<PAGE> 1
As filed with the Securities and Exchange Commission on August 30, 1999.
Registration No. 333-64995
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
SYNAGRO TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0511324
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
1800 BERING, SUITE 1000
HOUSTON, TEXAS 77057
(713) 369-1700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ROSS M. PATTEN
1800 BERING, SUITE 1000
HOUSTON, TEXAS 77057
(713) 369-1700
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
With Copies To:
DAVID F. TAYLOR
LOCKE LIDDELL & SAPP LLP
600 TRAVIS, 34TH FLOOR
HOUSTON, TEXAS 77002
(713) 226-1200
Approximate date of commencement of proposed sale to public: From time to time
after the effective date of this Registration Statement, as determined by the
Selling Stockholders.
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. [ ]
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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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION DATED AUGUST 30, 1999
PROSPECTUS
600,000 SHARES
SYNAGRO TECHNOLOGIES, INC.
COMMON STOCK
------------------------------------
Certain selling securityholders (the "Selling Securityholders") of Synagro
Technologies, Inc., a Delaware corporation ("Synagro" or the "Company") are
hereby offering for resale up to 600,000 shares (the "Shares") of the common
stock, par value $.002 per share, of the Company (the "Common Stock"). Of such
Shares, 300,000 are issuable upon exercise of an aggregate of 50,000
Representatives Warrants to Purchase Units (the "Unit Warrants") held by the
Selling Securityholders and 300,000 are issuable upon exercise of 300,000 Common
Stock Purchase Warrants ("Redeemable Warrants" and, together with the Unit
Warrants, the "Warrants") which are issuable to the Selling Securityholders upon
exercise of the Unit Warrants held by them, along with an indeterminate number
of shares of Common Stock issuable upon exercise of the Warrants pursuant to
certain anti-dilution provisions of the Warrants. The Company will not receive
any of the proceeds from the sale of the Common Stock offered hereby.
The Common Stock is traded on the Nasdaq SmallCap Market under the symbol
"SYGR." On July 21, 1999, the closing sale price of the Common Stock on the
Nasdaq SmallCap Market was $6.375 per share.
The Common Stock may be offered and sold from time to time by Selling
Securityholders 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 Securityholders and brokers
executing selling orders on behalf of the Selling Securityholders 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 $18,000 will be paid by the
Company.
PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY SHOULD CONSIDER
CAREFULLY THE MATTERS SET FORTH UNDER THE CAPTION "RISK FACTORS" BEGINNING ON
PAGE 3.
------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------------------
The date of this Prospectus is August 30, 1999
<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 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. Information regarding the operation
of the public reference facilities may be obtained by calling the Commission at
1-800-SEC-0330. 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/A for the fiscal year ended
December 31, 1998, as amended;
(2) the Company's Definitive Proxy Statement on Schedule 14A for the 1998
Annual Meeting of Stockholders, as filed on July 9, 1998;
(3) the Company's unaudited Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1999 and June 30, 1999;
(4) the Company's Current Reports on Form 8-K dated March 12, 1999, May 10,
1999, and August 25, 1999, and on Form 8-K/A dated March 12, 1999, July 1,
1999, and July 7, 1999;
(5) the description of the Common Stock contained in the Company's Registration
Statement on Form 10 (No. 21054), as filed on December 30, 1992, and all
amendments and reports thereafter filed for the purpose of updating such
description; and
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(6) the description of the Company's preferred share purchase rights
contained in the Company's Registration Statement on Form 8-A
(No. 21054), as filed on December 27, 1996.
All other 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, except as so modified or
superseded, to constitute a part of this Prospectus.
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., 1800 Bering, Suite 1000, Houston, Texas
77057, Attn: Mark A. Rome, Secretary, telephone (713) 369-1700.
THE COMPANY
GENERAL
The Company is a leading consolidator in the biosolids management
services industries. It provides land application, composting, lime
stabilization and product marketing to its municipal and commercial customer
base in some 20 states. The Company offers a full range of management services
in the biosolids industry, including regulatory compliance permit assistance,
and the design and operation of processing facilities.
The Company was incorporated under Nevada law in 1986 and was
reincorporated under Delaware law in 1996. Its principal offices are located at
1800 Bering, Suite 1000, Houston, Texas 77057, and its telephone number is (713)
369-1700.
RECENT DEVELOPMENTS
On May 17, 1999, the Company appointed J. Paul Withrow as Executive
Vice President and Chief Financial Officer. Mr. Withrow joined the Company from
his previous position as Vice President and Chief Accounting Officer of
Integrated Electrical Services Inc., a leading national provider of electrical
contracting and maintenance services.
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
The Company incurred a net loss of approximately $4.5 million for the
year ended December 31, 1998, a net income of approximately $1.1 million for the
year ended December 31, 1997 and a net loss of approximately $7.6 million for
the year ended December 31, 1996. The Company has historically financed its
operations principally through the sale of equity and debt securities and
through funds provided by operating activities. On March 31, 1998, the Company
completed a private placement (the "Private Placement") of 1,458,335 shares of
Series B Preferred Stock, par value $.002 per share (the "Series B Preferred
Stock") resulting in gross proceeds to the Company of approximately $3.5
million. Subsequently, said 1,458,335 shares of Series B Preferred Stock were
converted into a like number of shares of Common Stock. There can be no
assurances that the Company will operate profitably in the future or generate
positive cash flow from operations. Nor can there be any assurances that capital
in excess of the proceeds of the Private Placement 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 March 31, 1999, the Company had long-term borrowings of
approximately $28.6 million, and current liabilities of approximately $3.5
million. 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
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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, as amended, and comparable state enactments impose strict liability
(liability without fault) for the release 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 persons 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 $10,000,000. The Company's financial
condition and results of operations could be materially adversely affected by a
claim that is not covered or is only partially covered by liability insurance.
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 materially 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 biosolids
management services 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
therefore, 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
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
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can be no assurance the current strategy will result in the desired effect of
improving the Company's competitive position and financial condition.
POTENTIAL ACQUISITION LIABILITIES
The Company has expanded its business operations significantly since
1992 through the acquisition of existing businesses. Liabilities may exist with
respect to future acquisition candidates or completed acquisitions that the
Company has failed or has 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. Additionally, 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.
GOODWILL ISSUES
The Company has determined the estimated benefits period for goodwill
to be 20 to 40 years with a substantial majority of such goodwill with a life
of 40 years. If the Company has understated or overlooked a material
intangible asset having a benefit period less than the amortized period being
used, or has overlooked factors indicating that a shorter benefit period for
goodwill is appropriate, (1) earnings reported in periods immediately following
the acquisition will be overstated and (2) earnings subsequently would be
burdened by a continuing charge without the associated benefit to income that
is expected in arriving at the consideration paid for acquisitions. Earnings
in later years also could be significantly affected if management then
determines that the remaining balance of goodwill has become impaired. The
Company has reviewed all the factors and related future cash flows considered
in arriving at the amount paid for acquisitions. The Company has concluded
that (1) the anticipated future cash flows associated with the intangible
assets recognized in the acquisitions will continue throughout the period of
amortization selected and (2) no persuasive evidence exists that any material
portion will dissipate over a shorter period. The Company's conclusions may
prove to be incorrect. During May 1999, the Financial Accounting Standards
Board ("FASB") tentatively decided to reduce the current maximum write-off
period for goodwill from 40 years to 20 years for most companies. The 20 year
write-off period may apply only to acquisitions occurring after a future
effective date that the FASB will set. The FASB will issue a formal proposal on
this subject for public comment later in the year. Should the FASB's final
pronouncement apply only to business combinations consummated after a future
date, there should be no impact on the amortization expense for our previously
consummated acquisitions that use a 40 year goodwill life. However, if the FASB
effects a change that requires us to apply a reduced amortization period on our
previous acquisitions, our future operating results would be negatively
impacted.
COMPETITION
The Company competes with other businesses, including businesses in
the solid waste collection and disposal business. In many cases, these
competitors are significantly 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.
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 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
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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 and
related industries, 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 attract additional qualified personnel. The Company
does not have key-man life insurance on any employees of the Company.
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.
On December 23, 1996, the Company declared a dividend distribution of
one right (a "Right") for each outstanding share of Common Stock that, 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 in that they 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. Additionally,
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. See "Description of Capital Stock--Shareholder Rights Plan."
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 future issuance of any 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 make
any future issuances of shares of its preferred stock, there can be no
assurances that the Company will not do so in the future. See "Description of
Capital Stock--Preferred Stock."
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SHARES ELIGIBLE FOR FUTURE SALE; ISSUANCE OF ADDITIONAL SHARES
Future sales of shares of Common Stock by the Company and its
stockholders could adversely affect the prevailing market price of the Common
Stock. As of July 19, 1999, the Company had a total of 17,537,789 shares of
Common Stock outstanding and no shares of preferred stock outstanding. See
"Description of Capital Stock--Preferred Stock." Further, as of said date, the
Company has granted options to purchase up to an additional 3,987,060 shares of
Common Stock and warrants to purchase up to 770,000 shares of Common Stock.
Sales of substantial amounts of Common Stock in the public market, or the
perception that such sales may occur, could have a material adverse effect on
the market price of the Common Stock. Pursuant to its Restated Certificate of
Incorporation, the Company has the authority to issue additional shares of
Common Stock and preferred stock. See "Description of Capital Stock."
YEAR 2000
Certain computer programs and microprocessors use two digits rather
than four to define the applicable year. Any of the Company's computer programs
that have date-sensitive software and microprocessors may recognize a date using
"00" as the year 1900 rather than the year 2000. This phenomenon could cause a
disruption of operations, including, among other things, a temporary inability
to utilize equipment or engage in similar normal business activities. There can
be no assurance that the systems of customers, vendors, newly acquired
companies, sub-contractors, and other third party relationships on which we may
rely will be made Year 2000 compliant in a timely manner or that any such
failure to be Year 2000 compliant by another company would not have an adverse
effect on our business or consolidated results of operations, financial position
or liquidity.
SELLING SECURITYHOLDERS
The following table sets forth certain information, as of July 19,
1999, with respect to the number of shares beneficially owned and being
offered hereby by the Selling Securityholders (the "Shares"):
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
BEFORE OFFERING(1)
----------------------------------------------------- -------------------
NUMBER OF SHARES
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF CLASS OFFERED
--------------------------- ---------------------- -------------------
<S> <C> <C> <C>
M.K. Koo (2) 2,208 * 2,208
Bonso Electronics International, Inc. (2) 2,208 * 2,208
Jim Rappaport (2) 2,208 * 2,208
Freshman, Marantz, Orlanski & Klein (2) 1,104 * 1,104
Robert Grossman (2) 444 * 444
Guy Amico (2) 3,636 * 3,636
Andy Lassack (2) 168,000 * 168,000
Roy Amico (2) 14,520 * 14,520
Doug Kaiser (2) 14,520 * 14,520
Joe Visconti (2) 25,404 * 25,404
Ted Cooper (2) 444 * 444
Irving Rappaport (2) 444 * 444
Larry Brahim (2) 444 * 444
Rick Rappaport (2) 45,696 * 45,696
Myrna Domingo (2) 4,200 * 4,200
Frank Salvator (2) 14,520 * 14,520
Matthew K. Rochlin (2) 40,800 * 40,800
Gayle Aufderheide (2) 27,600 * 27,600
Cathy Mayberry (2) 3,300 * 3,300
Steve Marchese (2) 6,000 * 6,000
Nutmeg Securities, Ltd. (2)(3) 9,300 * 9,300
John Lane (2) 213,000 1.2% 213,000
- -------------------------
* Less than one percent.
</TABLE>
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<PAGE> 9
(1) No information is given with respect to beneficial ownership after the
Offering because the Company is unable to determine the number of
Shares that will be sold in the Offering.
(2) Represents shares of Common Stock issuable upon exercise of Warrants
issued by the Company. Each Unit Warrant entitles the holder thereof
to purchase an aggregate one Unit, each Unit consisting of six shares
of Common Stock and six Redeemable Warrants (each of which is, in
turn, exercisable for one share of Common Stock). All or any of the
securities may be exercised at any time, and the Warrants expire on
October 11, 2000. The holders of the Warrants have certain demand
registration rights which have been fulfilled by the filing of the
registration statement of which this Prospectus is a part.
(3) Nutmeg Securities, Ltd. acted as an underwriter and as co-manager in
the public offering pursuant to which the Warrants were issued.
PLAN OF DISTRIBUTION
This Prospectus relates to the resale of up to 600,000 shares of
Common Stock issuable upon exercise of Warrants held by the Selling
Securityholders. The Company will not receive any of the proceeds from the
offering of the shares of Common Stock offered hereby. The Company has been
advised by the Selling Securityholders that the Shares may be sold or
distributed from time to time by the Selling Securityholders directly to one or
more purchasers (including pledgees) or through brokers, dealers or underwriters
who may act solely as agents or may acquire Shares as principals, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices negotiated prices, or at fixed prices, which may be changed. The
distribution of the Shares may be effected in one or more of the following
methods: (i) ordinary brokers' transactions, which may include long or short
sales; (ii) transactions involving cross or block trades or otherwise in any
market or markets where the Company's Common Stock is traded; (iii) purchases by
brokers, dealers or underwriters as principal and resale by such purchasers for
their own accounts; (iv) "at the market" to or through market makers or into an
existing market for the Common Stock; (v) in other ways not involving market
makers or established trading markets, including direct sales to purchasers or
sales effected through agents; (vi) through transactions in options, swaps or
other derivatives (whether exchange-listed or otherwise), or (vii) any
combination of the foregoing, or by any other legally available means.
8
<PAGE> 10
To the extent not described herein and as otherwise required by law,
the Company will file, during any period in which offers or sales are being
made, a supplement to this Prospectus or a post-effective amendment to the
Registration Statement of which this Prospectus is a part, which sets forth,
with respect to a particular offering, the specific number of Shares to be sold,
the name of the Selling Securityholder, the sale price, the name of any
participating broker, dealer, underwriter or agent, any applicable commission or
discount and any other material information with respect to the plan of
distribution.
In order to comply with the securities laws of certain states, if
applicable, the Common Stock offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
states the shares of Common Stock offered hereby may not be sold unless they
have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and
compliance therewith is effected.
The Selling Securityholders and any brokers, dealers, agents or
underwriters that participate with the Selling Securityholders in the
distribution of the Common Stock offered hereby may be deemed to be
"underwriters" within the meaning of the Securities Act, in which event any
commissions or discounts received by such brokers, dealers, agents or
underwriters and any profit on the resale of the Common Stock offered hereby and
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
The Company and the Selling Securityholders have agreed to indemnify
each other against certain liabilities arising under the Securities Act. The
Company has agreed to pay all expenses incident to the offer and sale of the
Common Stock pursuant to this Prospectus other than selling commissions and
fees.
The Common Stock is traded on the Nasdaq SmallCap Market.
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The Company is currently authorized to issue 100,000,000 shares of
Common Stock, of which an aggregate of 17,537,789 shares were outstanding as of
July 19, 1999. All of the issued and outstanding shares of Common Stock are
fully paid and nonassessable. Each share is entitled to one vote in the election
of directors and other corporate matters. The holders of Common Stock do not
have cumulative voting rights, which means that the holders of a majority of the
votes entitled to be cast by holders of the outstanding Common Stock are able to
elect all of the Company's directors. The Common Stock has no redemption
provisions, and the holders thereof have no preemptive rights. The holders of
Common Stock are entitled to receive dividends in such amounts as may be
declared by the Board of Directors, as permitted by applicable law, and upon
liquidation, dissolution, or winding up of the Company, subject to the rights of
any preferred stock then outstanding, the holders of Common Stock are entitled
to share ratably in the Company's assets according to the number of shares they
hold. The Common Stock is traded on the Nasdaq SmallCap Market. The transfer
agent and registrar for the Common Stock is Intercontinental Registrar and
Transfer Agency, Inc.
PREFERRED STOCK
The Board of Directors, without any action by the stockholders of the
Company, is authorized to issue up to 10,000,000 shares of preferred stock, par
value $.002 per share ("Preferred Stock"), in one or more series, and to
determine the voting rights (including the right to vote as a series on
particular matters), preferences as to dividends and in liquidation and the
conversion and other rights of each such series.
SHAREHOLDER RIGHTS PLAN
In December 1996, the Company declared a dividend distribution of one
Right for each outstanding share of Common Stock. Generally, each Right, 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 (the "Series A Preferred Stock"), at a price
of $10.00 per one one-thousandth (1/1,000th) share (the "Purchase Price"),
9
<PAGE> 11
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and
Intercontinental Registrar & Transfer Agency, Inc., as Rights Agent.
Each share of Series A Preferred Stock will be entitled to an
aggregate dividend of 1,000 times the dividend declared per share of Common
Stock. In the event of liquidation, the holders of the Series A Preferred Stock
will be entitled to an aggregate payment of 1,000 times the payment made per
share of Common Stock, but in no event will they receive less than $1,000 per
share. Each share of Series A Preferred Stock will have 1,000 votes, voting
together with the Common Stock, except as otherwise provided by law. Finally, in
the event of any merger, consolidation, or other transaction in which Common
Stock is exchanged, each share of Series A Preferred Stock will be entitled to
receive 1,000 times the amount received per share of Common Stock. The shares of
Series A Preferred Stock purchasable under the plan will not be redeemable.
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. 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
becomes an Acquiring Person (as defined in the Rights Agreement), redeem all
(but not less than all) of the then outstanding Rights at the Redemption Price.
LEGAL MATTERS
Certain legal matters in connection with the Shares have been passed
upon for the Company by Locke Liddell & Sapp LLP, Houston, Texas.
10
<PAGE> 12
================================================================================
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 Securityholders ................................................. 7
Plan of Distribution .................................................... 8
Description of Capital Stock ............................................ 9
Legal Matters ........................................................... 10
</TABLE>
================================================================================
================================================================================
600,000 SHARES
SYNAGRO TECHNOLOGIES, INC.
COMMON STOCK
(PAR VALUE $.002 PER SHARE)
------------------------------------
PROSPECTUS
------------------------------------
AUGUST 30, 1999
================================================================================
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC registration fee ................... $ 670
Legal fees and expenses ................ $ 8,500
Printing expenses ...................... $ 2,000
Accounting fees and expenses ........... $ 5,500
Miscellaneous .......................... $ 1,330
-------
Total Expenses ........ $18,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Delaware law, a corporation may include provisions in its
certificate of incorporation that will relieve its directors of monetary
liability for breaches of their fiduciary duty to the corporation, except under
certain circumstances, including a breach of the director's duty of loyalty,
acts or omissions of the director not in good faith or which involve intentional
misconduct or a knowing violation of law, the approval of an improper payment of
a dividend or an improper stock purchase or redemption or any transaction from
which the director derived an improper personal benefit.
Section 145(a) of the General Corporation Law of the State of Delaware
("DGCL") grants to the Company the authority to indemnify each officer and
director of the Company against liabilities and expenses incurred by reason of
the fact that he is or was an officer or director of the Company if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
determination as to whether a person seeking indemnification has met the
required standard of conduct is to be made (i) by a majority vote of the
directors who are not parties to such action, suit, or proceeding, even through
less than a quorum, (ii) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (iii) 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 any such
provisions the Company has entered into pursuant to any contractual indemnity
agreements 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.
In a suit brought to obtain a judgment in the corporation's favor,
whether by the Company itself or derivatively by a stockholder, Section 145(b)
of the DGCL only allows the Company to indemnify for expenses, including
attorneys' fees, actually and reasonably incurred in connection with the defense
or settlement of the case, and the Company 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 Company except as otherwise
approved by the Delaware Court of Chancery or the court in which the claim was
brought. According to the statute, 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).
Section 145 of the DGCL also allows the Company to purchase and
maintain insurance on behalf of its directors and officers against liabilities
that may be asserted against, or incurred by, such persons in any such capacity,
whether or not the Company would have the authority to indemnify such person
against liability under the provisions of Section 145. The Company has purchased
insurance on behalf of its directors and officers for such purposes.
Insofar as indemnification for liabilities under the Securities Act
may be permitted to directors, officers or persons controlling the Registrant
pursuant to the foregoing provisions, the Registrant has been informed that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and therefore is unenforceable.
II-1
<PAGE> 14
ITEM 16. EXHIBITS
(a) EXHIBITS
The exhibits listed below are filed as part of the Registration
Statement:
Exhibit
Number Description
------- -----------
4.1* Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1, filed October 25, 1996
(Registration No. 33-95028)).
4.2* Bylaws of the Company (incorporated by reference to Exhibit
3.2 to the Company's Registration Statement on Form S-1,
filed October 25, 1996 (Registration No. 33-95028)).
4.3* Specimen Common Stock Certificate of the Company
(incorporated by reference to the Company's Registration
Statement on Form 10, filed December 29, 1992).
5.1* Opinion of Porter & Hedges, L.L.P.
23.1* Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
23.2** Consent of Arthur Andersen LLP
23.3** Consent of Royster Smith Shelton & Company, PC.
23.4** Consent of Ernst & Young LLP.
24.1* Powers of Attorney
- -------------
* Previously filed.
** Filed herewith.
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.
II-2
<PAGE> 15
(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 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.
II-3
<PAGE> 16
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 August 30, 1999.
SYNAGRO TECHNOLOGIES, INC.
By: /s/ ROSS M. PATTEN
-----------------------------------
Ross M. Patten, 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 August 30, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
<S> <C>
/s/ ROSS M. PATTEN Chief Executive Officer, Chairman
--------------------------- of the Board and Director
Ross M. Patten (Principal Executive Officer)
/s/ PAUL C. SELLEW President and Chief Operating
--------------------------- Officer
Paul C. Sellew
/s/ J. PAUL WITHROW Executive Vice President, Chief
--------------------------- Financial Officer and Treasurer
J. Paul Withrow (Principal Financial Officer and
Principal Accounting Officer)
/s/ MARK. A. ROME Executive Vice President
--------------------------- and Chief Development Officer
Mark A. Rome
* Executive Vice President
--------------------------- and General Counsel
Alvin L. Thomas II
* Director
---------------------------
Kenneth Chuan-Kai Leung
* Director
---------------------------
Irwin I. Gelbart
* Director
---------------------------
J. Mark Myers, M.D.
</TABLE>
II-4
<PAGE> 17
<TABLE>
<S> <C>
* Director
---------------------------
Alfred Tyler 2nd
* Director
---------------------------
Gene Meredith
* /s/ MARK A. ROME
---------------------------
Mark A. Rome
Attorney-in-fact
</TABLE>
II-5
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
4.1* Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1, filed October 25, 1996
(Registration No. 33-95028)).
4.2* Bylaws of the Company (incorporated by reference to Exhibit
3.2 to the Company's Registration Statement on Form S-1,
filed October 25, 1996 (Registration No. 33-95028)).
4.3* Specimen Common Stock Certificate of the Company
(incorporated by reference to the Company's Registration
Statement on Form 10, filed December 29, 1992).
5.1* Opinion of Porter & Hedges, L.L.P.
23.1* Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
23.2** Consent of Arthur Andersen LLP
23.3** Consent of Royster Smith Shelton & Company, PC.
23.4** Consent of Ernst & Young LLP.
24.1* Powers of Attorney
</TABLE>
* Previously filed
** Filed herewith
II-6
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports on the financial
statements of the following businesses included in the Synagro Technologies,
Inc. Current Report on Form 8-K/A filed on July 7, 1999; report dated June 30,
1999 on the consolidated financial statements of Synagro Technologies, Inc. as
of December 31, 1997 and 1998 and for the three years ended December 31, 1998,
and our report dated June 30, 1999 on the combined financial statements of
Anti-Pollution Associates, Inc. and D&D Pumping, Inc. as of December 31, 1998
and for the year then ended; and our report dated June 8, 1998 on the combined
financial statements of A&J Cartage and Related Companies as of December 31,
1996 and 1997 and for the three years ended December 31, 1997 included in the
Synagro Technologies, Inc. Current Report on Form 8-K/A filed on July 1, 1999
and to the incorporation of said reports into Synagro Technologies, Inc.'s
previously filed Registration Statements File Nos. 333-18029 and 333-64999 on
Form S-8 and Registration File No. 333-20825 on Form S-3.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Houston, Texas
August 26, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report in the Registrations (Form S-3 No. 333-64995
and 333-65005) and related prospectus of Synagro Technologies, Inc. for the
registration of 2,850,622 shares of its common stock, incorporated by reference
with respect to the financial statements of Amsco, Inc. included in Synagro
Technologies, Inc.'s Current Reporting Form 8-K/A, dated July 7, 1999, filed
with the Securities and Exchange Commission.
/s/ Royster Smith Shelton & Company, P.C.
Royster Smith Shelton & Company, P.C.
Winston-Salem, NC
August 25, 1999
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report in the Registrations (Form S-3 No. 333-64995
and 333-65005) and related prospectus of Synagro Technologies, Inc. for the
registration of 2,850,622 shares of its common stock, incorporated by reference
with respect to the financial statements of Biosolids Division of Recyc, Inc.
included in Synagro Technologies, Inc.'s Current Reporting Form 8-K/A, dated
July 1, 1999, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Riverside, California
August 25, 1999
