Filed with the Securities and Exchange Commission on January 4, 2000
Registration No. 333-89801
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
HI-RISE RECYCLING SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
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FLORIDA 65-0222933
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
8505 N.W. 74TH STREET
MIAMI, FLORIDA 33166
(305) 597-0243
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
-------------------------
DONALD ENGEL
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
HI-RISE RECYCLING SYSTEMS, INC.
8505 N.W. 74TH STREET
MIAMI, FLORIDA 33166
(305) 597-0243
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------------
COPIES OF COMMUNICATIONS TO:
GARY EPSTEIN, ESQ.
JEFFREY M. OSHINSKY, ESQ.
GREENBERG TRAURIG, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
(305) 579-0500
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
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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 (the "Securities Act"), 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. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================================
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF CLASS OF TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE PRICE (1) FEE(2)
============================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 3,401,205 $2.1563 - $2.03 $7,249,981.30 $1,996.50
============================================================================================================================
</TABLE>
(1) Estimated solely for the purposes of calculating the registration fee on
the basis of the average of the bid and ask prices of the Company's
common stock on December 29, 1999, as reported by the Nasdaq Small-Cap
Market.
(2) The Registrant paid $1,639.22 on October 27, 1999 in connection with the
original filing based on an offering price of $2.1563 per share.
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.
================================================================================
<PAGE>
PROSPECTUS
HI-RISE RECYCLING SYSTEMS, INC.
3,401,205 SHARES OF COMMON STOCK
($0.01 PAR VALUE)
-------------------------
The selling shareholders are offering up to 3,401,205 shares of our
common stock. Of these shares:
/bullet/ 3,095,205 are being offered by Ronald J. McCracken, our Executive Vice
President-Sales, which shares were acquired in connection with our
acquisition of Bes-Pac, Inc., a South Carolina corporation, pursuant to
the terms of an Agreement and Plan of Merger, dated as of October 9,
1998, by and among, Bes-Pac, Inc., Ronald McCracken, BPI Acquisition
Corp., our wholly owned subsidiary, and us; and
/bullet/ 106,000 shares are being offered by Roy C. Young, Jr. who acquired the
shares from Ronald J. McCracken in a private sale transaction;
/bullet/ 200,000 shares were issued to the other selling shareholders in
connection with our acquisition of substantially all of the assets of
Kohlman Engineering Corp., an Illinois corporation, pursuant to the
terms of an Asset Purchase Agreement, dated as of September 30, 1999,
among Kohlman Engineering Corp., Maxwell W. Croy, James Warren Hill, KE
Corporation, our wholly owned subsidiary, and us.
We will not receive any proceeds from the sale of common stock by the
selling shareholders under this prospectus.
Our common stock is traded on the Nasdaq SmallCap Market under the
symbol "HIRI." On December 29, 1999, the average of the high and low sales
prices of our common stock as reported by the Nasdaq SmallCap Market was $2.03
per share.
The selling shareholders have indicated to us that they presently
intend to retain ownership of a substantial portion of their shares of common
stock. However, the selling shareholders may offer the shares through public or
private transactions, on or off the Nasdaq SmallCap Market, at prevailing market
prices or at privately negotiated prices. The selling shareholders may make
sales directly to purchasers or through agents, dealers or underwriters.
-------------------------
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 5 OF
THIS PROSPECTUS.
-------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these shares or determined if this
prospectus is truthful and complete. Any representation to the contrary is a
criminal offense.
-------------------------
THE DATE OF THIS PROSPECTUS IS JANUARY 4, 2000
<PAGE>
YOU SHOULD RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. THE SELLING SHAREHOLDERS ARE OFFERING TO SELL, AND
SEEKING OFFERS TO BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS
AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF
DELIVERY OF THE PROSPECTUS OR OF ANY SALE OF THE COMMON STOCK.
TABLE OF CONTENTS
PAGE
----
Prospectus Summary.................................................3
Risk Factors.......................................................5
Forward Looking Statements........................................12
Use of Proceeds...................................................13
Selling Shareholders..............................................13
Plan of Distribution..............................................14
Legal Matters.....................................................15
Experts...........................................................16
Where You Can Find More Information...............................16
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<PAGE>
PROSPECTUS SUMMARY
This summary highlights selected information and does not contain all
the information that is important to you. You should carefully read this
prospectus and the documents we have referred you to in "Where You Can Find More
Information" on page 15 for more information about our company and our financial
statements. In this prospectus, references to "Hi-Rise Recycling Systems," "we,"
"our" and "us" refer to Hi-Rise Recycling Systems, Inc. and our wholly owned
subsidiaries, KE Corporation, IDC Systems, Inc., Wilkinson Company, Inc., Dade
County Recycling, Inc., Atlantic Maintenance of Miami, Inc., NuReTec of Florida,
Inc., Recycltech Enterprises Ltd., Acme Chutes, Inc., Bes-Pac, Inc., DeVivo
Industries, Inc., American Gooseneck, Inc. and Hesco Sales, Inc. and its wholly
owned subsidiary, United Truck and Body Corp.
GENERAL
We manufacture, distribute, market and sell recycling and other solid
waste handling equipment. Until February 1997, we primarily distributed,
marketed and sold a proprietary automated system known as the Hi-Rise System.
The Hi-Rise System collects source-separated recyclables and other solid waste
in multi-story residential buildings. In February 1997, we expanded our product
lines to include sheet metal fabrication products, consisting primarily of
garbage and laundry chutes. Since February 1998, we have consummated the
following strategic acquisitions in order to further expand our product lines:
/bullet/ In February 1998, we acquired Hesco Sales, Inc., a Florida
corporation that manufactures, markets and sells solid waste
handling equipment products including waste containers and
trash compaction systems.
/bullet/ In October 1998, we acquired Bes-Pac, Inc., a South Carolina
corporation that manufactures, markets and sells solid waste
handling equipment products including waste containers and
trash compaction systems.
/bullet/ In November 1998, we acquired Acme Chute Company, Inc., a
Florida corporation that manufactures, markets, sells and
installs sheet metal fabrication products.
/bullet/ In February 1999, we acquired DeVivo Industries, Inc., a
Connecticut corporation that manufactures, markets and sells
solid waste handling equipment products including waste
containers and trash compaction systems.
/bullet/ In September, 1999, we acquired certain of the assets of
Kohlman Engineering, Corp., an Illinois corporation that
manufactures, markets, sells and services waste compactors and
trash chutes.
/bullet/ In December 1999, we acquired American Gooseneck, Inc., an
Arizona corporation that manufactures, markets and sells solid
waste handling equipment products including waste containers
and trash compaction systems.
During the year ended December 31, 1998, sales of solid waste handling
equipment products and sheet metal fabrication products accounted for
approximately 54% and 36%, respectively, of our revenues. During the nine month
period ended September 30, 1999, sales of solid waste handling equipment
products accounted for approximately 79% of our revenues. We anticipate that, in
the future, the product lines of Hesco, Bes-Pac, DeVivo and American Gooseneck
will continue to be our single largest source of revenue. We also expect that
our other principal sources of revenue
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will be derived from sales of rubbish and linen chutes, trash compaction
systems, and sales and leases of the Hi-Rise System.
The Hi-Rise System, which is marketed under the Hi-Rise Recycling
System/trademark/ name, can either be incorporated into the design of a newly
constructed building, or it can be adapted to a multi-story building's existing
waste disposal chute. This system permits residents to conveniently dispose of,
without commingling, garbage and a variety of recyclable waste including glass,
metal, newspapers and plastic. By providing for source separation and collection
from each floor, the Hi-Rise System eliminates the cost, inconvenience and
potential health and fire hazards associated with manually transporting solid
waste in elevators and stairwells to a central storage area. The Hi-Rise System
is intended to promote recycling and divert recyclable waste from landfills,
while reducing the time, labor and hauling expenses normally associated with
solid waste disposal. We designed the Hi-Rise System in response to perceived
market opportunities arising out of increasing state and local environmental
regulation mandating or encouraging recycling.
To date, we have installed 191 Hi-Rise Systems, of which 75 were sold
and 116 were leased or rented. In connection with sales-type leases of the
Hi-Rise System, we have entered into shared savings agreements with building
owners. Under these agreements, we manage a building's solid waste disposal and
receive a percentage of the savings in waste disposal costs realized by the
owner.
RECENT TRANSACTIONS
AMERICAN GOOSENECK ACQUISITION. In December 1999, we acquired all of
the issued and outstanding common stock of American Gooseneck, Inc., a privately
held Arizona corporation. American Gooseneck is engaged in the business of
manufacturing and distributing solid waste handling equipment. The aggregate
purchase price we paid for the outstanding shares of American Gooseneck was
approximately $11,200,000 and consisted of $8,160,883 in cash to American
Gooseneck's former shareholders, $799,116 in cash to Merrill Lynch Business
Financial Services to satisfy amounts owed by American Gooseneck to such entity
in full, and an aggregate of 1,116,418 shares of our common stock, subject to
certain holdback provisions, having a fair market value of $2,240,000 as of the
closing of the acquisition. We funded the cash portion of the purchase price
through borrowings under our existing credit facility with GE Capital
Corporation and the other lenders to that credit facility.
GENERAL ELECTRIC CAPITAL CORPORATION CREDIT FACILITIES. In October
1999, we increased the amounts available under our existing credit facilities
with GE Capital by an aggregate of $21.0 million. In particular, our working
capital revolving line of credit was increased by $9.0 million, from $8.0
million to $17.0 million, and our acquisition line of credit was increased by
$12.0 million, from $8.0 million to $20.0 million. As a result of these
increases, the aggregate amount available under the credit facilities increased
to $61.0 million.
KOHLMAN ACQUISITION. In September 1999, we acquired substantially all
of the assets of Kohlman Engineering Corp., a privately held Illinois
corporation. Kohlman is engaged in the business of manufacturing, selling and
servicing waste compactors and trash chutes. In consideration for the purchase
of the Kohlman assets, we issued an aggregate of 200,000 shares of our common
stock having a fair market value of $425,000 at the time of issuance and repaid
certain of the sellers' expenses.
* * * * * *
We were incorporated in Florida in May 1990 as Recycling Systems, Inc.
and, in March 1992, changed our name to Hi-Rise Recycling Systems, Inc. Our
executive offices are located at 8505 N.W. 74th Street, Miami, Florida 33166,
and our telephone number is (305) 597-0243.
4
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A SIGNIFICANT
DEGREE OF RISK. WE URGE YOU TO CAREFULLY CONSIDER THIS INFORMATION TOGETHER WITH
THE OTHER INFORMATION IN THIS PROSPECTUS AND IN THE DOCUMENTS WE HAVE
INCORPORATED BY REFERENCE.
WE HAVE A HISTORY OF OPERATING LOSSES AND HAVE ONLY RECENTLY BEEN PROFITABLE.
Since our inception, we have incurred significant losses. At September
30, 1999, we had an accumulated deficit of approximately $638,202. We have been
profitable since June 1997, although we may not be able to remain profitable.
Our future operating results will depend upon many factors, including, among
others, our ability to effectively control expenses and successfully integrate
and manage the businesses that we have recently acquired.
WE HAVE SIGNIFICANT SECURED OUTSTANDING INDEBTEDNESS.
We have incurred significant indebtedness in order to finance our
operations and our recently completed strategic acquisitions. At December 31,
1999, indebtedness of approximately $47.2 million was outstanding under our
credit facilities with General Electric Capital Corporation. This financing is
collateralized by all of our existing and future tangible and intangible assets
and any future insurance proceeds. The financing is cross-guaranteed by each of
our operating subsidiaries. The terms of the GE Capital credit facilities
contain material restrictive covenants that may limit our flexibility and impair
our ability to react to changes in our business or obtain additional financing.
In particular, the GE Capital credit facilities limit or prohibit us from
/bullet/ merging or consolidating with another corporation,
/bullet/ selling all or substantially all of our assets or the assets
of a significant subsidiary,
/bullet/ purchasing all or substantially all of the assets of another
entity,
/bullet/ permitting or causing any material change in our controlling
ownership or senior management, or
/bullet/ operating in any material business other than our existing
business.
Any failure to comply with the covenants contained in the credit facilities or
otherwise perform our obligations under such facilities could result in GE
Capital declaring the indebtedness to be immediately due and payable and
foreclosing on our assets. Any one of these actions would have a material
adverse effect on our business, financial condition and prospects.
OUR ACQUISITION AND INTEGRATION EFFORTS MAY NOT BE SUCCESSFUL.
We have made a number of acquisitions in a relatively short period of
time and anticipate consummating additional acquisitions as opportunities arise.
Our acquisitions have resulted in
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rapid growth. Certain of our recent acquisitions are in an area of business that
was not our original focus and in which we have a limited operating history.
Accordingly, we may be confronted with a variety of business risks with which we
are not familiar and which could adversely affect our results of operations and
financial condition. The success of our acquisitions will be dependent upon,
among other things, our ability to:
/bullet/ select appropriate acquisition targets,
/bullet/ finance the transactions,
/bullet/ negotiate and complete the acquisitions, and
/bullet/ successfully integrate and manage newly acquired businesses
and operations.
There can be no assurance that we will successfully integrate and manage the
business that we acquire or, even if successful, that we will be able to
continue to successfully consummate strategic acquisitions.
WE DEPEND ON THIRD-PARTIES FOR SALES AND MARKETING.
We depend on independent sales representatives and distributors for the
sale and marketing of certain of our products. We have a network of distributors
who market our products. Our contracts with distributors generally grant them
the exclusive right to market our products in a specified territory. The
distributor typically is not required to meet designated sales quotas. Our
arrangements with our independent sales representatives and distributors
typically do not preclude them from selling competitive products. Our success
depends upon the expertise of our independent sales representatives and
distributors and their relationships with our customers. Our inability to
attract and retain qualified sales representatives and distributors would have a
material adverse effect on our business, financial condition and prospects.
GEOGRAPHIC CONCENTRATION EXPOSES US TO REGIONAL RISKS.
As of September 30, 1999, approximately 33% of our sales had been to
customers located in the State of Florida. In addition, Hesco's customer base
consists of waste haulers and municipalities located primarily in the State of
Florida. In the event the economy of the State of Florida suffers a downturn,
the demand for our products and services could be adversely affected. A
reduction in the demand for our products and services would materially adversely
affect our business, financial condition and prospects.
WE ARE AT RISK FOR LIABILITY FOR PERSONAL INJURY CLAIMS.
Our business involves substantial risks of liability, including
exposure to claims made by users of our waste handling equipment products for
personal injuries. Our subsidiary, IDC Systems, is currently a defendant in a
lawsuit involving a personal injury matter. The adverse party is seeking damages
which are in excess of applicable insurance coverage. If the claims are
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not resolved in IDC Systems' favor, IDC Systems could be required to pay
substantial monetary damages and/or curtail or cease its operations. Although we
believe, based upon the advice of counsel, that any liability arising out of
such claims will be limited to the assets of IDC Systems, it is possible that we
could become liable for such claims, which could have a material adverse effect
on our business, financial condition and prospects. Additionally, Hesco is
currently defending a product liability lawsuit although no specific dollar
amount has yet been claimed in this suit. An adverse outcome in this action
could have a material adverse effect upon our business, financial condition and
prospects. Additional claims may also be filed against us, resulting in
substantial liability for which we are not fully insured or for which we have
not been able to maintain adequate levels of insurance on acceptable terms. A
successful partially or completely uninsured claim of sufficient magnitude could
have a material adverse effect on our business, financial condition and
prospects.
WE ARE AT RISK FOR PRODUCT LIABILITY CLAIMS AND WARRANTY EXPENSES.
We may be exposed to product liability claims by our customers and
users of our products. We maintain product liability insurance coverage of $5.0
million in the aggregate and $1.0 million per occurrence. We believe, but can
not be certain, that our insurance provides adequate coverage for the types of
products that we currently market and propose to market. It is also possible
that adequate levels of coverage will not be available to us in the future at
reasonable costs. A large uninsured or partially insured claim could have a
material adverse effect on our business, financial condition and prospects.
Hesco, Bes-Pac, DeVivo and Kohlman provide warranties for one year to
cover defects in workmanship and materials. American Gooseneck also provides
warranties for one year to its customers, which obligations we have assumed
pursuant to the American Gooseneck acquisition. We warrant the Hi-Rise System to
be free from defects in manufacturing and materials for up to one year from the
date of shipment. In addition, IDC Systems warrants its trash compaction units
and Wilkinson warrants its sheet metal fabrication products to be free from
defects in workmanship and materials for one year from the date of installation.
The assertion of a significant number of claims under these warranties could
have a material adverse effect on our business, financial condition and
prospects.
WE MAY FIND IT NECESSARY TO SEEK ADDITIONAL FINANCING.
Our capital requirements have been and will continue to be significant.
We anticipate, based on currently proposed plans and assumptions relating to our
operations and proposed expansion, that cash flow from operations and funds
available under our existing credit facilities will be sufficient to satisfy our
contemplated cash requirements for at least 12 months following the date of this
prospectus. In the event that our plans change, our assumptions change or prove
to be inaccurate or our cash flow otherwise proves to be insufficient to fund
our growth and development (due to unanticipated expenses, delays, problems,
difficulties or otherwise), we could be required to restructure our operations
to minimize cash expenditures and/or seek additional sources of financing to
fund our operations. We may also seek to obtain additional
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sources of financing to fund acquisitions. Although we are not presently
directly or indirectly a party to any definitive acquisition agreement, our
capital requirements with respect to acquisitions may be substantial. In the
event that we require additional financing, we may seek to raise capital through
the sale of our equity securities. Such sales could be made at prices that
represent significant discounts from the market price of our common stock.
Additionally, the terms of the GE Capital credit facilities may prevent or
impede our ability to raise additional capital. There can be no assurance that
any additional financing will be available to us on acceptable terms, or at all.
WE RELY UPON THIRD-PARTY SUPPLIERS.
The ability to manufacture our products depends upon receiving
sufficient supplies of components and raw materials, including the steel
necessary to produce waste containers, chutes and certain other products, from a
limited number of sources. Although we have not experienced material
difficulties in procuring supplies, components or materials, a delay in the
deliveries of such items could adversely affect our production, which could have
a material adverse effect on our business, financial condition and prospects.
COMPETITION IN OUR INDUSTRY IS INTENSE.
The waste management industry is characterized by intense competition.
There are a number of companies involved in waste collection, hauling,
separation, recovery and recycling, any of which could develop products that are
similar or better than ours. We also compete with numerous companies that offer
trash compaction systems and sheet metal fabrication products substantially
similar to those sold by us. In addition, Hesco, Bes-Pac, DeVivo and American
Gooseneck compete with a number of national and regional manufacturers and
distributors of solid waste handling equipment. Many of the companies marketing
such waste disposal systems, sheet metal fabrication products and other solid
waste handling equipment or with the potential to do so are well established,
have substantially greater financial and other resources than we do, and have
established reputations relating to product design, development, marketing and
support. We may not be able to compete successfully with any of these companies.
Our inability to successfully compete in the waste management industry would
have a material adverse effect on our business, financial condition and
prospects.
WE ARE AT RISK FOR HAZARDOUS MATERIAL RELATED ENVIRONMENTAL LIABILITY.
Our manufacturing activities involve the use of certain potentially
hazardous materials. We are subject to federal, state and local laws and
regulations governing the use, manufacture, storage, handling and disposal of
materials and waste products. The risk of accidental contamination or injury
from these materials cannot be completely eliminated. In the event of an
accident, we could be held liable for damages that exceed our resources. Our
business, financial condition and prospects may be materially adversely affected
by current or future environmental laws or regulations. We are required to
obtain permits from local, state and federal agencies in connection with
emissions from our manufacturing process. The failure to obtain any such
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approvals or permits could have a material adverse effect on our business,
financial condition and prospects. We may be required to incur significant costs
in order to comply with applicable regulations or to obtain future permits which
could materially adversely affect our business.
OUR PATENTS AND PROPRIETARY INFORMATION MAY NOT BE FULLY PROTECTED AND WE MAY
INFRINGE ON THE RIGHTS OF OTHERS.
We have, or are attempting to get, certain intellectual property
protection. We believe that patent protection is important to our business and
will continue to apply for patent protection as we deem appropriate. It may be
necessary for us to expend significant funds, which we may not have available at
any particular time, in connection with obtaining, enforcing or defending our
patent rights. The patent protection that we have may not protect us completely
because it may be circumvented or the patents may be declared invalid. Although
we do not believe it to be the case, it is also possible that our existing
patent rights may infringe patents or proprietary rights of others, in which
case we may be required to modify the design of the applicable product, obtain a
license and possibly be liable for damages. Problems with our patent protection
could have a material adverse effect on our business, financial condition and
prospects.
We also rely on trade secrets and proprietary know-how and employ
various methods to protect the concepts, ideas and documentation of our
proprietary information. However, these methods may not afford complete
protection. Others may independently develop this know-how or obtain access to
our know-how, concepts, ideas and documentation. Although we have and expect to
have confidentiality agreements with our employees and appropriate vendors,
these arrangements may not adequately protect our trade secrets and other
proprietary and confidential information. Our failure to adequately protect our
proprietary information may have a material adverse effect on our business and
future prospects.
WE DEPEND UPON CERTAIN KEY PERSONNEL.
Our success is largely dependent on the personal efforts of Donald
Engel, our Chairman of the Board and Chief Executive Officer, Gary McAlpin, our
President and Chief Operating Officer, Brad Hacker, our Chief Financial Officer,
Ronald McCracken, our Executive Vice President- Business Development and Sales,
Mario DeVivo, our Vice Chairman and the President of DeVivo Industries, and
other key personnel. Although we have entered into employment agreements with
each of Messrs. Engel, McAlpin, Hacker, McCracken and DeVivo, we do not maintain
key-man insurance on these individuals. The loss of the services of any of them,
or certain other key employees, could have a material adverse effect on our
business and prospects and the prevailing market price of our common stock. Our
success is also dependent upon our ability to hire and retain additional
qualified marketing, technical and other personnel. Our inability to attract and
retain such qualified personnel could materially adversely affect our business,
financial condition and prospects.
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WE HAVE NOT DECLARED DIVIDENDS ON OUR COMMON STOCK.
We have not paid any cash dividends on our common stock and do not
expect to declare or pay any cash dividends on our common stock in the
foreseeable future. In general, we are not permitted to pay any dividends on our
capital stock while amounts are outstanding under our credit facilities with GE
Capital, other than dividend payments in respect of our existing issued and
outstanding shares of preferred stock.
THE YEAR 2000 PROBLEM COULD HURT OUR OPERATIONS AND PROFITS.
The year 2000 problem is the result of computer programs being written
using two digits rather than four to define an applicable year. In order to
prevent potential problems, we have upgraded our computer operating systems at a
cost of approximately $40,000 and believe that our systems are fully year 2000
compliant. Any computer systems that we purchase or lease in the future will
already be year 2000 compliant. Additionally, certain of our significant vendors
have advised us that they are year 2000 compliant. If our vendors are unable to
ship materials to us due to year 2000 related problems, we believe that we will
be able to secure adequate materials from alternative sources. However, if we
were unable to obtain adequate supplies, we may be unable to meet purchase
orders on a timely basis, which would have an adverse effect on our business,
financial condition and prospects. We will continue to undertake reasonable
efforts to ascertain third party compliance only when we deem it to be
necessary. Although we believe that the year 2000 issue has not and will not
present a material adverse risk to our future results of operations, if our
systems ultimately prove to have latent year 2000 defects or if compliance by
our vendors proves insufficient, the year 2000 issue could have an adverse
impact on our business, financial condition and prospects.
OUR BUSINESS IS AFFECTED BY RECYCLING LEGISLATION.
Traditional methods of waste disposal such as landfills and
incineration have produced negative environmental consequences. Government
authorities have adopted regulations designed to address some of these problems.
State and local legislation targeting these problems sometimes include recycling
goals, tax incentives to encourage recycling, and some require or encourage
separation of solid waste materials prior to final disposal. We believe that
continuing initiatives of state and local government authorities and increasing
hauling costs and landfill use fees have created incentives for multi-story
building owners to encourage recycling and significant demand for innovative
waste management solutions such as the Hi-Rise System. Nevertheless, failure by
government authorities to continue to implement mandatory recycling legislation
or significant relaxation of such requirements or enforcement thereof could have
a material adverse effect on our business and prospects.
FACTORS INHIBITING TAKEOVER.
The State of Florida has enacted legislation that may deter or
frustrate takeovers of Florida corporations. The Florida Control Share Act
generally provides that shares acquired in
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excess of certain specified thresholds will not possess any voting rights unless
such voting rights are approved by a majority vote of a corporation's
disinterested shareholders. The Florida Affiliated Transactions Act generally
requires supermajority approval by disinterested directors or shareholders of
certain specified transactions between a public corporation and holders of more
than 10% of the outstanding voting shares of the corporation (or their
affiliates). In addition our Articles of Incorporation authorize the issuance of
up to 1,000,000 shares of "blank check" preferred stock with such designations,
rights and preferences as may be determined from time to time by our Board of
Directors. Accordingly, our Board of Directors may, without shareholder
approval, issue preferred stock with dividend, liquidation, conversion, voting
or other rights that could adversely affect the voting power or other rights of
the holders of our common stock. The issuance of additional shares of preferred
stock could
/bullet/ make the possible takeover of our company or the removal of
our management more difficult,
/bullet/ discourage hostile bids for control of our company in which
shareholders may receive premiums for their common stock,
/bullet/ adversely affect the voting and other rights of the holders of
the common stock, and
/bullet/ result in a decrease in the value or market price of our
common stock.
SHARES ELIGIBLE FOR FUTURE SALE.
As of December 28, 1999, 15,248,455 shares of our common stock were
issued and outstanding. Of such shares, 6,359,576 shares were freely tradeable
without restriction or further registration under the Securities Act unless held
by an "affiliate" of ours. The remaining 8,888,879 shares of our common stock,
including 2,762,316 of the shares offered by the selling shareholders, are
"restricted securities," as that term is defined under Rule 144 promulgated
under the Securities Act, and may be sold only if registered under the
Securities Act or sold in accordance with Rule 144 or another exemption from
registration under the Securities Act. No prediction can be made as to the
effect, if any, that sales of shares of our common stock or the availability of
shares of our common stock for sale will have on the market price of our common
stock prevailing from time to time. Nevertheless, the possibility that
substantial amounts of our common stock may be sold in the public market,
particularly at prices below prevailing market prices, may adversely affect the
market price of our common stock and could impair our ability to raise capital
through the sale of our equity securities.
IT IS POSSIBLE THAT THE COMMON STOCK WILL BE DELISTED FROM THE NASDAQ SYSTEM.
In order to continue to be included in NASDAQ, a company must maintain
$2.0 million in total assets, a $1.0 million market value of the public float
and either (a) net tangible assets of at least $2.0 million, (b) market
capitalization of $35.0 million or (c) net income of at least $500,000 in the
most recent fiscal year or two of the three most recent fiscal years. In
addition,
11
<PAGE>
continued inclusion requires two market-makers and a minimum bid price of $1.00
per share. The failure to meet these maintenance criteria in the future may
result in the discontinuance of the inclusion of common stock in NASDAQ. In such
event, trading, if any, in the common stock may then continue to be conducted in
the non-NASDAQ over-the-counter market. As a result of such delisting, an
investor may find it more difficult to dispose of, or to obtain quotations as to
the market value of, the common stock. In addition, if the common stock were
delisted from trading on NASDAQ and the trading price of the common stock were
less than $5.00 per share, trading in our securities would also be subject to
the requirements of certain rules promulgated under the Exchange Act, which
require additional disclosure by broker-dealers in connection with any trades
involving a stock defined as a penny stock (generally, any non-NASDAQ equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions). Such rules require the delivery, prior to any penny stock
transaction, of a disclosure schedule explaining the penny stock market and the
risks associated therewith, and impose various sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors (generally institutions). For these types of
transactions, the broker-dealer must make a special suitability determination
for the purchaser and have received the purchaser's written consent to the
transaction prior to sale. The additional burdens imposed upon broker-dealers
may discourage broker-dealers from effecting transactions in penny stocks, which
could reduce the liquidity of our securities and have a material adverse effect
on their trading market.
FORWARD LOOKING STATEMENTS
This prospectus (including the information incorporated by reference)
contains forward-looking statements within the meaning of Federal securities
law. Terminology such as "may," "will," "expect," "anticipate," "estimate,"
"continue," "predict," or other similar words identify forward-looking
statements. These statements discuss future expectations, contain projections of
results of operations or of financial condition or state other forward-looking
information. Forward-looking statements appear in a number of places in this
prospectus and include statements regarding management's intent, belief or
current expectation about, among other things, (1) trends affecting the industry
in which we operate, as well as the industries we service and (2) our business
and growth strategies, including potential acquisitions. Although management
believes that the expectations reflected in these forward-looking statements are
based on reasonable assumptions, forward-looking statements are not guarantees
of future performance and involve risks and uncertainties. Actual results may
differ materially from those predicted in the forward-looking statements as a
result of various factors, including those set forth in Risk Factors.
12
<PAGE>
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares of
common stock by the selling shareholders hereunder. We have agreed to pay all of
the expenses, estimated to be approximately $40,000, related to this offering.
SELLING SHAREHOLDERS
The following table provides information regarding the beneficial
ownership of shares of common stock by the selling shareholders as of the date
of this prospectus and as adjusted to reflect the sale of all of their shares.
Of these shares, 2,534,538 shares were issued to Ronald J. McCracken, our
Executive Vice President- Sales, in connection with our acquisition of Bes-Pac
pursuant to the terms of an Agreement and Plan of Merger, dated as of October 9,
1998, by and among, Bes-Pac, Inc., Mr. McCracken, BPI Acquisition Corp. and us.
An aggregate of 106,000 shares offered hereby were acquired by Roy C. Young, Jr.
from Ronald J. McCracken in a private sale. The remaining 200,000 shares were
issued to the other selling shareholders in connection with our acquisition of
Kohlman Engineering pursuant to the terms of an Asset Purchase Agreement, dated
as of September 23, 1999, among Kohlman Engineering Corp., Maxwell W. Croy,
James Warren Hill, KE Corporation and us.
The selling shareholders are participating in this offering pursuant to
certain contractual registration rights granted to them in connection with the
agreements set forth above. In connection with those agreements, we have agreed
to file and maintain the effectiveness of the registration statement of which
this prospectus forms a part and to pay all fees and expenses incident to the
registration of this offering, including all registration and filing fees, all
fees and expenses of complying with state blue sky or securities laws, all costs
of preparation of the registration statement and the fees and disbursements of
our counsel and independent accountants.
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES OWNERSHIP OF SHARES
OF COMMON STOCK NUMBER OF COMMON STOCK
PRIOR TO OFFERING OF AFTER OFFERING(1)
NAME AND ADDRESS --------------------------- SHARES ----------------------------
OF SELLING SHAREHOLDERS SHARES PERCENTAGE OFFERED SHARES PERCENTAGE
- ------------------------------------------- ------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Ronald J. McCracken..................... 3,095,205 16.9% 3,095,205 0 0
120 Allen Street
P.O. Box 2049
Easley, South Carolina 29641
Roy C. Young, Jr. ..................... 106,000 * 106,000 0 0
Highway 19E N. Toe River
Plum Tree, North Carolina 28664
Maxwell W. Croy ........................ 100,000 * 100,000 0 0
1801W. Berteau Ave.
Chicago, Illinois 60613
James Warren Hill....................... 50,000 * 50,000 0 0
4241 N. Ravenswood Ave.
Chicago, Illinois 60613
James B. Hill Trust(2).................. 10,000 * 10,000 0 0
4241 N. Ravenswood Ave.
Chicago, Illinois 60613
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES OWNERSHIP OF SHARES
OF COMMON STOCK NUMBER OF COMMON STOCK
PRIOR TO OFFERING OF AFTER OFFERING(1)
NAME AND ADDRESS --------------------------- SHARES ----------------------------
OF SELLING SHAREHOLDERS SHARES PERCENTAGE OFFERED SHARES PERCENTAGE
- ------------------------------------------- ------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Carolyn A. Hill Trust(2)................ 10,000 * 10,000 0 0
4241 N. Ravenswood Ave.
Chicago, Illinois 60613
Amy Hill Trust(2)....................... 10,000 * 10,000 0 0
4241 N. Ravenswood Ave.
Chicago, Illinois 60613
Katherine Hill Trust(2)................. 10,000 * 10,000 0 0
4241 N. Ravenswood Ave.
Chicago, Illinois 60613
Robert W. Hill Trust(2)................. 10,000 * 10,000 0 0
4241 N. Ravenswood Ave.
Chicago, Illinois 60613
</TABLE>
- -------------------------
* Represents ownership of less than 1%.
(1) Assumes all shares registered hereunder have been sold. Because the selling
shareholders may sell all, some or none of their shares, no actual estimate
can be made of the aggregate number of shares that are to be offered or the
number or percentage of shares that the selling shareholders will own upon
completion of the offering to which this prospectus relates.
(2) James B. Hill and Marvin S. Fenchel are the trustees of these trusts.
PLAN OF DISTRIBUTION
GENERAL
TRANSACTIONS. The selling shareholders may offer and sell shares of
common stock in one or more of the following transactions:
/bullet/ on the Nasdaq SmallCap Market,
/bullet/ in negotiated transactions, or
/bullet/ in a combination of any of these transactions.
PRICES. The selling shareholders may sell their shares of common stock
at any of the following prices:
/bullet/ fixed prices which may be changed,
/bullet/ market prices prevailing at the time of sale,
/bullet/ prices related to prevailing market prices, or
/bullet/ negotiated prices.
14
<PAGE>
DIRECT SALES; AGENTS, DEALERS AND UNDERWRITERS. The selling
shareholders may effect transactions by selling the shares of common stock in
any of the following ways:
/bullet/ directly to purchasers, or
/bullet/ to or through agents, dealers or underwriters designated from
time to time.
Agents, dealers or underwriters may receive compensation in the form of
underwriting discounts, concessions or commissions from the selling shareholders
and/or the purchasers of shares for whom they act as agent or to whom they sell
as principals, or both. The selling shareholders and any agents, dealers or
underwriters that act in connection with the sale of shares might be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities Act, and
any discount or commission received by them and any profit on the resale of
shares as principal might be deemed to be underwriting discounts or commissions
under the Securities Act.
SUPPLEMENTS. To the extent required, we will set forth in a supplement
to this prospectus filed with the SEC, the number of shares to be sold, the
purchase price and public offering price, the name or names of any agent, dealer
or underwriter, and any applicable commissions or discounts with respect to a
particular offering.
STATE SECURITIES LAW. Under the securities laws of some states, the
selling shareholders may only sell the shares in those states through registered
or licensed brokers or dealers. In addition, in some states the selling
shareholders may not sell the shares unless they have been registered or
qualified for sale in that state or an exemption from registration or
qualification is available and is satisfied.
EXPENSES; INDEMNIFICATION. We will not receive any of the proceeds from
the sale of the common stock sold by the selling shareholders hereunder and will
bear all expenses related to the registration of this offering but will not pay
for any underwriting commissions, fees or discounts, if any. We will indemnify
the selling shareholders against some civil liabilities, including some
liabilities which may arise under the Securities Act.
LEGAL MATTERS
The validity of the shares being offered by this prospectus will be
passed upon for us by Greenberg Traurig, P.A., Miami, Florida.
15
<PAGE>
EXPERTS
The financial statements incorporated in this Registration Statement on
Form S-3 by reference to the Annual Report on Form 10-KSB for the year ended
December 31, 1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the SEC under File No. 000-21946. You may read and copy
any document in our public files at the SEC's offices at:
/bullet/ Judiciary Plaza
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549,
/bullet/ 500 West Madison Street
Suite 1400
Chicago, Illinois 60606
/bullet/ 3475 Lenox Road, N.E.,
Suite 1000
Atlanta, Georgia 30326
and
7 World Trade Center
Suite 1300
New York, New York 10048.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from the SEC's
web site at http://www.sec.gov through the SEC's electronic data gathering
analysis and retrieval system, EDGAR. Our common stock is traded on the Nasdaq
Market under the symbol "HIRI." Information about us is also available from the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
16
<PAGE>
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is
considered to be part of this prospectus. Later information that we file with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
by us:
/bullet/ Our Annual Report on Form 10-KSB, as amended on Form 10-KSB/A,
for the fiscal year ended December 31, 1998.
/bullet/ Our Quarterly Reports on Form 10-QSB, for the quarterly
periods ended March 31, 1999, June 30, 1999 and September 30,
1999.
/bullet/ Our Definitive Proxy Statement pursuant to Section 14(A) of
the Exchange Act filed on June 15, 1999.
/bullet/ Our Current Reports on Form 8-K filed on March 3, 1999 and on
Forms 8-K/A filed on January 8, 1999 and May 7, 1999.
/bullet/ The description of our common stock contained in our
registration statement on Form 8-A filed on June 17, 1993.
We will provide to you, without charge, a copy of any and all of the
documents or information referred to above that we have incorporated by
reference in this prospectus (other than exhibits to the documents unless those
exhibits are specifically incorporated by reference into this prospectus).
Requests for such copies should be directed to the following address:
Hi-Rise Recycling Systems, Inc.
8505 N.W. 74th Street
Miami, Florida 33166
Attn: Chief Financial Officer
Telephone (305) 597-0243
This prospectus is part of a registration statement that we filed with
the SEC. You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date on the front of that document.
17
<PAGE>
================================================================================
3,401,205 SHARES
HI-RISE RECYCLING
SYSTEMS, INC.
COMMON STOCK
--------------------------
PROSPECTUS
--------------------------
January , 2000
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant will pay all of the expenses incurred in connection with
the offering described in this registration statement, other than underwriting
commissions and discounts. Such expenses are estimated to be as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.......... $ 1,996.50
Legal fees and expenses...................................... 30,000.00
Transfer Agent and Registrar Fees............................ 2,000.00
Printing Expenses............................................ 2,000.00
Accounting Fees and Expenses................................. 3,000.00
Miscellaneous................................................ 1,003.50
-------------
Total............................................... $ 40,000.00
=============
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has authority under Section 607.0850 of the Florida
Business Corporation Act to indemnify its directors and officers to the extent
provided for in such statute. The Registrant's Amended and Restated Articles of
Incorporation and Bylaws provide that the Registrant shall indemnify and may
insure its officers and directors to the fullest extent not prohibited by law.
The Registrant has entered into an agreement with each of its directors and
executive officers wherein it has agreed to indemnify each of them to the
fullest extent permitted by law. The Registrant also maintains a policy of
directors' and officers' liability insurance that insures, subject to certain
exclusions, the Registrant's directors and officers against the cost of defense,
settlement of, payment of a judgment in connection with a proceeding, whether
actual or threatened, to which any such person may be made a party by reason of
the fact that such person is or was a director or officer of the Registrant.
II-1
<PAGE>
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
------- -----------
*3.1 Our Amended and Restated Articles of Incorporation
(incorporated by reference to Exhibit 3.1 of our Registration
Statement on Form SB-2, as amended (33-63778-A))
*3.2 Our Bylaws (incorporated by reference to Exhibit 3.2 of our
Registration Statement on Form SB-2, as amended (33-63778-A))
*5.1 Opinion of Greenberg Traurig, P.A.
*23.1 Consent of Greenberg Traurig, P.A. (contained in Exhibit 5.1
hereto)
23.2 Consent of PricewaterhouseCoopers LLP
- -------------------------
* previously filed
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;
(2) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
(3) That, for the purpose of determining any liability under
the Securities Act of 1933, 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.
(4) 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 of 1933 (the "Securities
Exchange Commission"), each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be
II-2
<PAGE>
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 the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of 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>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Miami, State of Florida, on this 29th day of
December, 1999.
HI-RISE RECYCLING SYSTEMS, INC.
By: /S/ BRADLEY HACKER
----------------------------------------
Bradley Hacker, Chief Financial Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, this Amendment No.
1 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
*/S/ DONALD ENGEL Chairman of the Board and Chief December 29, 1999
- --------------------------------------- Executive Officer
DONALD ENGEL
/S/ BRADLEY HACKER Chief Financial Officer December 29, 1999
- ---------------------------------------
BRADLEY HACKER
*/S/ WARREN ADELSON Director December 29, 1999
- ---------------------------------------
WARREN ADELSON
*/S/ IRA S. MERRITT Director December 29, 1999
- ---------------------------------------
IRA S. MERRITT
*/S/ JOEL M. PASHCOW Director December 29, 1999
- ---------------------------------------
JOEL M. PASHCOW
*/S/ LEONARD TOBEROFF Director December 29, 1999
- ---------------------------------------
LEONARD TOBEROFF
*By:/S/ BRADLEY HACKER December 29, 1999
- ---------------------------------------
BRADLEY HACKER
ATTORNEY-IN-FACT
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
NUMBER DESCRIPTION
- ------ -----------
23.2 Consent of PricewaterhouseCoopers LLP
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Hi-Rise Recycling Systems, Inc.
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated March 26, 1999, relating to the
consolidated financial statements, which appears in Hi-Rise Recycling Systems,
Inc.'s Annual Report on Form 10-KSB for the year ended December 31, 1998. We
also consent to the reference to us under the heading "Experts" in such
Registration Statement.
PricewaterhouseCoopers LLP
Miami, Florida
January 4, 2000
