Although the Company provides its services on a year-round basis, the
Company's services may be adversely affected by inclement weather conditions.
Extended periods of rain, cold weather or other inclement weather conditions
may result in delays in commencing or completing projects, in whole or in part.
Any such delays may adversely affect the Company's operations and profitability
and may adversely affect the performance of other projects due to scheduling
and staffing conflicts.
DEPENDENCE ON ABILITY TO SECURE BONDING
In order to bid successfully on and secure contracts to perform
environmental services of the nature offered by the Company, the Company
frequently must provide surety bonds with respect to each respective project.
Thus, the number and size of contracts which the Company can perform is
directly dependent upon the Company's ability to obtain bonding which, in turn,
is dependent upon the Company's net worth and working capital. There can be no
assurance that the Company will have adequate bonding capacity to bid on all of
the projects which it would otherwise bid upon were it to have such bonding
capacity or that it will in fact be successful in obtaining additional jobs on
which it may bid.
RISK OF COST OVERRUNS
Historically, the majority of the Company's contracts are on a fixed
price or per unit basis. Risks inherent in such contracts include cost overruns
on projects caused by unanticipated price increases, unanticipated problems,
inefficient project management, inaccurate estimation of labor or material
costs or disputes over the terms and specification of contract performance.
There can be no assurance that cost overruns will not occur in the future and
have a material adverse effect on the Company's financial condition and results
of operations. In addition, in order to remain competitive in the future, the
Company may have to agree to enter into more fixed price and per unit contracts
than in the past.
DEPENDENCE ON KEY PERSONNEL
The Company is dependent upon the skills of its management team.
There is strong competition for qualified personnel in the biosolids treatment
industry, and the loss of key personnel or an inability to continue to attract,
retain and motivate key personnel could adversely affect the Company's
business. There can be no assurances that the Company will be able to retain
its existing key personnel or to attract additional qualified personnel. The
Company does not have key-man life insurance on any employees of the Company.
RISK OF LOSING NASDAQ SMALL-CAP MARKET LISTING
The failure of the Company to meet the maintenance requirements of the
Nasdaq SmallCap Market could result in the Company's securities being delisted
from the Nasdaq SmallCap Market, with the result that the Company's securities
would trade on the OTC Electronic Bulletin Board or in the "pink sheets"
maintained by the National Quotation Bureau, Inc., which are generally
considered to be less efficient markets. Delisting from the Nasdaq SmallCap
Market may cause a material decline in the stock price, difficulty in
conducting trades and impair the Company's ability to obtain future financing.
DISCLOSURE RELATING TO LOW-PRICED STOCKS
If, at any time, the Company's securities are not listed for trading
in the Nasdaq SmallCap Market, the Company's securities could become subject to
the "penny stock rules" adopted pursuant to Section 15 (g) of the Exchange Act.
Many brokers do not trade "penny stock" because of difficulties in complying
with the requirements of the penny stock rules and, as a result, the number of
broker-dealers willing to act as market makers in such securities is limited.
In the event that the
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Company's securities become subject to the "penny stock rules," there may
develop an adverse impact on the market for the Company's securities.
RISK OF REDEMPTION OF WARRANTS
The Company has given notice of a February 21, 1997 redemption of its
warrants, which could result in issuance of up to 3,000,000 shares of Common
Stock. The shares of Common Stock underlying the warrants have certain
registration rights.
LACK OF DIVIDENDS ON COMMON STOCK
The Company has paid no dividends on its Common Stock to date and
there are no plans for paying dividends in the foreseeable future.
POTENTIAL ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS; RIGHTS AGREEMENT
The Company's Restated Certificate of Incorporation includes certain
provisions which are intended to protect the Company's stockholders by
rendering it more difficult for a person or persons to obtain control of the
Company without cooperation of the Company's management. These provisions
include certain super majority requirements for the amendment of the Company's
Restated Certificate of Incorporation and bylaws. Such provisions are often
referred to as "anti-takeover" provisions. The inclusion of such
"anti-takeover" provisions in the Restated Certificate of Incorporation may
delay, deter or prevent a takeover of the Company which the stockholders may
consider to be in their best interests, thereby possibly depriving holders of
the Company's securities of certain opportunities to sell or otherwise dispose
of their securities at above-market prices, or limit the ability of
stockholders to remove incumbent directors as readily as the stockholders may
consider to be in their best interests.
The Company recently declared a dividend distribution of one right (a
"Right") for each outstanding share of Common Stock when exercisable, entitles
the registered holder to purchase from the Company one one-thousandth
(1/1,000th) of a share of preferred stock--Junior Participating Series A, par
value $.002 per share, at a price of $10.00 per one one-thousandth (1/1,000th)
share, subject to adjustment. The Rights have certain anti-takeover effects.
The Rights will cause substantial dilution to a person or group that attempts
to acquire the Company without conditioning the offer on the Rights being
redeemed or a substantial number of Rights being acquired, and under certain
circumstances the Rights beneficially owned (or that were owned) by such a
person or group may become void. However, the Rights should not interfere with
any merger or other business combination approved by the Board of Directors
because, if the Rights would become exercisable as a result of such merger or
other business combination, the Board of Directors, may, at its option prior to
the time that any person acquires 15% or more of the Company's Common Stock,
redeem all (but not less than all) of the then outstanding Rights at the
redemption price.
FUTURE ISSUANCES OF PREFERRED STOCK
The Company's Restated Certificate of Incorporation, as amended,
authorizes the issuance of preferred stock with such designation, rights and
preferences as may be determined from time to time by the Board of Directors,
without shareholder approval. In the event of the issuance of additional
series of preferred stock, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. Although the Company has no present intention to issue
any shares of its preferred stock, there can be no assurances that the Company
will not do so in the future.
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SELLING STOCKHOLDERS
The following table sets forth certain information, as of the date
hereof, with respect to the number of Shares beneficially owned and being
offered hereby by the Selling Stockholders:
<TABLE>
<CAPTION>
SHARES OFFERED SHARES TO BE
NAME AND ADDRESS SHARES OWNED HEREBY OWNED
<S> <C> <C> <C>
Donald L. Thone
16000 Stuebner Airline, Suite 420 563,296 246,296 317,000*
Spring, Texas 77379 . . . . . . . . . .
Daniel L. Shook
16000 Stuebner Airline, Suite 420 134,000 125,000 9,000*
Spring, Texas 77379 . . . . . . . . . .
Irwin I. Gelbart
77 North Village Avenue 50,000 50,000 --*
Rockville Center, New York 11570 . . .
</TABLE>
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* Less than one percent.
All of the shares offered hereby have been or are to be acquired by the
holders thereof upon the exercise of outstanding options granted to Messrs.
Thone, Shook and Gelbart pursuant to certain employment agreements in the case
of Messrs. Thone and Shook and a stock option agreement in the case of Mr.
Gelbart, at an exercise price of $2.00. Of the shares offered hereby, one-third
of the shares offered by Messrs. Thone and Shook have not yet vested and will
not vest until January 1998, and in the case of Mr. Gelbart, two-thirds of the
shares offered by him have not yet vested and will vest subject to certain
schedules. Mr. Thone has been a director of the Company since July 1993 and has
served as its chief executive officer since January 1994. Mr. Shook has been an
officer and director since January 1996; and Mr. Gelbart has served as a
director since 1991.
PLAN OF DISTRIBUTION
All or part of the Common Stock offered hereby may be sold by the
Selling Stockholders from time to time (i) on the Nasdaq SmallCap Market or
otherwise at prices current at the time of sale or at prices related to such
market prices, either directly or through brokers or to dealers, to the extent
that such prices are obtainable and satisfactory to the Selling Stockholders or
(ii) to the extent the same may be available, pursuant to Rule 144 under the
Securities Act. It is anticipated that any commissions with respect to such
sales will not exceed regular brokerage commissions. The Selling Stockholders,
and brokers executing selling orders on behalf of the Selling Stockholders and
dealers to whom the Selling Stockholders may sell, may be deemed "underwriters"
within the meaning of the Securities Act. Any profit represented by the excess
of the selling price over the cost of the shares sold in the case of dealers,
or any commission received in the case of brokers, may be deemed to be
underwriting discounts or commissions under the Securities Act.
DESCRIPTION OF COMMON STOCK
The Company has authorized 100,000,000 shares of Common Stock, par
value $0.002 per share. Holders of the Common Stock are entitled to cast one
vote for each share held of record, to receive such dividends as may be
declared by the Board of Directors out of legally available funds and to share
ratably in any distribution of the Company's assets after payment of all debts
and other liabilities, upon liquidation, dissolution or winding up. Cumulative
voting is allowed for the election of directors. Holders of the Common Stock
do not have preemptive rights or other rights to subscribe for additional
shares, and the Common Stock is not subject to redemption.
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EXPERTS
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from the Company's Annual Report
on Form 10-K for the year ended December 31, 1995 have been audited by Singer
Lewak Greenbaum & Goldstein LLP, independent auditors, as stated in their
reports which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters in connection with the Shares have been passed
upon for the Company by Porter & Hedges, L.L.P., Houston, Texas.
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NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING OF SECURITIES MADE HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, NOR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES IN ANY JURISDICTION
TO OR FROM ANY PERSON TO OR FROM WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER
OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE.
------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
================================================================================
================================================================================
421,296 SHARES
SYNAGRO TECHNOLOGIES, INC.
COMMON STOCK
(PAR VALUE $.002 PER SHARE)
------------------------------
PROSPECTUS
------------------------------
February ___, 1997
================================================================================
<PAGE> 11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . . . . $355.07
Blue Sky fees and expenses . . . . . . . . . . . . . . . 1,000.00
Legal fees and expenses . . . . . . . . . . . . . . . . 7,000.00
Printing expenses . . . . . . . . . . . . . . . . . . . 1,000.00
Accounting fees and expenses . . . . . . . . . . . . . . 2,000.00
Miscellaneous . . . . . . . . . . . . . . . . . . . . . 2,000.00
--------------
Total Expenses . . . . . . . . . . . . $ 13,355.07
==============
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
permits a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action.
In a suit brought to obtain a judgment in the corporation's favor,
whether by the corporation itself or derivatively by a stockholder, the
corporation may only indemnify for expenses, including attorney's fees,
actually and reasonably incurred in connection with the defense or settlement
of the case, and the corporation may not indemnify for amounts paid in
satisfaction of a judgment or in settlement of the claim. In any such action,
no indemnification may be paid in respect of any claim, issue or matter as to
which such persons shall have been adjudged liable to the corporation except as
otherwise approved by the Delaware Court of Chancery or the court in which the
claim was brought. In any other type of proceeding, the indemnification may
extend to judgments, fines and amounts paid in settlement, actually and
reasonably incurred in connection with such other proceeding, as well as to
expenses (including attorneys' fees).
The statute does not permit indemnification unless the person seeking
indemnification has acted in good faith and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the corporation and, in the
case of criminal actions or proceedings, the person had no reasonable cause to
believe his conduct was unlawful. There are additional limitations applicable
to criminal actions and to actions brought by or in the name of the
corporation. The determination as to whether a person seeking indemnification
has met the required standard of conduct is to be made (1) by a majority vote
of a quorum of disinterested members of the board of directors, or (2) by
independent legal counsel in a written opinion, if such a quorum does not exist
or if the disinterested directors so direct, or (3) by the stockholders.
The Restated Certificate of Incorporation and bylaws of the Company
require the Company to indemnify the Company's directors and officers to the
fullest extent permitted under Delaware law, and to implement such provisions
the Company has entered into contractual indemnity agreement with its directors
and executive officers. The Company's Restated Certificate of Incorporation
limits the personal liability of a director to the corporation or its
stockholders to damages for breach of the director's fiduciary duty.
The Company has purchased insurance on behalf of its directors and
officers against certain liabilities that may be asserted against, or incurred
by, such persons in their capacities as directors or officers of the
registrant, or that may arise out of their status as directors or officers of
the registrant, including liabilities under the federal and state securities
laws.
II-1
<PAGE> 12
ITEM 16. EXHIBITS
(a) EXHIBITS
The exhibits listed in the Exhibit Index below are filed as part of
the Registration Statement:
Exhibit Description
Number
5.1 Opinion of Porter & Hedges, L.L.P.
23.1 Consent of Porter & Hedges, L.L.P. (included in
Exhibits 5.1)
23.2 Consent of Singer Lewak Greenbaum & Goldstein LLP
24.1 Powers of Attorney (included on signature page hereto.)
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement:
(i) to include any prospectus required by section
10(a)(3) of the Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement; and
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
PROVIDED, HOWEVER, that clauses (a)(1)(i) and (a)(1)(ii) of this
paragraph do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic
reports filed with or furnished to the Securities and Exchange
Commission by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post- effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering;
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by registrant
of expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the
II-2
<PAGE> 13
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Donald L. Thone and Daniel L. Shook, and
each of them, either of whom may act without joinder of the other, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all pre- and post-effective amendments to this
Registration Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, and each of them, or the
substitute or substitutes of either of them, may lawfully do or cause to be
done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on January 31, 1997.
SYNAGRO TECHNOLOGIES, INC.
By: /s/ Donald L. Thone
----------------------------------------
Donald L. Thone, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Donald L. Thone President and Chief Executive Officer January 31, 1997
---------------------------------------- (Principal Executive Officer)
Donald L. Thone
/s/ Daniel L. Shook Chief Financial Officer and Director January 31, 1997
---------------------------------------- (Principal Financial Officer and
Daniel L. Shook Principal Accounting Officer)
/s/ Irwin I. Gelbart Director January 31, 1997
----------------------------------------
Irwin I. Gelbart
/s/ Tony D. Childers Director January 31, 1997
----------------------------------------
Tony D. Childers
</TABLE>
II-3
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
*5.1 Opinion of Porter & Hedges, L.L.P.
*23.1 Consent of Porter & Hedges, L.L.P. (included in Exhibits 5.1)
*23.2 Consent of Singer Lewak Greenbaum & Goldstein LLP
*24.1 Powers of Attorney (included on signature page hereto)
</TABLE>
- --------------
* Filed herewith.
<PAGE> 1
January 30, 1997
Synagro Technologies, Inc.
16000 Stuebner Airline, Suite 420
Spring, Texas 77379
Re: SYNAGRO TECHNOLOGIES, INC. REGISTRATION STATEMENT ON FORM S-3;
SHELF RESALE PROSPECTUS
Gentlemen:
At your request, we have examined the Restated Certificate of
Incorporation of Synagro Technologies, Inc., a Delaware corporation (the
"Company"), the bylaws and all corporate proceedings of the Company in
connection with the proposed sale to the public by certain Selling Stockholders
of the Company of up to 421,296 shares of Common Stock, par value $.002 per
share (the "Shares"), and have reviewed such other matters as we deem relevant
in the premises, and based upon such review and examination, we are of the
opinion that the Shares have been duly authorized and when issued in accordance
with the terms of outstanding options and upon the Company's receipt of the
exercise price thereunder, will be validly issued, fully-paid and nonassessable
outstanding shares of Common Stock of the Company.
We hereby consent to the reference to our firm under the caption
"Counsel" in the Prospectus included in the Registration Statement on Form S-3
being filed by the Company with the Securities and Exchange Commission in
connection with the offering of the Shares.
Very truly yours,
/s/ Porter & Hedges, L.L.P.
PORTER & HEDGES, L.L.P.
<PAGE> 1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTS
We have issued our report dated February 28, 1996 accompanying the consolidated
financial statements of Synagro Technologies, Inc. and subsidiaries included in
the Annual Report of Synagro Technologies, Inc. on Form 10-K for the year ended
December 31, 1995 which are incorporated by reference in this Registration
Statement. We consent to the incorporation by reference in the Registration
Statement of the aforementioned report and to the use of our name as it appears
under the caption "Experts."
/s/ SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
- ---------------------------------------------------------
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
January 27, 1997
